Heflen v. Brown
| Decision Date | 05 March 1929 |
| Docket Number | 39168 |
| Citation | 223 N.W. 763,208 Iowa 325 |
| Parties | CHARLES B. HEFLEN, Appellee, v. R. BROWN, Appellant |
| Court | Iowa Supreme Court |
REHEARING DENIED MAY 17, 1929.
Appeal from Union District Court.--HOMER A. FULLER, Judge.
This was an action at law to recover, in two counts, for money loaned, and in a third count, on a contract to repurchase stock. There was a trial to a jury, resulting in a verdict for the plaintiff, and the defendant appeals.
Affirmed.
R Brown and E. J. Kelly, for appellant.
Kenneth H. Davenport, for appellee.
Defendant- appellant is a lawyer at Creston, and the plaintiff-appellee is a railroad locomotive engineer, with headquarters at that place. Appellant became interested in certain Oklahoma oil fields. Hence he approached appellee, for the purpose of borrowing money to be used in the venture. After obtaining the desired funds, in the amount of $ 1,000, appellant then induced appellee to purchase stock, in the par value of $ 1,000, to be repurchased at the end of a year. For the purpose of recovering the loan, and in order to obtain reimbursement under the repurchase agreement, this action was brought. The petition filed by appellee, as plaintiff, against appellant, as defendant, contained six counts, but only three were submitted to the jury. Those presented to that body were Counts 1, 3, and 4. Consequently, Counts 2, 5, and 6, are not involved. Counts 1 [208 Iowa 327] and 3 relate to the loan aforesaid, and Count 4 has reference to the repurchase undertaking. At the conclusion of a trial on the merits, the jury found for the appellee, and returned a verdict against the appellant in the sum of $ 2,770.42. Reversal is urged by appellant because of erroneous instructions given to the jury. No other questions are raised.
Convenience requires that Counts 1 and 3 be considered first.
I. On January 31, 1922, appellee, at the instance and request of appellant, delivered to the Moore Oil & Gas Company the sum of $ 1,000. Contemporaneously with that transaction, appellant assumed one half of the obligation for repayment, and executed his note to appellee in the sum of $ 500. As the net result of the manipulation between the parties, the Moore Oil & Gas Company and D. H. Moore owed appellee $ 500 on the loan agreement, and appellant was indebted to the latter for $ 500 on the promissory note. Interest was to be paid at the rate of 8 per cent per annum.
Apparently appellant was interested in the oil transaction, and told appellee that he would guarantee the payment of all the principal and interest on the $ 1,000 thus advanced. Security agreed upon was that the Moore Oil & Gas Company would deliver to appellee: First, the oil and gas lease held, or to be held, by it on a certain 10-acre tract in Garvin County, Oklahoma; second, shares of its own stock in the par value of $ 2,000; and third, 20 shares in the Home Oil & Gas Company, of Sedalia, Missouri. Accordingly, appellant demanded of and received from appellee a contract to the effect that one half of the alleged securities aforesaid should be due the former, in view of the fact that he had assumed $ 500 of the loan above mentioned. None of the securities mentioned were ever delivered to appellee.
Immediately after the negotiations just related, appellee learned that Moore, who appeared to be the executive officer in the Moore Oil & Gas Company, had absconded. Then appellee and his wife advised appellant of that fact; whereupon appellant stated that Moore had called him by telephone, and said that the title to the 10-acre lease named in said securities was defective. Furthermore, appellant contends that he went to Oklahoma and demanded that Moore have his corporation return the $ 1,000 loaned by appellee, but that, instead of doing so, Moore offered to sell appellant another lease. Therefore, appellant agreed to buy this second document, and when so doing, assumed and agreed to pay all the indebtedness due appellee arising out of the original loan transaction above described. It appears that appellant paid $ 25,000 in cash for this second lease, known as the Green Crest, and in addition thereto, agreed to pay $ 30,000 more out of the oil production.
After returning home from Oklahoma, after the purchase of the Green Crest lease, appellant reported to appellee concerning the new purchase. Upon hearing this, appellee complained to the appellant about the situation, and threatened to bring suit at once unless the $ 1,000 loaned the Moore Oil & Gas Company, including the $ 500 note, was paid at once. So, in order to prevent the publicity of a suit at that time, appellant agreed to pay appellee the entire $ 1,000 originally loaned to the Moore Oil & Gas Company, embracing the $ 500 note aforesaid.
Resultantly, said Counts 1 and 3 of appellee's petition sought recovery on appellant's promissory note of $ 500 and his oral agreement, just mentioned, to pay the remaining $ 500. By way of objections to the court's charge to the jury, appellant suggests the following propositions:
First. Contention is made by him that, while appellee can obtain redress on the promissory note for $ 500, he cannot succeed in recovering the remaining $ 500, because the basis therefore is an oral contract, in the nature of a guarantee, and therefore unprovable, under the statute of frauds. Manifestly, this objection was not raised in the court below. This particular point was not presented by answer, demurrer, objection to the evidence, motion for a directed verdict, or a motion in arrest of judgment. For the first time, the argument on this phase of the controversy is raised in this court. Now it is too late. Through failure to interpose the exception in the court below, the right to challenge is waived.
Second. Appellant urges next that the district court assumed in its instructions to the jury that the appellee loaned the Moore Company $ 500 and appellant $ 500; while, in truth and in fact, appellant asserts, the entire $ 1,000 was loaned to the Moore Company by appellee, and the appellant purchased or assumed a one-half interest therein by giving the $ 500 note. However this may be, appellant admitted his assumption of the entire obligation, and agreed to repay appellee the entire sum of $ 1,000 and interest. Inaccuracy of statement on the part of the trial court, if any there was, did not prejudice appellant.
Third. Further complaint is made by appellant because the court instructed at all concerning the $ 500 contained in the above transaction which was not embraced within the note. His theory at this juncture seems to be that there was no consideration for the assumption of that amount of the loan to the Moore Company not contained in the note. Clearly, there is no merit in this assignment of error. To begin with, appellant represented to appellee that the loan was safe, and that the money would be repaid by the Moore Company. Afterwards, appellant made an adjustment with the Moore Company on the basis that the former would assume and pay appellee's loan. Following this, when appellee became dissatisfied, and threatened suit, appellant promised to repay the obligation, provided that such proceeding was not instituted at that time. Such forbearance on the part of appellee amounted in itself to a consideration, to support appellant's promise. Urdangen v. Fryer, 183 Iowa 39, 166 N.W. 693. Appropriate language in the Urdangen case is:
Fourth. Insistence is made by appellant that the court erroneously instructed the jury in relation to the Green Crest lease transaction above explained. Stating the thought in another way, appellant says...
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