Weigell v. Gregg

• Decision Date: 26 October 1915
• Citation: 161 Wis. 413,154 N.W. 645
• Parties: WEIGELL v. GREGG ET AL.
• Court: Wisconsin Supreme Court

161 Wis. 413

154 N.W. 645

WEIGELL

v.GREGG ET AL.

Supreme Court of Wisconsin.

Oct. 26, 1915.

Appeal from Circuit Court, Milwaukee County; Lawrence W. Halsey, Judge.

Action by August Weigell against Margaret Anna Gregg and another. From a judgment for plaintiff, defendants appeal. Reversed, with directions.

Action to foreclose a mortgage for $4,500. Defense payment of $3,000 and tender of balance. The circuit court found against the defendants, and entered judgment for the face of the mortgage, with interest, costs, and $200 solicitor's fee. From such judgment, defendants appealed.Adolph Hubschmann, of Milwaukee, for appellants.

Charles E. Wild, of Milwaukee, for respondent.

VINJE, J.

December 10, 1903, the defendant Margaret Anna Gregg executed and delivered to the Citizens' Trust Company her note for $4,500, payable in five years, and secured by a mortgage on real estate executed by her and her husband, Walter F. Gregg. On December 10, 1908, the time of payment of the note was extended five years by an agreement in writing entered into by the Citizens' Trust Company, as agent for the owner of the note and mortgage, as party of the first part, and Margaret Anna Gregg and Walter F. Gregg, as parties of the second part. In this extension agreement the defendants agreed to pay the Citizens' Trust Company, as agent, the sum of $4,500 in five years, together with interest at the rate of 5 per cent. per annum, payable semiannually. This agreement was signed, sealed, witnessed, and acknowledged by the respective parties, and was accompanied by 11 semiannual interest coupons signed by both defendants. The defendants negotiated the loan through one H. J. Mabbet, and paid their semiannual interest to the Citizens' Trust Company through him. On August 24, 1909, they paid directly to the Citizens' Trust Company $1,000 of principal, and it released a portion of the mortgaged premises. On October 2, 1909, they paid a further sum of $2,000 directly to the Citizens' Trust Company, and took a receipt for the payment. On January 11, 1904, the plaintiff bought the note and mortgage from the Citizens' Trust Company, and both were delivered to him, and remained in his possession since. He also bought from time to time a number of other notes and mortgages from it of which he took and retained possession. The trust company collected interest on the notes sold to him, and in some cases the principal also, and it would either turn over the cash to him or other securities approved by him in lieu of cash. The trust company looked after taxes and the insurance on mortgaged premises and executed releases of mortgages when paid in full. The trust company did not notify plaintiff of the payment of the $1,000 and $2,000 principal paid in 1909, and he did not perhaps learn definitely of such payments till September 4, 1913. He then demanded cash or approved securities from it, but received neither. He tried at various times between then and October 2, 1913, when the trust company closed its doors and was taken charge of by the commissioner of banking of this state, to get a settlement with it, but without success. On October 7, 1913, he notified the defendants not to make any payments to the trust company, and that was the first time the defendants or either of them knew who owned their note and mortgage. The extension agreement was sent to plaintiff, and he consented to it, but whether such consent was given before or after its execution does not clearly appear, and he says he is unable to say whether or not he knew by the terms of the agreement that the trust company had authority to collect principal and interest. All other notes and mortgages bought by him from the trust company, as well as the ones in suit, were made payable to the trust company at its office.

[1] The trial court found that the Citizens' Trust Company had no authority from the plaintiff to receive the partial payments of $1,000 and $2,000, and, since he did not receive the same or any part thereof, defendants are entitled to no credit therefor as against him. This finding rests upon conclusions drawn from the almost undisputed evidence as to the transactions between the several parties, rather than upon any conflict in the testimony. It therefore does not carry with it the same conclusiveness of a finding resting only upon probative disputed facts. It is rather in the nature of a legal conclusion drawn from undisputed evidence, which, if not in accordance with the view of this court, can be disregarded almost as readily as a pure error of law on the part of the trial court. This is said not by the way of criticism of the finding made or of its form, but as a reason why this court feels free to disregard it, though nominally a finding of fact.

[2] Treating the trust company as having no greater general powers than an individual agent, as the trial court evidently did, he came to the conclusion that it had neither express nor implied authority to receive a part of the principal before due. The cases of Bartel v. Brown, 104 Wis. 493, 80 N. W. 801,Kohl v. Beach, 107 Wis. 409, 83 N. W. 657, 50 L. R. A. 600, 81 Am. St. Rep. 849,Loizeaux v. Fremder, 123 Wis. 193, 101 N. W. 423, and Bautz v. Adams, 131 Wis. 152, 111 N. W. 69, 120 Am. St. Rep. 1030, tend to support such conclusion, though it is deemed that the undisputed facts bring the case within the doctrine of implied authority, even if the agent were an individual, instead of a trust company. McDermott v. Jackson, 97 Wis. 64, 72 N. W. 375;Freeman v. Dells Paper & Pulp Co., 150 Wis. 93, 135 N. W. 540.

In McDermott v. Jackson, 97 Wis. 72, 73, 72 N. W. 378, the rule is thus stated:

“If a principal so conducts his business, either through negligence or otherwise, as to lead the public to believe that his agent possesses authority to contract in the name of the principal, such principal is bound by the acts of such agent, within the scope of his apparent authority, in so contracting with any person who, upon the faith of such holding out, believes, and has reasonable ground to believe, that the agent has such authority, and in good faith deals with him, even though such agent have express secret instructions to the contrary. If the principal, by his conduct, imparts to his agent a particular character, he is legally responsible to innocent third persons for all responsibilities which would be incident to such character if it existed by express authority, and without regard to any secret instructions.”

In the present case the principal, through the extension agreement, imparted to the trust...