Horigan Realty Co. v. Honan

• Decision Date: 09 October 1925
• Docket Number: No. 24702.,24702.
• Parties: HORIGAN REALTY CO. v. HONAN.
• Court: Missouri Supreme Court

275 S.W. 949

HORIGAN REALTY CO. v. HONAN.

No. 24702.

Supreme Court of Missouri, Division No. 1.

October 9, 1925.

Appeal from Circuit Court, Jackson County; Thomas B. Buckner, Judge.

Action by the Horigan Realty Company against Hugh C. Honan. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Frank P. Sebree, Henry L. Jost, Sam B. Sebree, and Wm. Paul Pinkerton, all of Kansas City, for appellant.

Lathrop, Morrow, Fox & Moore, Cyrus Crane, and Richard S. Righter, all of Kansas City, for respondent.

LINDSAY, C.

This is an action for damages in the sum of $33,444.25, based upon the charge that the defendant, by fraud, and fraudulent conspiracy with one Hitchcock, induced plaintiff to sell and convey to said Hitchcock, for less than its value, a farm owned by plaintiff. The sum sued for is the difference between the alleged value of the farm, $100 per acre, at the time of the sale, and the amount received for it by plaintiff under the sale. Upon the trial there was a verdict for the defendant, signed by nine jurors.

Plaintiff assigns errors in certain instructions given for defendant, and in the rejection of certain evidence offered by plaintiff. The defendant insists that the plaintiff did not make a case for the jury, and that the court erred in overruling his demurrer to the evidence offered at the close of plaintiff's case, and renewed at the close of the whole case, and that the question of error in the instructions and in the rejection of testimony is immaterial. This is urged upon the theory that, if plaintiff be allowed the benefit of all competent evidence introduced or offered in its favor upon which liability can be predicated, and has made no case and was unsuccessful below, then, it cannot be held that error in giving defendant's instructions, or in rejecting evidence offered by plaintiff, require a reversal. Sections 1276, 1513, R. S. 1919; Trainer v. Mining Co., 243 Mo. 359, 370, 148 S. W. 70, Ann. Cas. 19130, 949; Moore v. Lindell Ry. Co., 176 Mo. loc. cit. 545, 75 S. W. 672; Bradley v. Tea & Coffee Co., 213 Mo. loc. cit. 325, 111 S. W. 919; Mockowik v. Railroad, 196 Mo. 568, 94 S. W. 256; Farmers' Loan & Trust Co. v. Southern Surety Co., 285 Mo. 621, 226 S. W. 926. Not combatting that theory, counsel for plaintiff reply by saying that it involves admission of the truth of the evidence for the plaintiff, and the requirement that plaintiff must be allowed every reasonable inference that may be drawn in its favor from the evidence, and that thereon, plaintiff made a case for the jury. Upon the position thus assumed by the parties, a review of the evidence becomes necessary.

There are certain matters about which there was little or no dispute. The plaintiff is a family corporation and was organized about 1910 by Dr. Horigan, for the purpose of holding title to family real estate. He held all the stock except three qualifying shares for the directors who were his wife, Mrs. Katherine Horigan, Mrs. Kahman, their married daughter, and David A. Murphy, an attorney. Mrs. Horigan was president, Murphy was secretary, and Dr. Horigan was the attorney in fact, and general manager of the company. In 1916, the company acquired two. farms in Johnson county, one of 427 acres upon which it placed a mortgage for $17,000. The other farm consisted of 589 acres, upon which it placed a mortgage for $23,500, an indebtedness of about $40 per acre. The farm of 589 acres is the one about which this controversy turns. The mortgage on it was one coming due in 1921, and the interest fell due semiannually, in March and September. This farm lay along Blackwater creek and most of it was overflow land. Before the time of the events giving rise to this suit, a drainage ditch had been cut through this and other lands. The ditch widened by action of the water, and from about the time of the transaction in question, was efficient in carrying off the water, and preventing overflows. There was a ditch tax on the land of 50 cents an acre. The Hitchcock family lived in Kansas City, as did also the defendant Honan. He had been for a number of years engaged in the banking business, and in making loans on farm and city property. The wife of defendant was a sister of George Kahman, who was a son-in-law of Dr. Horigan, and the relations between the defendant and his family, and the members of the Horigan family, in the period of several years prior to the sale of this land, were of a friendly nature. Defendant testified that he had known the Horigan family 10 years, was related by marriage to them, and visited them occasionally.

