Case ID: wis_32/html/0205-01.html
Source: Caselaw Access Project
Author: {"author": "LyoN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Bertschy vs. McLeod.
    
      Discontinuance of action, where there is a counterclaim.
    
    1. At tlie common law a plaintiff had an absolute right to discontinue his action, whether before or after issue joined, without leave of the court.
    2. In equity suits, under the former practice, the plaintiff might in like manner dismiss his bill; but such dismissal did not carry with it a cross bill filed by defendant.
    3. The right of discontinuance is not affected by the code, but remains the same as under the former practice, both in legal and equitable actions,
    4. In an action upon a written contract, the answer, in addition to certain matters of defense, contained an equitable counterclaim for the reformation of the contract, and also a counterclaim for damages for plaintiff’s alleged breaches thereof. The plaintiff thereupon entered a side-bar order for the discontinuance of the action on payment of defendant’s costs, and notified defendant of such discontinuance, and of his readiness to pay the costs, etc. The defendant notified the case for trial, and the court refused to strike it from the calendar on plaintiff’s motion. Held,
    
    (1.) That plaintiff could, by such an order, discontinue the cause only as to his own alleged causes of action and the defense interposed thereto, and not as to defendant’s counterclaim.
    (2.) That if plaintiff had obtained an order of the court (or of some judicial officer having power to make such orders) for the discontinuance of the cause, defendant could not have disregarded it, but should have moved to set it aside. But where a side-bar order is improperly entered by an attorney, the other party may disregard it.
    APPEAL from the Comity Court of Milwaukee County.
    This action was brought to recover an alleged unpaid balance due from the defendant to the plaintiff for a steam engine and fixtures furnished by the plaintiff to defendant, pursuant to a written agreement between the parties, a copy of which is inserted in the complaint. The answer contains, in addition to certain matters pleaded as defenses, two counterclaims, one of which alleges that the written agreement does not contain the contract made by the parties and which they intended to include therein, in that an important portion of such contract is omitted therefrom, and prays that the written agreement be reformed so as to include the omitted portion; and the other counterclaim is for damages for the alleged failure of the plaintiff to perform such contract on his part, on account of which the defendant demands judgment against the plaintiff for a sum exceeding the demand of the plaintiff.
    The plaintiff replied to such counterclaims, in effect denying the material allegations thereof. After issue was thus joined in the action, the-attorney for the plaintiff entered a sidebar rule, or order of course, with the clerk of the court, discontinuing the action on payment of the defendant’s taxable costs therein. He also, on the same day, served upon the attorneys for the defendant notice of such proceeding, and an offer to pay the defendant’s costs upon presentation of a taxed bill thereof, and a further offer to appear without formal notice before any taxing officer for the purpose of having the costs adjusted. The attorneys for the defendant immediately notified the plaintiff’s attorney that they should disregard the attempted discontinuance of the action, for the reason that after a counterclaim had been interposed the action could only be discontinued by leave of court; and they accordingly noticed the cause for trial, and caused it to be placed on the calendar for trial at the next term of the court.
    Thereupon a motion was made on behalf of the plaintiff, to strike the cause from the calendar, on the ground that the same had been discontinued. The court denied the motion, holding that the cause had not been legally discontinued, but was still pending. This appeal is from the order denying such motion.
    Mariner, Smith & Ordway, for appellant:
    
      1. A discontinuance is regular if made by an ex parte motion to the court, or an ex parte order entered in the office of the clerk. Coolce v. Beach, 25 How. Pr. B., 859; Cummins v. Ben
      
