Massey v. Richmond

• Decision Date: 10 May 1932
• Citation: 242 N.W. 507,208 Wis. 239
• Parties: MASSEY v. RICHMOND ET AL. BANK OF BURLINGTON v. RICHMOND ET AL. TAGGART ET AL. v. BANK OF BURLINGTON ET AL.
• Court: Wisconsin Supreme Court

208 Wis. 239

242 N.W. 507

MASSEY

v.RICHMOND ET AL.

BANK OF BURLINGTON

v.RICHMOND ET AL.

TAGGART ET AL.

v.BANK OF BURLINGTON ET AL.

Supreme Court of Wisconsin.

May 10, 1932.

There was a separate appeal from a judgment of the Circuit Court for Walworth County in each of the above-entitled cases; E. B. Belden, Circuit Judge.

Three actions: The first by Eugene Massey against Volney P. Richmond and others; the second, by the Bank of Burlington against V. P. Richmond and others; and, the third, by Sturges P. Taggart, general administrator of the estate of Carl E. Hultquist, deceased, and others, against the Bank of Burlington and others. From an adverse judgment in each case, Eugene Massey, plaintiff in the first and one of the defendants in the second and third, appeals.--[By Editorial Staff.]

Judgment in each action reversed and remanded, with directions.

No. 134, action begun July 2, 1929; judgment entered August 27, 1931.

No. 135, action begun in May, 1929; judgment entered September 24, 1931.

No. 136, action begun May 31, 1929; judgment entered August 27, 1931.

The above-entitled cases were not consolidated for trial, and there was a judgment in each case, nor were the appeals consolidated, and a separate mandate will be necessary in each case. However, for convenience of the parties, the three cases have been heard in this court upon the same case and briefs. In our disposition of the issues, we shall follow the same procedure.

Massey v. Volney P. Richmond et al., hereinafter referred to as the foreclosure action, was an action brought by the appellant, Eugene Massey, to foreclose a real estate mortgage executed and delivered to him by Volney P. Richmond, defendant, as collateral to secure the payment of a note for $17,122.58, executed and delivered to Massey by Carl E. Hultquist.

The action begun by the Bank of Burlington against V. P. Richmond et al. was an action to set aside certain conveyances made by Carl E. Hultquist to Volney P. Richmond and to set aside and have canceled a mortgage executed upon certain property therein described by Volney P. Richmond to Eugene Massey, and also to have set aside certain mortgages on certain lots in which the First National Bank of Elkhorn was named as mortgagee. This action will hereinafter be referred to as the creditors' action, it having been brought pursuant to section 312.16, Wis. Stats.

The action in which Sturges P. Taggart is plaintiff and Eugene Massey et al. are defendants was an action in equity brought by the predecessor of Taggart, as administrator of the estate of Carl E. Hultquist, deceased, against Eugene Massey and others to procure the cancellation of the conveyances more particularly described in the statement relating to the creditors' action. The action was brought pursuant to section 312.13, Wis. Stats. Ellen C. Elfstrom was subsequently made a party plaintiff in the action.

