Clark v. Tallmadge

• Decision Date: 09 March 1920
• Parties: CLARK v. TALLMADGE ET AL.
• Court: Wisconsin Supreme Court

171 Wis. 133

176 N.W. 906

CLARK

v.TALLMADGE ET AL.

Supreme Court of Wisconsin.

March 9, 1920.

Appeal from Circuit Court, Winnebago County; Geo. W. Burnell, Judge.

Action by David B. Clark against Benjamin H. Tallmadge and others. From an order sustaining the demurrer of defendant Horicon State Bank, with leave to amend, plaintiff appeals. Reversed and remanded.

Vinje, J., dissenting.

Personal service was made in this action upon the defendant Horicon State Bank, which alone appeared and demurred to the complaint. The individual defendants named were served by publication only, and no appearance has been made in their behalf.

The complaint in effect seeks to cancel and set aside certain land contracts, deeds, and notes growing out of the purchase by plaintiff of certain lands in what is known as the Horicon marsh, and for the return of $500 paid by plaintiff to the individual defendants.

As against the Horicon State Bank it is alleged that it acquired two certain notes for $500 each, executed by the plaintiff to the defendant Oliver as part consideration of such purchase, and by the latter disposed of to the defendant bank; that such bank is not an innocent holder thereof, for the reason that the said notes are not negotiable instruments, and are held by the said bank therefore subject to any rights that the plaintiff may be adjudged to have as against the defendant Oliver.

The complaint, which is extraordinarily voluminous, alleges, in substance, that in June, 1915, after having received information to the effect that the individual defendants prior thereto claimed to be associated together in buying and selling real estate in what is known as the Horicon marsh in Dodge county, and were representing to own and control some 13,000 acres, and that such lands were fertile and highly adapted to the raising of onions and other garden products, the plaintiff visited the lands, and thereupon purchased 10 acres for the sum of $1,500, by $500 being paid in cash and the giving of two notes for $500 each, one due January 1, 1917, and another due the following year, to each of which was attached a form of warrant of attorney to enter and confess judgment upon the same; that such transaction was pursuant to a written contract with the defendant Tallmadge.

That in the following September the plaintiff visited the lands so conveyed to him, and found that the crops growing upon those and the surrounding lands were poor and not in a marketable condition, and that at the same time he learned that the defendant Tallmadge had left the country, and that his whereabouts were then unknown.

That in February, 1916, the defendants Oliver and Borchers called on plaintiff, and represented, among other things, that the defendant Oliver had acquired the interest of the defendant Tallmadge in the lands on the Horicon marsh; that said Oliver would exchange the lands which plaintiff had contracted to buy from Tallmadge in June for another and more desirable tract on the same marsh for the same price of $1,500, that he would give credit on the same for the $500 cash paid by plaintiff to Tallmadge, would give up the promissory notes of June, and take in exchange two new notes, dating the same back to June 24, 1915, to be secured by a real estate mortgage upon the lands which he was to convey.

That said Oliver would plow and prepare the said 10 acres of land for seeding, and seed the same the coming spring, and care for the crops during the season and harvest them.

That said Oliver would build a railroad to said marsh near these lands, and also build a warehouse at the railroad station convenient to the lands, and have it ready for use in the year 1916 for storing a large amount of onions and furnish crates for the same, and have all in readiness in 1916 to properly market such crops.

That if from 750 to 1,000 bushels of onions could not be raised on said lands the defendant Oliver would not charge the plaintiff a cent for the said lands.

That the defendants Oliver and Borchers had issued a pamphlet prior to June, 1915, edited by the defendant Oliver of some 64 pages, entitled “Onions and Independence,” containing highly laudatory descriptions of the defendant Oliver as a judge of lands and a successful onion grower in the state of Indiana, and an alluring picture of what could be done in the raising of onions upon the Horicon marsh; containing calculations showing that on a conservative basis there would be a net annual profit of $720 per acre from the 10 acres, or at least an annual average return of three to five times the whole cost of the farm. Also a pen picture of the warehouse that was to be built for the convenience of the purchasers of this land, the interest he would acquire therein, and the benefits therefrom, and the possibilities arising from such a situation, and many other details.

That, relying upon the promises and representations, the plaintiff did take in exchange for the property purchased in 1915 10 certain other acres, and executed the notes hereinafter set forth.

That the individual defendants have absconded from the state of Wisconsin and disposed of their interest, if any they had, to the said lands in the Horicon marsh, that there has been a failure on the part of the defendants to keep their promises and agreements, in that, among other things, they failed to build the railroad, to build and erect a warehouse, to plow and prepare the land for seeding, and to care for the crops.

That the land was not fertile or adapted to the raising of onions, and not capable of producing the quantity per acre as claimed.

That no village site has ever been laid out at or near these lands, and that the defendants never intended that such should be done, and that all of the promises, statements, and agreements made by defendants to the plaintiff were falsely and corruptly made, for the sole purpose of inducing the plaintiff to purchase the lands, pay the $500, and to make and deliver the promissory notes, land contracts, and mortgages.

That if the plaintiff had known, at the time he contracted the purchase and did purchase from the defendant Edward Oliver, that the promises, agreements, and statements so made to plaintiff, including those in the pamphlet aforesaid, were not true, he would not have purchased the said lands.

To this complaint the defendant bank demurred upon the following grounds:

(1) That it appears upon the face of the complaint that it does not state facts sufficient to constitute a cause of action.

(2) That it appears upon the face of the complaint that it does not state facts sufficient to state a cause of action against the Horicon State Bank.

The trial court sustained the demurrer, with leave to the plaintiff to amend. From such order the plaintiff appealed.

By stipulation between the parties a copy of the judgment notes held by the defendant bank and received by it from the defendant Oliver was made a part of the record as though set forth in the pleadings. The two notes in question were alike, except that the second was payable one year after the first. The first is as follows:

+--------------------------------------+
                ¦“$500.00.¦Horicon, Wis. June 24, 1915.¦
                +--------------------------------------+
                

On or before Jan. 1, 1917, after date, for value received, we, jointly and severally, promise to pay to the order of Edward Oliver five hundred dollars, at the Horicon State Bank, at Horicon, Wis., with interest at the rate of six per cent. per annum after date until paid.

And to secure the payment of said amount, I hereby authorize, irrevocably, any attorney of any court of record to appear for me in such court, in term time or vacation, at any time hereafter, and confess a judgment, without process, in favor of the holder of this note, for such an amount as may be due, and also for any amount to become due thereon, together with costs, and ten dollars attorney's fees, and to waive and release all errors which may intervene in any such proceedings, and consent to immediate execution upon such judgment, hereby ratifying and confirming...