Christofferson v. Wee

Spalding, Ch. J. (after stating tbe facts). Were tbe counterclaims as pleaded subject to attack on tbe grounds stated in tbe objections? Tbis court bas repeatedly beld that where a pleading is attacked by motion or objection to tbe reception of evidence on tbe trial, it will be construed more liberally in favor of tbe pleader than when tbe attack is made by demurrer. Weber v. Lewis, 19 N. D. 473, 34 L.R.A.(N.S.) 364, 126 N. W. 105; Donovan v. St. Anthony & D. Elevator Co. 7 N. D. 513, 66 Am. St. Rep. 674, 75 N. W. 809; Walters v. Rock, 18 N. D. 45, 115 N. W. 511. See also Eirst Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473; Gjerstadengen v. Hartzell, 8 N. D. 424, 79 N. W. 872, 6 Enc. Pl. & Pr. 276. Section 6859, Rev. Codes 1905, provides: “Tbe answer of tbe defendant must contain: . . . “2. A statement of any new matter constituting a defense or counterclaim in ordinary and concise language without repetition.” Section 6860 reads: “Tbe counterclaim mentioned in tbe last section must be one existing in favor of a defendant and against a plaintiff between whom a several judgment might be bad in tbe action, and arising out of one of tbe following causes of action: “1. A cause of action arising out of tbe contract or transaction set forth in the complaint as tbe foundation of tbe plaintiff’s claim, or connected with tbe subject of tbe action. “2. In an action arising on contract, any other cause of action arising also on contract and existing at tbe commencement of tbe action. Tbe defendant may set forth by answer as many defenses and counterclaims as be may have, whether they are such as have been heretofore denominated legal or equitable or both. They must each be separately stated, and refer to tbe causes of action which they are intended to answer in such manner that they may be intelligibly distinguished.” Respondent bas apparently briefed tbis proposition on tbe theory that ¶ 2 of § 6860, supra, is applicable. Herein be is in error. Tbe transaction set forth in tbe complaint as tbe foundation of tbe plaintiff’s claim is tbe giving of tbe notes, and tbe contract for tbe purchase of tbe land was tbe transaction out of which tbe whole difficulty arose. Without tbe land contract there would have been no notes; hence we are of tbe opinion that tbe causes of action attempted to be set forth in tbe counterclaims arise out of tbe contract or transaction set forth in tbe [514] complaint, and tbat they are connected witb tbe subject of tbe action, and come under subdivision 1. It does not, therefore, follow tbat tbe acts to be done by either tbe plaintiff or defendant must have been contracted to be done before tbe commencement of tbe action, nor does it follow tbat tbe acts on tbe part of tbe defendant alleged to have been done must have been done, before tbe commencement of tbe action. Tbe counterclaim provided for in tbe section of tbe Code quoted was intended as a substitute for both set-off and recoupment under tbe old procedure. Set-off could only take place in actions on contracts for tbe payment of money and all mutual liquidated debts or damages, and tbe statutes referring to set-offs refer only to mutual, unconnected debts. Tbe principle upon which they are based is tbat mutual debts between tbe parties are extinguished either pro tanto or totally, thus preventing a multiplicity of suits. Paragraph 2 of § 6859, supra, is applicable to set-offs, while ¶ 1 applies to what was formerly termed a recoupment, and is confined to matters arising out of, and connected witb, tbe transaction or contract upon which the suit is brought, and regardless of whether they are liquidated or unliquidated, and this right was given by the common law. 2 Estes, Pl. 3d ed. ¶ 3364, and authorities cited; 34 Cyc. 6821; Northwestern Port Huron Co. v. Iverson, 22 S. D. 314, 133 Am. St. Rep. 920, 117 N. W. 312. The authorities to which we refer are ample to sustain this proposition. Eespondent cites numerous authorities which he contends sustain his position, but on a careful examination we find they all relate to independent contracts or set-offs. Eespondent urges that if, in fact, such acts were not done until after the commencement of the action, defendant should have made application for leave to serve a supplemental complaint or answer alleging the facts material to his causes of action occurring after the former pleading was made. Even if this were necessary, where the first paragraph of § 6860, supra, is applicable, and even if the acts attempted to be pleaded, or any of them material, were done after the commencement of th action or after the original answer was served, the legal effect of defendant’s amended answer in which his counterclaims are contained is identical with the effect of the same answer had it been denominated a supplemental answer. It was served on leave of court, its due service was admitted by counsel for respondent, and it was retained by him without objection. It would be splitting hairs, if these acts were done [515] at a time when a supplemental answer would bave been tbe proper technical pleading, to set this amended answer at naught simply because it is not designated a supplemental answer. Section 6887, Key. Codes 1905, provides that a supplemental complaint, answer, or reply, alleging facts material to the case occurring after the former complaint, answer, or reply, or of which the party was ignorant when his former pleading was made, may be allowed on motion. It will be seen from this section thát the legislature has contemplated the making of a defense or the assertion of counterclaims which may have arisen after the former pleading, so the fact that the cause of action arose before