Wallace v. Perry

GIVENS, Justice.

Appellant sued respondents for $1,865, paid by appellant to respondents on claimed false representations as to the efficacy of a well drilled by respondents for appellant.

Substituted service of summons was by publication and mail on respondents, then resident in Arizona; and to acquire jurisdiction, attachment was issued and levied on property belonging to respondents within Idaho on the theory the cause of action was on an implied contract for the payment of money.

Respondents did not appear within the statutory time and default was entered, and upon a default trial, judgment was rendered against them May 11, 1951 and execution sale held July 5, 1951. Respondents specially appearing, moved September 1, 1951 to set aside the judgment.

July 3, 1952 the court vacated the judgment on the ground the action was not upon a contract, express or implied, but one in fraud and the affidavit of attachment was insufficient to support the writ.

The affidavit for the attachment, instead of stating the action was on an implied contract, stated it was upon a cause of action as set forth in the complaint on file herein, which by reference thereto was incorporated and made a .part of the affidavit. By reference and incorporation, the allegations of the complaint were as much a part of the affidavit as though set forth therein in extenso. Collins v. Brown, 19 Idaho 360 at pages 363-364, 114 P. 671; In re Dargie’s Estate, 33 Cal.App.2d 148, 91 P.2d 126 at page 131; Woodworth v. Skeen, 153 S.C. 362, 150 S.E. 764. Being incorporated by reference in the affidavit, if the complaint states a cause of action on implied contract, it speaks for itself. If it does not state a cause of action on implied contract, labeling it an implied contract in the affidavit would not make it such and would be ineffective.

The crucial question, therefore, is whether the complaint sufficiently waives the tort and states a cause of action on an implied contract. Foore v. Simon Piano Co., 18 Idaho 167, 108 P. 1038.

Respondents urge that because the fraud statute of limitations applies to a suit on an implied contract where the basis thereof is. fraud, by a parity of reasoning, fraud so permeates and dominates the implied contract action that attachment will not lie, citing Thomas v. Gordon, 68 Idaho 254, 192 P.2d 856.

That case relied on Common School Dist. No. 18 in County of Twin Falls v. Twin Falls B. & T. Co., 52 Idaho 200, 12 P.2d 774, where Judge Leeper exhaustively reviewed the diverse authorities. Thus, the Court advisedly adopted the rule that the fraud statute of limitations applies to a suit on implied contract where fraud is the basis or the reason why there should be restitution. Among other California cases cited therein, MacDonald v. Reich & Lievre, 100 Cal.App. 736, 281 P. 106, has been referred to frequently and it has been followed both in California and elsewhere on this proposition without deviation, except in certain cases not pertinent herein. Mary Pickford Co. v. Bayly Bros., 12 Cal.2d 501, 86 P.2d 102, at page 112, and see Adams v. Harrison, 34 Cal.App.2d 288, 93 P.2d 237, at page 241. As will hereafter appear, California has conclusively held that in a suit on implied contract based on fraud, where the tort is waived, attachment will lie; consequently, that such an action may be barred by the fraud statute does not so affect the •choice of remedy as to prevent the application of other principles, pertinent to a contract action.

Respondents contend the complaint herein states solely a cause of action for fraud and does not waive the tort and is not cast in the form necessary to set forth a common money count or an action on an implied ■contract and that it shows something of value was received by appellant, in that water was available at a depth of 225 feet and respondents had drilled the well to a depth of 503 feet and that certain casing pulled from the well was usable.

Moser v. Pugh-Jenkins Furniture Co., 31 Idaho 438, 173 P. 639, L.R.A.1918F, 437; held that, in an action for money had and received, the ground for recovery being fraud, the particular facts constituting the fraud must be alleged definitely and positively; such allegations, however, not defeating the cause of action for money-had and received or the concomitant cause of action on implied contract. It was, therefore, incumbent upon appellant to allege the fraud as the reason why, in equity and good conscience, the amount of money paid by him to respondents for the assertedly useless well should be returned and the same did not vitiate the complaint as stating a cause of action on the contract. Yosemite Growers Co-op Ass’n v. Case-Swayne Co., 73 Cal.App.2d 806, 167 P.2d 541, at 543; Los Angeles Drug Co. v. Superior Court of Los Angeles County, 8 Cal.2d 71, 63 P.2d 1124.

