Union Trust Co. v. McKeon

• Decision Date: 03 March 1904
• Court: Connecticut Supreme Court
• Parties: UNION TRUST CO. v. McKEON et al.

57 A. 109

76 Conn. 508

UNION TRUST CO.

v. McKEON et al.

Supreme Court of Errors of Connecticut.

March 3, 1904.

Appeal from Superior Court, New Haven County; Milton A. Shumway, Judge.

Action by the Union Trust Company against Mary McKeon and others. From a judgment for plaintiff, defendants appeal. Reversed.

A. Heaton Robertson, for appellants.

John K. Beach and John W. Bristol, for appellee.

TORRANCE, C. J. The mortgage sought to be foreclosed was made in March, 1886, by John McKeon, to Bennett and Converse, trustees, to secure a note for $3,000, made by McKeon, payable on demand to the order of said trustees or the survivor of them. In June, 1890, Bennett, as surviving trustee, assigned said note and mortgage to Jane E. Winchester, who held them as owner until April 6, 1894, when she assigned them to Luzon B. Morris as trustee. After the death of Mr. Morris, his executor, in September, 1895, assigned said note and mortgage to the plaintiff as trustee, and the plaintiff is now the owner and holder of them. The loan to McKeon was negotiated by Robert T. Merwin, a real estate broker of New Haven. While the note and mortgage were owned by Mrs. Winchester, the mortgagor made to Merwin two payments on the principal of the note, one of $1,000 on the 10th of March, 1892, and one of $1,400 on the 18th of July, 1893. Merwin died before this suit was brought, without having paid Mrs. Winchester the money so received from McKeon, and without accounting for the same, and McKeon and Mrs. Winchester are both dead. The plaintiff claims that, in receiving said money, Merwin was the agent of McKeon, while the defendants claim that he was the agent of Mrs. Winchester, and this is the main question presented in the case.

Upon the facts found, the trial court held that Merwin was not the agent of Mrs. Winchester in receiving these two payments. As bearing upon the question of Merwin's agency, the controlling facts found are, in substance, these: Prior to the date of the note and mortgage in question here, Merwin, "a well-known and highly respected real estate broker," requested Bennett and Converse, trustees, to loan the sum of $3,000 to McKeon, to be secured by the land described in the mortgage deed. Bennett examined the property, and told Merwin that the proposed loan would be accepted. The mortgage deed and note were drawn by Merwin, executed by McKeon, and delivered to the trustees by Merwin, when they paid to him the amount of the loan, which he paid to McKeon. "No commission or other compensation for placing the loan was paid to Merwin by the trustees," and they neither saw nor personally dealt with McKeon in the transaction. "It does not appear whether or not McKeon dealt with Merwin under the belief that Merwin was the agent of the trustees in making said loan." "At no time was the note or mortgage in the possession of said Merwin after the delivery of said papers to said Bennett and Converse in 1886." Prom the beginning McKeon paid the interest upon the note, as it became due from time to time, to Merwin. "No express authority was ever given to Merwin by any of said owners of the note, or by said Hennett as agent of Mrs. Winchester, to collect either principal or interest on the note. The interest on the note was regularly paid by Merwin to Mr. Bennett, as trustee, while said Bennett and Converse, as trustees, owned the note, and thereafter to Jane E. Win-Chester while she owned the note. No commission or compensation was paid by any of the owners of the note to Merwin on account of said payments of interest." It did not appear whether or not McKeon made the two payments of principal under the belief that Merwin was the agent of Mrs. WinChester to receive them. After the two payments were made to Merwin, he continued to pay to Mrs. Winchester and to the other owners of the note, down to the time of his death, the sum of $75, semiannually, as interest upon the full principal of said note. After the first payment of $1,000 to Merwin. McKeon paid to Merwin interest at the rate of 5 per cent. on the $2,000, and after the second payment of $1,400 he paid Merwin interest at the rate of 5 per cent. on $600. For many years prior to the time that the note became the property of Mrs. Winchester, Merwin had been her agent to collect the rents from various buildings belonging to her in the city of New Haven, and to make repairs on the same, for which services he received a commission or salary; and during the period that she was the owner of the note, to wit, from the 4th day of June, 1890, to the 6th day of April, 1894, the rents collected by Merwin for her amounted to at least the sum of $20,000 per annum, and during this period he negotiated and made leases of the various buildings belonging to Mrs. Winchester. For many years before, and during, the time that Mrs. Winchester held the McKeon note and mortgage, she loaned considerable sums of money through Merwin, secured by mortgages upon real estate, and in some cases Merwin received payments on the principal, and paid the same over to Mrs. Winchester, who accepted the same. But it did not appear that Merwin ever received any compensation for placing said loans, or that he was ever expressly authorized to collect or receive payments for her on account of the principal of said loans. At one time, while she owned the McKeon note, her bookkeeper sent to Merwin a list of the mortgages that Merwin had negotiated for her. That list contained some 29 mortgages, including the McKeon mortgage, representing loans amounting to $225,000. It was sent to Merwin with a request to ascertain the condition of the taxes...