Case Name: Devereux, Appellant, vs. Peterson, Respondent
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1906-01-09
Citations: 126 Wis. 558
Docket Number: 
Parties: Devereux, Appellant, vs. Peterson, Respondent.
Judges: 
Reporter: Wisconsin Reports
Volume: 126
Pages: 558–562

Head Matter:
Devereux, Appellant, vs. Peterson, Respondent.
December 14, 1905
January 9, 1906.
.Pleading: Amendment: Partnership: Settlement: Subsequent payments: Recovery: Parol evidence: Answer construed: Fraud: Burden of proof.
.1. Where, by amendment of the complaint at the trial, plaintiff alleges new facts it is proper to permit defendant to amend his answer to meet the new contention.
2. Although by a -written settlement of partnership affairs one partner was discharged from all legal liability to pay a debt of the firm to his copartner, yet if, recognizing a moral obligation, he did pay such debt without fraud of the copartner, the legal effect of the settlement is of no significance,; and in an action to recover the amount so paid on the ground that the payment was induced by fraud, parol evidence of all the circumstances of the transaction is admissible.
■3. In an action involving the question whether certain lodge moneys loaned by one partner to his firm had been repaid, allegations in an answer — setting forth a habit of depositing such moneys in the cash drawer and stating that when such sums were paid back it had been done either by cash or check and that the slip in the drawer representing the deposit was then and there destroyed — are held to allege merely the custom which accompanied such repayments as were in fact made, and not to contradict a further allegation of the answer that the amount in suit had never been repaid.
4. In an action to recover moneys alleged to have been obtained by false representations the burden is upon the plaintiff to prove both the making of the alleged representations and their falsity.
Appeal from a judgment of the circuit court for Washburn county: A. J. ViNje, Circuit Judge.
Affirmed.
Action in deceit to recover tbe sum of $194.25 claimed to have been paid by plaintiff to defendant by reason of certain false representations. Plaintiff and defendant having, prior to June 6, 1903, been copartners in running a country store, made settlement on that day, by wbicb plaintiff bought out the defendant, taking over all the stock, credits, business, and assuming all the debts, and paid defendant $600, the amount found due on that settlement. Defendant had been treasurer of a local lodge, called I. S. W. A., and from time to time had placed the moneys coming into his hands as such treasurer with the moneys of the firm, placing memorandum slips in the cash drawer. Two days after the settlement he, as alleged, represented to plaintiff that there were $255.50 of such moneys which had been deposited with the cash drawer of the business and had not been repaid, and which had been due by the firm to the defendant as treasurer, whereby plaintiff was induced to recognize such liability by crediting the lodge $61.25 upon rent owing by it to the firm and by paying to the defendant the balance of $194.25. The complaint alleges that the representation was false, by reason of the fact that the defendant had previously withdrawn all moneys of the lodge deposited in the cash drawer. Answer was a general denial with some explanation as to the circumstances under which the moneys of the lodge were deposited with the firm. At the close of the trial the jury found a verdict of no cause of action, upon which, after denial of motion for a new trial, judgment was rendered in favor of defendant for costs, from which plaintiff appeals.
A. L. Bugbee, for the appellant.
L. H. Mead, for the respondent.

Opinion:
Dodge, J.
The trial of this action proceeded upon such departure from, and confusion of, the issues joined by the pleadings as to render many of the questions debated, and the errors assigned, immaterial to the result. The issue as originally framed was simple, namely, the representation by the defendant that there remained due $255.50 of moneys belonging to the lodge which he had loaned to the firm and which should be repaid to him as treasurer, which representation was alleged to be false by reason of the fact that all such sums had been repaid before the dissolution of the firm. This issue of repayment was tried, and the plaintiff did prove payments, mostly by checks, of a considerable amount of money to the defendant for the use of the lodge prior to June 6, 1903. The' defendant, however, offered evidence at least tending to show that similar deposits had been made prior to those payments, and that this sum of $255.50 had all been deposited subsequently and had not been repaid; and this issue was fairly submitted to the jury and presumptively passed upon in defendant's favor by the verdict. At the commencement of tbe trial, however, tbe plaintiff verbally amended bis complaint by asserting tbat these moneys bad been loaned to tbe firm by tbe defendant personally, and therefore, if not repaid,, were a debt to him, be being responsible to tbe lodge therefor; tbe result of which would be tbat tbe written agreement of full settlement made June 6th would include and discharge-any legal indebtedness from tbe plaintiff to him. Thereupon defendant was permitted to amend bis answer by alleging tbat at tbe time of tbe written settlement it was expressly understood tbat liability for tbe amount of tbe lodge moneys was not discharged thereby, but they were to be paid in addition. One of tbe principally argued assignments of error is tbe allowance of this amendment. We can discover no impropriety or abuse of discretion in so allowing it. Tbe plaintiff bad rendered tbe fact material by an amendment to tbe complaint made at tbe trial, and it would have been highly unfair to refuse tbe defendant permission to meet this new contention.
A series of assignments of error are predicated upon tbe admission of evidence to support this new defense, based upon tbe contention tbat tbe written agreement of settlement was conclusive and could not be varied or added to by parol. Eor tbe purposes of this argument tbat contention may be fully conceded, but it has no relevancy to tbe present case. Neither plaintiff nor defendant was seeking to enforce legal rights arising out of tbat agreement, but plaintiff was seeking to recover back money which, as alleged, be bad been induced to part with by fraud of tbe defendant. Although, by virtue of tbe written settlement, be might have been under no legal obligation to- pay this additional sum, yet be bad a perfect right to recognize a moral obligation to pay it, and if be did so, without fraud by tbe defendant, tbe legal effect of tbe prior settlement was of no significance. It was entirely proper to permit evidence of all tbe circumstances and conditions surrounding tbe transaction by which plaintiff claimed to have been defrauded.
Another contention of appellant wbicb pervades numerous assignments of error is that the defendant's answer admitted that all sums of lodge money which had been deposited in the drawer had been paid back. This contention is based upon a misconstruction of the answer, which set forth the habit of depositing such lodge moneys, and proceeded to state that, when such sums were paid back to the defendant, that had been done either by cash or check, and the slip in the cash drawer representing the deposit was then and there destroyed. This, obviously, is merely an allegation of the custom which accompanied such repayments as were in fact made, and cannot be construed as a contradiction of the allegation that the $255.50 had never been repaid.
Another assignment of error is upon a charge to the jury generally to the effect that the burden of proof rested upon the plaintiff to establish both the making of the alleged representations and their falsity. Of this, as a general proposition of law,v there can be no question. The plaintiff who alleges fraud must prove it. The contention that such proof was conclusively made by the written agreement of settlement and by the admissions' of the answer is negatived by what we have already said.
We find no prejudicial error in the record.
By ihe Oourt. — Judgment affirmed.