PHœnix Mut. Life Ins. Co. v. Walrath

• Decision Date: 18 October 1881
• Citation: 10 N.W. 151,53 Wis. 669
• Court: Wisconsin Supreme Court
• Parties: PHŒNIX MUTUAL LIFE INS. CO. v. WALRATH.

53 Wis. 669

10 N.W. 151

PHŒNIX MUTUAL LIFE INS. CO.

v.WALRATH.

Supreme Court of Wisconsin.

Filed October 18, 1881.

Appeal from circuit court, Milwaukee county.

Finches, Lynde & Miller, for respondent.

Jenkins, Elliott & Winkler, for appellant.

TAYLOR, J.

This is an action brought by the respondent against the appellant to recover moneys alleged to have been collected by the appellant, as the agent of the respondent, and which, it is also alleged, the appellant had unlawfully converted to his own use. The complaint charges that the moneys were collected and converted in 1880. The answer is a general denial. The pleadings were not verified by either party. On the trial the respondent, to sustain his complaint, offered in evidence a contract made between the respondent and appellant, bearing date November 15, 1865, and which contract, by its terms, terminated in three years after the date thereof. This evidence was objected to by the appellant, but was received against such objection. Respondent also offered a bond given by the appellant, with sureties, bearing date November 7, 1865, conditioned for the faithful performance of the appellant's duty as the agent of the respondent. This was also objected to by the appellant, but was admitted against such objection. The only other evidence offered on the part of the respondent, was the evidence of the appellant that he had collected premiums for the respondent in 1880, and had not paid them over, giving the amounts collected and remaining in his hands; also, some evidence showing that the appellant had used some of the premiums so collected for his own purposes, and that the respondent had demanded the payment of the moneys in his hands previous to the commencement of the action. The respondent also showed, by the testimony of the appellant, that the reason he refused to pay over the money was because of a claim he made against the company, that, when the company removed him from the agency, he was entitled to receive from it what the agency was worth; that before he was removed the company had denied his right to any compensation in case of his removal; and that he had retained the money, under advice of counsel, in order to force a settlement between himself and the company as to his claim for compensation upon a change of the agency.

Upon the part of the appellant it was shown--although it appears from the record that upon the objection of the respondent the court held it inadmissible--that the contract of 1865 was not in force between the parties after it expired by its terms. The appellant then, as tending to prove the contract which did exist between the parties after the expiration of the contract of 1865, offered in evidence a letter written by the vice-president of the company to the appellant in 1866. This letter was objected to, and ruled out by the court. It is possible that this ruling was correct, considering the character of the letter and when it was written. In rejecting this evidence, the learned circuit judge, in giving his reasons for rejecting it, stated his views as to what evidence could be given under the general denial by the appellant. The learned judge said: “The general denial puts in issue only the material facts charged: First, the receipt of the money, the question of the ownership of the money, and the conversion. The law says the receipt of the money of another, and a demand by him for that money, and a refusal to pay it over, is prima facie evidence of conversion. The defendant, in my judgment, in this action may show-- First, either that he never received the commissions or premiums; or, secondly, that he had paid them all up. That is all he can show. He cannot show or set up, in my judgment, any outstanding damages on a contract, or any outstanding contract or arrangement by which money was paid in any other way, because that is not germain to the present action of tort to recover the amount of money refused by him to pay over, admitted by him to be collected by him as premiums; and that is all there is of this case, in my judgment.”

Upon the defence the appellant offered to show that after the expiration of the contract of 1865 he made a new contract with the company, different from the contract of 1865, and also to show what such contract was. This was objected to by the counsel for the respondent and excluded by the judge, holding, as above stated by him, that under the general denial he could show nothing in bar of the plaintiff's claim, except the fact that he had paid the money to the company. We think this was clearly an erroneous view of the case. The respondent charges that the appellant, as its agent, had collected moneys due to it and had unlawfully converted them to his own use; and to prove the agency and the conversion the respondent offered in evidence a contract made in 1865, and the subsequent collection of money as agent of the respondent in 1880, long after the contract of 1865 had expired by its terms, and after it had in fact terminated, as the proof shows, and a refusal to pay over the money so collected and also evidence showing that the agent had used a portion of the moneys collected for his own purposes.

As the evidence stood when the appellant offered to show what the existing contract of agency was between the company and the appellant, there was no evidence in the case showing the nature or character of the contract between the parties. The contract of 1865 was shown to have terminated long before the moneys sought to be recovered had been collected by the appellant. The case stood simply on the fact that the appellant was agent at the time the money was collected; that he had collected it as the agent of the company, and refused to pay over on demand; and that some of the money had been converted to his use. It is probable, as stated by the learned circuit judge, that this evidence made a prima facie case for the plaintiff, and, unexplained, would have justified a verdict in its favor. It seems to us very clear that, in this state of the proofs, it was competent for the appellant to show what the character and nature of his agency was, and what his rights were under his contract with the company. The respondent charges him with the unlawful conversion of its money. How can this court, or the circuit court, know that there has been an unlawful conversion of the money collected by the appellant for the respondent, under the terms of the contract between the parties, until the contract is brought before the court by the evidence? The appellant having offered to show that there was a specific contract between the parties, fixing the rights of both parties, that contract would be the best evidence of the appellant's rights, when proved. Such contract would determine whether the refusal to pay over the money in his hands, at the time the same was demanded of him, was a conversion thereof, and whether by the terms of the contract of agency he had the right to use the money collected as his own. The plaintiff having failed to show what the contract between the parties was, it is clear the defendant was entitled to bring it before the court under the general denial. He alleges that the contract would show that there had been no conversion of the money on his part, and he had the right to have its terms before the court for its adjudication upon that question.

It seems to be well settled that, in an action for the wrongful conversion of personal property, under the general denial the defendant is entitled to give in evidence any facts which disprove the plaintiff's title to the property in controversy, and also any facts which disprove a...