Rogers v. Priest

• Decision Date: 15 October 1889
• Citation: 43 N.W. 510,74 Wis. 538
• Parties: ROGERS v. PRIEST ET AL.
• Court: Wisconsin Supreme Court

74 Wis. 538

43 N.W. 510

ROGERS

v.PRIEST ET AL.

Supreme Court of Wisconsin.

Oct. 15, 1889.

Appeal from circuit court, Winnebago county; GEORGE W BURNELL, Judge.

Action on a promissory note, made by defendants, as partners, in their firm name, to the plaintiff, for $105 and 10 per cent. interest, dated July 10, 1877, and indorsed $10.50 paid thereon August 15, 1878, and $10, July 5, 1879. Also to recover certain moneys alleged to be held by the defendants in trust for the use of the plaintiff. The action was commenced in 1884. Defendants interposed a counter-claim for services rendered by them for plaintiff, and for moneys paid to her. They also answered the statute of limitations. Plaintiff replied to the counter-claim, which reply is, in substance, a general denial of the averments thereof. The cause was referred to Judge CLEVELAND to hear, try, and determine. The referee filed his report, dated October 14, 1888, in favor of the plaintiff, and stated an account of the transactions between the parties. The court confirmed the report, and gave judgment for the plaintiff in accordance therewith. A more specific statement of the case is contained in the opinion. The defendant Priest appeals from the judgment.De W. C. Priest, pro se.

Spence & Hiner, for respondent.

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

The note described in the complaint was put in evidence, and the payment of the sums indorsed thereon at or about the date of the indorsements was duly proved. This takes the note out of the operation of the statute of limitations. It was claimed in the argument that one partner in a firm of attorneys has no implied authority to give a firm note. No doubt such is the general rule of law. Smith v. Sloan, 37 Wis. 285. But in this case the note was signed in the firm name by the appellant himself, and the plaintiff testified that she paid to him the money for which it was given. Under these circumstances the appellant cannot be heard to deny the validity of the note. From 1874 to 1877 the defendants were partners in the business of practicing attorneys in the city of Fond du Lac. The plaintiff intrusted to them moneys for investment, as follows: September 5, 1874, $1,068.73; May 22, 1875, $135; and June 8, 1876, $320. The contract was that the money should be loaned by them at 10 per cent. interest, on good security. The defendantsdealt with the money, or part of it, as their own; and, although they loaned considerable portions of it, they retained the securities, collected such loans, and used the proceeds for their own purposes, except a loan of $150, to one Curtis; another of $100, to one Youmans; and a balance of $63, to one Mason; and except also certain payments made to the plaintiff by the defendants, to be hereinafter noticed. The securities for the loans last mentioned were delivered to plaintiff, and the defendants had nothing further to do with them. The defendants, under date of June, 1876, made formal entries in their books of loans to the amount of $270 of plaintiff's money in their hands to themselves, and, in December of that year, of $202 in like manner. They also entered on their books, from time to time, computations of interest thereon at the rate of 10 per cent. per annum. During the years 1875 and 1876 the defendants collected interest on such loans to others to the amount of $176.84, and applied the same to their own use.

The foregoing facts were proved on the trial, and found by the referee. Hence, after these transactions, say on January 1, 1877, the accounts between the parties, aside from payments to plaintiff, (which will be considered later,) stood thus:

+-----------------------------------------------------------------------------+
                ¦Amount of plaintiff's money thus placed in defendants' hands for     ¦$1,523 ¦
                ¦investment                                                           ¦73     ¦
                +---------------------------------------------------------------------+-------¦
                ¦Interest collected by them on loans                                  ¦176 84 ¦
                +---------------------------------------------------------------------+-------¦
                ¦Interest for six months at 10 per cent. on $270 loaned by defendants ¦13 50  ¦
                ¦to themselves in June, 1876                                          ¦       ¦
                +---------------------------------------------------------------------+-------¦
                ¦                                                                     ¦$1,714 ¦
                ¦                                                                     ¦07     ¦
                +---------------------------------------------------------------------+-------¦
                ¦Deduct securities received by plaintiff                              ¦313 00 ¦
                +---------------------------------------------------------------------+-------¦
                ¦                                                                     ¦$1,401 ¦
                ¦                                                                     ¦07     ¦
                +-----------------------------------------------------------------------------+
                

All the items charged in the complaint and answer, including those in the counterclaim, are involved in the accounting. The pleadings, taken together, demanded a statement of an account between these parties. When properly stated, the account necessarily will include all matters in issue between them.

