Larson v. Johnson

• Decision Date: 16 November 1928
• Docket Number: No. 26980.,26980.
• Citation: 175 Minn. 502,221 N.W. 871
• Parties: LARSON v. JOHNSON et al.
• Court: Minnesota Supreme Court

221 N.W. 871

175 Minn. 502

LARSON v. JOHNSON et al.

No. 26980.

Supreme Court of Minnesota.

November 16, 1928.

Appeal from District Court, Hennepin County; Mathias Baldwin, Judge.

Action by Christine Larson against Algot A. Johnson and others. From a judgment in favor of defendants Luebkeman, plaintiff appeals. Affirmed.

Thompson, Hessian & Fletcher, of Minneapolis, for appellant.

Harold E. Paulson and G. A. Will, both of Minneapolis, for respondents.

HOLT, J.

Plaintiff appeals from the judgment declaring unfounded her asserted interest or lien in certain land. There is no settled case, and plaintiff predicates her appeal solely on the proposition that the findings of fact entitle her to a judgment awarding her some substantial relief. A short statement of the facts found is this:

Defendant Chris Luebkeman and wife, hereinafter referred to as respondents, owned certain real estate with buildings near the State University, and on December 31, 1920, made a contract of sale thereof to defendant Johnson. The sale was made subject to mortgages aggregating $18,953, which the buyer assumed and agreed to pay; he also agreed to pay, as purchase price, the additional sum of $29,047, $6,200 thereof on the delivery of contract, and the balance of $22,847, with 6 per cent. interest, in monthly installments of $100 a month, beginning January 1, 1921, and the same sum for each succeeding month to June 1 of that year, when the payments increased to $200 per month, and thereafter varied between that sum and $400 per month, until fully paid. The buyer was to have possession. To make up the initial payment of $6,200, Johnson had procured plaintiff to assign a $2,000 note and mortgage she owned to respondents; and in consideration therefor Johnson, on January 19, 1921, executed his note to plaintiff for $2,000, and at the same time assigned as security his contract with respondents. This assignment was not witnessed or acknowledged, but on April 22, 1921, a formal assignment was executed by him. Respondents had no actual knowledge of either the informal or formal assignment until after they obtained a quitclaim from Johnson, terminating his interest in the contract and premises, as hereinafter noted. Their contract with Johnson contained this provision:

"It is further understood and agreed, by and between the parties hereto, that no assignment of this contract shall be valid or binding on the said parties of the first part unless such assignment shall be in writing duly approved by the said first parties by indorsement thereon of their consent thereto."

No consent, written or otherwise, to the assignments, was obtained from respondents. During all the times herein referred to, one Paulson was the attorney of the respondents. Paulson drew the contract between respondents and Johnson. He also drew the assignments from Johnson to plaintiff. Soon after going into possession, Johnson defaulted in the monthly payments to respondents and on February 8, 1922, was in default approximately in the sum of $5,000, when he and respondents agreed to obviate foreclosure of the contract by Johnson conveying to respondents by deed of quitclaim the premises described in the contract. This was done on that day, and Johnson surrendered the premises to respondents, who ever since have remained in undisturbed possession thereof. Neither Johnson nor plaintiff has ever offered to make good the default in the payments stipulated in the contract. Johnson never paid plaintiff any part of the $2,000 evidenced by the note mentioned. Upon these facts found, the court directed judgment in favor of respondents.

The first contention of appellant is that respondents were charged with constructive knowledge of Johnson's assignment of the contract to plaintiff, because their attorney, Paulson, possessed such knowledge, having drawn the assignment. To this we cannot agree. Although it is found that Paulson was the attorney of respondents from the inception of the deal with Johnson until it was canceled by Johnson quitclaiming to them, there is no finding that Paulson drew the quitclaim deed or acted for respondents in that transaction. But, even assuming that he did, respondents should not be chargeable with the knowledge gained by the attorney in a transaction between other clients. Usually attorneys are employed for specific pieces of work for many different clients in the course of the day or week. It would indeed be hazardous business to hire an attorney, if knowledge should be imputed to the client of matters that have come to the notice of the attorney months before, while acting for some other client. When Paulson drew the assignment to plaintiff he was not acting for respondents. As said in Trentor v. Pothen, 46 Minn. 298, 49 N. W. 129, 24 Am. St. Rep. 225:

"The facts of which the agent had notice must be within the scope of the agency, so that it becomes his duty to act upon them or communicate them to his principal."

Had there been a finding that Paulson was employed by respondents to obtain the quitclaim deed from Johnson, there might have been some substance to the claim that Paulson's knowledge of plaintiff's assignment was imputed to respondents. Different facts were...