Harman v. Hartman

• Decision Date: 16 December 1916
• Docket Number: 31018
• Parties: NOAH HARMON, Appellee, v. CLAUS HARTMAN, Appellant
• Court: Iowa Supreme Court

160 N.W. 295

178 Iowa 912

NOAH HARMON, Appellee, v. CLAUS HARTMAN, Appellant

No. 31018

Supreme Court of Iowa, Des Moines

December 16, 1916

Appeal from Linn District Court.--MILO P. SMITH, Judge.

ACTION upon a contract of guaranty, made by defendant as an inducement to plaintiff to purchase some land in North Dakota. Defendant admitted the making of the contract, but claimed that it did not cover the loss claimed by plaintiff that it was without consideration; and that it never became effective. Upon the issues joined, the case was tried to a jury, and, at the conclusion of the testimony, the trial court, on motion, directed a verdict for plaintiff, and defendant appeals.

Affirmed.

J. C France, for appellant.

Chas W. Kepler & Son, for appellee.

DEEMER, J. EVANS, C. J., WEAVER and PRESTON, JJ., concur.

OPINION

DEEMER, J.

Defendant was a real estate agent, living at Tipton, Iowa. He was handling land in North Dakota and elsewhere, and was well acquainted with plaintiff. For many years, he tried to induce plaintiff to go into North Dakota and purchase real estate there. He represented that he, defendant, had dealt in these lands himself and had made money thereon, and that plaintiff was foolish in not making some investments himself. Finally, in April of the year 1910, he, defendant, induced plaintiff to go with him, to look over some of the lands which were then on the market. They started for Bismarck, North Dakota, but went via Minneapolis, stopping there at the office of what was known as the Tri-State Investment Company, a corporation engaged in handling North Dakota land. There they met an agent of the company, by the name of Towne, who accompanied plaintiff and defendant to North Dakota. Arriving at Bismarck, they were shown certain tracts of land which it was claimed were owned by the investment company, and which were on the market for sale.

The location of these lands was pointed out, and plaintiff was urged to buy some of them, on the theory that it would prove a profitable investment. The investment company was represented as a rich and perfectly reliable corporation, and defendant said he would be willing to guarantee the performance of any agreement that it might make. Plaintiff was not disposed to make any ventures, but defendant still pressed the matter, saying that he did not want to go back to Iowa without selling the plaintiff some land; that it would help him, defendant, in securing other purchasers of lands in that vicinity. In order to induce plaintiff to buy, defendant finally said that he would personally guarantee any contract which plaintiff might make with the investment company. Finally yielding to these persuasions, plaintiff executed his contracts with the investment company for some lands. These were drawn up and signed by the parties on April 14, 1910, at Bismarck.

The papers were signed late in the evening, and, as plaintiff was in a hurry to get away on a train, the understanding was that defendant, when he got through with another customer whom he had for land, would return to Iowa, and execute his guaranty contract. Plaintiff then left for Iowa, taking the two contracts with him. About two weeks thereafter, defendant came to Tipton, and, pursuant to promise, signed the guaranty contract upon which this suit was brought. It soon transpired that the investment company had no title to the lands it had contracted to sell to plaintiff, and that it was unable to secure title thereto. Plaintiff thereupon made demand of the investment company to return him the money paid on the contracts, to wit, the sum of $ 250, but this it failed and refused to do. He also made demand upon the defendant to refund the money to him on his contract of guaranty, but this, too, was refused. He then brought this action upon the guaranty, to recover the money paid, with interest, with the result hitherto indicated. The original contracts for the purchase of the lands contained these, among other provisions:

"Bismark, N. D., April 14th, 1910.

"Received of Noah Harmon, P. O. Tipton, County Cedar, State Iowa, Note $ 00. due Cash $ 250. Total $ 250 as earnest money for the purchase of the following described property, situated in the county of Burleigh and state of North Dakota, viz.: The North East 1/4 of Section 12 in Township 138 and Range 77, which we have this day sold and agreed to convey to said Noah Harmon for the sum of $ 3,920, on terms as follows, viz., $ 250 in hand paid as above, and the sum of $ 50 allowed as car fare and expenses. The sum of $ 950 when warranty deed and abstract showing good title is delivered Harmon, balance by assuming or executing mortgage to part Tri-State Investment Co. may select in the sum of $ 2,670 due five years from date, with interest on deferred payments at 6 per cent from date of this contract, payable annually, payable on or before the date named above, or as soon thereafter as a warranty deed conveying good title to said land is tendered, time being considered of essence of this contract. . . . And it is agreed that, if the title to said premises is not good and cannot be made good, then this agreement shall be void and the above earnest money refunded. But if the title to said premises is good, in the name of the grantor, and said purchaser refuses to accept the same, said earnest money shall be forfeited to Tri-State Investment Co. as liquidated damages. No agreement verbal or written not here contained shall be considered as a part hereof. And said sale is made subject to the approval of the owner of the said land; should he disapprove of the sale, then and in that case, funds to be returned and Tri-State Investment Company released from any liability.

"Tri-State Investment Company. By O. LUND, Mgr.

"I hereby agree to purchase the said property for the price and upon the terms above mentioned, and also agree to the conditions of forfeiture and all other conditions herein expressed.

"NOAH HARMON."

This is the substance of the original contract. At the same time, and as a part thereof, the following contract was signed:

"Bismark N. D., April 14th, 1910.

"For and in consideration of Noah Harmon of Tipton, county of Cedar and state of Iowa, having this day purchased from the Tri-State Investment Co. of Minneapolis, Minn., the N. E. 1/4 of Section 12, Twp. 138, Range 77, Burleigh County, N. D for a consideration of $ 3,920, on terms as follows, $ 250 in hand paid, $ 950 to be paid when warranty deed and abstract showing good title is delivered to Harmon. The sum of $ 50 having been allowed as car fare and expenses, and the said Harmon to execute a mortgage of $ 2,670 against the above described land due five years from date, the Tri-State Investment Co. agree and guarantee, as a part of this consideration and transaction, that should the said...