It will be convenient to notice here some objections to the report of the referee. One is that he did not expressly pass upon the charges for services contained in the counter-claim. True, his report is silent as to these, but he did not allow them, and the effect thereof is that he disallowed them entirely. They will therefore be regarded as having been disallowed by him. These charges are for commissions for loaning a portion of the money so left with the defendants for investment, and for professional services in the foreclosure of certain mortgages for the plaintiff in 1874, 1875, and 1877. The charges for commissions cannot be allowed. The defendants were trustees and agents of the plaintiff to loan her money for her on good security. They failed in their duty to her in respect to the most of it, and the result is she has had five years of litigation to get her money back, and has not yet fully succeeded. The idea of giving them a commission for loaning a few hundred dollars which they properly loaned for her benefit cannot be entertained. They failed essentially in their duty to the plaintiff, and have no legal or moral claim for commissions.

In all the dealings between the parties, running through several years, an intention to make any charges in the foreclosure actions, beyond taxable costs, was not suggested to the plaintiff. There is no charge for these services on defendants' books of account, except that after this action was commenced, and probably eight or ten years after the services were rendered, entries of such charges were made by some one at the foot of other entries in those cases in the office docket of the defendants. It is reasonable to believe the referee inferred from these facts that the defendants were content to take the taxable costs of the statute (which they received) as their compensation, and declined to allow them, years afterwards, to surcharge their account pending this litigation. But, whatever may have been the grounds upon which the referee rejected the charges, we think they come altogether too late to be considered with favor. They must stand rejected.

The referee allowed the plaintiff 10 per cent. interest on $472 thus formally loaned by the defendants to themselves, and 7 per cent. on all other sums, for which they are accountable to the plaintiff. There is no error in this interest charge of which the defendants can justly complain. Their contract was to loan the plaintiff's money on 10 per cent. interest, and they constantly recognized their obligation to pay that rate on the unauthorized loan to themselves. Indeed, in a brief statement of their accounts, made by the defendant Carter in 1879, when the parties were endeavoring to adjust the account, which statement the plaintiff has put in evidence, the defendants seem to recognize their liability to pay that rate of interest on all moneys of the plaintiff for which they are accountable to her. The balance due the plaintiff was ascertained in that statement, and the defendants executed their note to her for the amount of it, and gave such note to her, but she refused to retain it. The note was for $1,100. Had she kept it, the statement would probably have the conclusive effect of an account stated. The referee did not give it that effect, and on this appeal by one of the defendants we cannot disturb his ruling. It was claimed by the appellant in his argument in this court that no interest could lawfully be charged against the defendants until due demand of the money, and that no demand at any particular time was found by the referee. The point is not well taken. The money was due the plaintiff as soon as the defendants failed to invest it as they agreed, and no demand was necessary to entitle her to interest thereon from that time.

The referee found that defendants had made payments to plaintiff aggregating in each year as follows: In 1875, $61; in 1876, $387.80; in 1877, $110.36; in 1878, $95; in 1879, $57; in 1880, $112; in 1881, $100; in 1882, $77; in 1883, $100; and in 1884, $80. The date and specific amount of each item is reported. We have examined the pleadings and testimony with much care, and are quite unable to say that any item in defendants' account, which should have been allowed, was disallowed or omitted by the referee, or that any amount has been allowed to the plaintiff to which she is not legally entitled. The testimony is somewhat confused in respect to dates, and in some cases it has been difficult to identify the items in the account to which it refers, but the best scrutiny we have been able to exercise satisfies us that all the items of payments admitted in...