7/30/2019 Arjay.v.kohlmetz.standing.loan.Injury

1/2

Arjay Inv. Co. v. Kohlmetz, 101 N.W.2d 700, 9 Wis.2d 535 (Wis., 1960)

Page 700

101 N.W.2d 700

9 Wis.2d 535

ARJAY INVESTMENT CO., a Wisconsin Corporation, Respondent,

v.

Lilian M. KOHLMETZ, Appellant.

Supreme Court of Wisconsin.March 8, 1960.

Rudolph L. Forrer, Milwaukee, forappellant.

[9 Wis.2d 537] Thomas E. Torphy,Milwaukee, for respondent.

HALLOWS, Justice.

The trial court in its decision characterized

this case in the following words:

'Prior to December 28, 1956, there werediscussions between Rudolph J. Steinbacher(now deceased) and Lilian Kohlmetz regardingthe acquisition of an interest in land. Both ofthose parties were seasoned lawyers, but,reminiscent of the proverbial cobbler's shoelesschildren, the attorneys' understanding was notreduced to writing.'

The rule that the findings of a trial court

will not be reversed on appeal unless they arecontrary to the great weight and clearpreponderance of the evidence is so wellestablished and elementary as to require nocitation of authorities.

The defendant strenuously contends thatshe made no contract with the plaintiff and allher dealings were with Rudolph J. Steinbacherindividually and therefore the plaintiff is not thereal party in interest. She also contends themoney was a loan by the plaintiff to Steinbacheror his own money. Upon a review of thetestimony we must conclude that, while thedefendant thought all her dealings were withSteinbacher, they did not amount to a contract,and the check which was given her was not aloan to Steinbacher or his own money, but wasthe check of the plaintiff. All the findings of thetrial court are supported by credible evidenceexcept the

Page 702

finding that the defendant made an oral contractwith the plaintiff. The mere acceptance of theplaintiff's check by the defendant under thecircumstances here did not amount to anacceptance of an offer to make a contract whenthe defendant believed she was dealing withSteinbacher individually. A person has a right tochoose with whom he wishes to contract. In ourview, no agreement,[9 Wis.2d 538] certainly novalid one, was made by the defendant with eitherRudolph J. Steinbacher as an individual or withhim as an officer and agent of the plaintiff.

Although the court found there was acontract between the plaintiff and the defendantwhich was invalid, the court tried the case on thetheory of unjust enrichment. On page 57 of the

record it appears that the court stated:

'As In understand your theory, Mr. Torphy, thiscourt is asked to use its equitable powers toreturn to Arjay Investment Company monieswhich it paid out for which you contend it got noconsideration and which you contend wouldunjustly enrich the defendant if she were entitledto retain it.'

In paragraph 10 of the findings the courtfound the defendant received the benefit of

$3,000 which it would be unjust and inequitableto retain.

Under the theory of unjust enrichment it isimmaterial whether the defendant and theplaintiff entered into a void contract. Theplaintiff is not seeking to have the defendantperform the alleged contract. It is seeking thereturn of its money. Money paid under an oral

- 1 -

7/30/2019 Arjay.v.kohlmetz.standing.loan.Injury

2/2

Arjay Inv. Co. v. Kohlmetz, 101 N.W.2d 700, 9 Wis.2d 535 (Wis., 1960)

contract void because of the statute of fraudsmay be recovered on the theory that it was paidwithout consideration because the law implies apromise of repayment when no rule of publicpolicy or good morals has been violated. Durkinv. Machesky, 1922, 177 Wis. 595, 188 N.W. 97;

Brandeis v. Neustadtl, 1860, 13 Wis. 142, 158;Merten v. Koester, 1929, 199 Wis. 79, 225 N.W.750.

However, in actions on the theory of quasicontracts which are legal actions ruled byequitable principles, recovery is allowed on aquasi contractual obligation when it is shown thedefendant has received a benefit from theplaintiff and the retention of the benefit by thedefendant is inequitable. Woodward, The Lawof Quasi Contracts, p. 9, [9 Wis.2d 539] sec. 7,

ch. I; Dunnebacke Co. v. Pittman, 1934, 216Wis. 305, 257 N.W. 30; Richland County Bankv. Joint School District, 1933, 213 Wis. 178, 250N.W. 407. A quasi contract is not a genuinecontract and no promise of repayment need beshown. A quasi contract means there is nocontract in fact the parties will be treated underthe circumstances as if there had been a contract.To fit the theory into the old requirement offorms of action it was said that the action wasfor money had and received. Recovery is basedupon the universally recognized moral principle

that one who has received a benefit has the dutyto make restitution when to retain such benefitwould be unjust. Woodward, The Law of QuasiContracts, p. 8, sec. 6(4), Ch. I; see alsoGrossbier v. Chicago, St. P., M. & O. Co., 1921,173 Wis. 503, 181 N.W. 846; Miller v. Schloss,1916, 218 N.Y. 400, 113 N.E. 337; Graf v. NeithCoop. Dairy Products Ass'n, 1934, 216 Wis.519, 257 N.W. 618.

The rationale of the cases allowingrecovery for money had and received on thetheory of quasi contracts is that the law creates

or imposes an obligation in the absence of anyagreement or assent of the party bound in thosesituations when the acts of the parties or othershave placed in the possession of one partyproperty or money or other things of value undersuch circumstances that in equity and in good

morals such person ought not to keep it. Nelsonv. Preston, 1952, 262 Wis. 547, 55 N.W.2d 918;County of Shelboygan v. City of Sheboygan,1932, 209 Wis. 452, 245 N.W. 87. It is the dutyof such a person to return the property or itsvalue, which is the basis for recovery, not hispromise, agreement, or intention. The factsalleged in the

Page 703

complaint and those findings of the court, whichare not against the great weight and clearpreponderance of the evidence, include theessential elements of a quasi [9 Wis.2d 540]contract. See Kelley Lumber Co. v. Woelfel,1957, 1 Wis.2d 390, 83 N.W.2d 872.

The defendant, a lawyer of good standing,acknowledges her willingness to repay the$3,000. Her contention is that she should beprotected from the claims of any creditors of theestate of Rudolph J. Steinbacher. No proceeding

to probate his estate has been commenced. Thisis a natural and legitimate concern for oneplaced in her position. Because in our view ofthe evidence no contract was made by her withSteinbacher and the money she received fromhim was delivered in his capacity as president ofthe plaintiff corporation, and the other necessaryfacts are proven, we must hold that the trialcourt did not err in allowing recovery on thetheory of quasi contracts.

Judgment affirmed.

- 2 -