Wm. Braithwaite v. Akin

• Decision Date: 24 July 1893
• Court: North Dakota Supreme Court

56 N.W. 133

3 N.D. 365

WM. BRAITHWAITE v. HENRY C. AKIN, et al

Supreme Court of North Dakota

July 24, 1893

Appeal from District Court, Burleigh County; Winchester, J.

Action by William Braithwaite against Akin and others. William Rea and George F. Robinson, partners as Robinson, Rea & Co., and others intervened. To the complaint in intervention plaintiff, Braithwaite, answered, setting up counterclaims. To this answer interveners demurred. From an order overruling their demurrer, interveners appeal.

Reversed.

Reversed.

Louis Hanitch, F. H. Register and Edgar W. Camp, for appellants.

A single count of a complaint cannot be permitted to combine several kinds of action as one in tort, one for money demand on contract, and one in equity. Supervisors v Decker, 30 Wis. 624; Schuenert v. Koehler, 23 Wis. 523; Rothe v. Rothe, 31 Wis. 570; Anderson v. Case, 28 Wis. 505; Johanneson v Borschenius, 35 Wis. 136; DeGraw v. Elmore, 50 N.Y. 1; Ross v. Mather, 51 N.Y. 108; Walter v. Bennett, 16 N.Y. 250. In the present case the wrong done is the conversion of plaintiff's property, not the mere breach of an agreement to deliver property to him. Smith v. Hall, 57 N.Y. 48. The counterclaim sets out facts showing plaintiffs ownership--the conversion and the value of the boat. It is true plaintiff might have waived the tort and sued upon an implied contract. Star Cash Car Co. v. Reithart, 20 N.Y.S. 872; Norden v. Jones, 33 Wis. 600. But the allegations do not admit of such construction. The counterclaim does not set forth a violation of any contract right, but the violation of a non-contract right. Schuenert v. Koehler, 23 Wis. 523; Smith v. Hall, 67 N.Y. 48; Edgerton v. Page, 20 N.Y. 281; Thorpe v. Philbin, 3 N.Y.S. 939; Boreal v. Lawton, 90 N.Y. 293; Woodruff v. Garner, 27 Ind. 4; Peo. v. Dennison, 84 N.Y. 272. The counterclaim does not state a cause of action connected with the subject of the action. Thorpe v. Philbin, 3 N.Y.S. 939; Burgman v. Burr, 46 N.W. 644; Rothchild v. Whitman, 30 N.E. 858; Edgerton v. Page, 20 N.Y. 281; Woodruff v. Garner, 27 Ind. 4. The subject of an action is either property (as illustrated by a real action) or a violated right. The Glenn & Co. v. Hall, 61 N.Y. 226; Woodruff v. Garner, 27 Ind. 4, 7 Abb. Pr. 372.

Geo. W. Newton, for respondent.

The counterclaim in question shows a breach of the contract alleged in the complaint as the basis of the claim in this action. At common law when the contract in suit laid mutual duties and obligations, the defendant was allowed to meet plaintiffs demand by a claim for breach of duty on his part. This was called recoupment and only reduced or extinguished the plaintiffs claim. Bliss Code Pl. 370; Keyes v. Slate Co., 34 Vt. 83. "Recoupment, a quasi off set of counterclaims not liquidated." Londonderry v. Andover, 28 Vt. 416. It is a rule of strict justice and the deduction is allowed to prevent a circuity of actions. Florida R. R. Co. v. Smith, 21 Wall 255; Wender v. Caldwell, 14 How. 434; Dermott v. Jones, 23 How. 220; Ingle v. Jones, 2 Wall. 1. In tort by conversion of personal property, the plaintiff can waive the tort and recover for the value of the property converted as upon an implied contract to pay its value. Bliss Code Pl. 381; Norden v. Jones 33 Wis. 600; Brady v. Brennan, 25 Minn. 210; Bank v. Bank, 32 Hun. 105.

OPINION

CORLISS, J.