Early in the year of 1918, Mr. Horigan entered the army, was ordered into active service in May, and about the last of July, 1918, sailed for France. He did not return until July, 1919. His son was also in the army and did not return until 1919.

The testimony was that, at the time Dr. Horigan went away, all interest payments and taxes on the land, that had become due, had been paid. Mrs. Horigan testified that shortly after the departure of Dr. Horigan she was made sick by an infection of her foot, caused by a burn; that about this time, some income-producing property of the company was destroyed by fire; that she became worried and nervous over the financial situation, and about the interest payments to be made; that about August, 1918, or a few weeks after the departure of Dr. Horigan, she conceived the idea of selling the farms, or of selling the 589-acre farm; that she was not informed as to its value; that on account of her friendly relations with defendant, and the fact that he had been engaged in the banking, and loan and real estate business, she applied to him. Her testimony was that she asked defendant to look at the farm and to find out what it was worth—to value it for her—and that defendant agreed to do so. Defendant made a visit to the farm. It appears that Hitchcock went with him. She testified that, on his return, he told her the farm in question was not worth any more than the mortgage upon it; that he had gone to the Fidelity Trust Company which held the loan, and was told that if they renewed the loan, they would not do so for the existing amount. Testifying as to this, Mrs. Horigan said: "That decided me."

She testified that she believed him; that she told him if she could only get $10 an acre for the equity, it would help pay the interest; that defendant said he would see if he could do that. The defendant denied that he was asked to value the land, or that he ever placed a value on it. He testified that he was acting as a sales agent; that he told Mrs. Horigan if they would talk the matter over and come to a decision as to what they wanted for the farms, he would try to find somebody who would buy one or both of them, and that he made it clear that he did not want to be considered as an adviser. He testified that he had never made any loans on land in Johnson county, and was not acquainted with land values in that county.

Mr. Murphy, the secretary and attorney for plaintiff was consulted by Mrs. Horigan, but he did not know the value of the farm. Murphy testified that when Mrs. Horigan told him that defendant had appraised the farm, and said it was not worth more than the mortgage upon it, he called up defendant at the time, and asked about it. Murphy testified:

"I called up Mr. Honan at the time over the telephone, and told him Mrs. Horigan had told me that he had been down there to appraise the property, and that she had said he told her it was not worth more than the mortgage. I asked, 'How about that?' He said, `That is true; that is right; it is worth no more than the mortgage.' I believed that Mr. Honan knew values, and I believed what he said."

It is not contended that Mrs. Horigan knew the value of the farm, or was capable of determining its value as upon her own judgment.

After his first visit to the farm, defendant took several persons to see it, but none of them, except Hitchcock, became interested. Plaintiff's evidence tended to show that defendant and Hitchcock officed in the same building; that they had been associated in many transactions and were intimate; that Hitchcock had always transacted his business with the banking house with which defendant was connected as an officer. Shortly after the time of the conversation to which Murphy referred, a meeting was had at Murphy's office at which he, Mrs. Horigan, Hitchcock and defendant were present, and a sale was discussed but no agreement reached, and the matter was apparently dropped for a time. It does not appear to have been taken up again between Mrs. Horigan and defendant, until on October 26, 1918, when the defendant and his wife were at the Horigan home at a birthday party. On that occasion, Mrs. Horigan and defendant again talked about the sale of the farm. Her testimony was that on this occasion, defendant told her he thought he could get $3,500 for the equity in the 589 acres; that he was not sure, but would do the best he could. She testified that she did not know, at that time, that Hitchcock was buying the property. At this conversation, there was some talk between them about the corn crop on the farm, and she testified that defendant said the corn crop would offset the taxes. Not long after that, according to the testimony of Mrs. Horigan, defendant informed her that he had got Mr. Hitchcock to buy the equity in the 589 acres; that Hitchcock would pay $3,500 for it, and the corn crop would offset the taxes. According to defendant's testimony, it was at a meeting at Murphy's office at which Mrs. Horigan, Hitchcock, the defendant, and Murphy were present, that terms of sale were agreed upon. Mr. Murphy denied that any such meeting as that took place at his office. He testified that he was in Minnesota from about November 3, to November 17, 1918, where his mother and certain other relatives had died of influenza, and that he did not know an agreement had been reached for the sale...