      nett, 8 Paige, 79 ; Averill v. Patterson, 6 Seld., 502; Spaulding v. R. R. Co., 12 "Wis., 607; Waite’s Annotated Code, 638-640. 2. Could defendant disregard tbe order of discontinuance, and notice the cause for trial, until he had by motion procured it to be vacated? Rex v. Wilkes, 4 Burr., 2569; Moore v. Cord, 13 Wis., 413; Jones v. Row, 15 id., 582. 3. At common law, on payment or tender, etc., of defendant’s costs, plaintiff was absolutely entitled to discontinue his action at any time before the case was submitted to a jury (Smith v. White, 7 Hill, 520; Seaboard etc. R. R Co. v. Ward, 18 Barb., 595); and in equity at any time before decree. Curtis v. Lloyd, 4 Myl. & 0., 194; Cummins v. Bennett, 8 Paige, 81; Spaulding v. R. R. Co., 12 Wis., 607. The court authorized the party on his own motion to enter a side-bar rule with the same force and effect as if made by special order. 7 Hill, 521, 522 ; 1 Salk., 178; 2 Arch. Pa., 233 ; 1 Bun. Pi., 383. Under our code practice rules for discontinuance are permitted to be entered ex parte. 12 Wis., 667; 18 Barb., 595; Sweet v. Mitchell. 19 Wis., 530; 1 Van Santv. Eq. Pr., 231; Cooke v. Beach, 25 How. Pi. R., 356. This common law and equitable right is retained under the code except only as limited by rights expressly given thereunder to the defendant; nor can it be taken away by implication, unless it be an absolutely necessary consequence of some statutory enactment. Counsel further argued that the only limitations created by the code upon plaintiff’s right of discontinuance as it previously existed, were those which necessarily follow (1) fiorn the right given to either party, after issue joined, to notice the cause for trial; and (2) from defendant’s right to interpose new matter by way of defense or counterclaim, and thereafter, in case there is no reply or demurrer within the time-limited, to move on ten days’ notice for judgment; and that in the present case, defendant not having noticed the cause for trial after issue joined, plaintiff’s absolute right to discontinue was not cut off. Seaboard etc. R. R. Co. v. Ward, 18 Bai’b., 595 ; Rees v. Van Patten, 13 How. Pa. R., 258; Oaksmith v. Suther
      land, 1 Hilt., 265.' It is not disputed that under tbe general power of tbe court to control its process and tbe orders made by it or in its name, -it may, on motion, vacate, sucb an order of discontinuance when tbe defendant would otherwise lose bis redress {Rees v. Van Patten, supra); as, for instance, where the bar of tbe statute of limitations would intervene. Van Alen v. Schermerhorn, 14 How. Pr. R., 287. The fact that plaintiff was a nonresident has been held, however, no obstacle to tbe discontinuance (18 Barb., 595; 25 How. Pr. R., 859); as also tbe fact that defendant would be deprived of tbe benefit of certain testimony already taken. 2 Till. & Sb. Pr., 880 ; 2 Whit. Pr., 189 ; Yoorhies’ Code, 521; Waite’s Ann. Code, 641.
    
      Jenkins & Elliott, for respondent,
    argued that tbe counterclaim under tbe code is analogous to tbe cross bill in equity under the old system, and “ secures to the defendant the full relief which' a separate action at law, or a bill in chancery, or a cross bill would have secured him on tbe same state of facts” {Gleason v. Moen, 2 Duer, 642); that a court of equity could not be ousted of its jurisdiction of a cross bill by admission of tbe original bill (2 Barb. Ch. Pr., 128; Wickliffe v. Olay, 1 Dana, 589; Madison's Ex'rs v. Wallace's Ex'rs, 2 Dana, 63 ; Brown v. Story, 2 Paige, 594; Seaboard etc. R. R. Go. v. Ward, 18 Barb., 595); that in replevin, under tbe old system, if plaintiff dismissed his suit, there was judgment against him for a return to defendant of the property taken {Sallcold v. Skelton, Cro. Jac., 519; Loioe v. Brigham, 3 Allen, 429; Morris on Rep., 195); and even when tbe court is without jurisdiction in tbe replevin action, and the cause is dismissed for that reason, it will not only order a return of tbe property, but will render a judgment against tbe plaintiff for tbe value in case a return cannot be bad {Booth v. Ableman, 16 Wis., 460, and 18 id., 495); that as thus, under the old practice, wherever the law permitted a defendant to assert a claim against the complainant, it did not allow the complainant to dismiss the action against him, it must be inferred that if the common law had permitted the action of counterclaim, it would not have allowed tbe plaintiff to discontinue that action by discontinuing his own. They further argued that the doctrine or practice of counterclaim is borrowed from the Eoman and Spanish law, where it is known under the name of “demand in reconvention;” andas showing that by the civil law the plaintiff can discontinue the suit only in so far as he is himself the actor, and not as to the demand in reconvention, in which the defendant is the actor, they cited Lanusse’s Syndics v. Pimpienella, 4 Martin, N. S., 439, 442, 444; Adams v. Lewis, 7 id., 405; McDonough v. Copeland, 9 La., 309; Coxe v. Downs, 9 Eob., 133-135; Doanellv. Parrott, 10 La. Ann., 703; Desirehan v. Fazende, 13 id., 307. They also cited the following cases in California under the code: Hancock Ditch Co. v. Bradford, 18 Cal., 637; Dimich v. Deringer, 32 id., 488; People v. Loewy, 29 id., 264. As to the cases in New York (Cockle v. Underwood, 3 Luer, 676; Sea-hoard etc. P. B. Co. v. Ward. 18 Barb., 595, and 1 Abb. Pr. E., 46; Pees v. Van Patten, 13 How. Pr. E., 258; Van Alen v. Schernierhorn, 14 id., 287; Oahsmith v. Sutherland, 1 Hilt, 265 ; Young v. Bush, 36 How. Pr. E., 240 ; Livermore v. Bainhridge, 42 id., 53, and 43 id., 272, 274; and, as to the general character and effect of a counterclaim, Fdbhricotti v. Launitz, 3 Sandf., 743, .and 1 Code E., N. S., 121; Farmers' L. & T. Co. v. Hunt, 1 Code E., N. S., 1; Hammond v. BaJcer, id., 105; Wiltsie v. Noriham, 3 Bosw., 162; Vassear v. Livingston, 13 N. Y., 256; Patterson v. Bichards, 22 Barb., 146; Boston Mills v. Hull, 6 Abb., N. S., 319, and 37 How. Pr. E., 299; Clinton v. Eddy, 1 Lans., 61; Gleason v. Moen, 2 Duer, 642; Miller v. Freeborn, 4 Eob., 608), counsel contended that while they are confused and contradictory, none of them show that the appellant should have been .permitted to discontinue his cause upon application to the court, much less by an ex parte rule entered by, the attorney.
   LyoN, J.

