Stephens v. Wheeler

• Decision Date: 05 April 1927
• Citation: 193 Wis. 164,213 N.W. 464
• Parties: STEPHENS v. WHEELER ET AL.
• Court: Wisconsin Supreme Court

193 Wis. 164

213 N.W. 464

STEPHENS

v.WHEELER ET AL.^a1

Supreme Court of Wisconsin.

April 5, 1927.

Appeal from Circuit Court, Columbia County; Chester A. Fowler, Judge.

Action by G. W. Stephens against J. R. Wheeler and others. From an order suspending further proceedings, defendants appeal and plaintiff seeks to review a part of the order overruling his demurrer. Order reversed in toto and cause remanded.--[By Editorial Staff.]

The substance of plaintiff's complaint, verified January 28, 1926 (the summons served in December, 1925), was as follows:

That defendant Wheeler was president of the defendant bank and acted for it in this matter. That in January, 1920, defendant Wheeler induced plaintiff to purchase two $5,000 notes for $10,000--these with others, all aggregating $20,000, being secured by a mortgage of the face value of $20,000 on certain real estate in Polk county, located more than 300 miles from plaintiff's residence, and which he had never seen and had no knowledge as to its value, condition, or of the financial responsibility of the then owner of said premises. That defendant Wheeler to induce plaintiff to so purchase represented that he had been upon and knew the property, and that the same was as he then represented, to wit: (a) That the mortgaged premises were good farming lands; (b) that they had valuable improvements, in a No. 1 condition; (c) that they were worth from $40,000 to $50,000 and good security for the loans; (d) that Searle, the then owner, was in good shape financially; (e) that the principal and interest of said mortgage would be promptly paid. That plaintiff believed said representations and relied thereon and made such purchase. That in truth and in fact only a very small part of the premises were suitable for farming; it was practically worthless as security for such loan; it was entirely inadequate as security for the notes purchased by plaintiff; said Searle was financially irresponsible.

The complaint further alleged:

That the taxes assessed against the premises since 1920 remained unpaid; that interest on plaintiff's notes has remained unpaid since December 15, 1923; that said mortgage has been foreclosed, but that the time for redemption has not expired and the sale of the premises has not yet been had; that by reason of the fraud and deceit of the defendant and the worthlessness of the security plaintiff has been damaged in the sum of $11,250, for which sum with interest and costs judgment was demanded.

Defendants jointly answered: First, as and for a plea in abatement, that after plaintiff had acquired said notes and with full knowledge of the facts of said transaction, and (this upon information and belief only) of the nature and value of the property covered by the mortgage and the financial standing of the maker thereof, he demanded an assignment of said mortgage, obtained possession thereof, and in behalf of himself and others as plaintiffs prosecuted to judgment, in a court of competent jurisdiction, a suit for the foreclosure of said mortgage, thereby electing to rely and realize upon said security and claim the proceeds from a sale thereof pursuant to such judgment of foreclosure. That the redemption period has not expired. That no sale has been had thereunder, and (this upon information and belief) that the condition and value of the said premises is such that the same ought to sell for an amount sufficient to pay in full the amount due under said judgment. “That by reason of plaintiff's said election and the facts hereinbefore set forth, as defendants are informed and believe, this action has been prematurely brought, since damages for the purported fraud alleged in the complaint can result only by reason of said mortgaged premises selling for a sum insufficient to pay and satisfy the indebtedness secured by said mortgage, and the costs and expense incident to a foreclosure thereof, a contingency which has not arisen and cannot arise until a sale of said mortgaged premises has been had under and pursuant to said foreclosure judgment. Wherefore defendants pray that this action be abated and dismissed, with costs.”

The defendants further, and for an answer in the event that the relief sought under and by virtue of the foregoing plea in abatement be denied, admit certain of the allegations of the complaint; deny knowledge or information sufficient to form a belief as to certain others; allege that plaintiff was informed and fully aware of the fact that defendants had no personal knowledge of the value or condition of said property or of the financial standing of its owner; that all their information was in certain written communications from others, all submitted to plaintiff; and defendants assumed no responsibility in respect thereto. That plaintiff was a practicing attorney with experience in buying and selling real estate and in the making and obtaining of loans, and had ample opportunity to ascertain and estimate the value of the said lands. Defendants further denied the other allegations of the complaint and demanded judgment dismissing the complaint with costs.

