Weinhagen v. Hayes
| Decision Date | 05 August 1920 |
| Docket Number | No. 97.,97. |
| Citation | 174 Wis. 233,178 N.W. 780 |
| Parties | WEINHAGEN v. HAYES ET AL. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Milwaukee County; E. T. Fairchild, Judge.
Action by Frederick Weinhagen against H. Jay Hayes and others, who counterclaimed. From a judgment for plaintiff, defendants appeal. Reversed and remanded.
The plaintiff is a resident of the city of Milwaukee, and the owner of certain real property. The land increased in value, so as to make it unprofitable for renting purposes with the buildings then on it. He did not care to make the necessary investment for the purpose of erecting buildings, and indicated to one Schenck, a real estate agent, that he would lease the property upon satisfactory terms. The defendant Hyatt was a resident of Detroit, and associated with Harvey and McClure in real estate deals. Hyatt was a friend of the defendant Carrow, and introduced Carrow to McClure, whom they sought to interest in a long-term lease proposition in the city of Milwaukee. Carrow brought the matter to the attention of his business associate, H. J. Hayes. McClure then presented the matter to Hayes and Dr. McFall, another friend of Carrow, and an arrangement was made by which McClure and Harvey were to procure a long-time lease on Milwaukee property for Hayes, Carrow, and McFall.
McClure and Hyatt visited Milwaukee, and there met Carl Remeeus and plaintiff's agent, Otto Schenck. Negotiations were entered into between McClure and Hyatt on one side and Schenck on the other, with Remeeus interested, and finally on October 2, 1911, Weinhagen executed a lease to Hayes, which was signed by Hayes on October 13, 1911. The lease as finally signed was substantially in the form proposed by Weinhagen. In the meantime, in August, Hayes and Carrow had visited Milwaukee, had seen the property, but made no further investigation in regard to it. Before McClure and Hyatt would disclose their principal, they demanded a commission of $12,000 from Weinhagen, in which Schenck was to share. It was finally agreed that McClure and his associate, Harvey, and Hyatt, were to receive $6,000 from Weinhagen, the remaining $3,000 of the $9,000 which Weinhagen had agreed to pay to be taken by Schenck.
By the terms of the lease the lessee was required to give a bond to secure the performance of its conditions, and on November 17, 1911, Hayes, Carrow, Bartholomew, another associate of Hayes, McFall, Harvey, and McClure signed the bond. E. H. McFall, father of Dr. Guy H. McFall, guaranteed the performance of the bond so far as his son was concerned. Harvey, McClure, Hyatt, and Remeeus then received the $6,000, of which $2,000 was in cash and the balance in notes due in 1913 and 1914, but payable only if the taxes were paid by Hayes, to and including 1914. Harvey and McClure then sold the notes to Remeeus at a discount. The defendants Hayes, Carrow, McFall and Bartholomew had an arrangement with Harvey and McClure, by which Harvey and McClure were to receive as compensation for conducting the negotiations on the part of Hayes and his associates, one-fourth interest in the net profits which should result from the transaction.
In 1913 Hayes did not pay the taxes when they became due. Remeeus therefore could not collect the commission notes which he had purchased from Harvey and McClure. Remeeus arranged to have a company organized, which company should loan Hayes money enough to pay the taxes; Hayes giving his notes for $6,400 to the company. Remeeus took the $2,000 commission notes to Weinhagen, with $6,200 in cash, and Weinhagen paid the taxes; Hayes in the meantime having assigned the lease to the company, which loaned him the money, as collateral for his note, the lease being executed by Hayes individually, for himself and his associates, Carrow, McFall, and Bartholomew. The property continued to run behind, Hayes defaulted in the payments of rents, and in 1915 Weinhagen brought suit for the unpaid rent, and in this suit Remeeus was appointed receiver. This was done to prevent the company which held Hayes' note from collecting the rents. Remeeus remained receiver down to the time of the trial.
On behalf of Hayes and his associates it is claimed that they had no knowledge of the payment by Weinhagen of commission to Harvey, McClure, and Hyatt until the month of July, 1916. In November, 1916, Weinhagen began this action. Hayes, Carrow, and Guy McFall answered January 30, 1917, and in their cross-complaint set up the payment of the double commissions, charged Weinhagen with fraud, and repudiated the lease and bond.