“On the other hand, where the facts show a misappropriation of funds one may waive the tort and sue upon an implied contract for money had and received. * * * Such an action is based upon the tort of embezzlement, yet the action is one ex contractu, in which the plaintiff may have a writ of attachment.” Hill v. Superior Court, 16 Cal. 2d 527, 106 P.2d 876, 877, at page 879, citing McCall v. Superior Court, 1 Cal.2d 527, 36 P.2d 642, 95 A.L.R. 1019.

“ ‘The action in assumpsit in such cases is not upon the failure of consideration or upon the fraud practiced, but upon the promise or obligation set up by the law to afford to the injured party additional relief. Failure of consideration, duress, fraud, or mistake, are elements only in the sense that they ■furnish a foundation upon which to rest the rescission from which flows the promise or obligation.’ * * * ‘The action is not on the fraud, or failure of consideration, or duress, but upon quasi contract imposed by law.’ ” Miller v. McLaglen, 82 Cal.App.2d 219, 186 P.2d 48, at page 52-53, again citing McCall v. Superior Court, supra; Filipan v. Television Mart, 105 Cal.App.2d 404, 233 P.2d 926.

Respondents cite McCall v. Superior Court, 1 Cal.2d 527, 36 P.2d 642, supra, in support of the proposition that if anything of value has been received in connection with the transaction, attachment will not issue, even though the suit is on implied contract. The thesis of that case is a continuation of Philpott v. Superior Ct., 1 Cal. 2d 512, 36 P.2d 635, 641, 95 A.L.R. 991, which was cited and followed with approval in Addy v. Stewart, 69 Idaho 357, at page 362, 207 P.2d 498, to the effect that where money is obtained by fraud, the law -will! imply a promise to repay it. Both the Philpott and McCall cases, supra, involved the form and substance of actions and the latter, whether attachment may issue in a suit brought on an implied contract based upon fraudulent representations.

While these and other cases discuss rescission and executory contracts, they ultimately indicate that neither is of importance as bearing on the right of attachments

“Indeed, under the facts here present, no rescission would seem to be required other than the initiation of the action itself, as plaintiff has received nothing of value belonging to the defendants * * * and, moreover, the common-law action of debt might lie also in such case.” Philpott v. Superior Court, supra.

“It would be perplexing to have the right of attachment in all other quasi contract cases and to deny it in cases of fraud. As already observed, the law implies the promise and affords an added remedy if the injured party elects to follow it. The action is not on the fraud, or failure of consideration, or duress, but upon quasi contract imposed' by law. It was through failure to concede this additional relief that error crept into the decision in the Stone Case [214 Cal. 272, 4 P.2d 777, 77 A.L. R. 743].” McCall v. Superior Court, supra [1 Cal.2d 527, 36 P.2d 647].

The following pronouncement in the Philpott case, supra, is compellingly pertinent in characterizing the complaint herein:

"Plaintiff apparently is content to merely seek a return from defendants of money given them, with interest, forgetting and foregoing all other elements of injury. Is it not plain, therefore, that he has waived the tort of defendants and has come into court relying solely upon the promise created by law to return to him the consideration paid upon the contract?”

So herein. The complaint alleges the expenditure by appellant of $1,672.68 to secure a well furnishing the water supply, which it is alleged respondents did not furnish by the well they drilled; but appellant seeks only the return of $1,865 which, it is alleged, was paid respondents for their — to appellant —useless work. Though the tort is the cause or the reason why. there is an implied contract, i. e., an action for money received, on the theory it would be inequitable for respondents to retain the money because of fraudulent representations, the action is, nevertheless, ex contractu. The McCall case, supra, further expressly stated:

“In fact, there is little, if any, difference between the promise implied by law i.n the case before us, where the transaction was induced by fraud, and .a case of total failure of consideration such as S[anta] C[laras] V[alley] Peat Fuel Co. v. Tuck, 53 Cal. 304; Mahony v. Standard Gas Engine Co., 187 Cal. 399, 405, 202 P. 146; Bennett v. Superior Court, 218 Cal. 153, 21 P. 2d 946.

“The action in assumpsit in such cases is not upon the failure of consideration or upon the fraud practiced, but upon the promise or obligation set up by the law to afford the injured party additional relief. Failure of consideration, duress, fraud, or mistake, are elements only in the sense that they furnish a foundation upon which to rest the rescission from which flows the promise or obligation. We therefore conclude that in such cases when suing for the consideration paid, the injured party may, where he has received nothing of value, have the writ of attachment.”

