Volker v. Stone
| Decision Date | 01 June 1914 |
| Parties | WILLIAM VOLKER, Assignee of GREAT WESTERN PORTLAND CEMENT COMPANY, Appellant, v. JOSEPH H. STONE, Respondent |
| Court | Kansas Court of Appeals |
Appeal from Jackson Circuit Court.--Hon. A. C. Southern, Judge.
REVERSED AND REMANDED (with directions).
Judgment reversed and cause remanded.
New & Krauthoff, John N. Davis and James B. Nourse for appellant.
(1) To constitute a set-off the demand must be in the nature of a debt, and the term debt is defined by most of the appellate courts of the country. A set-off is a cross debt. Nat'l Handle Co. v. Hoffman, 140 Mo.App. 642; Zerbe v. Railroad, 80 Mo.App. 418; Pomeroy Code Remedies (4 Ed.), p. 120. (2) To constitute a set-off the demand must be in the nature of a debt, and as an unliquidated claim for damages is not included in the term "debt," it cannot be made the subject of set-off. Brokerage Co. v. Campbell, 164 Mo.App. 8. (3) The damages to be recovered are not necessarily liquidated, and the action is not therefore one in which a set-off is allowed. State v. Modrell, 15 Mo. 424; Johnson v. Jones, 16 Mo. 494; Walton v. Catron, 125 Mo.App. 507. (4) Respondent's defense is in the nature of a counter-claim, and as such is not maintainable against this appellant. Empire Transportation Co. v. Boggiano, 52 Mo. 294; McAdam v. Ross, 53 Mo. 199; Emery v Railroad, 77 Mo. 346.
McCune Harding, Brown & Murphy and Blatchford Downing for respondent.
(1) Recoupment is a defense and not a cross-action. Grand Lodge v. Knox, 20 Mo. 433; Ives & McCarthy v. Van Epps, 22 Wend. (N. Y.) 155; Batterman v. Pierce, 3 Hill (N. Y.) 171; Benjamin v. Richards, 51 Mich. 110; Epperly v. Bailey, 3 Ind. 72; Winder v. Caldwell, 12 How. (U.S.) 443; Van Buren v Digges, 11 How. 461, 475; Withers v. Green, 9 How. 214; Linnenkohl v. Winkelmeyer, 54 Mo.App. 570; Chitty on Pleading 563, quoted in Bloom v. Lehman & Co., 27 Ark. 489; 34 Cyc. 623, 642, 643, 676. (2) Recoupment is available against an assignee. R. S. Mo. 1909, Sec. 1867; Langdon v. Markle, 48 Mo. 357; Roman v. Boston Trading Co., 87 Mo.App. 186; Burrill v. Stevens, 73 Maine, 395; Johnson v. Geneva Pub. Co., 122 Mo. 102; Heman v. Improvement Co., 58 Mo.App. 480. (3) The agreed facts show a valid recoupment in excess of plaintiff's claim. Roman v. Boston Trading Co., 87 Mo.App. 186; Harralson v. Stein, 50 Ala. 347; Sterling Organ Co. v. House, 25 W.Va. 64; Railway Co. v. Tenn. Coal Co., 98 Ga. 189; Morrison v. McIntosh Co., 73 Mo.App. 95; Nelson v. Nelson, 122 Mo.App. 90.
This action originated before a justice of the peace and was tried in the circuit court without a jury, on an agreed statement of facts. Judgment was rendered for defendant and plaintiff appealed.
In a contract between defendant, who is a contractor doing business in Kansas City, and a corporation engaged in the manufacture of cement in Kansas, defendant purchased ten shares of the preferred stock of the company at their par value of $ 1,000, and the company agreed "in consideration of this subscription . . . to give gratis" fifty barrels of cement with each one hundred barrels purchased by defendant until the value of such donations should equal the par value of the preferred stock thus purchased.