The trial court found that the plaintiff had paid commissions as hereinbefore stated; that McClure and Harvey had produced H. J. Hayes as a customer for the lease; “that at the time of the agreement to pay and the payment of such commissions to said McClure, Harvey, Remeeus, one Clark C. Hyatt, and Schenck, and at all times prior to the execution, delivery, and acceptance of said lease, and for a long time thereafter, the plaintiff was without any knowledge or notice that any or either of them were in the employ of or represented the defendant Hayes, or any of his associates, in any manner whatsoever, or that they were, or any of them was, in any wise interested with the said Hayes, or his associates, in the profits to be derived by the lessee of said premises, or in any wise acting or undertaking to act for the defendant Hayes and his associates, or any or either of them;” that there was no conspiracy between the defendants Harvey and McClure and Hyatt and plaintiff; found the facts in relation to the default of the lessee, H. J. Hayes, from which it appears there was due at the time of the trial from Hayes large sums; found further that H. J. Hayes had not commenced the construction of a building upon the premises, as he was required by the terms of the lease to do, and that in consequence of his failure to do so there was due to the plaintiff $15,000 as liquidated damages, with interest; that by reason of the defaults of the defendant there was due to the plaintiff on the 17th day of June, 1918, the sum of $35,325.93, principal and interest; found the facts in regard to the execution of the bond, and “that Eugene McFall died in the month of January, 1917 (this action having been commenced November 25, 1916), a resident and inhabitant of Erie county, Ohio, leaving a last will and testament, duly admitted to probate in the court of proper jurisdiction in such county, and naming Guy H. McFall, Anna J. McFall, and Elizabeth A. Lewis as executors; * * * that the action was revived against such executors by their entering their appearance upon the trial of this action, and by specific consent being given in open court, and answer and cross-complaint were made and filed by them, such consent being limited to cover the revival of the action as it then stood; that later in the proceedings upon the trial plaintiff amended his complaint, so as to charge additional defaults as in the amendment on file set forth, to which amendment counsel for said executors objected, insisting that he had no authority to consent to the revival of the action, excepting as it stood before the amendment”; further, the facts in relationship to the receivership, and “that the defendants, W. C. McClure and H. B. Harvey, were the agents of H. Jay Hayes in the matter of negotiating the said lease, and represented the said Hayes and his associates in the negotiation of the lease, and were to receive as their compensation for acting as such representatives, a proportion of the profits, if any, made in the transaction; and neither said Schenck nor said Remeeus was in any manner such agent or so represented said Hayes or his associates, and was in no manner employed or engaged by any or either of them, and had no interest in any such compensation or profits”; and further found “that after having knowledge (before the commencement of this action) of the payment by the plaintiff of the moneys aforesaid to the defendants Harvey and McClure, and of the payment by the said Harvey and McClure of a part thereof to said Clark C. Hyatt, the defendants H. Jay Hayes, H. P. Carrow, Guy H. McFall, and R. A. Bartholomew continued to exercise acts of ownership of said premises under and by virtue of the lease, and elected to hold and assert the interest of the lessee therein, and have by their conduct, since obtaining such knowledge, waived their rights, if any they ever had, to have said lease or bond canceled, and have elected to retain said lease and the benefits thereof.”
The proper and necessary conclusions of law followed, and judgment was rendered in favor of the plaintiff against Hayes for the sum of $22,976.40, and in favor of the plaintiff against Carrow, Guy H. McFall, McClure, Harvey, and R. A. Bartholomew, and Guy H. McFall, Anna J. McFall, and Elizabeth A. Lewis, as executors of the last will and testament of Eugene McFall, for the sum of $15,000, the amount of the bond, and dismissed the cross-complaint of the defendants upon the merits. From such judgment the defendants Hayes, Carrow, Guy H. McFall, and the executors of the estate of Eugene McFall appeal.
Miller, Mack & Fairchild, of Milwaukee, Beaumont, Smith & Harris and Henry C. Walters, all of Detroit, and Fish, Marschutz & Hoffman, L. A. Olwell and H. T. Ferguson, all of Milwaukee, for appellants.
John H. Paul and Glicksman, Gold & Corrigan, all of Milwaukee, for respondent.
ROSENBERRY, J. (after stating the facts as above).
We wish to commend the careful, lawyerlike, and thorough manner in which this case has been prepared for presentation to this court by the attorneys on both sides. We are furnished with a printed case. The index to the exhibits gives a short statement as to what the exhibit is. An index which simply says that exhibit so and so may be found on page so and so, requires us to look at a large...
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