Godefroy v. Reilly

• Decision Date: 27 October 1926
• Docket Number: 19985.
• Citation: 140 Wash. 650,250 P. 59
• Parties: GODEFROY v. REILLY et ux.
• Court: Washington Supreme Court

250 P. 59

140 Wash. 650

GODEFROY v. REILLY et ux.

No. 19985.

Supreme Court of Washington

October 27, 1926

Department 1.

Appeal from Superior Court, Spokane County; Oswald, Judge.

Action by W. D. Godefroy, doing business under the firm name and style of the Northern Pacific Land Exchange, against John Reilly and wife, wherein defendants, by cross-complaint sought damages for alleged false representations by plaintiff. From a judgment denying recovery to either party plaintiff appeals. Reversed and remanded for new trial.

O. C Moore, of Spokane, for appellant.

R. L. Edmiston, of Spokane, for respondents.

FULLERTON J.

On February 21, 1923, the respondents Reilly entered into a contract with one S. B. Hopkins and his wife, Norma Hopkins, by which they agreed upon an exchange of properties. The property of Reilly and wife was situated in the Dominion of Canada, and the property of Hopkins and wife was situated in Stevens county, in this state. Subsequently, the contract was consummated by the exchange of deeds and other proper conveyances. The negotialtions leading up to the contract were conducted by the appellant Godefroy, who was a real estate broker doing business at Spokane. The contract of exchange contained the following recital:

'It is mutually understood and agreed that [Godefroy] is acting as agent for both parties hereto, and by reason of said services performed, parties of the first part and parties of the second part [the parties to the contract], each for themselves, agree to pay to the said agent a commission of 2 1/2 per cent. of their above valuation of the property conveyed to them.'

The valuations placed on each of the properties by the parties for the purpose of exchange was $65,600.

After the exchange had been consummated, the Reillys conceived that they had been defrauded thereby, and they brought an action against Hopkins and wife and Godefroy, in which they sought a rescission of the contract as against Hopkins and wife and a judgment in damages against Godefroy. To the complaint a demurrer was interposed on the ground of misjoinder of causes of action, which demurrer the trial court sustained. Godefroy was thereupon dismissed from the action, an amended complaint was filed, and the action was continued against Hopkins and wife. At the trial, on the conclusion of the evidence on the part of the Reillys, a judgment of dismissal was entered against them. This judgment, this court affirmed on appeal. Reilly v. Hopkins, 133 Wash. 421, 234 P. 13.

Godefroy had theretofore begun an action against the Reillys to recover the commission agreed to be paid in the contract of exchange. The Reillys defended on the ground that they had been induced to enter into the contract by the falsity and fraud of Godefroy, whereby they had parted with a valuable property and received a worthless property in return. The action for rescission first mentioned had not been determined at the time of the filing of the answer, and the relief sought was that Godefroy's action be stayed until it was so determined, and that they have and recover from Godefroy the value of the property; namely, $65,600, or such sum as might necessarily be expended in recovering the property. A trial of the action was entered upon before a jury when, at the close of all of the testimony, a challenge to the sufficiency of the evidence to sustain the defense was sustained. The jury was thereupon discharged and a judgment was entered in favor of Godefroy for the full amount claimed. On appeal to this court, the judgment was reversed and the cause remanded for further proceedings, on the ground that there was sufficient evidence to take the defendants' case to the jury on the question of fraud. Godefroy v. Reilly, 134 Wash. 163, 235 P. 8.

On the remand of the cause, there was a trial in which the court submitted the entire issue to the jury, instructing them that they could return any one of three verdicts; namely, 'one a verdict for the plaintiff, and assessing his recovery in the sum of $_____; another, a verdict for the defendants, and assessing their damages in the sum of $_____; and, third, a verdict for the defendants, without the assessment of any damages.'

The jury returned a verdict in accordance with the last of the permitted forms, on which a judgment was entered to the effect that the plaintiff take nothing by his action and that the defendants recover their costs.

Of the errors assigned which we do conceive to be well taken, but which are necessary to be noticed because of the result we have reached, the first is that the court did not sufficiently limit the issues on its submission of the cause to the determination of the jury. The assignment has its foundation in the opinion and direction of this court in the former appeal of the cause. 134 Wash. 163, 235 P. 8. It will be remembered that, on the former trial, the trial court took the question of fraud of the plaintiff from the jury, discharged the jury, and entered a judgment in favor of the plaintiff for the full amount demanded by him in his complaint, and that we held this to be error. In the course of the opinion, we used this language:

'The chief and vital questions are whether there was evidence on the part of appellants sufficient to carry the case to the jury, and whether or not the judgment in Reilly v. Hopkins, 133 Wash. 421, 234 P. 13, was determinative of the issues here. After a careful study of the record, we are convinced that there was, in this case, sufficient evidence on the part of the appellants to carry to the jury the question of the making by respondent of representations to the appellants, upon which they relied, to the effect that no lands in the irrigation district had been forfeited or sold to the district because of delinquent water assessments, and that the assessment of $10 per acre was a special charge for one particular year because of the necessity of certain improvements and repairs, not likely to be continued in effect or repeated, and that thereafter the annual water assessments would not exceed $1.50 per acre. * * * A jury might have found that the conversation did not extend to the matter of the $10 per acre charge, or, if so, that it had reference to such charge for only one particular year and not to a continuing annual charge of that amount. * * * We hold that the issues hereinbefore pointed out should have been submitted to the jury.'

The trial judge, in stating the issues to the jury, said:

'* * * And for a further and affirmative answer, defense and cross-complaint, defendants allege that plaintiff, as agent of the owner, approached these defendants and submitted a proposition to sell the Hopkins land in Stevens county clear of incumbrance and irrigated with ample water from the municipal irrigation district at a cost of $1.50 per acre per year therefore, which said Hopkins lands are specifically described in Exhibit A, and offered to cause the alleged owners thereof to convey the same to defendants upon certain terms; that thereafter about February 21, 1923, plaintiff for the purpose of deceiving and defrauding defendants, as agent of said alleged owners, Hopkins and wife, again sought defendants on behalf of said Hopkins and offered to sell said Stevens county land and take in full payment the Canadian land and $8,000 in notes owned by defendants, and then and there stated that no owner of any of the 6,000 acres of land composing said irrigation district, in which said Hopkins land was located, had ever permitted any of their lands to go delinquent for failure to pay the irrigation assessments, or to permit any part thereof to be sold by the district, and that the water would cost defendants only $1.50 per acre per year; that said defendant John Reilly, being in a weakened physical condition and impaired in mind and body and being ignorant of irrigation farming and the operation of irrigation districts, and relying implicitly upon the truth of said representations, and being assured that he could rely upon said representations, signed Exhibit A; that said statements and representations were made as material inducing facts for defendants to rely on, and each was a material inducement and were all relied upon by defendants in signing said contract; that each and all of said representations were false and untrue, and were known by plaintiff at the time of making the same to be false and untrue, and made for the purpose of defrauding the defendants; that said plaintiff had been agent of said lands as to the sale thereof for a number of years, and knew that the same had been sold by and bought in by said irrigation district for delinquent water assessments; that the charge for water was and is $10 and upwards per acre per year; that the irrigation district had sold much of the lands within its bounds by reason of the failure of the owners to pay the assessments for water thereon; that the said Hopkins land had been sold by the irrigation district for delinquent water taxes in February, 1922, for the year 1921, and had also been sold the second time in February, 1923, for the delinquent taxes for the year 1922, and that the said irrigation district is wholly unable to supply any water to large portions of lands in the districts,

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