Potter v. Taggart

• Decision Date: 14 March 1882
• Citation: 11 N.W. 678,54 Wis. 395
• Parties: POTTER v. TAGGART.
• Court: Wisconsin Supreme Court

54 Wis. 395

11 N.W. 678

POTTER

v.TAGGART.

Supreme Court of Wisconsin.

Filed March 14, 1882.

Appeal from circuit court, Fond du Lac county.W. W. D. Turner and Geo. E. Sutherland, for appellant.

C. W. Becker, for respondent.

TAYLOR, J.

This action was brought to recover from the respondent the money paid to him for a note and mortgage purchased from him by the appellant, upon the ground of fraud and misrepresentation on the part of the respondent in the sale thereof. The complaint alleges that the respondent was the owner and holder of a certain note, and a mortgage which was given to secure the payment thereof, setting out the note, which is for $500, payable five years from the date thereof, with interest payable annually at 10 per cent. after July 1, 1873. The note is dated May 22, 1873. The mortgage was given to secure the payment of said note and interest upon a certain lot of land therein described, containing 62 1-10 acres, situate in Winnebago county. The note and mortgage were made by one J. W. Sanders. The complaint then alleges that the mortgagor, Sanders, on June 9, 1873, sold to one H. B. Jackson 22 acres of said mortgaged premises, and that the said respondent, for the consideration of $125 then paid to him, released said 22 acres of said mortgaged lands so sold from the lien of said mortgage, and that the $125 so received by the said respondent was indorsed by him upon said note of $500; that afterwards, and on April 20, 1877, at the request of the respondent, the appellant bargained with respondent for the purchase of said note and mortgage, and purchased the same from him for the sum of $403.91. The complaint then alleges as follows:

“And the plaintiff further alleges that at the time of the purchase of said note and mortgage as aforesaid, he had no knowledge of the dealings between said Sanders and said Jackson, nor of the execution by defendant of said release or satisfaction of said mortgage upon that part or portion of said land so conveyed by said Sanders to said Jackson as aforesaid.

And plaintiff alleges that, being so possessed of said note and mortgage, on said twentieth day of April, A. D. 1877, said defendant, wrongfully and injuriously contriving and intending to defraud and injure this plaintiff, falsely, fraudulently, and deceitfully pretended and represented to plaintiff, and by fraud induced plaintiff to believe and suppose, that said note, so reduced in amount by said credit or indorsement upon it as aforesaid, was secured by said mortgage upon the whole of said land so described in said mortgage; and wrongfully and fraudulently concealed from plaintiff the fact that he, the said defendant, had released a large part or portion of the land described in said mortgage, made and executed as aforesaid, to secure the payment of said note.

Plaintiff further alleges that, not knowing that defendant had executed said release or satisfaction of said mortgage upon that portion of said land so conveyed as aforesaid by said Sanders to said Jackson, and relying upon the representations of defendant that all the land mentioned and described in said mortgage was a security for the unpaid balance on said note, he was thereby induced to purchase said note and mortgage of the defendant, and then and there paid to him a large sum of money, to-wit, $403. 91, as and for the price and value of said note and mortgage.

Plaintiff further alleges that said mortgage, because of the execution of said release or satisfaction of a portion of said land as aforesaid, became thereby and was of much less value, and said note became and was of much less value, than they would have been had not said release been executed as aforesaid; and that said note and mortgage thereby became of little value to the plaintiff, and thereby the plaintiff has lost all the benefit and advantage which he might and would have derived from the purchase as aforesaid of said note and mortgage, had said representation been true, and as represented to him by said defendant.

And plaintiff further alleges that as soon as he ascertained that the said representations were not true, to-wit, on or about the twentieth day of September, A. D. 1879, he went to the defendant for the purpose of demanding of said defendant a return of the $403.91, so paid by plaintiff to defendant as aforesaid, and to return to him, the said defendant, said note and mortgage; but the defendant then and there refused to do anything in regard to the matter, and then and there refused, and still refuses, to return to plaintiff said sum, or any part thereof.

Wherefore, plaintiff demands judgment against the defendant for the said sum of $403.91, with interest thereon from the twentieth day of April, A. D. 1877, together with his costs and disbursements in this behalf laid out and expended.”

To this complaint the respondent answered a general denial.

The case was placed upon the calendar after due notice of trial, and was called for trial in its order upon the calendar. Upon the trial the respondent objected to the introduction of any evidence in the case, on the ground that the complaint did not state facts sufficient to constitute a cause of action. The objection was sustained by the circuit court, and the appellant duly excepted. Thereupon judgment was entered dismissing the complaint, with costs. From that judgment this appeal is taken. It will be seen by the complaint that the appellant seeks to rescind the contract of purchase, and recover back from the respondent the purchase money of the note and mortgage, basing his rescission upon the ground of the alleged fraudulent representations and concealment on the part of the respondent of the fact that 22 acres of the land described in the mortgage had been released by the respondent before the sale thereof to the appellant.

The learned counsel for the respondent insists-- First, that the complaint does not show that the appellant was injured by the alleged fraudulent representations and concealment of the respondent, and so fails to state any reason for a rescission of the contract; and, second, that it fails to show that he has returned or offered to return the note and mortgage to the respondent before the action was commenced, and in that respect he fails to show himself in a position to demand his purchase money back.

We are inclined to hold that after answer, upon an objection taken for the first time to its sufficiency, the complaint is sufficient in both respects. In the case of Hazelton v. Union Bank, 32 Wis. 34-43, Justice Lyon, in delivering the opinion, says: “The rule is well settled that a greater latitude of presumption may be indulged in to sustain a complaint where the objection that it does not state a cause of action is taken for the first time at the trial, and after an issue of fact has been taken upon it by answer, than where the same objection is taken by demurrer.” The same rule was stated in Teetshorn v. Hall, 30 Wis. 162-167;Hamlin v. Haight, 32 Wis. 238-242;Lutheran Evangelical Church v. Cristgan, 34 Wis. 328;Johnson v. Ashland Lumber Co. 46 Wis. 119; Johannes v. Youngs, Id. 448; Wittman v. Watry, Id. 493. Under the rule established by the cases cited, we think the complaint sufficiently alleges that the respondent was guilty of making either a fraudulent representation or a fraudulent concealment of the fact that a part of the property described in the mortgage had been released before the date of the sale, and that such fraud was injurious to the...