Afterward, on November 4, 1911, the company accepted a blanket order from defendant for 1500 barrels of cement for delivery "when ordered if completed by Jan. 1, 1912," and during the month of November filled two shipping orders for 200 and 150 barrels respectively. These shipments, of the total value of $ 191.43, were received and accepted by defendant but not paid for and this action is for the recovery of their value. No other shipping instructions were given by defendant and no more cement was delivered for the reason that early in December, the company ceased manufacturing and notified defendant that it could not fill the remainder of the blanket order. Afterward the company was adjudicated a bankrupt and its assets, including the account against defendant, were sold and assigned to plaintiff at trustee's sale.
Plaintiff brought this suit on the account and defendant appeared in the justice court and filed a "counter-claim or set-off" in which he prayed judgment against plaintiff for $ 283.66, "as damages for the failure of plaintiff's assignor to deliver fifteen hundred barrels of cement at a price equal to that of one thousand barrels at sixty-nine and one-half cents a barrel, net, according to the terms of a certain written contract and order filed herewith."
On the next day defendant filed a "recoupment" alleging as a defense to the account "that the cement, the purchase price of which forms the basis of this suit, was purchased by defendant under a contract . . . by which plaintiff's assignor was to furnish and deliver free to defendant one-third the amount of cement which defendant might order; that defendant ordered fifteen hundred barrels, but plaintiff's assignor and plaintiff have neglected and refused to deliver the five hundred barrels free and that the damages thereby incurred by defendant exceed the amount of plaintiff's claim."
It is conceded that defendant is indebted to plaintiff as the assignee of the cement company in the full amount of his demand and the counterclaim was abandoned in the circuit court. The defense there interposed was that the unliquidated damages sustained by defendant in consequence of the breach by the cement company of its contractual agreement to deliver free of charge fifty barrels of cement for each one hundred barrels ordered by defendant, exceeded plaintiff's demand and were a proper subject of recoupment. The court accepted this view and refused declarations of law asked by plaintiff "that under the pleadings and agreed statement of facts defendant is not allowed to recover upon its counterclaim or recoupment filed herein" and that "plaintiff's action is based on an assigned account for the purchase price of cement and the defense herein is not a set-off within the meaning of the law, but is for unliquidated damages and cannot be considered as a legal defense to plaintiff's cause of action."
The statutes relating to actions in justice courts provide (sec. 7411, R. S. 1909) that "the defendant may unite in his defense as many grounds of defense, including off-sets and counterclaims as he may have. . . ." This statute has remained unchanged since 1889 (see sec. 6137, R. S. 1889) when sec. 2850, R. S. 1879, which provided that "the defendant may unite in his defense as many grounds of defense including offsets as he may have" was amended by inserting after "offsets" the words "and counterclaims." Before this amendment the quoted clause remained unchanged on the statute books for many years (see R. S. 1855, p. 929, sec. 5) and it was the opinion of the courts that it did not authorize the filing of any counterclaim not of the nature of a set-off in an action in a justice court (Flesh v. Christopher, 11 Mo.App. 483) and that since the provisions of the Practice Act relating to counterclaims (sec. 1897, R. S. 1909) do not apply to practice before justices of the peace, "a defendant's counterclaim must be supported, if at all, as a defensive recoupment, or mere right of reduction of damages." [Emery v. Railway, 77 Mo. 339.]
Obviously the amendment of 1889 was prompted by the decision in the Emery case which was rendered in 1883 and was intended to give defendants in justice courts the benefit of the Practice Act relating to counterclaims insofar as that Act properly could be fitted to the restricted jurisdiction of such courts. Consequently a defendant not only may avail himself of a set-off or defensive counterclaim but also, within the scope of the jurisdiction of the court, may seek affirmative relief against his adversary upon an independent cause of action belonging to a class for which a counterclaim is allowed by section 1807, R. S. 1909, which first appeared in our statutory law in 1855 (sec. 13, p....
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