Boden v. Renihan

• Decision Date: 06 October 1941
• Docket Number: No. 72.,72.
• Parties: BODEN v. RENIHAN.
• Court: Michigan Supreme Court

299 Mich. 226

300 N.W. 53

BODEN

v.RENIHAN.

No. 72.

Supreme Court of Michigan.

Oct. 6, 1941.

Bill in equity by Sarah H. Boden against Joseph Renihan to compel an accounting of moneys claimed by the plaintiff to have been intrusted to the defendant for safekeeping and for investment. Decree for the plaintiff, and the defendant appeals.

Decree affirmed.

Appeal from Circuit Court, Kent County, in Chancery; William B. brown, judge.

Argued before the Entire Bench.

Norman A. Lilly, of Grand Rapids, for defendant and appellant.

Allaben & Wiarda, of Grand Rapids, for plaintiff and appellee.

BOYLES, Justice.

Plaintiff filed a bill in equity to compel an accounting of moneys claimed by plaintiff to have been entrusted to defendant for safekeeping and for investment. The transactions began in 1915 and continued until suit was started in 1939. Plaintiff is an elderly lady, a resident of Grand Rapids, who never married. The defendant (appellant) is a practicing attorney in Grand Rapids, admitted to the bar in 1893. Plaintiff had decree in the court below for $6,100.

The parties first became acquainted in 1912 in connection with a will prepared by defendant for plaintiff's father who died in 1912. Plaintiff acted as executrix of his will and defendant was the attorney for the estate. Under her father's will, plaintiff received a farm which she sold in 1915 for $8,000 cash. At the time of sale, the draft in payment was left with defendant overnight, and the next day plaintiff and defendant went to a bank, cashed the draft, plaintiff used approximately $2,000 to pay off the balance due from her on a land contract, and the remaining $6,000 was left in the bank. The dispute arises mainly over the ultimate use or disposal of this $6,000, together with an additional $4,150 referred to later herein. Plaintiff claims, and defendant admits, the money was left with the bank, although there is a dispute as to how it was to be withdrawn. The parties agree, however, that there was a conversation at that time to the effect that defendant was to loan out this money for plaintiff and invest it in real estate mortgages. In that regard, plaintiff testified:

‘A. And Mr. Renihan was to put that on real estate mortgages; he concluded that would be the best thing.

‘I never had seen Mr. Renihan until the morning my father died. Between the time my father died in 1912 and the time I closed up this Friend deal, I never had any other attorney. He took care of my father's estate.

‘I had some conversation with Mr. Renihan about handling the money at the bank that morning. I asked him if he would handle the money; he agreed to handle it on real estate mortgages.

‘Q. He was to handle it for you on real estate mortgages? A. Yes, well to the best of his-what he could get it out on, get the interest and everything.

‘He was to invest it and I think I have given you all of the conversation. He said he would invest it.

‘I don't think I had any of the six thousand dollars. I had the interest on it as the interest came in but I never handled any of the six thousand dollars myself. Mr. Renihan paid me some interest after that time.’

This occurred in 1915. There is some dispute as to the way the money was actually handled or withdrawn. In that regard, the plaintiff testified:

‘Q. Then this last question, Miss Boden: The actual way that this eight thousand dollars was taken out of the bank, whether it was by Mr. Renihan signing his own name or your name or some arrangement with the bank, so he could draw it out, do you know? A. I do not know how that was arranged; it was between him and Mr. Hefferan in some way; but of course, knowing as little as I did about those things, and I trusted to what they were doing, and Mr. Renihan drew the money evidently or got the money when they wanted to make loans and it was done in that way.

‘Q. Are you perfectly sure that you, yourself, did not draw that money out and loan it to the people directly? A. Oh, sure, I didn't have anything to do with it.

‘Q. And when you left that day you didn't have any of the eight thousand dollars with you? A. No, not a cent of it.

‘Mr. Renihan and I discussed at the bank as to what was to be done with the balance of the money after paying up Miss Harmon's mortgage. I asked him if he would handle the money, and he said ‘Yes', he would.

‘Q. Handle it how? A. For loaning out on real estate.

‘Q. And what did he say? A. He said ‘Yes, I will’, or something of that nature, I don't know that that is just the words or not.'

