Krause v. Reichel

There was' sufficient evidence to support tbe findings of fact of tbe trial court negativing fraud on tbe part of Reiehel. Tbe statement in tbe written agreement that there have been “no representations, warranties, or guaranties with reference to said business, property, or otherwise, or tbe income therefrom, except those herein fully set out,” except that tbe average gross income of tbe business for tbe year has been $220 a month, may not perhaps be conclusive on tbe plaintiffs, but it is certainly of much weight when it is remembered that tbe plaintiffs were sui juris, of average intelligence and brightness, and that tbe contract was read over, to them and explained to them before signature, and that they made no claim of any deception or fraud until they bad, through their own fault, lost tbe business.

It appears by tbe testimony of tbe general agent, Mr. Nichols, that be would not have accepted Reiehel’s advice as to tbe appointment of Krause as bis successor bad be known that Reiehel bad attempted to sell tbe business by bis contract with Krause, and tbe fact that Reiehel concealed tbe attempted sale from Nichols is much relied on as a fraud upon Krause and bis wife. We are not able to see, however, that this fact in any way concerns tbe plaintiffs or affects their rights. They received just what they bargained for and knew they were bargaining for. They lost tbe agency, not *365by reason of any act of Reichel’s, but by reason of their own inefficiency or worse in the condiict of the business. There is no proof or intimation that the company would have discharged Krause so long as he was rendering faithful and satisfactory service, even had the prior contract with Reichel been discovered after he had entered on his work. Reichel’s lack of candor and frankness with the company does not seem to have in any way affected the situation or the plaintiffs’ rights at any time. Practically the only complaints the plaintiffs now have to make in their testimony is that Reichel had in fact no business to sell and that he ought to have told them that Krause would not be able to transact the business and hold the job. As we have seen, all the parties understood that Krause could be discharged at any time if his work was not satisfactory, and, knowing this, they necessarily knew that there was no “business,” in the ordinary sense of the word, to sell. As to the second contention just named, the fact seems clear that Krause had full information as to the nature of the business and the demands which it made on business capacity.

It may well be that the plaintiffs made a poor bargain, indeed this seems fairly well proven, but they made it with their eyes open and were not defrauded. They paid or agreed to pay a gross sum for the personal property and for the effort of Reichel to procure the agency for them. It cannot be said that they paid any definite part of the consideration for this effort or influence and another definite part for the personal property; in other words, the contract is not separable. There was a tangible consideration (i. e. the equipment) and an intangible one, namely, the successful exertion of influence to obtain the agency for Krause. Taken together they may be inadequate, but mere inadequacy of consideration alone is not a fatal defect or cause for rescission unless the inadequacy be so gross as to prove fraud by its very inadequacy under the circumstances, and we cannot *366say that the present is such a case. Rust v. Fitzhugh, 132 Wis. 549, 112 N. W. 508. _

It was entirely competent for Mrs. Krause to give a valid mortgage on her own property in payment of or as security for her husband’s debt. Fitzgerald v. Dunn, 112 Wis. 37, 87 N. W. 803.

By the Gourt. — Judgment affirmed.

The following opinion was filed May 20, 1918:

(dissenting). By the defendant’s own testimony he considered the personal property worth about $1,000 and the business worth $2,000. The sale for $3,000 by defendant was to plaintiff Charles Krause only, and not to Lydia Krause. Two thousand dollars is also just the amount of the mortgage given by the plaintiff Lydia on her separate property, and which mortgage she seeks to have canceled in this action. The $2,000 of the $3,000 purchase price, plainly separable under the admissions of the defendant and therefore binding as such against him, whether the parties so specified in the contract or not, was of no value whatsoever unless and except the Standard Oil Company would consent to take plaintiff Charles Krause as its agent in place of defendant. Beichel recommended Charles Krause to the Standard Oil Company as a proper successor, but in doing so concealed from that company the fact that it was to his financial interest to the extent of $2,000 to have the contract given to Krause. He was expressly asked for information on that precise point and made a material false statement in answer. There is no escape from the conclusion, under the testimony, that if he had been truthful the agency would not have been given to the plaintiff Charles Krause, and the plaintiff Lydia Krause would have saved her separate property.

If defendant Reichel were suing for this $2,000 as being unpaid on the agreed purchase price and the same facts were disclosed as here, I think the court would have been bound *367to Rave denied Rim relief, as Re, in order to maintain Ris rigRt to secure Ris $2,000, would Rave to sRow Ris own wilful deceit in connection witR and as a part of the transaction and witRout wRicR deceit tRe condition requisite to Ris rigRt to recover would not Rave come into existence. Sauerhering v. Rueping, 137 Wis. 407, 412, 119 N. W. 184; Holcomb v. Weaver, 136 Mass. 265; Harrington v. Victoria G. D. Co. L. R. 3 Q. B. D. 549.

I tRink it follows as a necessary consequence tRat tRe plaintiff Lydia Krause was entitled to Rave tRe $2,000 mortgage executed by Rer canceled.