15 N.W.2d 793 | Wis. | 1944
Action commenced December 11, 1943, by William R. Faust against A.K. Murray for foreclosure of a mortgage. Judgment for plaintiff. But from an allowance of a credit' of $750, plaintiff appeals.
A motion for summary judgment by plaintiff was denied February 2, 1944, and the case was tried to the court February 19, 1944. Upon facts to be referred to, the court concluded:
"1. That during all of the negotiations and the purchasing of the mortgage the plaintiff acted as the defendant's agent, and that any reduction in the amount of the mortgage which was secured would inure to the benefit of the defendant, and that the plaintiff is limited in his recovery to the amount which he actually paid for the mortgage, with interest from *644 the date of acquisition; and that he is estopped to deny his agency in the transaction which resulted in his becoming the owner of the mortgage in question, and therefore is entitled to recover only the sum of $2,750 principal with interest at 5% from September 23, 1943."
And the court "ordered and adjudged that there is due the plaintiff for principal and interest on said note and mortgage the sum of $2,750, with interest at 5% from September 23, 1943."
The mortgage in question covers one hundred sixty-three acres of land in Fond du Lac county, all wild land and marsh except thirty to forty acres. The lower court found that the reasonable value of the land is $4,500. The original holder of the mortgage was one Margaret Haight of Green Bay, Wisconsin. Sometime prior to August 3, 1943, the day upon which the note secured by said mortgage became due and payable, defendant had been informed that the holder of the note and mortgage would take the sum of $3,000 in satisfaction thereof. Defendant desired to refinance this mortgage. A friend and neighbor advised defendant that a Mr. Faust, the plaintiff, might be interested in purchasing the mortgage. Plaintiff visited the farm and discussed the matter with defendant. He arranged to make a trip to Green Bay to talk with Mrs. Haight. He was told that the holder had granted to defendant an extension of time of two years in which to pay the mortgage provided that certain monthly payments were made. None of these payments were made. On September 2, 1943, plaintiff and defendant made the contemplated trip to Green Bay and there held a conference with Mrs. Haight and her attorney. Plaintiff made an offer to purchase the mortgage for $2,500 which offer was not accepted. No agreement was reached that afternoon but thereafter plaintiff was notified by Mrs. Haight that she would accept $2,750. This offer was accepted and on the 23d of September, 1943, the mortgage was duly transferred to *645 plaintiff who paid the $2,750 and interest thereon. Thereafter, several conferences concerning an extension of time for payment were held but no agreement was reached. Foreclosure proceedings were subsequently brought by the plaintiff for the full sum of $3,500. Appellant insists that the lower court had no right to reduce the amount due on the note and mortgage from $3,500 to $2,750. This claim is based on the lack of a written agreement between the parties either extending the time for payment or reducing the amount of the mortgage and on the contention that the terms of the mortgage could not be varied by an oral agreement. However, the trial court found upon ample evidence that the appellant held himself out as respondent's agent in the negotiations to obtain a reduction of the mortgage and ruled that he is estopped to deny his agency. The court concluded that appellant was entitled to recover only the sum of $2,750 with interest.
It is considered that the trial court's findings of fact and conclusions of law under the facts and circumstances of the case are sustained. The appellant acted as defendant's agent in securing a reduction of the mortgage; a constructive trust resulted by operation of law which prevents appellant from taking an assignment of the mortgage at a price lower than the face of the mortgage and enforcing it against the respondent for the full amount of $3,500. The evidence shows that the respondent applied to appellant to aid in refinancing the mortgage. Although appellant did not expressly state that he would act as respondent's agent in the matter, his course of conduct, as revealed in his conversation at the farm and subsequent trip to Green Bay, carry that inference. At the farm, he offered respondent $3,500 for the farm. Although *646 appellant testified that there was no conversation concerning a proposed loan by him to respondent to enable him to satisfy the mortgage, respondent testified that he informed appellant that the holder of the mortgage would settle for $3,000 and asked for a loan, and that appellant's answer was "I will go to Green Bay with you and we will see what we can do about it." This statement coupled with the trip to Green Bay reasonably lead respondent to believe that appellant was acting in the matter in his interest. Respondent further testified that appellant said: "I think we ought to try to get that mortgage for less than three thousand, if we can. . . . It won't do any harm to try, if we can get it for less than three thousand, and give you the benefit of the discount; it will be less interest for you to pay and less to pay off on the mortgage in case it is paid." Certainly, if such statements were made, they indicated that appellant was holding himself out as acting in behalf of the respondent. There is also evidence of a proposed promise of the respondent to give appellant exclusive hunting rights on the land in question in return for his aid in refinancing the mortgage. Respondent relied on appellant's implied promise to act for him in securing the mortgage reduction. Had he not placed such reliance on the appellant's purpose, he would have had an opportunity to seek a loan elsewhere or pay the instalments as they fell due under the arrangement with Mrs. Haight.
The fact situation here is analogous to the position of an agent verbally employed to buy lands for another, but who purchases it for himself with his own funds. Under such circumstances a constructive trust results by operation of law and the agent is compelled to convey the property to his principal.Krzysko v. Gaudynski (1932),
And in Trice v. Comstock (8th Cir. 1903), 121 Fed. 620, 61 L.R.A. 176, the court in holding that an agent employed to sell, who, having obtained information of a prospective sale of land which his principal had not yet acquired, bought the land himself after having left the principal's employ, had bought the land for the benefit of the principal and could not retain it to his own advantage, said "the law peremptorily forbids everyone who, in a fiduciary relation, has acquired information concerning or interest in the business or property of his correlate from using that knowledge or interest to prevent the latter accomplishing the purposes of the relation. If one ignores or violates the prohibition the law charges the interest or property which he acquired in this way with a trust for the benefit of the party to the relation. . . ."
The appellant, having acted as respondent's agent, cannot now be allowed to profit by the transaction.
By the Court. — Order and judgment affirmed. *648