Plaintiff demurred to the first alleged defense or “plea in abatement” stated in the above answer on the ground that upon the face thereof said alleged defense does not state facts sufficient to constitute a defense.

After argument the court, on March 30, 1926, ordered as follows: (a) That said demurrer is overruled; (b) further proceedings are hereby suspended until the result of the sale of the mortgaged premises involved shall be alleged by supplemental complaint or answer, whereupon trial or dismissal shall be ordered according to the event.

Defendants appeal from the portion of said order designated (b), and plaintiff seeks to review so much of said order (a) as overruled the demurrer.Grady, Farnsworth & Walker, of Portage, for appellants.

Olin & Butler, of Madison, for respondent.

PER CURIAM.

[1] Under our Code of Civil Procedure a “plea in abatement” to raise the question of whether the plaintiff's action is premature is something of an anomaly. No specific provision for it is found in the statutes anywhere except that it is mentioned in section 355.09, Stats., as a method of raising objections to an indictment or information. Such a distinctly common-law plea was proper for a time in this state, not only by the express preservation of the common law by section 13, art. 14 Const., but by early legislative action, as is shown by section 6, c. 93 of the Revised Statutes of 1849, providing, “Special pleas or special demurrers shall be allowed in any court in this state,” thereby of course, recognizing the special plea in abatement as distinguished from a plea in bar. The situation so stood until the passage of chapter 120 of 1856 (made to take effect March 1, 1857, by chapter 127 of 1856), providing that the then forms of actions and pleadings in cases at common law should be abolished, and simplifying and abridging the practice, pleadings and proceedings in courts. This was the first effective or substantial compliance with the mandate in 1848 of section 22, art. 7, Const., directing the Legislature at its first session to provide for commissioners to arrange a code. The Legislature by act approved August 19, 1848 (Laws 1848, p. 181), appointed as such commissioners “the persons selected or hereafter to be selected by an act of this Legislature.” If any such selection was thereafter made their labors were not adopted until said chapter 120 of 1856, whose main provisions as to pleadings in civil actions were preserved in chapter 125 of R. S. of 1858, and have been since maintained with but little change.

Since 1856 by what is now section 263.05, Stats., the only pleading by a defendant is either a demurrer or an answer. The objection that an action is premature is not one of the specified grounds for demurrer in section 263.06 (in which section there has been no change except that the seventh subdivision, viz., the matter of the statute of limitations first appears in R. S. 1878 (§ 2649), and added to comply with the holding in Howell v. Howell, 15 Wis. 55, and George v. C., M. & St. P. Ry. Co., 51 Wis. 603, 605, 8 N. W. 374, and unless it could be raised under the sixth subdivision, viz., an insufficiency of facts to constitute a cause of action, such question cannot be raised by demurrer. For a demurrer must, by section 263.09 distinctly specify the grounds of objection. It can be presented, however, by answer under section 263.13, Stats., permitting a “statement of any new matter constituting a defense,” and evidently whether such “new matter” be of fact or of law.

Shortly after the adoption of our Code, supra, this court held (Freeman v. Carpenter, 17 Wis. 126, 133), in accord with the New York court upon whose Code ours was modeled, that in a suit on a promissory note a defendant might by answer deny liability--a plea in bar, and also assert by the same answer--in abatement the pendency of another action. See, also, State ex rel. G. B. & M. R. Co. v. Jennings, 56 Wis. 113, 122, 14 N. W. 28;Raymond v. Sheboygan, 70 Wis. 318, 322, 35 N. W. 540. And in Town of Winneconne v. Village of Winneconne, 111 Wis. 10, 86 N. W. 589, a defendant named as a village successfully interposed by an answer in abatement its nonexistence as such. In Dutcher v. Dutcher, 39 Wis. 651, it was shown that the Code, however express the language to that effect might seem to be, did not abolish such special or dilatory pleas in abatement, but only modified the manner, form, and time of presenting them. In Supervisors of Brown County v. Van Stralen, 45 Wis. 675, it was pointed out, page 680, that the Code did not make any change in the common-law rule that such dilatory pleas should be disposed of prior to trial on the merits. The nature of such pleas and the method of interposing them is further discussed in Lombard v. McMillan, 95 Wis. 627, 634, 70 N. W. 673, and in Hilliard v. Wis. Life Ins. Co....