Campbell v. Spears

• Decision Date: 25 May 1903
• Citation: 94 N.W. 1126,120 Iowa 670
• Parties: W. A. CAMPBELL, Appellant, v. MARY E. SPEARS AND E. D. SPEARS
• Court: Iowa Supreme Court

94 N.W. 1126

120 Iowa 670

W. A. CAMPBELL, Appellant, v. MARY E. SPEARS AND E. D. SPEARS

Supreme Court of Iowa, Des Moines

May 25, 1903

Appeal from Wright District Court.--HON. S. M. WEAVER, Judge.

SUIT to rescind a contract under which the parties exchanged properties. Upon hearing, the petition was dismissed, and plaintiff appeals.

Reversed.

Nagle & Nagle for appellant.

B. P Birdsall and S. Flynn for appellees.

LADD J. WEAVER, J., took no part.

OPINION

LADD, J.

On April 2, 1895, the plaintiff traded an acre of land, on which was a residence and barn, and a cow, three pigs, and twelve chickens, to E. D. Spears, for a quarter section of land in South Dakota. Plaintiff's realty was incumbered for $ 700, and worth about $ 1,500, and the land had a value of $ 800. The residence property was conveyed to Mary E. Spears, who deeded the land to plaintiff. The record puts it beyond question that she had no title to the land, and for this reason none passed under her deed to plaintiff. An abstract brought down to February, 1893, was exhibited to plaintiff, from which it appeared that one Schatunovsky entered the land and obtained final pre-emption receipt in 1883; that he conveyed it by warranty deed to McDonald June 4, 1884,--"except taxes for 1883 amounting to $ 15.44 and a contest before United States land office, Mitchell, S. D., which said Moses Schatunovsky does not warrant against"; that patent issued to George A. Rogers June 25, 1890; that the county treasurer executed a tax deed to M. H. Rowley in 1888, and another in 1892; that Rowley conveyed the land to defendant E. D. Spears in 1892; that in February, 1893, he transferred it to Caffrey. The evidence shows that the entry of Schatunovsky was canceled by the Land Department in 1886, and that the tax deeds were based on assessments and levies made in the years 1884 and 1887, long before title passed from the United States under the patent to George A. Rogers. As the lands were not then taxable, the deeds were void (Reynolds v. Plymouth Co., 55 Iowa 90, 7 N.W. 468; Moriarty v. Boone Co., 39 Iowa 634; Duncan v. Newcomer, 9 S.D. 375 (69 N.W. 580); Pitts v. Clay, (C. C.) 27 F. 635. And the deed of Caffrey to Mary E. Spears, and of her to plaintiff, passed no title.

II. The evidence has convinced us that E. D. Spears induced Campbell to take the land by knowingly misrepresenting the title. Campbell appears to have been unlearned and not much accustomed to business transactions. The abstract, to his comprehension, was Greek. He relied on Spears' assertion that the title was good. His testimony that such representation was made is confirmed by Donly, a witness called by defendants. Spears admits saying he believed the title good, but insists that he added that he was no abstract reader, and would let him (Campbell) have the title as he got it. As he caused his wife to execute a warranty deed to Cambpell, assuring the title as plaintiff claims he represented, we are inclined to accept Campbell's account of the transaction. They agreed to submit the abstract to Donly, and, upon doing so, were advised by him that, though not pretending to be an authority on abstracts, he believed it was defective because of the patent to Rogers. In the face of this, Spears stoutly asserted the title was good, and afterwards saw Donly privately and chided him for what he had said, as it might break up the trade, and requested him to remain quiet--let the exchange be made--and he would make it "all right with him." Though the proposition was not accepted, Campbell did not return. As the abstract did not disclose title in either of defendants, and Donly indicated a fatal defect in that of Caffrey, on what did Campbell rely, if not on Spears' representations? The bare suggestion, without support in the record, of defendant's financial responsibility to comply with the covenants of the deed, does not answer this inquiry. Spears represented the title good, and Campbell was foolish enough to accept his word as against Donly and anything he may have been able to read in the pretended abstract. That Spears knew his statements were false needs no other proof than his attempt to suppress information by Donly, with a price on his silence. See Anderson v. Buck, 66 Iowa 490, 24 N.W. 10; Ballou v. Lucas, 59 Iowa 22, 12 N.W. 745. But such knowledge is not essential to a rescission in a case like this. Smith v. Bricker, 86 Iowa 285, 53 N.W. 250.

III. The delay in bringing suit for more than five years ought not, under the circumstances, deprive plaintiff of his remedy. Undoubtedly, as contended, he was bound to rescind within a reasonable time after the fraud of defendant was discovered, or might have been discovered by the exercise of ordinary diligence. When was that? In determining this question, we are to begin the inquiry with the assumption of the fact, as found, that Campbell, on receipt of his deed, was satisfied with the title conveyed. What happened thereafter to arouse his suspicions? In April or May of the same year, Spears claims that, at Campbell's request, he submitted the abstract to two different lawyers for examination; that each advised that nothing was wrong with the title; and that he so reported to Campbell. Of course, the statement is equivocal, as it is not inconsistent with ownership of Rogers, but it was calculated to lull plaintiff into a more perfect sense of security. During the same season plaintiff went to South Dakota to look at the land, and while there his confidence in Spears was further confirmed by being informed by the person who, as county treasurer, had conveyed the land by tax deed to Rowley, that "the title was all right." If upon his return he said to Spears and wife that the title was bad, as they claim, they certainly convinced him to the contrary, for thereafter no question was raised until December, 1899. At that time he employed an attorney at Plankington, S. D., to examine the abstract, and was advised that "the title of the land seemed to be in George A. Rogers." Shortly afterwards McIntyre, to whose father he had executed a mortgage on the land in 1886, came to Eagle Grove, and, owing to a remark by Campbell that "something in the abstract did not appear just right, but, in his opinion, the title was all right," persuaded him to consult an attorney. They called upon counsel for appellant, who advised Campbell to go to South Dakota and make a thorough investigation. He did so copying the records, and submitted the result to said counsel in September, 1900. Immediately following this, demand for the return of the property was made, and upon refusal this suit begun. Certainly nothing occurred subsequent to the trade, prior to December, 1899, to arouse the suspicions of a...