This case is no stranger in this court. In various forms it has already been before us several times. 1 N.D. 455, 475, 48 N.W. 354, 361; 2 N.D. 57, 49 N.W. 419. On this appeal we have to deal with the rights of the interveners and the plaintiff. The defendants are no longer interested in the contests of the cause. Their liability to the plaintiff and the interveners has been finally established, and now the only strife is between the interveners and the plaintiff over the judgment they have recovered. By their complaint in intervention, the interveners have ingrafted upon the original suit another controversy. In that controversy they have become plaintiffs, and the plaintiff has become defendant. To their complaint in intervention, the plaintiff Braithwaite interposed an answer, which embodied two counterclaims. Other matters appear in the answer, but upon this appeal we have to decide only the question whether these counterclaims set forth in the answer are such counterclaims as the defendant Braithwaite had a right to interpose to the claim of the interveners. There is no contention that the first counterclaim does not contain facts sufficient to constitute a cause of action; but it is urged that this claim which the defendant Braithwaite seeks to set off against the interveners' claim to the judgment is not a legal counterclaim under the statute. The question was raised in the court below by demurrer to the answer to the complaint in intervention. From the order overruling the demurrer the interveners have appealed. The judgment in favor of the plaintiff and the interveners over which this contest is pending, was recovered in an action for freight earned by the plaintiff Braithwaite in the transportation of army stores for the defendants from Bismarck to Ft. Buford, by the steamer Eclipse. The interveners' alleged interest in the judgment grows out of a written contract, which is fully set out in the opinion of this court in the case of Braithwaite v. Aikin, 1 N.D. 475, 48 N.W. 361. The substance of the agreement was that the interveners and the defendant Braithwaite were to contribute in cash certain sums of money with which to purchase the steamer Eclipse, which was about to be disposed of at judicial sale, the interveners being interested in making this purchase because of claims held by them against the steamer, which would be cut off and rendered valueless by the sale. So far as they were concerned, their sole purpose in entering in the arrangement was to save, if possible, the money which they had theretofore ventured on the security of the boat. With the fund so created, the defendant Braithwaite was to attend at the marshal's sale, and buy the boat, taking the title in the name of himself and the intervener Joseph McC. Biggert as trustee. Under this purchase the boat was to be run by Braithwaite as captain and Biggert as financial agent; and out of her earnings the claims of the interveners were to be paid in full, and also the sums contributed by them to the purchase fund; and thereafter the Eclipse was to be the absolute property of Braithwaite and Biggert. The interveners claim that they have not been paid in full, and that the judgment for freight earned by the steamer under this contract, or some part of the judgment, belongs to them, and they ask for an accounting. It is obvious that the interveners' cause of action against Braithwaite, set forth in the complaint in intervention, is upon contract. The counterclaim interposed is for the conversion of the steamboat Eclipse by the interveners. The defendant Braithwaite seeks to recover against these wrongdoers the value of his half interest on account of such conversion.

The right to set up a counterclaim rests upon statute, except in those cases which are peculiar in their nature. In those cases equity prevent injustice, will allow counterclaims which the law ignores. Our first inquiry is whether the defendant Braithwaite has a right to set up this tort as a counterclaim under the statute? This brings us to the statute itself. It provides: "The counterclaim mentioned in the last section must be one existing in favor of a defendant and against a plaintiff, between whom a several judgment might be had in the action, and arising out of one of the following causes of action: First, A cause of action arising out of the contract or transaction set forth in the complaint as the foundation of plaintiff's claim, or connected with the subject of the action. Second, In an action arising on contract, any other cause of action arising also on contract and existing at the commencement of the action." Section 4915, Comp. Laws. Under the second subdivision, any other cause of action arising on contract would constitute a good counterclaim. It is contended that the defendant Braithwaite had a right to waive the tort involved in the conversion of his interest in the steamboat, and sue in the assumpsit. The averments of the counterclaim would not bring him within the rule that a tort may be waived, as it is laid down in many of the cases. The doctrine that the injured party may waive the tort and sue in assumpsit is limited by these decisions to cases where the wrongdoer has sold the property, and received therefor money or money's worth. Jones v. Hoar, 22 Mass. 285, 5 Pick. 285; Mhoon v. Greenfield, 52 Miss. 434; Willet v. Willet, 3 Watts 277; Stearns v. Dillingham, 22 Vt. 624; Watson v. Stever, 25 Mich. 386; Balch v. Patten, 45 Me. 41; Kidney v. Persons, 41 Vt. 386; 1 Am. & Eng. Enc. Law, 888; cases in note to Webster v. Drinkwater, 17 Am. Dec. 242; Tuttle v. Campbell, 74 Mich. 652, 42 N.W. 384; Moses v. Arnold, 43 Iowa 187. There is no allegation in the answer that the interveners ever sold the steamboat, or in any manner received money or money's worth for her. But we are of opinion that this limitation of the doctrine that the tort may be waived is without foundation in reason or principle. The whole doctrine is built upon a fiction. It asserts that what was done in defiance of the owner's rights was in law done with the most perfect regard for his rights; that the wrongdoer has received the money for the owner, or that he has bought the property from the owner at its fair value. This fiction is indulged only in the interests of the owner, and it rests upon the receipt by the wrongdoer of benefits accruing to him from his wrongful acts. Where no benefits are...