In 1919, plaintiff sold her house on a contract for $4,150; the money on this contract was collected from time to time when due, by Mr. Renihan. Plaintiff testified: ‘In 1919 I sold my house on La Grave street to Mr. Crinzi. The amount was four thousand, one hundred and fifty dollars, on contract. The money was paid to Mr. Renihan's office. I didn't get any of that, only just the interest money that would come in. It was finally all paid up. I don't think I got any of the four thousand, one hundred and fifty dollars. Mr. Renihan invested it as I understood it. I can't tell what happened to that money. It was left with Mr. Renihan. He said he thought real estate mortgages was good and I agreed with him and he handled that, put it out on real estate mortgages or in good investments of some kind. The interest came right along then; I was to get the interest.’

Plaintiff thus claims that she left with defendant a total of $10,150 for handling and investment. It was her entire capital. From time to time thereafter, up to and including 1939, plaintiff occasionally talked with Mr. Renihan about these investments. She did not know who borrowed the money; she never investigated or appraised the properties; the mortgages were never in her possession; and she had no information as to the investments except what she obtained from Mr. Renihan. On occasion, she was called to his office by Mr. Renihan to sign discharges of mortgages and testified that at no time was she given the principal of a mortgage, but that ‘it was turned right over to him to handle again’; that no part of the principal, $10,150, was ever paid to her. Plaintiff kept no books of account or record of moneys paid to her by Mr. Renihan. Her recollection of the details of the loans and the amounts received is hazy, and convinces us that the plaintiff relied entirely upon the defendant as her attorney and counselor and trusted agent to handle her investments. She testified that the defendant made the loans as he thought best and all her collections and transactions were through his office. The records in the register of deeds' office showed that between 1915 and 1922 plaintiff appeared as mortgagee in eight different mortgages approximating $10,000. These mortgages have all been discharged, and the record indicates there are now no mortgages of record in which plaintiff appears either as mortgagee or assignee. These mortgages and the discharges were all executed in Mr. Renihan's office, with either the defendant or a member of his office staff as notary and witnesses. After being recorded in the register of deeds' office, they were delivered back to Mr. Renihan. From time to time plaintiff received payments from Mr. Renihan, explained by her as being ‘interest payments,’ the amount of which she did not know. The largest amount received by her at one time as shown by defendant's cancelled checks was $366.77. Most of the checks were under $100. She testified she had received no payments on principal. At one time Mr. Renihan claimed interest payments were not coming in and that some money he subsequently paid plaintiff was as a loan. There was some conversation about where the money was coming from that Mr. Renihan was paying her. She considered it an advance on interest and inquired whether she was paying him interest on it as her money was not coming in. In that regard, she testified:

‘Q. Had you heard then that this was not your money, or had he told you it was not your money? A. No, he had not absolutely told me it was not my money; it was my money but I got kind of suspicious and I felt as though he was giving me money and not getting any interest on it.

‘At that time Mr. Renihan told me that my investments were not paying any interest. When I did not get any interest at all, I went to Mr. Renihan to find out why. That was last March, this past March, we went down there, Louise and I, ‘and he said it was not paying any interest, money was not coming in at all, and then he made a question as to-how things was done, don't you see, because the interest was not coming in and I wasn't getting any.’'

These transactions continued for a period of nearly 25 years, during which time plaintiff had no other attorney to look after her affairs except the defendant. In 1939, plaintiff's niece, with whom plaintiff had lived since 1918, went to Mr. Renihan's office to inquire about plaintiff's investments. She testified that the following took place: ‘I talked with Mr. Renihan in April, 1939. I said to him that he had promised my aunt a statement of her account. He said, ‘I never promised your aunt a statement.’ I said, ‘Well, when we and she were here, you promised her one and we would like an account.’ He replied that he did not promise her one and could not give her one. I asked, ‘Mr. Renihan, what is auntie's money invested in?’ He said, ‘Three two thousand dollar mortgages in Walker township and no buildings on the land and the land does not produce anything.’ I said, ‘Why can't we foreclose on them?’ Mr. Renihan said, ‘We can't foreclose.’ I said, ‘If these people want that property very badly they will get government loans and you can foreclose.’ He said, ‘I cannot foreclose.’ That was the only reason he would give me.'

Plaintiff thereupon employed another attorney to look after her affairs. This attorney, Mr. Allaben, testified he went to see Mr. Renihan in July or August, 1939, and that the following occurred: ‘I said...