Griffith v. Strand

• Decision Date: 30 August 1898
• Citation: 54 P. 613,19 Wash. 686
• Parties: GRIFFITH v. STRAND ET AL.
• Court: Washington Supreme Court

54 P. 613

19 Wash. 686

GRIFFITH v. STRAND ET AL.

Supreme Court of Washington

August 30, 1898

Appeal from superior court, Whatcom county; H. E. Hadley, Judge.

Suit by J. M. Griffith against H. B. Strand and Josephine M. Strand and James M. Lombard. There was a judgment for plaintiff, and defendants Strand appeal. Affirmed.

Newman & Howard, for appellants.

Dorr &amp Hadley, for respondent.

GORDON J.

This action was commenced for the foreclosure of two mortgages one a chattel, the other a real- estate mortgage, both of which were made to secure the payment of a note for $4,800 and interest, which was given by the defendants in part payment of the purchase price of a stock of dry goods and clothing. The defendants in their answer alleged fraud by reason of which they were induced to purchase the stock. To this plea and counterclaim the court sustained a demurrer, and, the defendants electing to stand thereon and refusing to amend, judgment was given for the plaintiff, and defendants have appealed. It appears from the answer that the defendants are husband and wife, residing at New Whatcom, in this state; that in October, 1896, in the city of Minneapolis, Minn., they entered into a contract for the purchase of said stock with G. W. Skinner, who was at that time the owner thereof; that, in the negotiation leading up to the contract, Skinner was also represented and assisted by the firm of Buck & Campbell, his agents at Minneapolis for the purpose of effecting the sale. These negotiations terminated in the following written agreement: "This agreement, made and entered into this 6th day of November, A. D. 1896, by and between H. B. Strand, of New Whatcom, Washington, party of the first part, and G. W. Skinner, of Kossuth county, Ia., party of the second part, witnesseth: That for and in consideration of the sum of one ($1.00) dollar, in hand paid by the said party of the first part to the said party of the second part, the receipt whereof is hereby acknowledged, and the further consideration of the covenants and agreements on the part of the said party of the first part hereinafter contained, the said party of the second part hereby agrees to deliver to the said party of the first part, his heirs or assigns, after full payment of the notes herein described, and he has otherwise fully performed his part of this contract, all that certain stock of goods, wares, and merchandise as has this day been fully inspected by the said first party, an inventory of which is hereto attached and made a part hereof, free, clear, and discharged of all liens, charges, costs, or incumbrances of every kind and nature: Stocks Nos. 157, 161, 162, and 163, amounting to eleven thousand ($11,000) dollars, according to the invoices thereof. In consideration, therefore, the said party of the first part hereby agrees to pay to the said party of the second part or order the further sum of one thousand ($1,000) dollars, on or before the 1st day of December, 1896, and the further sum of two thousand seven hundred ($2,700) dollars on or before the 15th day of December, 1896, according to the conditions of two certain promissory notes, bearing even date herewith, one for the sum of one thousand ($1,000) dollars, due on or before December 1st, 1896, and one for the sum of two thousand seven hundred ($2,700) dollars, due on or before December 15th, 1896, executed by the said party of the first part hereto, and to deliver to the said party of the second part a good and sufficient deed of warranty conveying all the certain real property situate in the county of Whatcom, state of Washington, and more particularly described as follows, to wit: The E. 1/2 of the E. 1/2 of sec. 17, town 40, range 1 E., and that part of section 20, town 40, range 1 E., lying north of California creek; also W. 1/2 of S. 1/2 of S.E. 1/4 of section 10, town 40, range 1 E., state and county aforesaid,-free and clear of all incumbrances of whatsoever nature, accompanied by an abstract of title of said real property extended down to date of delivery, showing the title to be as above stated. And the said party of the first part agrees to buy the said stock of merchandise, and pay for the same, at the time and in the manner herein set forth, and does by these presents accept the same in the condition it now is, and at the prices set forth in the said inventories, waiving all claim for damaged goods, shortage, and prices, etc. Time is the essence of this agreement. Witness our hands and seals this day and year first above written. H. B. Strand. [Seal.] G. W. Skinner. [Seal.] Witnesses: M. C. Black. C. A. Campbell." It is alleged in the answer that the appellant Strand was induced to enter into this agreement by reason of certain representations and statements made to him by Skinner and his agents concerning the character and value of said stock of goods. The representations referred to are alleged to have been as follows: "Said Skinner then and there further stated that said stock of goods consisted of dry goods, notions, and clothing of the value of $11,000, as shown by a complete and full invoice thereof then in the possession of his said agents, Buck & Campbell; that said invoice was correct in every particular, and said stock was reasonably worth the invoiced value thereof; that said stock was practically new, was A No. 1, first class in every respect, and readily salable and merchantable in such retail business as said defendant desired to engage in." It is also alleged that all of said statements and representations "touching the amount, quality, value, character, and condition of said stock of goods *** were knowingly, falsely, and willfully made by said Skinner, with the unlawful and fraudulent intent and purpose of persuading and inducing the purchase of said stock of goods, *** and for the purpose of deceiving, cheating, and defrauding said defendant; *** and that said stock, instead of being practically new, A No. 1, first class in every respect, readily salable and merchantable, and worth the invoiced value thereof, was at said time very old, much shelf-worn, badly faded, moth-eaten, unsalable, and unmerchantable, and not worth over twenty per cent. of its invoiced value,-all of which the said Skinner at the time well knew."

In accordance with the written agreement above set out, the defendants executed and delivered to Skinner their promissory notes for $1,000 and $2,700, respectively, due on December 1 and 15, respectively, 1896, and also executed and delivered to Skinner their deed of conveyance of real estate described in said agreement. It also appears in the answer that the defendants were unable to pay said notes as they matured, and the stock continued in possession of Skinner at Minneapolis. It also appears that plaintiff was the owner of the warehouse in which the goods were stored at the time when the written agreement heretofore set out was entered into at Minneapolis between the defendants and Skinner; that both before and after the execution of said agreement of November 6, 1896, the plaintiff herein was fully acquainted and conversant with all the matters and things pertaining thereto. It further appears that about February 1 1897, plaintiff went to New Whatcom, and represented to the defendants that he "was the sole owner of the agreement" (above set out), and was the "sole owner and holder of the two promissory notes" executed and delivered by the defendants to Skinner as aforesaid, "and was the sole owner and holder of all that stock of goods referred to in said agreement of November 6th, and that he, the said Griffith, became the sole owner and holder of all of said property, and of all the interests and rights of said Skinner therein, by purchase, assignment, and delivery of, from, and by said Skinner." It appears, also, that about that time, viz. early in February, 1897, the defendants borrowed from the plaintiff the sum of $500 for the purpose of paying off an incumbrance which was upon a part of the real estate theretofore conveyed by them to Skinner. The amount at that time owing by the defendants was estimated to be $4,800, which was made up of the two notes, aggregating $3,700 and interest, $500 cash advanced by the plaintiff, and certain expenses incurred by him. On February 15, 1897, the following written agreement was entered into between the parties hereto, viz.: "This instrument witnesseth that whereas, the undersigned, J. M. Griffith, of Minneapolis, Minnesota, and H. B. Strand and Josephine M. Strand, his wife, of New Whatcom, Washington, have entered into certain agreements whereby, among other things, E. W. Purdy, of New Whatcom, Washington, is constituted and appointed as the agent, respectively, of said parties; and whereas, the said J. M. Griffith is the owner and in possession of a certain stock of goods, wares, and merchandise, consisting of dry goods, notions, clothing, etc., the same being now...