Dieter v. Scott

• Decision Date: 03 October 1939
• Docket Number: No. 1669.,1669.
• Citation: 9 A.2d 95
• Court: Vermont Supreme Court
• Parties: DIETER v. SCOTT.

9 A.2d 95

DIETER

v. SCOTT.

No. 1669.

Supreme Court of Vermont. Washington.

Oct. 3, 1939.

[Copyrighted material omitted.]

Exceptions from Barre Municipal Court; Arthur C. Theriault, Acting Judge.

Action by F. J. Dieter against H. W. Scott to recover rent claimed to be due from the defendant under certain leases. Judgment for defendant, and plaintiff brings exceptions to the findings of fact and to the judgment.

Judgment reversed, and judgment for plaintiff to recover the sum of $308.83, with interest from October 21, 1936, and costs.

Argued before MOULTON, C. J., and SHERBURNE, BUTTLES, STURTEVANT, and JEFFORDS, JJ.

H. C. Shurtleff, of Montpelier, for plaintiff.

Finn & Monti, of Barre, for defendant.

MOULTON, Chief Justice.

In this action the plaintiff seeks to recover rent claimed to be due from the defendant under certain leases covering a business block in the city of Montpelier. Judgment was for the defendant, and the cause is here upon the plaintiff's exceptions to the findings of fact and to the judgment.

The premises were leased by the plaintiff to George B. Littlefield, and his heirs, executors, administrators and assigns, by three conveyances, under seal, one dated October 9, 1926, and the other two June 18, 1927, each of the three being for a different part of the building, but together covering all of it. They all expired on October 21, 1936. Each lease was expressed as "yielding and paying" a certain annual rent, by monthly installments, and contained a provision that Littlefield should not "lease or assign the said premises to any person except to a person to occupy the premises with said George B. Littlefield without the consent of" the plaintiff. The findings state that on March 24, 1928, Littlefield assigned the three leases to the defendant, as collateral security for an indebtedness to the latter of $26,000, but that it did not appear that the plaintiff consented to the assignments, or whether the assignments were in writing and recorded. On November 30, 1929, Littlefield moved away, and, so far as appears, has not since been heard from, and his whereabouts is unknown. On the day of Littlefield's departure the defendant took possession of the premises and paid to the plaintiff the rent then in arrears amounting to $866. Thereafter he sublet parts of the building, paid for repairs, and from the rents collected from the subtenants paid to the plaintiff the rents due under the leases to August 31, 1936, leaving at the end of the terms, an unpaid balance of $308.33, which is the amount claimed in this action. The rents received, after deducting the cost of repairs and the payments to the plaintiff were applied by the defendant upon Littlefield's indebtedness to him, and for his services. The indebtedness exceeded the sum thus received by the defendant, and, it is fairly inferable, any sum that he could have received, even if no deductions had been made. During all this time the defendant had no communication with Littlefield and no conversation or personal negotiation with the plaintiff concerning the leases, the assignment or the rents. The court found that the defendant has accounted to Littlefield for the monies received, and that in taking possession of the premises, paying for repairs, subletting and paying the rent to the plaintiff, the defendant acted as agent for Littlefield, and therefore held him not liable for the unpaid balance. It is to this finding that the plaintiff has excepted. The defendant criticizes the exception thereto as being indefinite, but we consider that it is sufficiently explicit to present the issue.

The defendant testified that he acted as agent for Littlefield, and that the leases were assigned to him as collateral security "with full power of attorney;" but whether this power of attorney was in writing or not did not appear, and nothing further was said about it. Where it is claimed that an agency has been created by parol, the agent is a competent witness to prove his agency and its scope. Northeastern Nash Automobile Co. v. Bartlett, 100 Vt. 246, 252, 136 A. 697; Hendrickson v. International Harvester Co., 100 Vt. 161, 166, 135 A. 702. But he must testify to facts, and not opinions or conclusions. Hendrickson v. International Harvester Co., supra, 100 Vt. 167, 135 A. 702. In Young v. Newark Fire Ins. Co., 59 Conn. 41, 22 A. 32, 33, the testimony of a witness that he acted as agent for certain insurance companies in placing the policies in issue, was held to be "a question of law, depending on the facts in the case, and * * * to state no facts, but only the conclusion of the witness." In Schagrin v. Schagrin, 5 Boyce 318, 28 Del. 318, 92 A. 862, 864, a question whether the plaintiff's wife had authority to enter into a certain transaction with the defendant was held to call for a conclusion of law. In Commercial Standard Ins. Co. v. Rinn, 100 Colo. 76, 65 P.2d 705, 707, it was held that testimony that one was agent for the defendant did not establish such agency, but was a mere conclusion. Other decisions to the same effect are—Farrell v. United States, 8 Cir, 110 F. 942, 943, 944; McCluskey v. Minck, 18 Misc. 565, 42 N.Y.S. 462, 463; Cameron v. Ayres, 175 Cal. 662, 166 P. 801, 802; Watkins Medical Co. v. Holloway, Mo.App, 181 S.W. 602, 604; McCornick v. Queen of Sheba Gold Mining, etc, Co., 23 Utah 71, 63 P. 820, 822; Goddard & Sons v. Garner, 109 Ala. 98, 19 So. 513, 514; Arnold v. Johnson, 60 Tex.Civ.App. 368, 128 S.W. 1186; Maurer v. Midway, 25 Neb. 575, 41 N.W. 395, 396; Larson v. Lombard Investment Co., 51 Minn. 141, 53 N.W. 179, 181; Chaplin v. Mutual Cash Guaranty Fire Ins. Co., 26 S.D. 632, 129 N.W. 238, 240, 241; Decker v. Lightfoot, 44 App.D.C. 45, 48.

