Mueller v. Michels

• Decision Date: 15 January 1924
• Citation: 184 Wis. 324,197 N.W. 201
• Parties: MUELLER ET AL. v. MICHELS ET AL.
• Court: Wisconsin Supreme Court

184 Wis. 324

197 N.W. 201

MUELLER ET AL.

v.MICHELS ET AL.

Supreme Court of Wisconsin.

Jan. 15, 1924.

Appeal from Circuit Court, Sheboygan County; Michael Kirwin, Judge.

Action by Fred Mueller and Emelia Mueller against Frank Michels and others. From a judgment for defendants, plaintiffs appeal. Affirmed.

Two causes of action are separately alleged in the complaint, one for rescission based on fraud, and the other for damages for like cause.

The plaintiffs are husband and wife of about middle age and, for and during a great portion of their existence, have been engaged in farming. The defendants Frank Michels and Margaret Michels, his wife, are farmers and were the owners of an 80-acre farm in Sheboygan county, while the defendant Rosenthal was a farmer and a licensed real estate agent in said last-named county. In September, 1921, the plaintiffs were the owners and in possession of a piece of real estate located near the outskirts of the village of Kiel, Wis., on which was located a residence, saloon, and dance hall. Being desirous of exchanging their said property, plaintiffs engaged the services of said defendant Rosenthal to aid and assist them in procuring some one with whom a satisfactory exchange could be made and to aid and advise them in such exchange. Rosenthal was informed by the plaintiffs that the latter estimated their property at $10,000 and that they expected it to be credited at such value upon any exchange which might be effected. This property was incumbered by two mortgages, aggregating $3,025. Rosenthal called the attention of the plaintiffs to the Michels farm, and on the 26th day of September, 1921, the plaintiffs, together with Rosenthal, called on defendants Michels and made an inspection of the farm and of the buildings. Mr. Michels told Mr. Rosenthal that he wanted $16,000 for the farm, but his attention having been called to the defective condition of the roofs on the buildings, he volunteered to take $15,500 for the property. Thereupon the Michels, together with Rosenthal, made an inspection of the plaintiffs' property and were told that plaintiffs wanted $10,000 for their property, and it was thereupon agreed by and between the parties that an exchange would be effected, each party assuming the indebtedness upon the properties to be received in exchange. On September 28, 1921, a written agreement for an exchange was executed upon the terms above referred to; it being expressly agreed between the parties that each would pay the interest upon the incumbrances upon their property up to the time of the exchange. Considering the valuation of the parties, as aforesaid, it was ascertained that there was a difference of $1,535 due the defendants Michels, which amount, it was understood, would be paid by the plaintiffs in cash; however, it was ascertained that the plaintiffs were in possession of no ready means and were unable to consummate the exchange, being unable to raise this difference in cash. Thereupon plaintiffs and Rosenthal skirmished around the county and interviewed various monied parties to raise the cash necessary upon a chattel mortgage of the personal property on the farm but utterly failed in their efforts. After some negotiations, it was agreed that the defendants Michels would accept a note for the amount, payable in six months, secured by a chattel mortgage. The proper documents for an exchange were thereupon prepared, executed, and delivered, including the chattel mortgage aforesaid. It is to be noted that the chattel mortgage contained the usual insecurity clause, authorizing the mortgagees, in the event of their deeming themselves insecure, to levy upon the property and to sell the same and to apply the proceeds on the payment of the note and mortgage. The parties thereupon immediately removed upon the properties received by them in the exchange. Neither of the parties complied with the agreement, pursuant to which they were to pay the interest upon the incumbrances on their own property up to the date of the exchange. Within four or five days after the exchange had been effected, Mr. Michels demanded payment of the chattel mortgage. Having no means whatever, excepting only the farm and the stock upon the same, plaintiffs sold certain of the stock and realized thereon the sum of $312.95, which amount was paid over to Michels and the proceeds of which were in part used in paying interest on one of the mortgages upon the property, originally owned by the plaintiffs, and the balance was credited upon the chattel mortgage note. Thereafter and up to December 30, 1920, Michels, at intervals, persistently demanded the payment of the balance of the amount secured by the chattel mortgage and, being unsuccessful in his efforts, seized the property under the aforesaid insecurity clause and sold the same at public auction, realizing therefrom the sum of $623.95. The plaintiffs continued to remain upon this farm until April, 1923, but being without any means of subsistence, having lost all of their personal property secured by the chattel mortgage, removed from the farm, and during the same month the owner of the $3,000 second mortgage upon the farm, on account of default in the payment of principal and interest, foreclosed the same by advertisement, and the farm was thereupon sold. In the month of July, 1922, the instant action was begun. The complaint, among other things, alleges fraudulent representations as to the value of the farm and the personal property, also as to the status of the incumbrances upon the farm and the existence of a secret agency existing between the defendants Michels and the defendant Rosenthal, by the terms of which Rosenthal, who was known by the defendants Michels to be the agent of the plaintiffs, also was hired and acted as the agent for such defendants for a valuable consideration; and that, pursuant to such employment by his codefendants, Michels, Rosenthal deliberately failed to perform his full duty as an agent for the plaintiffs and to properly or sufficiently advise them with respect to the exchange. The case was submitted to a jury upon a special verdict, and the jury found that the market value of the 80-acre farm, at the time of the exchange, was $8,000; that the market value of the personal property on the farm was worth the sum of $1,900; that the market value of the plaintiffs' property was worth the sum of $4,800; that the defendants Frank Michels and Rosenthal did not represent to the plaintiffs, shortly before the date of the exchange, that the farm and personal property thereon were of the reasonable value of $16,000; that Rosenthal acted as the agent for the defendants Michels and wife, as well as for the plaintiffs; that the plaintiffs did not have knowledge, before the exchange was consummated, that Rosenthal was acting as the agent for the defendants Michels; that the defendant Frank Michels did not, at the time of the making of the exchange, represent to the plaintiffs that he had paid the interest on the mortgages on his farm up to the date of the exchange. At the close of the evidence and before the case was submitted to the jury, the court made and entered the following finding upon the undisputed evidence:

