Monongahela Tie & Lumber Co. v. Flannigan
| Decision Date | 16 November 1915 |
| Docket Number | 2633. |
| Citation | 87 S.E. 161,77 W.Va. 162 |
| Parties | MONONGAHELA TIE & LUMBER CO. v. FLANNIGAN. |
| Court | West Virginia Supreme Court |
Submitted November 2, 1915.
Syllabus by the Court.
By admitting the validity and correctness of plaintiff's demand, proved before a jury, impaneled to try the case, upon the issues joined in assumpsit, with notice of recoupment and recoverable only thereunder, because in the nature of unliquidated damages, controverted and not capable of ascertainment by computation, though arising out of the same transaction, a defendant cannot, under any provision of chapter 126 of Code 1913 (secs. 4821-4831), by motion sustained, to discharge the jury without rendition of a verdict, and for leave, in lieu thereof, granted, to prove before the court, under a special plea, not replied to averring only matters contained in such notice, have judgment over, plaintiff objecting and excepting thereto, on such counterclaim, though it exceeds the demand stated in the declaration.
Section 4 of chapter 126 (sec. 4824) authorizes such judgment only for set-offs arising out of independent contracts or transactions between the parties or between defendant and those under whom plaintiff claims, but not unliquidated damages; and if pleaded and proved, under notice thereof judgment for defendant may be rendered for the excess of the set-offs herein described over the demand averred in the declaration.
Section 5 (sec. 4825) provides only for pleas alleging any such failure in the consideration of the cont ract, or fraud in its procurement, or breach of warranty of title to realty or personalty or of the soundness of personal property, for the value or price whereof defendant entered into such contract, as would entitle him to damages from plaintiff or the persons under whom he claims, or to relief in equity in whole or in part against the obligation thereby imposed, or, if the contract be by deed, and defendant alleges and proves any such matter existing before the execution thereof as would entitle him to relief in equity, and the amount to which he is thereby entitled. The matters averred in the special plea do not come within the permissive terms of this section.
Section 9 (sec. 4829) authorizes recovery over only on pleadings authorized by that chapter, by none of whose provisions can defendant obtain judgment against plaintiff by reason of an excess of a counterclaim provable only under a notice of recoupment. That doctrine remains unaltered, and applies where the demand and counterclaim arise out of the same contract or agreement, express or implied.
While a special plea alleging new matter in bar of plaintiff's right to recover, not replied to, may require judgment thereon for defendant, yet where the matters so alleged, if proved, present no defense to the action, or are provable under a notice of recoupment, and, if objected to, should be rejected, a replication thereto is not required, and, the omission thereof being immaterial, judgment on the plea is erroneous.
Nor does section 5 (sec. 4825) admit recovery for breach of any contractual obligation fraudulently committed by either party thereto. The party not in default must resort to other common-law remedies for redress therefor.
Fraud, like any other necessary fact, must be alleged as well as proved before relief therefrom can be obtained by the party injured thereby.
Counterclaims arising out of the same contract or transaction, whether liquidated or not, may be proved under notice of recoupment and general issue; but, while to the extent proved such claims may bar or reduce a recovery by plaintiff, defendant, under recoupment, cannot have judgment over.
Additional Syllabus by Editorial Staff.
Ordinarily a "set-off" is a counter demand held by defendant against a plaintiff arising out of a transaction extrinsic of plaintiff's cause of action and by means whereof defendant may liquidate the whole or a part of plaintiff's demand according to the amount of the set-off. In character and effect set-offs are cross-actions.
Since the consideration expressed in the contract is only presumptive evidence of the real consideration, parol evidence is admissible to show another or greater consideration.
Error to Circuit Court, Monongalia County.
Action by the Monongahela Tie & Lumber Company against Elizabeth Flannigan. Judgment for defendant, and plaintiff brings error. Reversed, and new trial awarded.
Chas. T. Herd and Lazzelle & Stewart, all of Morgantown, for plaintiff in error.
