Gordon v. Tobias

• Decision Date: 25 March 2003
• Citation: 262 Conn. 844,817 A.2d 683
• Court: Connecticut Supreme Court
• Parties: HELENE A. GORDON ET AL. v. ANDREW TOBIAS

262 Conn. 844

817 A.2d 683

HELENE A. GORDON ET AL. v. ANDREW TOBIAS

SC 16763.

Supreme Court of Connecticut.

Argued January 7, 2003.

officially released March 25, 2003.

Norcott, Katz, Palmer, Vertefeuille and Zarella, Js. Barbara F. Green, with whom, on the brief, was Bernard Green, for the appellant-appellee (defendant).

Jonathan S. Bowman, with whom was Barbara M. Schellenberg, for the appellees-appellants (plaintiffs).

Opinion

NORCOTT, J.

The dispositive issue in this appeal is whether the trial court properly concluded that a now defunct mortgage loan brokerage corporation, Mutual Mortgage Services, Inc. (Mutual), had acted as an agent for the defendant, Andrew Tobias, for the purpose of receiving payments of the balance due on a mortgage held by the defendant on property owned by the plaintiffs, Helene A. Gordon and William J. Gordon.¹ The defendant appeals² from the judgment of the trial court settling title to the property in the plaintiffs. The defendant claims that there was no evidence to support the trial court's finding that Mutual had acted as his agent when it received payment on the mortgage at the time title to the property transferred to the plaintiffs. The plaintiffs claim in response that the evidence produced at trial supports the trial court's finding of an agency relationship. We agree with the plaintiffs and, accordingly, we affirm the judgment of the trial court.

The record reveals the following undisputed facts. Elixir Limited Partnership (Elixir), which is not a party to this appeal, was a condominium developer engaged in the development of a number of condominium units in Madison. In order to finance construction on various condominium units, Elixir borrowed money from Mutual, which, in turn, secured its loan by taking mortgages on the individual condominium units. Mutual used the defendant's money to fund the mortgage at issue in the present case. On February 16, 1994, Mutual assigned the mortgage at issue in the present case from Elixir to the defendant. Both the mortgage on the condominium and the assignment to the defendant were recorded in the Madison land records. Thereafter, payments on the mortgage were made by Elixir to Mutual, which then remitted the payments to the defendant. Early in 1995, the plaintiffs became interested in buying one of the condominium units constructed by Elixir and encumbered by the mortgage that had been assigned to the defendant. The plaintiffs hired a real estate attorney who completed a title search that revealed the mortgage on the property. After counsel for the plaintiffs contacted Elixir regarding the purchase of the property, Elixir agreed that, at the closing, it would pay off the amount due under the mortgage, $125,046.66, to Mutual. Subsequently, on February 2, 1995, the plaintiffs closed on the condominium purchased from Elixir, which then gave Mutual a check for the amount due and conveyed the property to the plaintiffs by warranty deed.

Although Mutual received full payment on the mortgage at the closing, it neither remitted this sum to the defendant, nor informed him of the closing. Rather, Mutual continued to send periodic payments to the defendant until July, 1997, when the president of Mutual died and Mutual's scheme was revealed. After the defendant refused to release the mortgage, the plaintiffs filed an action, pursuant to General Statutes § 47-31,³ in order to quiet title in the property in favor of themselves. After trial, the trial court concluded, inter alia, that Mutual was an agent of the defendant for the purpose of receiving payment of the outstanding amount due on the mortgage that was paid at the February, 1995 closing. Thus, the trial court concluded that payment to Mutual, as agent for the defendant, constituted payment to the defendant and, consequently, discharged the plaintiffs' obligation under the mortgage. Accordingly, pursuant to § 47-31, the trial court quieted title in the property in favor of the plaintiffs. This appeal followed.

The defendant claims that there was insufficient evidence in the record to support the trial court's finding that Mutual was an agent of the defendant for the purposes of collecting payments on the mortgage that he held on the plaintiffs' property. We disagree.

It is well settled that, "[t]he nature and extent of an agent's authority is a question of fact for the trier where the evidence is conflicting or where there are several reasonable inferences which can be drawn." (Internal quotation marks omitted.) Maharishi School of Vedic Sciences, Inc. (Connecticut) v. Connecticut Constitution Associates Ltd. Partnership, 260 Conn. 598, 606, 799 A.2d 1027 (2002). "To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous." (Internal quotation marks omitted.) Id., 605. "A finding of fact is clearly erroneous when there is no evidence in the record to support it ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.... In making this determination, every reasonable presumption must be given in favor of the trial court's ruling." (Internal quotation marks omitted.) Id.

Turning to the merits of the defendant's claim, "[a]gency is defined as the fiduciary relationship which results from manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act .... Restatement (Second), 1 Agency § 1 [1958].... Thus, the three elements required to show the existence of an agency relationship include: (1) a manifestation by the principal that the agent will act for him; (2) acceptance by the agent of the undertaking; and (3) an understanding between the parties that the principal will be in control of the undertaking." (Citation omitted; internal quotation marks omitted.) Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 132-33, 464 A.2d 6 (1983).

Moreover, "it is a general rule of agency law that the principal in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal, and within the scope of the [agency relationship]." Maharishi School of Vedic Sciences, Inc. (Connecticut) v. Connecticut Constitution Associates Ltd. Partnership, supra, 260 Conn. 606. An agent's authority may be actual or apparent. Id., 606-607. "Actual authority may be express or implied." Id., 607. Because the plaintiffs do not claim that Mutual had express actual authority, we must review whether the trial court properly found implied actual authority. "Implied authority is actual authority circumstantially proved. It is the authority which the principal intended his agent to possess.... Implied authority is a fact to be proven by deductions or inferences from the manifestations of consent of the principal and from the acts of the principal and [the] agent." (Citation omitted; internal quotation marks omitted.) Connecticut National Bank v. Giacomi, 242 Conn. 17, 70, 699 A.2d 101 (1997).

As the trial court's memorandum of decision reveals, the court found that the defendant had authorized Mutual to collect monthly payments on the note secured by the mortgage on the plaintiffs' property and remit those payments to him. This conclusion was based on the trial court's findings that the defendant was "an investor living in Florida and had no interests in managing such details for himself." Moreover, the trial court concluded, "the entity designated to collect payments on the note secured by the mortgage was plainly authorized to receive...