Elder v. Sage
| Decision Date | 06 June 1950 |
| Citation | 257 Wis. 214,42 N.W.2d 919 |
| Parties | ELDER et al. v. SAGE et al. |
| Court | Wisconsin Supreme Court |
Donovan, Gleiss, Goodman, Breitenfield & Gleiss, Tomah, for appellant.
C. E. Macomber, New Lisbon, for respondents.
Since defendant-appellant has raised the question of fraud, it is necessary to detail many of the facts in this case.
The land upon which plaintiff Elder erected tourist cabins in which the defendant Sage installed heating and plumbing fixtures, was purchased by Elder for $900. He had only $600 of his own to pay toward the purchase price. In 1947, Elder negotiated a G. I. loan from the impleaded defendant, New Lisbon State Bank, in the amount of $10,000. The loan was to be repaid in installments of $100 every three months commencing September 12, 1947. The specification for the G. I. loan contemplated that the $10,000 would provide for pluming and heating.
The bank made no investigation to see whether the money was being used by the plaintiff for the intended purposes. Elder defaulted in the first three payments and then made four payments at one time in May, 1948, out of the principal of the loan. The amount of the loan was disbursed by the bank to Elder starting on October 13, 1947, and the final balance of $2,340 was disbursed May 19, 1948.
Elder made an application for a further loan in addition to the $10,000 on June 14, 1948, at which time he received a loan of $500 on a note with his mother's signature. Further application for an additional loan was made about June 16, 1948. At that time the bank knew that Sage had not been paid for his plumbing. On June 18, 1948, the bank had a reply from the Veterans Administration indicating that a further loan might not be approved. At that time in June, 1948, if Elder had had to pay all of his debts he would not have had sufficient assets to do so.
Sage had no knowledge of the above facts with the exception of information conveyed to him that Elder was obtaining a loan from the bank.
Sage, a plumbing and heating contractor, entered into an oral agreement with the plaintiff Elder in April, 1948, for the furnishing of plumbing fixtures and services in the tourist cabins. Elder agreed to pay Sage between the first and tenth of each month as the work progressed and that the account would be kept current.
Sage started work April 29, 1948. He received payments of $200 on May 1, 1948 (balance $135.55), $300 on June 11, 1948 (balance $331.29), $100 on June 14, 1948 (balance $259.82), and $25 on June 14, 1948 (balance $367.92). Throughout these delinquencies, Sage demanded payment.
Sage testified: Elder stated that he had made a $1,000 loan to a friend and would pay him when this was repaid; that he was having money transferred from a New Yor bank and when that was accomplished he would pay him; and later that he had $10,000 of his own money in the project and needed additional money and had negotiated a loan with the New Lisbon bank. In June, 1948, Sage's bookkeeper consulted a Mr. Gibson, cashier of the impleaded defendant, and informed him that Sage was doing the plumbing on Elder's premises and that Elder was delinquent in his payments. On July 3, 1948, Sage stopped at the bank and talked with Gibson and was told that the loan was approved. On July 14, 1948, he again discussed the matter with Mr. Gibson and was informed that the loan was approved but the guarantee was not back from Milwaukee, but Sage had nothing to worry about. He was also told that the job would have to be completed before he would get his money. He then stated that if Sage would complete the plumbing he would be paid. Before completing the plumbing, Elder wanted a heating plant and Sage told him that he would not furnish $1,000 worth of material until he got paid for the work and material already furnished. Elder assured him that the money would be available if Sage furnished the heating equipment. About August 5, 1948, Sage checed with Mr. Gibson at the bank who informed him that they had to have the heating plant and that the work had to be completed before payment could be made. Thereafter as he continued to furnish materials and services, he had further contact with the bank and Mr. Gibson stated he should go ahead and do the work, not to worry, the money would be paid. There remained only the act of connecting up forty feet of pipe to complete the heating installation, which was done just prior to the deer season in 1948. On December 6, 1948, Sage telephoned Mr. Gibson from the Bank of Tomah and a cashier from that bank listened in on the conversation. The testimony of the cashier and Sage is that Gibson inquired whether the last forty feet of pipe had been installed and when informed that it had been, Mr. Gibson said 'come down Friday and you will get your money.' Sage went to the bank the following Friday but was informed that the bank had to make an inspection of the premises before they could pay out any money. On October 15, 1948, when Sage was installing the heating system, his attorney prepared and filed a lien for Sage and a copy of this lien was sent to the bank. Sage testified that he subsequently discussed filing the lien with Mr. Gibson and was told it would not have been necessary for him to do that because he would get the money.
When Sage failed to get his money he had his attorney telephone the bank. Mr. Clark, the attorney, testified the bank at that time inquired what Sage would take to release his lien and was told Sage would accept $1,500. Mr. Gibson told him that Sage should come to the bank and the matter would be worked out. On December 18, 1948, he and Sage went to the bank. On the way they stopped at the Elder premises. Elder and his wife were gone and the premises were to a great extent unlocked and exposed to the public as well as the elements. Some of the equipment had already been damaged by freezing. In the conference with Gibson and Mr. Mortenson, the president of the bank, Mr. Mortenson stated that the bank was 'turning thumbs down' and they they were not paying out any money. He and Sage were informed that they did not know where Elder was. When they told the bank officials the conditions at the premises, Mr. Mortenson stated that the bank would attend to it.
Sage testified that Elder owed him $2,184.15. On December 18, 1948, he removed such part of his equipment as could be removed without damage to the premises and after acertaining that Elder could not be found. He was not able to remove any of the materials installed in the house, which was locked, nor was he able to remove any of the pipe and fittings imbedded in concrete in the floors and walls of the buildings. The value of the materials which could not be removed and which still remained on the premises was...
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