Weinhagen v. Hayes , 179 Wis. 62 ( 1922 )

Rosenberry, J.

The sole question presented by this appeal is whether or not the appellants are entitled to recover upon the accounting the amount of the liabilities incurred by them for attorneys’ fees in defending the action begun by the plaintiff and in asserting the cause of action set out in their counterclaim, which resulted in a judgment canceling and rescinding the contract upon which the plaintiff sued, for the reason that it was tainted by fraud. In this respect the appellants make two principal claims: first, that they are entitled to it upon general legal principles; and second, that they are entitled to it under the specific direction of this court upon the former appeal.

It is claimed that the accounting directed by this court by its mandate on the former appeal is equivalent to a separate action for damages. This position of the defendants is untenable. By the mandate of this court upon the reversal of the first judgment the defendants secured the relief for which they asked in their counterclaim and to which they would have been entitled by the first judgment rendered if the finding of the trial court had been in accordance with the determination made by this court. The mere fact that the defendants were required to appeal to this court, to sustain their contention upon their counterclaim and were successful in no way alters the cause of action set out in the counterclaim of the defendants and upon which they finally recovered judgment. An action for rescission and accounting is not two actions — it is one. ■

' It is the further claim of the appellants that, the mandate having directed that the parties be placed in statu quo, the appellants cannot be placed in statu quo until they are permitted to recover the amount of the attorney fees for which they necessarily became liable in the defense of the actipn begun by the plaintiff and in the prosecution of their counterclaim. In all actions begun and prosecuted for the cancellation and rescission of a contract upon the ground of fraud, it is one of the conditions of relief that the parties be placed in statu quo. It is the contention of the appealing defendants that in such cases recovery of attorney fees is allowed. They cite, as sustaining their contention, First Nat. Bank v. Williams, 62 Kan. 431, 63 Pac. 744; Collen v. Wright, 7 El. & Bl. 301; Godwin v. Francis, L. R. 5 Com. Pl. 295; Randell v. Trimen, 18 Com. Bench, 786; Spedding v. Nevell, L. R. 4 Com. Pl. 212; Bennett v. Gibbons, 55 Conn. 450, 12 Atl. 99; Roberts v. Heim, 27 Ala. 678, 683, and other cases.

An analysis of these cases discloses the fact that they are mainly of two classes: first, those in which punitory or exemplary damages may be allowed and in which class of cases some courts, particularly those of Connecticut, hold that a jury may take into consideration plaintiff’s expenses in the suit; or second, those in which the complaining party has been, through the fraud of the opposite party, involved in litigation and in the prosecution thereof has incurred liability for attorneys’ fees in actions other than the one in which recovery is sought. The correct rule is stated in McGaw v. Acker, Merrall & Condit Co. 111 Md, 153, 73 Atl. 731:

“The general rule is that costs and expenses of litigation, other than the usual and ordinary court costs, are not recoverable in an action for damages, nor are such costs even recoverable in a subsequent action; but, where.the wrongful acts of the defendant have involved the plaintiff in litigation with others, or placed him in such relation with others as to make it necessary to incur expense to protect his interest, such costs and expense should be treated as the legal consequences of the original wrongful act.”

In this very case this rule was correctly applied b.y the trial court. In order to protect the interest of the parties in the property which was the subject of the controversy, the appealing defendants were required to and did expend' certain amounts for expenses of litigation, including attorney fees. These amounts the trial court correctly allowed in the accounting and the appealing defendants had judgment therefor.

By the statutes of Wisconsin, - secs. 2918, 2919, 2920, 2921, 2927, and 2928, provision is made for. the allowance and taxation of costs and fees in actions in the circuit court. It is provided by sub. (7), sec. 2918, “. . . but in all equitable actions and special proceedings costs may be allowed or not to any party, in whole or in part, in the discretion of the court.” Sub. (1), sec. 2921, “. . . that in actions at law on contract the costs, exclusive of disbursements, shall not in any one case exceed twenty-five dollars. ...”

This was an action at law, and although an equitable counterclaim was interposed it must be held that the defendants can recover only such costs and fees in this action as are provided by law. Baker v. Becker, 153 Wis. 369, 141 N. W. 304.

The amount recoverable as attorney fees is fixed by statute and no greater sum can be recovered for liability incurred for attorneys’ fees in the prosecution or defense of this action. This is in accord with the great weight of authority in other jurisdictions. Garner, Neville & Co. v. Leverett, 32 Ala. 410, 414; Williamson v. Williamson, 1 Met. (Ky.) 303; Salmina v. Juri, 96 Cal. 418, 31 Pac. 365; Patterson v. Northern Trust Co. 286 Ill. 564, 122 N. E. 55; 7 Ruling Case Law, 781; 15 Corp. Jur. 20, and cases cited.

To hold otherwise would be to open the door to oppression and extortion, to penalize persons who appeal to the courts to adjudicate their differences. It would not be in accord with sound public policy. The temptation to institute litigation for the purpose of recovering from the opposite party generous fees would be very great and no doubt lead to great abuses. Stringfield v. Hirsch, 94 Tenn. 425, 29 S. W- 609; Joplin Gas Co. v. Joplin, 182 Mo. App. 422, 167 S. W. 660.

By the Court. — Judgment'affirmed.