Hackett Digger Co. v. Carlson

In Banc. This action was instituted to collect the sum of $543.70 owing to defendant from plaintiff for goods, wares and merchandise. The amount so owing is admitted in the answer. A first further and separate answer, however, pleaded by way of payment, counterclaim, recoupment, offset and affirmative relief alleges in part as follows:

"That on the 18th of April, 1925, this defendant was indebted to the plaintiff in the sum of $1,043.70 and no more, part of which is the same said sum mentioned in plaintiff's complaint; that on said date there was due this defendant from Archie Mason, a contractor of the City of Portland, Oregon, the sum of $1,304.00 and that on said date this defendant sold, assigned, and set over unto the plaintiff herein, all of said sum of money and in said assignment constituted and appointed the said plaintiff herein, attorney for the defendant, which said appointment was irrevocable and that plaintiff accepted said assignment and said appointment and the said Archie Mason accepted the same and agreed to pay said money unto the plaintiff and the plaintiff undertook to protect itself and this defendant under said assignment and to make collection of said money and at all times since the date of said assignment to this date, the plaintiff has held said assignment and said account and said powers and is still the irrevocable attorney of the defendant under said assignment for said collection.

"That thereafter, namely, on or about the 5th of June, 1925, the plaintiff collected thereupon the sum of $500.00, which said plaintiff received for the use and benefit of this defendant.

"That at all times since plaintiff has kept and retained the balance of said assignment in the sum of $804.00 and that said sum is secured by a bond and undertaking which a Mr. Moon of the plaintiff, executed with the said Archie Mason and that the plaintiff has failed and neglected to use reasonable and ordinary care in the matter of the collection of said balance of $804.00 and has carelessly and negligently while the irrevocable attorney of this defendant, failed to take any steps or bring any procedure to enforce said collection and has had a reasonable time in which to do so and that there is now due this defendant thereunder the full sum of $804.00, and after deducting the said sum of $543.70 would leave a balance due this defendant of the sum of $260.30.

"That on the 21st of January, 1926, this defendant by and through Henry S. Westbrook, his attorney, made a written demand upon the plaintiff for the payment of the said sum of $260.30 and that since said demand plaintiff has kept and retained said assignment and said irrevocable authority as attorney and has failed and declined to make said collection or to pay said sum unto this defendant and that the full sum of $260.30 with interest at 6% from January 21, 1926, is now due, payable and unpaid from the plaintiff to this defendant and that all sums due the plaintiff have been fully paid, satisfied and discharged as hereinbefore alleged and stated."

Defendant demanded judgment against plaintiff for the sum of $260.30 and recovered judgment for the sum of $155.70 based upon a unanimous verdict of the jury. The reply put in issue the affirmative matter in the answer. Plaintiff appeals assigning two errors as follows: First, the court erred in overruling plaintiff's motion for a new trial; second, the court erred in entering a judgment on it at all.

AFFIRMED. The assignments of error do not conform to the rules of this court. The only argument in the brief is that the further and separate answer does not state facts sufficient to constitute a counterclaim. Plaintiff first presents its contention that the further and separate answer is based on a tort. Action grounded in tort cannot be counterclaimed in an action on contract:Chance v. Carter, 81 Or. 229 (158 P. 947); Kondon v.Aylsworth, 81 Or. 225, 228 (158 P. 946). Its argument is that defendant seeks to recover damages because plaintiff failed to collect from one Archie Mason the account assigned to plaintiff for that purpose. Defendant's answer does not plead a tort. It is an action on a breach of contract. A tort is defined: "A private or civil wrong or injury. A wrong independent of contract." Baldwin's Century Ed. of Bouvier's Law Dictionary, 1181. The affirmative answer being an action for breach of contract is not a tort: Meadow Valley Land Co. v. Manerud, 81 Or. 303, 306 (159 P. 559). Not every action for damages is in tort.