In 1921, Carl E. Hultquist and Eugene Massey were associated together in certain transactions relating to real estate. They were real estate brokers residing in Chicago, and Eugene Massey was also engaged in the business of loaning money on real estate mortgages. Hultquist apparently located some property situated upon Booth Lake, in Walworth county, which will hereafter be referred to as the Booth Lake property, and, at the request of Mr. Hultquist, Eugene Massey advanced the money with which to purchase the property. It consisted of twenty acres of land upon which was situated a comparatively large well-built dwelling house and some small outbuildings. The property was purchased upon the understanding and agreement that Mr. Massey was to have returned to him out of the proceeds of the sale of the property the money advanced, with interest, charges, and expenses, and that any profit accruing should be divided equally between them. At the time of the purchase, the title to the property was taken in the name of Loretta G. Maher, an employee of Massey. In 1922, Hultquist desired to have the property platted, and for that purpose Loretta G. Maher deeded the Booth Lake property to Carl E. Hultquist. A plat known as the Hultquist subdivision at Booth Lake was recorded June 6, 1922. Some of the lots were then sold to the township of Troy for a memorialpark. The part upon which the residence stood was not platted and will hereafter for convenience be referred to as the residence property. Subsequently, on November 24, 1922, Hultquist deeded the residence property and some of the lots to Massey. It is the contention of Massey that Hultquist, without knowledge on his part, withheld certain of the lots from the conveyance, he supposing at the time that he was to receive a reconveyance of all the property deeded by Miss Maher to Hultquist, except the part which had been sold. The title to the residence property and the lots included in the deed from Hultquist to Massey remained in Massey until June 2, 1928, when, at the request of Hultquist, Massey deeded the property to V. P. Richmond. Certain real estate was conveyed to Marie N. Freberg on August 12, 1926, and at the request of Hultquist, on November 25, 1927, she conveyed the property to V. P. Richmond. Hultquist placed a very high and what Massey considered an unreasonable value upon the property. The investment was Massey's; Hultquist's interest was a share in the profits. Massey continued to urge a sale, and finally they entered into the following arrangement: The title to the property, including that deeded by Miss Freberg, now being in V. P. Richmond, it was agreed that Richmond should execute and deliver to Massey a mortgage for $25,000 upon the residence property and upon lots 1 and 2, except certain parts thereof; that upon the giving of the mortgage Hultquist was to execute a note to Massey for the amount owing from Hultquist to Massey, including Massey's share of the profits, which was agreed upon in the amount of $17,122.58. The transaction was completed on June 2, 1928. The mortgage was duly recorded in the office of the register of deeds for Walworth county, and thereafter delivered to Massey, who held the same as collateral security.

It is conceded on all sides that V. P. Richmond acted merely as a dummy or transfer agent at the request of Hultquist. In the meantime, at the request of Hultquist, Richmond had also executed mortgages upon other property not covered by the Massey mortgage to the First National Bank of Elkhorn. The First National Bank of Elkhorn knew nothing about these transactions, and it is conceded on all sides that they are nugatory.

In January, 1929, Hultquist died. Nothing having been paid upon the indebtedness owing from Hultquist to Massey, about July 1, 1929, Massey began the foreclosure action. The interest of the Bank of Burlington arose in this wise; The bank held a mortgage upon certain property executed to it by Charles E. Fenlon and Delia Fenlon, his wife, which was duly executed, delivered, and recorded. Subsequently Hultquist acquired title to the property and by the conveyance assumed and agreed to pay the mortgage which amounted to $2,500. He purchased the property in 1924. The judgment against him was entered and docketed January 14, 1928. The mortgages upon the lots to the First National Bank of Elkhorn were given in November, 1927. Neither the bank nor Mr. Massey knew anything of these mortgages or claimed any interest in them. In this connection it should be remembered that the deed from Massey to Richmond was dated June 2, 1928. The interest of the defendant Elfstrom is that of a general creditor of Carl E. Hultquist. At the time of his death, Miss Elfstrom held notes in the sum of approximately $30,000. With these and other claims filed and allowed against the estate in the county court of Walworth county, the total claims against the estate were approximately $34,000. Miss Elfstrom testified that she was at Booth Lake with Hultquist in August, 1921, at which time she was introduced as Mrs. Smith, a buyer. She had known Mr. Hultquist for twenty-three years and he lived in her home as a friend for fourteen years. They were not related. It does not appear from the record at what time Hultquist became indebted to Miss Elfstrom, except that she loaned him $3,800 in August, 1921. Whether that indebtedness or any part of it is represented by the notes held by her at the time of his death does not appear. Apparently Miss Elfstrom had no conversation with Massey until after the death of Hultquist when she went to his office for the purpose of obtaining information in regard to Hultquist's affairs, who was then indebted to her in approximately $30,000. Her version of what occurred during the course of that interview is certainly confused, and from the documentary proof it seems to be incorrect, and, so far as it relates to the Massey transaction, directly contradicted by Massey.

Thereafter Miss Elfstrom applied to the county court of Walworth county for a special administrator of the estate of Carl E. Hultquist. One Ellsworth E. Zook was appointed special administrator. Thereafter she applied for the appointment of a general administrator, and Sturges P. Taggart, attorney at law, was appointed general administrator. Before the appointment of Mr. Taggart, Mr. Zook instituted an administrator's action, and subsequently the general administrator was substituted as party plaintiff. After a decision had been rendered by the trial court, settlement of the issues was agreed upon by the respective parties to the action. To this settlement Miss Elfstrom objected, employed...