Harrington v. High
| Decision Date | 02 August 1924 |
| Citation | 39 Idaho 555,228 P. 883 |
| Parties | LEWIS E. HARRINGTON and CLARA I. HARRINGTON, Appellants, v. HARVEY J. HIGH and HARRIET HIGH, Respondents |
| Court | Idaho Supreme Court |
PRINCIPAL-AGENT-CONVEYANCE-ADEQUACY OF CONSIDERATION-FAIRNESS-BURDEN OF PROOF.
In an action to set aside a conveyance from a principal to an agent, the burden is on the latter to show that the consideration is adequate and that no unfair means were used.
APPEAL from the District Court of the Tenth Judicial District, for Nez Perce County. Hon. Edgar C. Steele, Judge.
Action to set aside conveyance. Judgment for defendants. Reversed.
Reversed and remanded. Costs to appellants. Petition for rehearing denied.
Benjamin F. Tweedy, for Appellants.
Where the proof shows that a real estate agent has acquired from his principals the subject matter of the agency, and the transaction is seasonably attacked, the law presumes that the transaction was fraudulent, and puts the burden on the real estate agent to allege and prove that he dealt honestly fairly and justly with his principals and got no advantage of them. And if he fails to allege and prove that he dealt honestly, fairly and justly with, and got no advantage of his principals, the deal will be set aside by a court of equity. .)
Fred E. Butler, for Respondents.
To rescind an executed contract for the conveyance or exchange of real property the plaintiff must plead and prove fraud. (27 R. C. L. 411.)
Inadequacy of the price paid for land is not sufficient to prove fraud but, "Gross inadequacy of price may, however, in connection with other circumstances, slight in their nature, demonstrate such imposition or undue influence as to shock the conscience, as has been said, and amount in itself to conclusive and decisive evidence of fraud for which a court of equity will afford relief by way of rescission." (27 R. C. L. 389.)
--Appellants, husband and wife, brought this action to set aside a deed executed and delivered by them to respondents, husband and wife, also a contract entered into between appellants and respondents, and to recover the value of certain livestock. The material facts alleged in the complaint are as follows: Appellants and respondents were negotiating for an exchange of 160 acres of farm land owned by appellants and 80 acres of farm land owned by respondents, all situate in Nez Perce county, Idaho; they had entered into one written agreement, pursuant to which deeds were placed by both parties in escrow; this agreement was abandoned and rescinded because of inability to perform it according to its terms; thereafter they renewed negotiations, and arrived at an oral agreement whereby appellants would deed to respondents their 160 acres with an encumbrance of $ 5,000, respondents would deed to appellants their 80 acres with an encumbrance of $ 2,000, and respondents would pay a sum of money to appellants, the exact amount not being mentioned in the complaint; the respondent Harvey J. High undertook to have this oral agreement reduced to writing; the written agreement, as dictated by him and prepared by the scrivener, gave appellants an option to purchase the 80 acres by paying respondents $ 3,000 in 11 months' time, gave appellants the right to possession in the meantime and to two-thirds of the crop, provided that, on failure to pay the $ 3,000 at the time stated, all rights of appellant should be forfeited; respondent Harvey J. High represented that the only reason for signing the written contract was to furnish written evidence of the trade and give him necessary time to execute and deliver his deed; the written agreement was read to appellant Lewis E. Harrington, but he did not understand it; it was not read to appellant Clara I. Harrington before she signed it; respondent Harvey J. High told her that it was the same as the oral understanding for the exchange of the farms; at the time this written agreement was executed, appellants delivered a deed to their 160 acres to respondents, but did not receive a deed from respondents to the 80 acres; appellants' land was worth from $ 7,500 to $ 8,000 over and above the $ 5,000 mortgage thereon and respondents' equity in their land was worth not more than $ 5,000; respondent Harvey J. High charged and collected from appellants a real estate commission for the transaction, which was paid by turning over certain livestock and implements; appellants received no consideration for their deed; upon learning the true nature of the written agreement which they had executed appellants notified respondents that they rescinded the contract. Appellants pray that the deed and contract be canceled, and that they recover the value of the personal property in question.
Respondents in their answer deny the material allegations of the complaint as outlined above. They allege in substance that appellants and respondents reached an oral agreement for the exchange of their lands, and that the written agreement entered into, and which appellants seek to set aside, represents the true agreement.
The court finds that the written agreement in controversy represented the true agreement of the parties; that no fraud or misrepresentation was practiced by respondents, or either of them, upon appellants; that a valuable consideration was given appellants by respondents for the deed to the 160 acres, said consideration being the written agreement; that the two farms were of about the same value; that appellants were well acquainted with the 80 acres in question and its value; that appellants entered into the written contract with full knowledge of the facts and were fully advised in regard to the nature and import of the contract. From a judgment for respondents this appeal is taken. Of the many specifications of error set forth by appellants the only one which merits consideration is that the judgment is against the evidence.
Appellants neither alleged nor proved a mutual mistake of fact. The allegations of the complaint are not sufficient to charge fraudulent misrepresentations. Failure or inability of a party to read a written contract is not ground for setting it aside. (Constantine v. McDonald, 25 Idaho 342, 137 P. 531.) While appellants allege total failure of consideration they have failed to prove it. The so-called option agreement was a legal consideration. In view of the whole record appellants must fall back upon the contention that the relation which existed between them and respondents, by reason of the fact that they had listed their land for sale with respondent Harvey J. High, and gross inadequacy of the consideration received by them for their land, make a case of presumptive fraud which justifies the interposition of equity.
The evidence discloses the following facts. Respondent Harvey High was a real estate broker with whom appellant Lewis Harrington had listed the 160 acres for sale. Five witnesses familiar with this land testified it was worth $ 12,000. After he got the deed High listed it for sale with the witness Burnham at that price. One witness testified for respondents that it was worth $ 7,000 to $ 8,000 and that High offered to sell it to him for $ 8,000 after he acquired it. This witness does not say whether this means $ 8,000 subject to the mortgage. If so his estimate agrees with that of appellants' witnesses. The Federal Land Bank actually loaned $ 5,000 on this land. This strongly bears out appellants' contention that it was worth $ 12,000 rather than respondents' contention that it was worth only $ 8,000. Four witnesses familiar with the land testified on behalf of appellants that the 80 acres was worth from $ 5,000 to $ 6,000. High listed it for sale with Burnham at $ 5,000. Respondent Harvey High testified that it was worth as much as the 160. The improvements on the 160...
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