It is clear, therefore, that the testimony of the defendant must be regarded as his conclusion, based upon the facts of the case. Although inadmissible, it was for consideration by the trial court, since it came in without objection. Streeter's Dependents v. Hunter, 93 Vt. 483, 484, 108 A. 394; Pocket v. Almon, 90 Vt. 10, 14, 96 A. 421; Taplin & Rowell v. Harris, 88 Vt. 15, 21, 90 A. 956. But it cannot be given more than its legitimate probative effect; and where the conclusion is not the legal result of the facts upon which it is based, it does not afford justification for a finding. The finding of the trial court based thereon is only a conclusion as to the legal effect of the relationship between the defendant and Littlefield. See Gordon v. First Universalist Soc., 217 Mass. 30, 104 N.E. 448, 450. If it is inconsistent with the other findings which state the facts showing such relationship, it is to be disregarded. Greenwood v. Lamson, 106 Vt. 37, 42, 168 A. 915; Smith v. Vermont Marble Co., 99 Vt. 384, 396, 133 A. 355; Trask v. Karrick, 94 Vt. 70, 74, 108 A. 846; Bomhower v. Smith, 110 Vt. 290, 5 A.2d 925, 926. The circumstances under which the defendant came into possession of the leasehold premises thus become controlling upon the question of the capacity in which he acted. See Travelers' Ins. Co. v. Gebo, 106 Vt. 155, 164, 170 A. 917.

It is found that possession was taken under an assignment as collateral security; and an assignment of this nature, being a pledge, vests in the assignee only a special property, the general property remaining in the assignor. White River Savings Bank v. Capital Savings Bank & Trust Co., 77 Vt. 123, 128, 59 A. 197, 107 Am.St.Rep. 754; Island Pond National Bank v. Lacroix, 104 Vt. 282, 295, 158 A. 684, and cases cited. The pledgee is, of course, entitled to possession, but he does not, by virtue of the transaction, become liable for the pledgor's obligations with respect to the thing pledged—that is to say, in this instance, the defendant merely as pledgee of the leases would not be liable to the plaintiff for the stipulated rent. Biltmore Land Co. v. Munro's Estate, 271 Mich. 125, 260 N.W. 135, 136; Krueger v. Campbell, 264 Mich. 449, 250 N.W. 285, 286; Treadway v. Western Cotton Oil, etc., Co., 40 Ariz. 125, 10 P.2d 371, 375; and see Smith v. Morin Bros., 233 App. Div. 562, 253 N.Y.S. 368, 370. Indeed, as Professor Williston says (2 Williston on Contracts, Rev.Ed., p. 1203): "This fact (assignment of a bilateral contract as collateral security) is enough to show a positive intention not to assume the burdens of the contract." So there is nothing inconsistent in an assignment for collateral security and an agency on the part of the assignee for the assignor.

But an assignment stated to be by way of collateral security is not necessarily prevented from being absolute. Its intrinsic character is the determinative factor. Todd v. Meding, 56 N.J.Eq. 83, 38 A. 349, 352; Killmer v. Nelson, 196 Minn. 420, 265 N.W. 293, 294, 295; Hughes v. Pump House Hotel Co., [1902] 2 K.B. 190, 194; Russell and Co. v. Austin Fryers, 1909, 25 Times Law Reps. 414, 415; Burlinson v. Hall, 12 Q.B.D. 347, 349, 350. Where the debt for which a contract is assigned as security exceeds the sums that can be realized during the life of the contract, and the creditor is given authority to collect such sums and apply them upon the diminution of his just demand, the assignment must be treated as absolute. Brindze v. Atlantic City Policemen's Beneficial Association, 75 N.J.Eq. 405, 72 A. 435, 437, affirmed 77 N.J.Eq. 272, 79 A. 686; Todd v. Meding, supra.

Such appears to be the case here. The character of the transaction between Littlefield and the defendant was such that the entire interest in the term passed to the latter. Nothing was left to be returned to the former after all the income during the existence of the leases had been collected and credited. Intrinsically then, the matter stands as if the assignment were in satisfaction, or part satisfaction of the debt, passing title to the assignee. See Nathan, Adm'r v. King, 51 Cal. 521, 522.

The lease was assignable, by its terms; as it would have been even if the word "assigns" had not been employed therein. Cooney v. Hayes, ...