or after the serving of the original answer is in this case immaterial, unless a case is presented in which the exact time when the acts were done or were to be done is a vital element. The mere misnomer in designating a pleading as an amended pleading, instead of a supplemental pleading, has no effect where the substantial rights of the parties are not affected thereby, and an additional pleading may be treated as supplemental, even though designated as an amended pleading. Bank of Chadron v. Anderson, 6 Wyo. 518, 48 Pac. 197, 49 Pac. 406; Seevers v. Hamilton, 11 Iowa, 66; Howard v. Johnston, 82 N. Y. 271; Cincinnati v. Cameron, 33 Ohio St. 336; 21 Enc. Pl. & Pr. 13. Now as to the objections to the counterclaims as pleaded. Unquestionably there are many causes of action in which time is of the essence and should be stated, but this pleading does not disclose such a condition or necessity. The mere pleading in the form that it is pleaded, that these acts had been done, and all in connection with the giving of the notes, or growing out of their execution and delivery, in itself shows that they could not have been done earlier than the notes were given nor after the amended answer was served. The conditions are such as to render any inference that they occurred prior to or later than such times impossible. The acts were done or were to be done, not with third parties, but between plaintiff and defendant, and as far as disclosed it was not important that any one of them should be don©; or an offer made to do it on any fixed date. The repeated use of the-word “thereupon” implies that the act referred to followed shortly-after the act or fact on which it was predicated. We are of the opinion that they state the time with sufficient certainty to render the plead [516] ing immune to tbe objection made. Tbe answer setting up tbe counterclaims stated tbe main facts necessary to constitute affirmative causes of action existing at tbe time tbe answer was served; and if tbe plaintiff deemed it too uncertain or too indefinite as to time or other necessary ingredients to raise a clear issue, bis remedy was by motion to make more definite and certain, or by a demand for a bill of particulars; and not having availed himself of either of these remedies, for a period of more than ten months after tbe answer containing tbe counterclaims was served, or until tbe motion of defendant for judgment, be bad waived bis right to object on tbe grounds stated, even if time should have been more definitely pleaded. First Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473; 19 Enc. Pl. & Pr. 761; Puffer v. Lucus, 101 N. C. 281, 7 S. E. 734. See also Stensgaard v. St. Paul Real Estate Title Ins. Co. 50 Minn. 429, 17 L.R.A. 575, 52 N. W. 910, and Noble Twp. v. Aasen, 8 N. D. 77, 76 N. W. 990. We bold, therefore, that plaintiff’s objection was not available in tbe form and at tbe time made. Neither of tbe objections raised any question as to tbe facts pleaded constituting a proper counterclaim in this action (if well pleaded), and as this could only have been raised by demurrer it is unnecessary to pass upon such question. First Nat. Bank v. Laughlin, 4 N. D. 391, 61 N. W. 473; Noble Twp. v. Aasen, 8 N. D. 77, 76 N. W. 990. Numerous other objections to tbe counterclaims are now for tbe first time raised. They need not be specified as they are covered by our answer to other contentions of respondent, or were waived by not including them in bis objections to tbe pleading in tbe trial court. First Nat. Bank v. Laughlin, supra. We conclude that tbe court erred in sustaining respondent’s objections, on tbe grounds stated. Tbe order denying appellant’s motion is reviewable on appeal from tbe judgment, under § 7226, Rev. Codes 1905. Tbe defendant was entitled to judgment upon bis counterclaims on bis motion submitted October 28, 1910, as against any objection made or considered by tbe trial court. Section 6863, Rev. Codes 1905, provides for a reply to a counterclaim. Section 6878 provides that every material allegation contained in a counterclaim not controverted by a reply shall, for tbe purposes of tbe action, be taken as true; and § 6864 authorizes the defendant to [517] move, on notice of not less than ten days, for such judgment as he is entitled to upon the statements of his counterclaim, in case the plaintiff fails to reply or demur thereto within the time prescribed by law. These provisions are directly in point, and were authority for the motion submitted October 28, 1910, by defendant for judgment upon the counterclaims. See also Power v. Bowdle, 3 N. D. 107, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404; Heebner v. Shepard, 5 N. D. 56, 63 N. W. 892; Noble Twp. v. Aasen, 8 N. D. 77, 76 N. W. 990; Dunham v. Travis, 25 Utah, 65, 69 Pac. 468; Jarvis v. Peck, 19 Wis. 74; Moyer v. Gunn, 12 Wis. 386. In the absence of some reason in this instance for requiring evidence to be submitted, the defendant was entitled to judgment. His motion was not denied on the ground that the court, in the exercise of any discretion vested in it, desired to hear evidence, and the nature of the counterclaims was not such as to make the submission of evidence necessary to the entry of judgment, as might be in the case of an accounting or assessment of damages. The foregoing are all the questions necessary to be decided upon this appeal. The judgment of the District Court is reversed, and it is directed to enter a judgment in appellant’s favor canceling the notes in controversy upon his depositing in that court a deed, properly executed, conveying to the respondent the premises described in the deed set out in appellant’s answer. The appellant will recover his costs.