decided: January 30, 1893.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF KANSAS.
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MR. JUSTICE SHIRAS, after stating the case, delivered the opinion of the court.
This was an action to recover damages for an alleged breach of warranty, and we are called upon to consider the legal effect of a plea to the action, setting up a former recovery by the plaintiffs.
The transaction out of which the controversy arose was a sale by J.A. Field & Co., defendants in error, to Clement, Eustis & Co., plaintiffs in error, of a cane mill for the sum of $1850, whereof $500 was payable in cash, and the rest in notes secured by a chattel mortgage on the mill. One of the terms of the sale was a warranty by the vendors that the mill would do as good work as any other mill for a similar purpose, and should be of good material and workmanship.
Payment of the notes not having been made, J.A. Field & Co. brought an action of replevin, under the provisions of the chattel mortgage, to recover possession of the mill, or, in default or recovering actual possession, to recover a money judgment for the unpaid purchase money, amounting to $1350 with interest. To the declaration in replevin, Clement, Eustis & Co. pleaded that, by reason of delay in delivering
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the mill and of its failure to come up to the terms of the warranty, they had been damaged in an amount largely in excess of the unpaid purchase money.
The issue thus raised was submitted to a jury, with the following instructions:
"The defendants' damages would be, if entitled to damages, the whole of the cane lost by the delay caused by plaintiffs' fault and failure of the mill to work up to its capacity, and also the loss of juice during that time caused by the fault of the mill in not properly pressing it from the cane, and any expenses incurred in repairs.
"And should you find damages for defendants, and that such damages equaled or exceeded the entire debt due on the mill, then you will find for the defendants.
"If you find damages, but they do not equal plaintiffs' debt, then you will find for plaintiffs and state the value of plaintiffs' interest in the mill, which would be their debt and interest, less the damages."
Under these instructions the jury found for the plaintiffs, and assessed the value of the plaintiffs' special interest in the property at the sum of $1151.20.
As the amount of plaintiffs' unpaid purchase money, at the time of the trial, was $1350 with interest, it is obvious that the jury allowed the defendants, as a set-off, damages in an amount of between two hundred and three hundred dollars.
Subsequently, Clement, Eustis & Co. brought the action which is now before us, claiming damages in a large sum of money arising out of an alleged delay in the delivery of the mill, and by reason of an alleged breach of the warranty that the mill would do its work as well as any other mill, and be of good material and workmanship.
To this action, J.A. Field & Co., the defendants therein, pleaded a former recovery by Clement, Eustis & Co., in that in the previous suit in replevin, they had set up the same claims for damages asserted in the present action, and had been allowed credit for them by the jury in finding their verdict.
The parties waived a jury, and agreed that the action might be tried by the court.
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Thereupon, J.A. Field & Co., to sustain their plea of a former recovery, put in evidence the record of the suit in replevin. The court was of opinion that the record of the proceedings in the replevin suit sustained defendants' plea of a former recovery, and was complete bar to the plaintiffs' cause of action in the present case, and entered judgment accordingly in defendants' favor.
It is claimed in this court that the court below erred in its judgment sustaining the plea of a former recovery, because the record in the replevin suit shows that the question of damages for breach of contract and of warranty was withdrawn from the jury by the court, except to prevent a recovery therein.
We do not so read the record. On the contrary, it plainly appears that the court instructed the jury that they were at liberty to find damages in defendants' favor, and to set off the amount of such damages against the plaintiffs' debt. It is true that the court told the jury that should they find damages for defendants equaling or exceeding the entire debt due on the mill, they should then find for the defendants. This instruction may have been understood to mean that, if defendants' damages exceeded the amount of plaintiffs' claim, the jury could not go further and find a verdict in defendants' favor for the amount of such excess. And in such an event it may be that, so far as defendants' damages exceeded the plaintiffs' debt, the defendants would not have been precluded from maintaining a subsequent action for such excess.
But the jury's verdict shows that, while they allowed damages in defendants' favor, they found such damages to have been for less than the amount of plaintiffs' debt, and, accordingly, if the defendants were bound by that finding of the jury, there was no excess of damages on which they could base a subsequent suit.
In Burnett v. Smith, 4 Gray, 50, was ruled that, in an action to recover damages for a false representation as to the value of certain corporation stock, it was competent for the plaintiff to avail himself of such false representation in reduction of damages in the action on the note given for the stock.
Another objection urged to the judgment of the court below
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is that the action in replevin was an action founded upon tort, and not upon contract, that a set-off can, under the Code of Kansas, only be pleaded in an action founded on contract, and that hence the defendants in the replevin suit in question could not legally plead a set-off of the damages caused by the breach of warranty.
The Supreme Court of Kansas disposed of this contention in Gardner v. Risher, 35 Kansas, 93, which, like the present, was a case wherein the plaintiff sought, by a writ of replevin, to enforce the provisions of a chattel mortgage, and the defendant set off against the notes secured by the mortgage certain damages incurred by reason of breaches of a contract. The court held that, as the plaintiff's claim was really founded on contract, the defendant could, notwithstanding that the form of the action was replevin, avail himself, by way of set-off, of damages caused by the failure of the other party to the chattel mortgage to comply with his contract.
The later case of Kennett v. Fickel, 41 Kansas, 211, is cited on behalf of plaintiffs in error as holding that a set-off cannot be pleaded as a defence in an action of replevin, because such an action is founded upon the tort or wrong of the defendant, and not upon contract. An examination of these two cases satisfies us that they are not irreconcilable. They were both suits in replevin, but, in the earlier case, the plaintiff's cause of action originated in the provisions of a chattel mortgage, and the suit in replevin was resorted to in pursuance of one of those provisions, and was regarded by the court as, in substance, founded on contract. The later case was founded on a wrongful taking by the defendant of property of the plaintiff, and was, therefore, in substance as well as form an action ex delicto.
The replevin suit pleaded in answer in the present case was substantially a proceeding in enforcement of contract provisions, and therefore within the decision in Gardner v. Risher, 35 Kansas, 93.
Moreover, the record shows that, in point of fact, the defendants did plead a set-off in the replevin suit, and had the benefit of such a plea, and it seems to us that they cannot
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now be heard to say that the plea was not allowable in such case. There is high authority for saying that, as that question was a subject of judicial inquiry in the action of replevin, it would not be open elsewhere, even in behalf of the plaintiffs in replevin, against whose contention the set-off was allowed. Bartlett v. Kidder, 14 Gray, 449, 450; Merriam v. Woodcock, 104 Mass. 326.
Much less can the defendants in the replevin suit, at whose instance and in whose favor the set-off was allowed, be permitted afterwards to escape from the effect of a judicial inquiry invoked by themselves. The use of a so-called action of replevin as a mode of enforcing provisions of a contract in writing seems scarcely consistent with the nature and purpose of that form of action, as understood and enforced in England and the older States of this Union; but, as the Supreme Court of Kansas, in the case already cited, has approved of such a proceeding, and has likewise held that it is competent, for a defendant in replevin, to set up as a defence unliquidated damages arising out of a breach by the plaintiff of the contract, and as the plaintiffs in error in the present case themselves resorted to such a defence and obtained its benefits, it was not error in the Circuit Court of the United States for the District of Kansas to hold that the plaintiffs in error were precluded by the verdict and judgment in the replevin suit.
The judgment of the Circuit Court is
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