J. R. Sheppard and Stewart & John, all of Morgantown, for defendant in error.
Claiming an indebtedness of $1,400 as a balance due from defendant, under a contract executed September 1, 1909, delivered April 20, 1910, for the sale and purchase of timber on 500 acres of land in Monongalia county, known as the "McClaren tract," the contract stipulating the price therefor and the terms of payment, plaintiff brought assumpsit, and defendant pleaded nonassumpsit, tendered and was permitted to file a notice of recoupment, and, over plaintiff's objection, also a special plea. The notice and plea aver the same defensory matters against the claim alleged in the declaration. In detail they charge that, in consequence of the delayed delivery of the contract, whereby defendant was prevented from exhibiting her title and authority to sell, she was deprived of the benefit of a sale of 420,000 feet of timber, log measure, by her cut at great cost and expense from the tract of land; the prospective profits therefrom, as so alleged, amounting to $3,150. On the nonassumpsit plea issue was regularly joined; but plaintiff did not reply to the special plea, because, as argued by counsel, the matters therein contained, if true, were provable under the general issue and the recoupment notice.
After plaintiff had proved its claim before the jury, impaneled to try the case upon the "issues joined," defendant, admitting the validity and correctness of the account averred in the declaration, moved the discharge of the jury before verdict, which motion being sustained and the jury discharged, defendant furthermore moved for leave to prove her counterclaim before the court in lieu of a jury, and, when so proved, to enter judgment in her favor therefor less plaintiff's demand so admitted. These several motions the court sustained, and accordingly rendered judgment for $2,089.60 over the protest and objection of the plaintiff, who brings the case here, praying reversal upon various assignments of error.
For defendant, it is insisted that the special plea properly set up defenses authorized by sections 4 and 5 (secs. 4824, 4825) c. 126, Code, and, when not replied to, its averments ought to be taken as true without proof thereof. The evident object to be attained by this procedure was obviation of the limitations ordinarily imposed upon the extent of the relief allowed under the doctrine of recoupment, as generally understood and applied in this and other jurisdictions. Under it, defendant is permitted to defeat or to curtail recovery by plaintiff, but not to recover against him when the counterclaim exceeds the demand stated by plaintiff. If such claim exceeds or equals his demand, defendant is entitled to costs only.
But, by the plea, defendant undertook to and did obtain a substantial recovery against plaintiff; and her right thereto she seeks to maintain by invoking the provisions of the sections cited. Does this case fall within the equitable provisions of either section? To this inquiry the only response is a negative one. Generally, unliquidated damages cannot be allowed as a set-off against a legal demand, either in an action at law or in a suit in equity, though when they arise out of the contract or transaction on which plaintiff's demand is based damages may be proved and allowed to reduce or bar recovery by him. Coal & Coke Co. v. Coal & Coke Corporation, 67 W.Va. 503, 68 S.E. 124. No judgment over can be had by way of recoupment. Guano Co. v. Appling, 33 W.Va. 470, 10 S.E. 809; Manufacturing Co. v. Sweeney, 47 W.Va. 638, 35 S.E. 853. While by recoupment, itself an innovation on the strict rules of the common law, defendant attempts to rebate part or all of the claim or demand on which he is sued, by proving a legal or equitable right or counterclaim when the original demand and counterclaim arise out of the same transaction (34 Cyc. 623), ordinarily a set-off is a counter demand held by defendant against a plaintiff arising out of a transaction extrinsic of plaintiff's cause of action, and by means whereof defendant may liquidate the whole or a part of plaintiff's demand according to the amount of the set-off. In character and effect, they are cross-actions; and, when the set-off exceeds the demand of the plaintiff, defendant may have judgment for the excess, though he cannot recover under a notice of recoupment, however much the counterclaim may exceed such demand. See opinion in Railroad Co. v. Jameson, 13 W.Va. 833, 841, 31 Am. Rep. 775.
The object of the liberal provisions of chapter 126 was the modification of the strict common-law rule denying defendant right of recovery of a judgment for a positive claim against plaintiff. Though the cross-demands were mutual and liquidated, or capable of ascertainment by calculation, and arose out of disconnected contracts, a judgment over was not allowed under such rule. They could not be settled in one litigation. Defendant was relegated to his common-law remedy. This inflexible requirement section 4 modified, and provided that:
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