Glaspie v. Keator, 195.

• Decision Date: 01 May 1893
• Docket Number: 195.
• Citation: 56 F. 203
• Parties: GLASPIE v. KEATOR et al.
• Court: U.S. Court of Appeals — Eighth Circuit

56 F. 203

GLASPIE v. KEATOR et al.

No. 195.

United States Court of Appeals, Eighth Circuit.

May 1, 1893

Statement by THAYER, District Judge:

The defendants in error (hereafter spoken of as Keator & Son) sued the plaintiff in error for fraud and deceit practiced in the sale of three tracts of pine lands situated on the St Croix river, in the state of Minnesota, aggregating about 4,640 acres. Defendants in error are citizens of Illinois and the plaintiff in error is a citizen of Minnesota. There were two counts in the complaint, the first relating to the purchase of a tract of land for the sum of $35,000, and the second count relating to the purchase of two other tracts for the sum of $16,000 and $18,500, respectively. The facts averred in the first count were substantially as follows That the plaintiffs, being desirous of making an investment in pine lands in the state of Minnesota, employed one Edwin St. John as their agent to make inquires from time to time for opportunities to make desirable purchases of standing pine timbered lands, and to advise them of the character value, and cost of the same; that thereafter John Glaspie, being the owner of certain pine lands, and desiring to sell the same, entered into a conspiracy with Edwin St. John, who was plaintiffs' agent, with a view of defrauding the plaintiffs by effecting a sale of said lands at a sum greatly in excess of their true value; that in pursuance of said conspiracy St. John subsequently represented to the plaintiffs that he had obtained an option to purchase the said lands of Glaspie for the price of $35,000, and further represented to the plaintiffs that he (St. John) was familiar with the lands, and had caused them to be examined by competent persons with a view of buying them himself, and that in view of said examination, and his own knowledge thereof, said lands would yield 19,435,000 feet of merchantable pine timber standing on said lands, and would cut from twenty-two to twenty-five million feet of merchantable pine logs; that St. John further exhibited to the plaintiffs what purported to be a detailed estimate made by competent persons of the timber standing on said lands, from which it appeared that they would yield the amount aforesaid of merchantable pine timber; and that St. John further advised a purchase of the lands at the price mentioned in the aforesaid option. It was further averred that the plaintiffs bought the lands for $35,000 in reliance upon said representations, and without knowledge of their falsity; that in point of fact the representations in question were false, and were known to the defendant and to St. John to be false, and were fraudulently made in pursuance of the conspiracy aforesaid; that the lands in question at no time had standing thereon more that 8,295,500 feet of merchantable pine timber, as the defendant and St. John well knew, and were not worth more than $14,500. The averments in the second count were substantially the same as in the first count, differing only as to the amount of land, quantity of timber, prices, etc. On a trial had before a jury the plaintiffs below recovered a judgment for $9,000, and the defendant below sued out a writ of error.

J. N. Castle and Edmund S. Durment, for plaintiff in error.

Jasper N. Searles, for defendants in error.

Before CALDWELL and SANBORN, Circuit Judges, and THAYER, District Judge.

THAYER District Judge, after stating the case as above, .

It is insisted, among other things, that the circuit court erred in refusing to instruct the jury to return a verdict in favor of the plaintiff in error, or the ground that he was not shown to have been guilty of any fraud or deceit. We are of the opinion that this position is untenable.

There was evidence which fully warranted the finding that Keator & Son had been induced by St. John to make the purchase of the pine lands in question, by means of the options, and by means of estimates and representations as to the amount of pine timber growing on the lands, which were at least believed to be untrue, even if they were not known to be so. And we also think that there was proof of some facts and circumstances from which a jury might legitimately infer that Glaspie, the plaintiff in error, had acted in concert with St. John, and had knowingly aided and abetted him in said scheme. In this class of cases, direct proof of a fraudulent intent or a fraudulent conspiracy is not to be expected, because such proof is rarely obtainable. Fraud is generally established by circumstances, and it very frequently happens, in cases like the one in hand, that slight circumstances will warrant important inferences. It was shown in the present case that Glaspie gave to St. John certain written options to purchase the pine lands in question at prices which were greatly in excess of their value, and that at the time of given such options he agreed to pay back to St. John about 30 per cent. of the purchase price, if he sold the lands at the sums specified in the options. It is evident, we think, that Glaspie must have known that the lands could not be sold at the figures mentioned in the options to any one who was correctly informed of the approximate value of the lands, and the inference is very persuasive that he must have known that St. John intended to use the options for the purpose of deceiving, or helping to deceive, purchasers. It was also shown that Glaspie approached Mr. B. C. Keator, and urged him to make the trade for the lands covered by the second option, immediately after the negotiations with St. John had terminated in a refusal to buy, and that he succeeded in effecting the second deal after St. John had failed, by making some concessions to Keator & Son as to the terms of payment. In the negotiations which culminated in the second purchase the evidence tended to show that Glaspie acted hand in hand with St. John. He was advised at once of St. John's failure to effect the sale under the second option, and immediately took up the negotiation where St. John had left off. It was proven that St. John received $7,000 of the proceeds of the second sale, although that sale was made by Glaspie after the second option had expired, and after St. John had ceased to have any apparent interest in the transaction. St. John also received $11,000 of the proceeds of the first sale. It was further shown that Glaspie had on one occasion consulted an attorney with a view of finding out how he could dispose of the land notes which he had received from Keator & Son without incurring any personal liability, and that he actually sold and indorsed them without recourse, although he seems to have had no reason for questioning the maker's solvency. It is also worthy of notice, especially in a case of this character, that Glaspie was not called as a witness to refute any of the allegations of fraud, and that he was not sworn as a witness in a previous suit between the same parties, which had resulted in a mistrial, and in which the same charges had been preferred against him. There was proof of some other facts to which a jury might attach some importance in a suit of this nature, but we will not stop to recount them. It is sufficient to say that, in view of all of the circumstances which the record discloses, we think that it was the province of the jury to determine whether Glaspie and St. John had acted in concert, and in pursuance of a preconcerted scheme to deceive Keator & Son, and to sell the pine lands to them at a very exorbitant price.

The views last expressed will also serve to dispose of some of the exceptions that were taken by the plaintiff in error to the admission of testimony; for, if there was evidence sufficient to show that Glaspie and St. John had acted in collusion, then it was competent to prove whatever either one of them may have said or done in furtherance of the objects of the conspiracy. It was competent to show the correspondence and the telegrams which had passed between Keator & Son and St. John relative to the sale of the lands; it was competent to show the confidential relations that had previously existed between St. John and Keator & Son, and it was also competent to show that St. John had carefully refrained from indorsing his portion of the land notes when he disposed of them to the First National Bank of Stillwater. All of this evidence had a direct tendency to show the various steps that St. John had taken to effect the sale; the reliance that Keator & Son would naturally place on whatever he said or did, as well as guilty knowledge on his part when he undertook to dispose of the land notes after the fraud was accomplished. We think, therefore, that the testimony last referred to was properly received, and that the exceptions saved in relation thereto are without merit.

Several other errors in the admission of testimony have been assigned, which upon examination prove to be either immaterial, or not well founded. We shall only notice two of the assignments last referred to, and the first of these is the error said to have been committed in admitting the 'scale bill.'

On the trial of the case one of the plaintiffs testified that during the winter of 1886 and 1887, after the purchase of...