Lutz v. Pasternick

• Decision Date: 09 March 1926
• Citation: 189 Wis. 325,207 N.W. 713
• Parties: LUTZ ET AL. v. PASTERNICK ET AL.
• Court: Wisconsin Supreme Court

189 Wis. 325

207 N.W. 713

LUTZ ET AL.

v.PASTERNICK ET AL.

Supreme Court of Wisconsin.

March 9, 1926.

Appeal from Circuit Court, Marathon County; A. H. Reid, Judge.

Separate actions by Ernest A. Dunn, Jr., against H. S. Lutz and F. J. Zell, and by H. S. Lutz and F. J. Zell and wife against Joseph Pasternick and wife and Ernest A. Dunn, consolidated for trial. From the judgment, H. S. Lutz and F. J. Zell and wife appeal. Reversed and remanded.

October 23, 1920, by written contract the plaintiffs agreed to sell to the defendants Joseph and Mary Pasternick a farm of 137 acres with the personal property thereon for $26,000, with a credit of $5,600 by deed of a farm then owned by said defendants, and with provisions for yearly payments of $1,000 until a designated amount had been paid. Such defendants took immediate possession of said farm, but thereafter defaulted in the required payments, taxes, and conditions.

May 7, 1921, the defendant Ernest A. Dunn, Jr., obtained a judgment in said county against the defendant here Joseph Pasternick and one John Pasternick for $691.83. An execution was issued thereon May 8, 1922, returned July 21st; again issued on August 10th and returned October 26th wholly unsatisfied.

On Saturday, July 22, 1922, the plaintiffs Lutz and Zell met with the defendants Joseph and Mary Pasternick and their attorney, Mr. Okoneski, to arrange for some disposition regarding the contract of October, 1920.

The Pasternicks' financial troubles were discussed, but no reference made to the Dunn judgment. A tentative agreement was then made in substance that, instead of an action being brought by the plaintiffs to foreclose on said contract, they (the plaintiffs) were to pay $500 cash, execute a promissory note for $1,000 to Mary Pasternick, and assume and pay certain specified then outstanding debts of the Pasternicks, who were to quitclaim and assign to the plaintiffs. A quitclaim deed was then executed and acknowledged before Mr. Okoneski. The instrument conveyed the real estate in question, and also recited, as part of the consideration from defendants, a conveyance of all the live stock and personal property except the household goods and certain tools. It also recited that the plaintiffs, as grantees, “assume and agree to pay all chattel mortgages and lienable claims when due now against said premises or personable (sic) property which in all amounts to the sum of $796.75 (should be $755.96), which includes the claim of J. Hanowitz & Son for $132.16.”

The undisputed testimony shows that the above-mentioned amount included a number of claims alleged to be due by the Pasternicks to third persons, but did not include the Dunn judgment. At the close of this conference, an inquiry was raised as to whether or not there was any judgment outstanding against the defendant Joseph Pasternick, and an effort was made by Mr. Okoneski to ascertain that fact by telephoning to the courthouse, but no information could be then obtained. Thereupon Mr. Okoneski took with him such quitclaim deed and other papers, and no delivery of the same was made that afternoon. The Pasternicks immediately thereupon gave up possession, and moved to Detroit. Mrs. Pasternick pledged said note of $1,000 with the State Bank of Mosinee as collateral to a new note of hers on July 24th.

On Monday, July 24th, the existence of the said Dunn judgment was ascertained. Mr. Okoneski communicated with defendant Dunn's attorney and made an offer on behalf of Pasternicks to pay $100 for a release of the judgment against the farm, and such offer was accepted and Lutz and Zell so informed. Later, but apparently the same day, Lutz and Zell conferred with Dunn's attorney and subsequently had interviews with Dunn and his father. There is substantial dispute as to these conversations; defendant Dunn and others testifying that the plaintiffs produced at one or more of such interviews the quitclaim deed above described, that it was read, and that plaintiffs said that Dunn ought not to take the $100, for they (the plaintiffs) had agreed with the Pasternicks to assume and pay the Dunn judgment in full. On cross-examination the Dunns testified that mention was made by the plaintiffs of the $1,000 note aforesaid, which was to be held at the Bank of Mosinee as collateral, and that sufficient had been held back in the bank to pay this judgment, and that he (Dunn) should not accept less than the full amount of his judgment.

During these interviews, some suggestion was made that the plaintiffs should receive some compensation for their having made such an arrangement to the benefit of Dunn, and the latter states that he did in the first instance agree to allow a 10 per cent. commission if the amount of the judgment was paid promptly. No payment was made, and August 11th the defendant Dunn issued garnishee proceedings upon the execution and apparently against Lutz and Zell as well as the bank which held the $1,000 note of Mary Pasternick, and claims to have notified the plaintiffs or served notice thereof upon them. This garnishment was dropped by defendant Dunn, relying, it is claimed, upon the renewed promise of the plaintiffs to pay the judgment. Several letters were written to plaintiffs on behalf of Dunn in October without result, and the offer of a discount in effect withdrawn. The quitclaim deed was never recorded and was held in escrow for a time by one of the creditors and subsequently delivered to Mr. Okoneski, who produced it as a witness on the trial.

September 29, 1923, defendant Dunn commenced an action against Zell and Lutz, alleging the judgment recovered against Joseph Pasternick aforesaid; that in July, 1922, the said Zell and Lutz purchased the farm and personal property, and as part of the consideration for such purchase agreed to pay the sum of $500 and to pay the said judgment as well as all other sums due on said lands and personal property; that the property and the deed were thereupon delivered, and Lutz and Zell took possession, and by reason thereof became liable and obligated to pay the...