Mihills Manufacturing Co. v. Camp , 49 Wis. 130 ( 1880 )

ORTON, J.

Without passing upon other questions raised, and so ably discussed upon this appeal, we are compelled to hold that the acts and conduct of the respondent company, as they appear by the evidence, estop the company from setting up their release of the Fond du Lac property from the first mortgage sale.

Pier and Baker were officers of the company, one as president and the- other holding the financial office of treasurer. Being such officers, but as individuals, as they claim, they bought and owned the certificate of sale, and as such released from the same the Fond du Lac property to the respondent. Being such officers, but as individuals, they kept this release secret and concealed from Camp, the trustee and subsequent mortgagee, and from the creditors in the trust. And being such officers, but as individuals, as they claim, they had several interviews with Bryant, one of the principal creditors in the trust, and who had the chief management of the matter for Camp, the trustee, in respect to the Camp mortgage, its payment and its relations with .the first sale; and in one of such interviews, at least, they claimed to have bought and owned the certificate of the first sale; and upon the offer of Bryant to purchase it, they refused to sell it to him for Camp, the trustee; and this was long after the time they had released the Fond du Lac property from it.

We think it clear, from the evidence, that they had knowledge, as individuals at least, that Bryant intended to redeem the Fond du Lac property from such sale for Camp, the trustee, if the Camp mortgage was not paid, and had knowledge that he was about to redeem the same, and did so redeem it, on the last day of redemption, not knowing that the Fond du Lac property had been long before released to the respondent, and allowed Bryant to pay to the sheriff for such redemption the sum of $6,500, for the Fond du Lac property, which they had long before released to the respondent company of which they were such officers. Under these circumstances, perhaps, there was no legal duty imposed upon them, as individuals, to disclose to Bryant such an important fact, which they knew he was ignorant of, and was about to pay, and probably lose, so large a sum of money through such ignorance, however dishonorable such a concealment might have been.

There is a strange and suspicious confusion of individual and official relations, duties and responsibilities all through this transaction, and a separation and distinction of official and personal identity which we think ought not to be recognized or receive judicial indorsement. Pier and Baker, although, as they claim, they were interested and acted only for themselves in this matter, were, nevertheless, officers of the company, and the company was also deeply interested in the same matter, and as such officers they had a duty to perform for and on behalf of the company, which they could not ignore or neglect with impunity. The company, to the extent of its interests, was present with and by them in all of these pretended personal interviews with Bryant, and it was unquestionably their duty, as such officers, to make the proper disclosures for the company of these facts (which for their own gain only they may have concealed), which would, prevent this fruitless investment of Bryant to redeem property which they knew the company held and owned exempt from such redemption. By all authorises, and the commonest principles of equity, we are compelled to hold that these fraudulent concealments by these officers were the fraudulent concealments of the company, and that the compaiiy is now estopped thereby from setting up their release of the Fond du Lac property from the first mortgage sale to the detriment of the Camp mortgage.

The legal and equitable result of so holding might be to divest the company of all title to the Fond du Lac property; but as many persons, as stockholders or creditors or otherwise, may be interested in the company, property and business, who ought not innocently to suffer on account of this conduct of the officers of the company, we think such a disposition of the case should be made that none of the parties may suffer injury; and we shall therefore remand the cause with directions to the circuit court to grant the relief prayed for, on condition only that the respondent company reimburse the said Bryant or the said Camp, as the case may be, for the amount he paid for such redemption, with interest.

The judgment of the circuit court is reversed, with costs, and the cause remanded with directions to that court to ascertain the amount which George T. Bryant paid to the sheriff for the redemption of the property sold on the first foreclosure, and order and adjudge that the respondent pay the same to the said Camp, trustee, together with interest thereon from the time the same was paid by the said Bryant, within ninety days from this time; and, on the payment of the same within that time, order and adjudge that the respondent have the relief prayed for in the complaint; otherwise, and if said payment so ordered is not made within such time, the complaint to be dismissed.

Taylor, J., took no part.