The following cases are to the same effect: Rice v. Wheeling Dollar Savings & Trust Co., 155 Ohio St. 391, 99 N.E.2d 301; Cleveland v. San Antonio Building & Loan Ass’n, 148 Tex. 211, 223 S.W.2d 226, 12 A.L.R.2d 781; Nutzel v. Kozdron, 64 Cal.App. 2d 908, 149 P.2d 411; Warner Mfg. Co. v. Standard Interstate Mfg. Co., 97 Cal.App.2d 494, 218 P.2d 131; Filipan v. Television Mart, 105 Cal.App.2d 404, 233 P.2d 926, supra; Republic of Poland v. Pan-Atlantic, D.C., 92 F.Supp. 330; Mason v. Moore, 221 Ky. 481, 298 S.W. 1100.

Clearly the complaint herein may be construed as showing there was some kind of contract between appellant and respondents whereby respondents were drilling a well for appellant; that because of alleged fraudulent representations on the part of respondents relative thereto, appellant paid respondents money without consideration and thereby there came into play the recognized cause of action on an implied contract for the repayment to appellant of the money paid by appellant to respondents in connection with the contract. This principle has been recognized by this Court under a sufficiently similar situation to justify attachment, Carney & Co. v. Murphy, 68 Idaho 376, 195 P.2d 339, in accordance with Addy v. Stewart, 69 Idaho 357, 207 P.2d 498, supra.

Weaver v. Superior Court, 93 Cal. App.2d 729, 209 P.2d 830, at page 832, construes the McCall case, 36 P.2d 642, supra, with reference to the point urged by respondents, to the effect that if there has been only partial failure of consideration, attachment will not lie. There is no allegation appellant used the pulled pipe or that he used the hole drilled by respondents, Eastern Idaho Loan & Trust Co. v. Blomberg, 62 Idaho 497, at page 507, 113 P.2d 406; thus, the holding relied upon by respondents does not apply to the allegations herein. Furthermore, this Court has held:

“In case the writ [of attachment] is sought against the property of a nonresident, it is sufficient to set forth in the affidavit just what is required by the second subdivision of said section 4303 [now 8-502, I.C.], and no more.” Kerns v. McAulay, 8 Idaho 558, at page 568, 69 P. 539, 541; Foore v. Simon Piano Co., 18 Idaho 167, at page 174, 108 P. 1038.

The second paragraph of Section 4303,. Rev.Codes, now Section 8-502, Idaho Code, makes no requirement as does the first paragraph that the affidavit must show the lack: or failure or valuelessness of any security. The affidavit, therefore, was not deficient in this particular.

We are aware that the attachment statute-in California has a section which we do not have which permits attachment for fraud,, but none of the cases cited herein from California was based upon that portion of the statute. All considered only suits on implied contracts in connection with the issuance of attachments.

That the amount of recovery is uncertain and has to be proved does not defeat attachment. Eaton v. Queen, 78 Cal.App. 2d 571, 177 P.2d 997, at page 999. The attachment, therefore, was valid and the court had jurisdiction of respondents and it was-error to set aside the judgment for the reason assigned.

However, we are impressed with this portion of respondents’ affidavit in support of the motion to vacate the judgment:

“ * * * That Affiant and his son at all times have understood that the above entitled action was one for fraud,. # * *»

■and they may have been unwittingly misled to their prejudice.

In the above California cases, there is considerable discussion as to whether a suit on an implied contract, as herein, is legal or equitable, with ultimate recognition that, though an action at law, equitable principles may be applied in connection therewith.

It is always better to hear a case on its merits than on default. Pittock v. Pittock, 15 Idaho 47, at page 52, 96 P. 212; Sessions v. Walker, 34 Idaho 362, 201 P. 709; Dellwo v. Petersen, 34 Idaho 697, at page 705, 203 P. 472.

The showing being wholly written, we may independently exercise our discretion. Curtis v. Siebrand Bros. Circus & Carnival Co., 68 Idaho 285, at page 290, 194 P.2d 281.

It is, consequently, consonant with justice and fair dealing that the judgment be set aside, if respondents, within twenty days of the going down of the remittitur herein, serve and file an answer showing a meritorious defense; otherwise, the order setting aside the judgment will be reversed and the judgment approved.

' Costs to appellant.

PORTER, C. J., and TAYLOR and THOMAS, JJ„ concur.