Howerton v. Augustine

• Decision Date: 09 April 1906
• Citation: 106 N.W. 941,130 Iowa 389
• Parties: HOWERTON v. AUGUSTINE.
• Court: Iowa Supreme Court

130 Iowa 389

106 N.W. 941

HOWERTON

v.AUGUSTINE.

Supreme Court of Iowa.

April 9, 1906.

Appeal from District Court, Mahaska County; John T. Scott, Judge.

Action to recover damages for fraudulent representations in exchange of real property. At the close of plaintiff's evidence the court, on motion, directed a verdict for defendant, and from judgment thereon plaintiff appeals. Reversed.Irving C. Johnson and Liston McMillen, for appellant.

John O. Malcolm, for appellee.

McCLAIN, C. J.

In September, 1903, plaintiff and defendant entered into a written contract by which plaintiff agreed to deed to defendant 160 acres of land in Coffee county, Kan., subject to a mortgage of $1,500, in exchange for the assignment to plaintiff of a contract for the sale of 640 acres of land in Douglas county, Wash., subject to the payment by plaintiff of $700 to the Northern Pacific Railroad Company, by whom the assigned contract to convey the land in Washington was made. Subsequently a deed for the Kansas land was secured, to be made by one who held the title in trust for the plaintiff to the defendant, and an assignment of the Northern Pacific Railway Company contract was made to the plaintiff. But thereafter plaintiff discovered that the contract of the railway company contained a reservation of such portions of the Washington land as “are now known or shall hereafter be ascertained to contain coal or iron or other mineral, and also all of such surface ground as may be necessary for mining operations, and the right of access to such reservation and access to coal and iron or mineral lands for the purpose of exploring, developing and working the same”; and thereupon plaintiff instituted this action, claiming that he had no notice or knowledge of any such reservation at the time his contract was made, and that the existence in the railway company's contract which was to be assigned to him of such reservation without disclosure of the fact to him constituted a fraud, resulting in his damage in the sum of $5,000. The grounds stated in the motion to direct a verdict were that there was no evidence showing, or tending to show, that any damage to plaintiff and no evidence showing, or tending to show, that any amount of damages to plaintiff was due, or, if due, that the same had not been paid, and no allegation in plaintiff's petition of any amount of damage due plaintiff from defendant.

1. Plaintiff relied entirely upon his own testimony to establish the fraud of defendant in not disclosing to him the reservation in the contract for the Washington land, and also to show the amount of damage suffered by him on account of such fraud; and it seems to us his testimony was sufficient to make out a case which should have gone to the jury. He testified that defendant and his agent both assured plaintiff that defendant had a good title, and that defendant explained the absence of the railway contract at the time of the negotiation of the trade by saying that it had been sent off to the company for formal assignment to the defendant by the person from whom defendant had contracted to buy it. It seems to us that defendant must be assumed to have known the provisions of the contract which he proposed to assign to plaintiff, and that the existence in such contract of a reservation which substantially impaired the title that could be acquired from the railway company under such contract was a fraud upon plaintiff for which defendant should answer in damages. As to the amount of damages, plaintiff testified that he knew what would have been the fair market value of the railway contract without the mineral reservation in it, that it would have been worth $4,500 to $5,000, and that, with the mineral reservation in it, it had no market value. On cross-examination he admitted that he did not know anything about the land personally, and did not know whether there was mineral or not, but no objection to his evidence on the ground of incompetency was interposed, nor was any motion made to strike it out, and we think that it should have gone to the jury. Plaintiff testifies that he knew something about the land, although he had never seen it, and, although this knowledge was derived from inquiries and from conversations with others, he may have had such knowledge as would qualify him to speak. 2 Jones, Evidence, § 365; Phelps, D. & P....