Kuechle v. Springer

Mr. Presidihg Justice Adams

delivered the opinion of the court.

The evidence in this case discloses a deliberate, premeditated, malicious and cunningly devised scheme, by the defendant Springer and his confederates, to defraud, by means of the worthless notes of an insolvent person, unsecured by anything of value, any person whom they could induce to purchase the notes or take them in payment for anything of value, and that the plaintiff fell a victim to this scheme. The fraud, besides being proved by the plaintiff’s evidence, is impliedly admitted by the defendant’s failure to produce any evidence in contradiction of it.

The chief contention of appellee’s counsel is that the proceedings and decree of the Wisconsin court, in which the deed from plaintiff and her husband to .John E. Maginnis was cancelled, is a bar to the present suit. Counsel contend that the prosecution of that suit by the plaintiff to a final decree was a rescission of the contract between her and John E. Maginnis, and precludes her from maintaining the present suit. Whether this contention can be sustained depends on the facts. What are the facts and the relation between the parties 1 The plaintiff in the present suit sues the defendant, Springer, for damages for his fraud, resulting in injury to her. Springer was not a party to the agreement for the deed from plaintiff to Maginnis, nor is he a party to the deed. He has no legal interest in either of those instruments. The sole object of the Wisconsin suit was the cancellation of the deed. No relief was sought or granted as against Springer. The only relief granted was the cancellation of the deed.' Springer, having no legal interest in the subject-matter of the suit, was not a necessary party to the suit.

In Simpson Brick Co. v. Wormley, 61 Ill. App. 460, the suit was against Wormley and two others, and pleas were filed for all the defendants, but were subsequently withdrawn as to all defendants except Wormley, and the trial proceeded to judgment against Wormley without further, action against them. A reversal was sought on the ground that there should have been a rule on the other defendants to plead and a default as against them. The court said: “The evidence shows that no one but the defendant Wormley had any interest in the subject matter of the suit, and he was the only necessary party” (Ib. 463), and the cause was adjudged as if Wormley had been the only defendant.

“On a written agreement the parties can only be sued in the manner in which they have made themselves liable”. Barbour on Parties to Actions, p. 176.

The question, therefore, is whether plaintiff, by bringing the Wisconsin suit, to which Springer was not a necessary party, is precluded from maintaining the present action. For the purpose of the argument Springer is to be regarded as if not made a party to the Wisconsin suit. The doctrine of election between inconsistent remedies, on which defendant’s counsel rely, applies solely to the parties to a contract, as, for instance, where there has been a breach of a contract by one of the parties to the contract. It has no application as between one of the parties to a contract and a third person, a stranger to the contract.

In Nash v. Minn. Title Ins. & Trust Go., 163 Mass. 574, the court say: “In rescinding a contract, and in enforcing rights growing out of such rescission, one would expect to look only to the other party to the contract. The nature and effect of such rescission are such that they can have no consequences except as against the other party to the contract”. In that case the plaintiff had purchased certain bonds of one Davis, induced thereto by alleged fraudulent representations of the defendant corporation, and, after rescinding the contract between him and Davis, he brought suit against-the corporation for the fraud. In respect to this, the court say: “We do not think the plaintiff’s rescission of the contract, on account of the fraud, defeats their right to recover their damges from a third party, so long as they have failed to obtain satisfaction of their injury, either by a restoration or recovery of the consideration, or otherwise”. See, also, Mack v. Latta, 178 N. Y. 525. We are of the opinion that the proceedings and decree in the Wisconsin suit, for the cancellation of plaintiff’s deed to Maginnis, are not a bar to the present action.

Counsel for the plaintiff claim that their client is entitled to recover damages for the loss of her Council Bluffs property. In respect to this claim, counsel for defendant say there is no evidence that plaintiff has lost that property; also, that damages in respect to its loss are speculative and too remote. There is certainly no evidence in the record that plaintiff has lost the Council Bluffs property. It is true that evidence was offered, which, if admitted, would have tended to prove that if an encumbrance on that property, to secure payment of $3,500, should not be removed by October 12, 1906, the encumbrance might be foreclosed, but there is no evidence that it has been foreclosed. The claim for damages for the alleged loss of the Council Bluffs property is based on the assumption that if plaintiff had not been induced by the defendant’s fraud to trade for the worthless notes, and had not thus been delayed, she would have obtained the necessary money, by sale of the Wisconsin property, or otherwise, to lift the encumbrance on the Council Bluffs property, and the further assumption that, having obtained the money, she would have used it in payment of the indebtedness secured by the encumbrance. The utmost that can be said in respect to the claim is, that the 'plaintiff might, perhaps, have obtained the necessary money from another source, and that having obtained it, she might have applied it in payment of the indebtedness on the property. The damage is too uncertain and remote to be the basis for a verdict for damages. Lamb v. Stone, 11 Pick. 527; Wellington v. Small, 3 Cush. 145, 149; Bradley v. Fuller, 118 Mass. 239; I. B. & W. Ry. Co. v. Birney, 71 Ill. 391.

In the last case the court say: “Damages produced by other agencies than those causing the injury, or even by agencies remotely connected with those causing the injury, cannot be awarded as proximate or proper compensation, but only where the injury flows from the wrongful act as its natural concomitant, or as the direct result thereof. Where speculation or conjecture has to be resorted to, for the purpose of determining whether the injury results from the wrongful act or from some other cause, then the rule of law excludes the allowance of damages for such injury”.

The evidence is that the plaintiff relied solely on the sale for cash of the Merrill, Wisconsin, property, to pay the encumbrance of $3,500 and interest on the Council Bluffs property, and, to say the least, it is a matter of grave doubt, from the evidence, whether she could have thus raised the money. Plaintiff acquired her title to the Merrill property by deed from one Andrew Dunning, the sole consideration for which conveyance was the assumption by plaintiff of the payment of $3,500, secured by trust deed of the property, and payable December 7, 1906. She paid out no money for the property. Miller, witness called by plaintiff, testified: “Kuechle” (meaning plaintiff’s husband and agent) “said that the Wisconsin property was not very desirable.” “I think Kuechle said that the Merrill property was not worth a great deal.” “I think my answer on the other trial that Kuechle said the notes’ were as good as the property in Merrill was correct”. It appears from the record that the said property was sold under a decree of the Wisconsin court, in a suit for the foreclosure of the trust deed, to which plaintiff was a party defendant and appeared and answered, and that the sale was ratified and confirmed by the court December 1, 1900.

Plaintiff’s counsel also claim as damages the plaintiff’s necessary and reasonable expense of prosecuting the suit for the cancellation of her deed to Maginnis and of her agent’s trip to Merrill to show the property to Springer. The sending or going to Merrill to show the property there to Springer, and the prosecution of the suit to cancel the deed of that property to Maginnis, on discovery of the fraud, were natural consequences of the fraud, and we perceive no good reason why plaintiff should not recover her necessary and reasonable expenses in so doing. While in the view the trial court took of the cause, it was not necessary for the court to pass on the question of damages, and while we do not understand that the court did pass on that question, yet, inasmuch as counsel for the parties have discussed the question of damages, and as there must be another trial of the cause, if not settled by the parties, we have thought it expedient to make the foregoing suggestions as to damages.

The judgment will be reversed, and the cause will be remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.