Harm v. Boatman

• Decision Date: 24 January 1924
• Docket Number: 17892.
• Parties: HARM et al. v. BOATMAN et al.
• Court: Washington Supreme Court

222 P. 478

128 Wash. 202

HARM et al. v. BOATMAN et al.

No. 17892.

Supreme Court of Washington, En Banc.

January 24, 1924

Appeal from Superior Court, Pierce County; Chapman, Judge.

Separate actions by Emma Harm, Peter L. Hale, William Colegrove, and Sento Gardella, against E. A. Boatman and others. Two separate causes of action were alleged in each complaint and judgments were rendered for plaintiffs on the first cause of action and for defendants on the second cause of action in each case, and, from the judgments for defendants, plaintiffs appeal. Affirmed.

Holcomb J., dissenting.

Bates & Peterson, of Tacoma, for appellants.

Lyle Henderson & Carnahan, of Tacoma, for respondents.

MAIN C.J.

Five several actions were brought by as many plaintiffs against the defendants Boatman, Krause, and Kipling, for the purpose of effecting rescission or cancellation of two certain syndicate agreements theretofore entered into between the respective plaintiffs and defendants, and to recover back moneys paid by the several plaintiffs under the syndicate agreements. Each of the plaintiffs had separate and independent causes of action against the same defendants, in each case for varying amounts, but they all involved the same questions of fact and of law. Two separate causes of action were alleged in each complaint: One to recover moneys paid into a syndicate or pool organized for the purpose of raising $7,500, divided into units of $500 each; and the second to recover moneys paid into similar syndicate or pool organized for the purpose of raising $16,000; both of which syndicate agreements involved the purchase of oil and gas leases in counties in the Olympic Peninsula.

Plaintiffs had judgment on the first cause of action in each case, and judgment was entered for defendants on each of the second causes of action. The defendants in each case did not appeal from the judgment on the first cause of action, but plaintiffs have appealed from the judgments in favor of the defendants on the second cause of action.

It was stipulated among all the parties in interest that the cases should be consolidated for the purposes of trial, and at the conclusion thereof one set of findings was made and one judgment entered as to the causes of action involved herein. The respondent Boatman alone has filed a brief in answer to that of the appellants.

The plan seems to have been devised by one Kipling, assisted by Krause, and somewhat assisted by Boatman, who was both victim and beneficiary. The first syndicate agreement was entered into June 26, 1920, whereby a syndicate was formed of $7,500 in units of $500 each, Boatman, Krause and Kipling each signing his name and making out his check for $1,000, which checks were attached to the form of syndicate agreement, and taken and exhibited to the appellants, who upon the representations made to them became parties to the syndicate agreement, paying the alleged balance of $4,500 for the purpose of raising the $7,500 with which to buy oil and gas leases on 160 acres of land in Grays Harbor, Clallam, and Jefferson counties, upon which the three organizers claimed to have an option. They, in fact, owned the leases which were a part of a 320-acre tract previously purchased by them for $1,000. They had never paid the sum represented by them to have been paid, and it later developed that the $4,500 paid in by the appellants was divided among them. Their three checks amounting to $3,000 were not paid. Upon that showing at the trial, the trial court very promptly and properly held that appellants were entitled to rescission of that syndicate agreement and to a recovery of their moneys.

It then appears that, after having completed the payments on the $7,500 syndicate agreement by appellants, a meeting was held at Puyallup on September 29, 1920, all of the appellants and the three organizers being present, whereupon the latter presented a proposition on their part to the syndicate for the purpose of raising $16,000 to purchase leases on another 320 acres of land, alleged to be favorably located for oil and gas exploitation. The agreement was entered into in writing. The name Valley Oil Syndicate was adopted. It contemplated the acquisition of oil and gas leases and the pooling of the interests of all the parties for the purpose of managing and handling the undertaking. On the same date the syndicate entered into an option with one Dunlop and one Demeree for the purchase of 320 acres of gas and oil leases for $16,000. On the same day another and secret or what is referred to in the testimony thereto as 'side agreement' was entered into between Dunlop and Demeree, the owners of the land described in the option to purchase by the syndicate, and the three organizers, and a Mr. Eisenhower, which refers to the leases taken under option by the Valley Oil Syndicate, which provides:

'If the said Valley Oil Syndicate shall purchase the entire amount of oil leases this day sold it under an option by the said E. A. Dunlop and C. M. Demeree, then and in that event the transfer herein made to the said trustee of the said leases above mentioned shall become absolute, and for the benefit of the six parties herein named. If, however, the said Valley Oil Syndicate should

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