“Before the date when the properties in question were exchanged it was agreed between the plaintiffs on the one part, and the defendants Michels on the other part, that the unpaid interest on the mortgages of $3,025 incumbering the plaintiffs' saloon and dance hall property, should be paid by the plaintiffs up to September 28, 1921; and that the unpaid interest on the mortgages aggregating $7,000 on the Michels farm should be paid by the defendants Michels up to September 8, 1921. The plaintiffs failed to pay the interest which they agreed to pay as aforesaid, and the defendants Michels also failed to pay the interest on the mortgages of $7,000 which encumbered their farm.”

Upon the rendition of the verdict, the defendants moved for judgment to dismiss the plaintiffs' complaint with costs, and defendants moved for findings of fact and conclusions of law and for a change in the answer of the jury to question 2 in the special verdict from $1,900 to $936.60. Plaintiffs' motions were denied, and defendants' motion was granted. Whereupon judgment was entered in defendants' favor, dismissing plaintiffs' complaint, with costs, from which judgment plaintiffs have taken this appeal.Lehner & Lehner, of Oconto Falls (Otto P. Lehner, of Madison, of counsel, for appellants.

Bowler & Bowler, of Sheboygan, for respondents.

DOERFLER, J. (after stating the facts as above).

[1] Before the introduction of any evidence, defendants' counsel moved that plaintiffs be required to elect upon which cause of action they desired to rest their case. The court did not rule upon the motion, but reserved its ruling, whereupon plaintiffs' counsel made the following statement, entered upon the record:

“We elect and rely upon the cause of action for equitable rescission, if there is any election necessary.”

A similar motion was made, both at the close of plaintiffs' evidence and at the close of defendants' evidence, but no ruling was made by the court; the plaintiffs' counsel, however, insisting throughout the trial that the action was one in equity for rescission. Counsel for both parties on this appeal have treated this case as an action in equity for rescission. While there is nothing definite in the record to convince one as to the attitude of the trial court on the subject, in view of the attitude of counsel, we are persuaded that the court considered the action one in equity, took the verdict of the jury as advisory, and inferentially adopted the same as its findings and added the finding above set forth, based upon the undisputed evidence in the case. We therefore conclude that the action is one in equity, that the plaintiffs duly elected to stand upon rescission, and that having made such election are bound thereby. Limited...