Grosgebauer v. Schneider, 24947.

• Decision Date: 29 March 1934
• Docket Number: 24947.
• Citation: 177 Wash. 43,31 P.2d 90
• Parties: GROSGEBAUER et ux. v. SCHNEIDER et ux.
• Court: Washington Supreme Court

31 P.2d 90

177 Wash. 43

GROSGEBAUER et ux. v. SCHNEIDER et ux.

No. 24947.

Supreme Court of Washington

March 29, 1934

Department 1.

Appeal from Superior Court, Yakima County; Dolph Barnett, Judge.

Action by C. Grosgebauer and Ersa Grosgebauer, husband and wife against Jacob Schneider and Neter E. Schneider, husband and wife, who filed a cross-complaint. From an adverse judgment plaintiff's appeal.

Remanded with directions.

La Berge, Cheney & Hutcheson, of Yakima, for appellants.

M. C. Delle, Grady & Velikanje, and Stanley P. Velikanje, all of Yakima, for respondents.

STEINERT Justice.

Plaintiff brought this action to recover the sum of $300, the accrued amount of unpaid installments due and owing upon an executory contract for the sale of real estate by plaintiffs to defendants, the total price of which, according to the contract, was $20,000. In their cross-complaint defendants sought to recover damages in the sum of $11,300 for fraudulent misrepresentations inducing the sale. Trial was had Before the court without a jury. Findings were made to the effect that plaintiffs, through false representations, had defrauded defendants to their damage in the sum of $10,000; further, that on January 4, 1933, there was owing by defendants on the contract, according to its terms, the sum of $12,362.77 including the $300 which plaintiffs had sued for. The court concluded that the sum of $10,000 should be applied as an offset and abatement against the $12,362.77, leaving a balance of $2,362.77 to be paid in installments as provided in the contract. Judgment was entered accordingly, with costs to defendants. Plaintiffs having appealed, they will hereinafter be referred to as appellants, and defendant as respondents.

At the time of the transaction with which we are presently concerned, the property here involved was owned by appellants. It consisted of two pieces of improved real estate located opposite each other on a paved highway in the town of Buena, which is about sixteen miles southeast of Yakima. The property on the north side of the road comprised about an acre, upon which was a garage, a Shell service station and a grocery store with two apartments above it, all of which buildings and improvements faced on the highway, and, in the rear, a seven-room house, a fourroom house, and four cabins. The property on the south side of the road comprised about four acres, used and operated as a tourist park, and upon which there were seventeen cabins, an office, and a washhouse. The tourist park had been purchased in an unimproved state in November, 1928, by appellants and one M. A. Sheridan, under a real estate contract, for the sum of $1,200, of which $200 had been paid in cash, and the balance of which was payable in annual installments of $250, beginning November 27, 1929. During the year 1929, Mr. Grosgebauer and Mr. Sheridan had erected the cabins and other buildings on the tourist park property.

The story of this case has its beginning in the month of April, 1930. Respondent Jacob Schneider, a man 60 years of age, was the pastor of the Lutheran Church at Buena, where he had been located for about two years. He had been a minister for about thirty-five years and had arrived at the age and point of retirement from his chosen profession. He was desirous of securing some business or employment that would produce a livelihood for himself and family and at the same time afford him the opportunity of being out of doors. His inclination was to secure a gasoline service station or tourist park, and with that idea in mind he began to make inquiry and investigation. He had purchased gasoline at appellants' station several times, and in that way had established a slight acquaintance with Mr. Grosgebauer, a man then about 57 years of age. On one occasion, shortly prior to May 1, 1930, Mr. Schneider chanced to ask Mr. Grosgebauer whether the latter could suggest a business opportunity of the kind desired by the former, and was informed that the Grosgebauer property was for sale. Negotiations then began and continued over a week or ten days. In the first conversation between the two men, Mr. Grosgebauer stated that he did not care to sell the tourist park property. Mr. Schneider indicated that he would not be interested unless that property was included. A few days later Mr. Schneider called again, and Mr. Grosgebauer then offered to sell the entire property, including his undivided one-half interest in the tourist park property, for $20,000. The Schneiders at that time owned a house and several lots in Valleyford, near Spokane, which they desired to trade in on the deal. After a trip of inspection, Mr. Grosgebauer agreed to take over the Valleyford property on a valuation of $2,500. During the negotiations Mr. Schneider inspected the Grosgebauer property several times and on one or two of these occasions was accompanied by his wife. The parties finally agreed to a sale and purchase of the Grosgebauer property at a price of $20,000, of which $3,500 was to be paid down in cash, $2,500 by the conveyance of the Valleyford property, and the balance of $14,000 to be paid at the rate of $150 per month, including interest at 6 per cent. per annum.

The matter was then referred to an attorney for the preparation of a contract. To meet various suggestions and objections made by the parties, the contract was redrawn a number of times by the attorney, who, upon each occasion, sent each of the parties a corrected copy. Finally, the contract was completed, executed, and delivered. The contract bears date May 1, 1930, though concededly the transaction was not consummated until May 16, 1930. At that time there was still owing on the contract under which Grosgebauer and Sheridan were purchasing the tourist park a balance of $375, which respondents assumed and agreed to pay.

After the deal had been concluded, respondents went into, and ever since have been in, possession of the property purchased by them. Some time in December, 1931, appellants notified respondents, in writing, that the latter were in default in the performance of certain terms of the contract, particularly with reference to installment payments, insurance, and taxes, and that forfeiture would be declared unless the contract was put in good standing on or Before December 29th. In response to this notice, respondents' attorney, on December 11, 1931, wrote to appellants that all payments referred to in the notice had been made prior to receipt of appellants' demand. In June, 1932, respondents were in default of the payment for that month and also in arrears to the extent of $25 per month for the six preceding months. After demand and refusal of payment, this action was begun by appellants, against which respondents cross-complained upon the ground of fraudulent misrepresentations in the sale of the property.

The fraud alleged in respondents' pleading, and concerning which they testified, was as follows: That during and prior to the conclusion of the negotiations appellants had stated and represented to respondents that the store building had cost $2,500; that the dwelling house and residence had cost $3,500; that the service station had cost $1,800; that the tourist park property had cost $6,000, and that during the year 1929 it had yielded an income sufficient to pay for itself, which the books would show if it were not for the fact that they had been burned; that the pump on the park property had cost $250; that the apartments over the store building would readily rent, and that there was an applicant for one of them at a stipulated rental of $25 per month; that all of the buildings on both properties were in a good state of repair, and that the value of the entire property was $20,000 and had been yielding, and would yield, a very substantial income. The appellants admitted, and testified, that they had told respondents that the park property had made enough in 1929 to pay for itself, but they denied having told appellants that it had cost $6,000. They further testified that the total value which they had placed on their property was $20,000, and gave in detail their reasons and basis therefor. They emphatically denied, however, having made any misrepresentation whatever. The evidence concerning the alleged misrepresentations was based almost entirely upon the testimony of the parties concerned, and presented a sheer conflict. The trial judge, in his memorandum opinion, stated that he had carefully studied the respondents while giving their testimony, and was impelled to conclude that they had told the truth, and that Mr. Grosgebauer's testimony, in one respect at least, had been discredited. Testimony was also offered by third persons on behalf of respondents to impeach Mr. Grosgebauer's veracity.

Were we deciding this case upon the evidence as it appears in cold print, we have grave doubt that we would arrive at the same conclusion that the trial court did upon the question of fact regarding fraud. In many respects the testimony of appellants accords with what we think was actually said and done by the parties...