Hooper v. O. M. Corwin Co.
| Decision Date | 04 June 1929 |
| Parties | HOOPER v. O. M. CORWIN CO. ET AL. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from a judgment of the Circuit Court for Winnebago County; Fred Beglinger, Judge. Affirmed on defendant's appeal; reversed on plaintiff's appeal.
The action was commenced January 14, 1927. Judgment for the plaintiff against the Corwin Company and of dismissal in favor of the Dickey Company was entered July 7, 1928. The Corwin Company appeals, and the plaintiff appeals from the judgment of dismissal and from the judgment in his favor on the ground that he was entitled to judgment for a larger sum than was awarded.
The action is to recover for services rendered in selling bonds on an alleged express contract for a compensation of one-half the premium the bonds were sold for above the principal and interest due. The plaintiff as attorney for the trustee was foreclosing a trust deed on lands of the Stark Company given to secure a bond issue of which bonds of the par value of $105,000 were outstanding, and procured judgment of foreclosure and appointment of a receiver. For his services as attorney for the plaintiff and the receiver he was compensated by the judgment and an order of the court fixing his fees therefor. As additional security for these bonds there was a chattel mortgage on a warehouse located on leased land, which mortgage was not foreclosed with the trust deed. A second mortgage on the lands but not on the warehouse secured other bonds. The Dickey Company had purchased the first mortgage bonds and sold them to its customers. It was the agent of the holders of these bonds, and had authority from them to settle the foreclosure suit for the principal and 6 per cent. interest net to them. The Corwin Company had the same board of directors as the Dickey Company. It was organized by the Dickey Company solely to take charge of farm mortgage collections and transactions for that company. J. F. Horn was assistant secretary of the Dickey Company and vice president of the Corwin Company and general counsel for both companies. O. M. Corwin was vice president of the Dickey Company and president of the Corwin Company. The claim that there was a contract as alleged rests on correspondence between Horn, Corwin, and the plaintiff and the acts of the three connected with the sale of the bonds. The plaintiff before securing the judgment conceived the idea of selling the first mortgage bonds to the holders of the second mortgage bonds, and proposed such sale to the principal officers of the Corwin Company, who favored the proposition and requested the plaintiff to prepare and submit a proposition to such holders. Plaintiff thereupon did so and expended time and money in so doing and in negotiating with these bondholders. The proposal as prepared and submitted by plaintiff to the second mortgage bondholders was approved by the Corwin Company. It was referred to in the correspondence in evidence as an “ultimatum,” and called for a “premium” of 1 per cent. for each month of delay if the purchase was not effected by December 31, 1925.
Prior to December 31st there was no agreement for compensation to plaintiff for these services. The proposition was not accepted by that date. Plaintiff thereupon wrote the Corwin Company that while if the proposition had been accepted he would have asked for compensation, because it had not been, he would accept none; but stated in connection that if the proposition should thereafter be accepted and negotiations thereon consummated he would split the “premium” with the company “50-50.” It is upon this as an “offer” and subsequent transactions that the plaintiff relies to make out his case upon express contract. The company did not explicitly accept or reject the suggestion to split the premium. Its only direct reference to it was by Horn that the suggestion to split would be laid before Corwin; that while he (Horn) did not want to make any “absolute commitment” in Corwin's absence, he would say that plaintiff need have no fears of their reliability and that if they “caught the hare” they would agree with plaintiff about the “recipe for the soup.” The company thereafter invoked plaintiff's aid and constantly advised with him in efforts to sell the bonds to the second mortgage holders and to carry out the scheme practically as prepared by him. They suggested to him that they would offer the holders of the second mortgage bonds to take for the bonds principal and interest, certain items of taxes and expenses and $2,500, and asked plaintiff if he could see any reason why “we,” meaning plaintiff and the defendant company, should not do so. Plaintiff at this time urged insistence on the terms of the “ultimatum” and referred to receiving his commission under it. The sale of the property under mortgage foreclosure would regularly occur about January, 1927. In September, 1926, the holders of the second mortgage bonds actively began efforts to protect their interest either by procuring assignment of the judgment, redeeming under the statute or by purchasing the first mortgage bonds. Securing the chattel mortgage rights on the warehouse was at the suggestion of Hooper urged upon them as reason for the last in preference to either of the others. Their representatives met and eventually agreed with the Corwin Company to buy the interest of the first mortgage bondholders in the property of the Stark Company for the principal sum due on the bonds and 6 per cent. interest, a $431.05 advancement for income tax, etc., and $2,000, 50 per cent. of the amount to be paid in cash and the remainder on time and secured by mortgage on the property to be purchased on foreclosure. The $2,000 was referred to in the Corwin Company's final letter of proposal as for “expense and attorney fees” and as “for the privilege of buying the bonds rather than for the purchase of the judgment or redemption.” In correspondence between the Corwin Company and the plaintiff the former referred to the $2,000 as a “bonus” to the plaintiff and gave its inclusion as its reason for favoring the sale. This final proposition, after it was made to the bondholders, was submitted to plaintiff and he approved it. The preliminary contract for the sale was negotiated in the name of the Corwin Company, but the final contract was in the name of the Dickey Company. The Dickey Company purchased the land on the foreclosure sale and conveyed it to the Oneida Company, which was formed by the second mortgage bondholders for the purpose of purchasing the property in...
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