The other contention is that the facts stated in the affirmative answer are not sufficient to constitute a counterclaim because defendant's assigned claim was unliquidated. Defendant assigned to plaintiff his unliquidated account against Archie Mason for a valuable consideration. The assignment was in writing and contained an irrevocable power of attorney. Plaintiff collected $500 from said Mason and gave defendant credit for that amount. It did not take any steps to force payment from Mason. Plaintiff still retains the assignment. The defendant demanded that he collect the account or return the assignment prior to the commencement of this action. Plaintiff has failed to do either. The only issue was that raised by the affirmative answer and reply to the effect that Mason did not owe the amount which defendant claims he did. In substance that was the sole issue to be tried. Evidence was introduced by both parties and the jury returned a verdict as stated above. There was evidence adduced by defendant to the effect that said Mason owed defendant the full sum of $1,199.40; that plaintiff collected from said Mason the sum of $500 leaving due from Mason on said assigned account the sum of $699.40. The amount owing by defendant to plaintiff was $543.70. The verdict was for the difference between the amount owed by Mason on said assigned account and the amount owed by defendant to plaintiff. The difference is stated in the verdict of the jury.

The authorities permit the assignment of an unliquidated claim: Wait v. Wheeler Wilson Co., 23 Or. 297 (31 P. 661). "The purpose of the statute permitting a defendant, in his answer, to set up a counterclaim was to prevent circuity of action, multiplicity of suits, unnecessary delay and expense to litigants." McCargar v. Wiley, 112 Or. 215, 224 (229 P. 665).

"A counterclaim is shown to be more comprehensive than the old set-off, in that the latter could not be resorted to in an action to recover unliquidated damages, — that is, damages which could not be ascertained by mere calculation without the intervention of a jury. But in order to be available as a counterclaim, however, damages need not be liquidated." 1 Sutherland, Code Pleadings, p. 376, § 631.

1 Bancroft, Code Pl., p. 553, § 373, note 16; Id., pp. 553-559, in same section, note 4; Id., pp. 554, 555, § 374; La GrandeNat. Bank v. Oliver, 84 Or. 582, 586, 587 (165 P. 682); 24 R.C.L., p. 850, § 54, p. 856, § 60.

It is contended by plaintiff that the counterclaim is fatally defective because it does not allege that the amount of the assigned claim had not been lost to defendant. This point, we think, was not well taken. The complaint shows that the claim was in writing; that the assignment contained an irrecoverable power of attorney; that plaintiff retained the assigned claim and refused to either return it to defendant or to give defendant credit for the amount thereof. The counterclaim was not moved against or demurred to. After verdict it is sufficient. Every intendment and presumption will be indulged in favor of a pleading after verdict and when issue has been joined on the facts alleged and determined by a jury: Sig. C. Mayer Co. v. Smith, 112 Or. 559, 561 (230 P. 355); McHargue v.Calchina, 78 Or. 326 (153 P. 99); Cooper v. HillsboroGarden Tracts, 78 Or. 74 (152 P. 488, Ann. Cas. 1917E, 840);Oregon Engineering Co. v. West Linn, 94 Or. 234 (185 P. 750); Bailey v. Wilson, 34 Or. 186 (55 P. 973). Plaintiff should have either sued upon the assigned claim or returned it to defendant. Plaintiff cites Brockhausen v. Toklas, 64 Wash. 150 (116 P. 668). Therein the court held that an allegation that the statute of limitations had run against a claim was an absolute essential. Here the question of statute of limitations is not involved in any degree. Plaintiff could not retain the claim, thus prevent defendant from taking the necessary action to enforce the payment, and at the same time refuse to act on the claim itself. The assigned claim as proved in the instant action exceeded the amount defendant owed the plaintiff. Defendant was entitled to the benefit of that account.

The counterclaim must be sufficient in itself, that is, it must state facts sufficient to constitute a cause of action by the defendant against the plaintiff. If it fails so to do plaintiff may take advantage of that failure in this court for the first time. But the court will indulge every intendment in favor of the pleading when not attacked before verdict. It is unnecessary for us to determine whether or not the counterclaim was demurrable. The parties tried to the jury the issue framed by it and the reply. The only issue tried was the amount owing by said Mason on the assigned claim. No objection was made to the testimony pertinent to that issue. It is now too late to consider a demurrer thereto: Meadow ValleyLand Co. v. Manerud, 81 Or. 303, 306 (159 P. 559).

The judgment is affirmed. AFFIRMED.