225 Wis. 46 | Wis. | 1937
The following opinion was filed April 7, 1937:
It is undisputed that on January 16, 1933, the defendant caused a machine, which belonged to the Wisconsin Lannon Stone Company (hereinafter called the “Stone Company”), to be sold for $300, under a chattel mortgage given by the Stone Company to secure an indebtedness to the defendant. It had recovered possession of the machine under a judgment entered January 7, 1933, in an action of
On one of the matters in dispute, and as to which the defendant contends that the court erred, its findings are to the following effect: That by reason of defendant’s written notice of January 11, 1933, that the sale would be made at public auction on January 27, 1933, the Stone Company relied upon that notice and believed that the machine would be sold on January 27, 1933; that it received no notice of the private sale which was made on January 16, 1933; and that having been misled by the written notice of January 11, 1933, it was deprived of an opportunity to be present at the sale to protect its interests, and was also deprived of its opportunity to redeem the machine within five days after the sale, under sec. 241.13, Stats. A review of the record discloses that although there is some conflict in the evidence, the court’s findings on those matters are not contrary to the clear preponderance of the evidence and must therefore be sustained.
The defendant further contends that the court erred in finding that the value of the machine on January 16, 1933,
The defendant further contends that the court erred in its findings to the following effect: That the defendant made no effort to advertise the sale, which it made on January 16,
A review of the record discloses that those findings are not contrary to the clear preponderance of the evidence, and warranted the court’s conclusions thereon, excepting in so far as they were based on the finding that the value was $750.
“Whether this sale was planned and executed to defraud plaintiffs it is unnecessary to decide. It was certainly well calculated to take an unjust advantage of them. In the seizure of the property under the mortgages defendant owed a duty to plaintiffs. That duty required him to use all fair and reasonable means in obtaining the best price for the property on sale. The referee and the court found that the sale was not made in good faith nor the amount received upon the sale adequate, and that defendant took a wrongful*53 and unfair advantage of plaintiffs. We think the finding on this point is fully sustained by the evidence. The sale, therefore, being unfair was void, and the defendant was bound to account for the value of the property. . . . The sale being void there was no valid foreclosure, and the acts of defendant amounted to a conversion of the property to his own use, and rendered him liable for its value at the time he converted it.”
The principles and conclusions then stated are equally applicable herein to the defendant’s conduct and the manner in which it disposed of the mortgaged property, and particularly the surplus of the sale, even though the Stone Company is estopped by the former finding and judgment to establish herein that the value of the property was in excess of $150. However, notwithstanding that estoppel, the defendant is not thereby released from its duty to account to the Stone Company for the $300 which were actually realized on the sale. Out of the amount then realized, regardless of the real value, the defendant was entitled to retain or deduct only the indebtedness of $144.12, owing to it and secured by the mortgage, and its reasonable costs and charges in making the sale. Flanders v. Thomas, 12 Wis. *410, *412. It was not entitled to deduct for expenses needlessly incurred, 11 C. J. p. 737, § 575; Jones, Chattel Mortgages (5th ed.), pp. 1013, 1014, § 815a; or for services or commissions in selling property in an unusual manner not provided for in the mortgage, Spencer Co. v. Papach, 103 Iowa, 513, 70 N. W. 748; Buckingham v. Dake (C. C. A.), 112 Fed. 258, 262. The items totaling at $18.40, viz., $7.90 for the re-plevin costs, $6 for constable fees, and $4.50 for other costs on the sale, may be considered reasonable and deductible costs and charges, but the defendant was not entitled to any allowance for the alleged payment of $137.48 to O’Rourke. That sum, amounting to over forty-five per cent of thé selling price, would be grossly excessive as a commission. But
The defendant also contends that even if the Stone Company had a cause of action for any surplus on that sale, it did not pass to the plaintiff as its trustee in bankruptcy, because the liability for violating sec. 241.15 (3), Stats., is solely “to the person personally liable for the indebtedness,” and not to any assignee, or trustee in bankruptcy, etc.; and likewise the right to redeem from a foreclosure sale under a chattel mortgage is merely a privilege which is personal to the persons mentioned in sec. 241.13, Stats. Neither of those statutes are applicable. The plaintiff is not seeking to recover damages under sec. 241.15 (3), Stats., or to redeem the mortgaged property under sec. 241.13, Stats. On the contrary, he is seeking to recover damages on a cause of action which became vested in the Stone Company on January 16, 1933, which was prior to the adjudication in bankruptcy. Upon the plaintiff’s appointment as such trustee in bankruptcy, the Stone Company’s right and title to that cause of action became vested in the trustee by operation of law, and he was empowered to maintain this action to recover thereon. USCA, title 11, § 110 (a) ; Miley v. Heaney, 168 Wis. 58, 89, 169 N. W. 64; Sparks v. Kuss, 195 Wis. 378, 391, 216 N. W. 929, 218 N. W. 208; Hazelwood v. Third and Wells Realty Co. 205 Wis. 85, 236 N. W. 591.
By the Court. — Judgment modified as stated in the opinion, and affirmed as modified.
A motion for a rehearing was denied, with $25 costs, on May 25, 1937.