The following propositions must, we think, be conceded: 1st. At the common law, a plaintiff bad the absolute right to discontinue bis action before or after issue joined, and without leave of court. 2nd. In suits in equity, under the former practice, the plaintiff might, in like manner, dismiss his bill, but such dismissal did not carry with it a cross bill interposed by the defendant. 2 Barb. Ch. Pr., 128 and cases cited. 3d. The right of discontinuance is not affected by the code, but remains the same, both in legal and equitable actions, as under the former practice.

By the common law, neither of the counterclaims here interposed could be pleaded in the action. The one which demands a reformation of the written agreement could only be made available by a suit in equity; and the other, which demands judgment for damages for the alleged violation of his contract by the plaintiff, in excess of the plaintiff’s demand, could only be enforced by a separate action. Of course, the subject matter of the latter counterclaim might be pleaded as a defense to the action, either in whole or in part; but the defendant could not in that case recover judgment for any excess of damages sustained by him, over and above the damages sustained by the plaintiff. In brief, at the common law the defendant could only plead such matter in defense, and could not obtain in the action equitable relief, or recover a judgment for damages against the plaintiff, as he now may under proper pleadings and proofs. Waterman on Set-Off, Recoupment, etc., 471; 1 Chitty’s Pl., 569; 2 Black. Com. (Cooley’s ed.), 305, note 19. Hence, all there was of the action at the common law was the cause of action as stated in the declaration, and the defense pleaded thereto by the defendant; and that was all which the plaintiff had an absolute right to discontinue. Such right of discontinuance still remains under the present practice, and, to the extent above indicated, has been rightfully exercised in this case by the plaintiff. The plaintiff’s cause of action, and all defenses pleaded thereto which could have been pleaded as sucb under tbe former practice, have disappeared from the cause by force of the order of discontinuance.

But we are unable to perceive how it can be held, upon any logical principle, that such discontinuance necessarily carried with it those proceedings of the defendant which the code permits him to institute in the action, or rather to engraft upon it, but which are, in substance and effect, actions brought by the defendant against the plaintiff. Had these proceedings been under the common law practice, as already observed, the counterclaims interposed in this action would have been asserted in two separate and distinct actions, one at law and the other in equity, in both of which the position of the parties would be the reverse of their position in the present action. In such case, surely the discontinuance by the plaintiff of the action brought by him would not -work a discontinuance of such other actions brought against him. Why should the plaintiff’s discontinuance of his action lead to that result under the present practice? The learned counsel for the plaintiff have failed to answer this question satisfactorily, and we freely confess our inability to do so.

The cases decided by the various courts of New York upon the su eject of the right of discontinuance under the code are conflicting, and quite unsatisfactory ; and we can get but little aid from them in determining the question under consideration.

It may be stated, in support of the views above expressed, that this right or practice of counterclaim is borrowed from the civil law, where it is designated “ demand in reconvention and the Louisiana cases referred to by the learned counsel for the defendant clearly show that, by the rules of the civil law, a discontinuance of the action by the plaintiff is ineffectual to put a defendant out of court who has interposed a “ demand in reconvention.”

If the foregoing views are correct, it necessarily follows that the discontinuance of his action by the plaintiff left the issues made by tbe counterclaims and tbe reply thereto, pending in court and for trial, and tbat tbe court ruled correctly in refusing to strike tbe cause from tbe calendar. If application be made for tbat purpose, tbe county court should, under the special circumstances of tbe case, permit tbe plaintiff to vacate tbe order of discontinuance so entered by him, to the end tbat the whole controversy between the parties may be adjudicated in this action.

As to tbe point that the defendant could not properly disregard tbe order of discontinuance and' notice tbe case for trial, but tbat be should first have procured that order to be vacated, we think tbat bad tbe order been made, although erroneously, by the court or some judicial officer having power to make such orders, the point would have been well taken. The case of Jones v. Dow, 15 Wis., 582, so holds. But where a mere sidebar order, or order of course, is improperly entered by an attorney, the other party may disregard it.

By the Court. — The order appealed from is affirmed.