Kallberg v. Newberry

• Decision Date: 12 April 1918
• Citation: 43 N.D. 521,170 N.W. 113
• Parties: KALLBERG v. NEWBERRY.
• Court: North Dakota Supreme Court

43 N.D. 521

170 N.W. 113

KALLBERG

v.NEWBERRY.

Supreme Court of North Dakota.

Dec. 21, 1918.

On Petition for Rehearing, April 12, 1918.

Syllabus by the Court.

Plaintiff gave defendant a 30-day option on certain land, at $25 per acre, and within the 30 days defendant found a purchaser, accepted the option, and the land was conveyed. A short time prior to the giving of the option, plaintiff had given defendant a similar option at the same price, which had expired, and had offered to sell the land to others at the same price. Subsequent to the conveyance by the plaintiff, a dispute arose relative to the transaction, and the plaintiff, with full knowledge of the surrounding facts, brought an action to rescind the option contract, claiming therein to be entitled to the full amount which defendant had obtained upon a resale of the property. The purchaser from the defendant was not made a party to the rescission suit, which terminated in favor of the defendant. Held:

That the termination of the rescission suit adversely to the plaintiff bound him to his election of remedies, and he could not subsequently maintain an action upon the option contract for the recovery of the difference between the price stated in the option and the amount realized upon the resale.

That the doctrine of res judicata precludes repeated litigation and prevents the relitigation of issues which were properly involved in a previous suit between the same parties.

On Petition for Rehearing.

Additional Syllabus by Editorial Staff.

The doctrine of res judicata. except in unusual cases such as merger, is not employed to prevent the separate litigation of separate and distinct causes of action.

Questions of fact directly in issue in a former suit and judicially determined by a court of competent jurisdiction are conclusively settled as to parties to that action, and cannot be relitigated between them or their privies in the same or a different cause of action.

The doctrine of election has to do with the legal means of enforcing a right arising out of a transaction, and involves nothing more or less than a choice of inconsistent rights and the selection of the appropriate remedy; the latter being merely incidental.

A suitor may be precluded from litigating certain questions of fact by reason of having previously litigated them, and also prevented from maintaining a subsequent action by reason of his adversary's reliance on account of his unequivocal choice to litigate the matter in a former proceeding appropriate to give him adequate relief.

The real basis for a binding election is estoppel; and, if the election is held binding or not binding, depending upon whether the elements of an estoppel are present, no injustice can result.

Appeal from District Court, Foster County; J. A. Coffey, Judge.

Action by Victor M. Kallberg against G. S. Newberry. From an order setting aside verdict for plaintiff, and directing entry of judgment non obstante for defendant, plaintiff appeals. Order affirmed. Petition for rehearing denied.

Robinson, J., dissenting.T. F. McCue, of Carrington, for appellant. Edward P. Kelly, of Carrington, for respondent.

BIRDZELL, J.

This is an appeal from an order entered in the district court of Foster county, setting aside the verdict of a jury in favor of the plaintiff for $1,440, and directing the entry of a judgment non obstante for the defendant. The facts are as follows: Plaintiff, Kallberg, being indebted to the First National Bank of Carrington, of which the defendant, Newberry, was cashier, and there being liens outstanding upon his land in considerable amount, was apparently desirous of disposing of his property and paying his debts. The bank was also apparently desirous of collecting the amount owing to it by Kallberg. In carrying out this purpose, Kallberg, in the fall of 1914, talked with the defendant concerning the proposed sale of his land, and on October 20th gave Newberry a 15-day option upon the land at $25 per acre. During the life of this option, some prospective deals were discussed and investigated by the plaintiff and defendant, but inasmuch as they involved trades which, for one reason or another, were regarded as undesirable, the sale was not consummated. During this same year, Kallberg had listed his land with at least two real estate men in Carrington at $25 per acre. He had also offered it for sale to one, Herman, at the same price. On November 19th, Kallberg gave to the defendant a second option for 30 days, on the terms of $25 per acre. The stated consideration for each of these options was “$1.00, receipt of which is hereby acknowledged.” While there is some conflict in the testimony relative to the understanding of the parties at the time the second option was given, it is not disputed that on the morning of the day the option was signed, Newberry, in company with one A. T. Johnson, and a prospective purchaser by the name of Ganske, and the wife of the latter, went to the Kallberg farm for the purpose of inspecting it with a view to the purchase thereof by Ganske. It appears that Johnson was interested in the matter by reason of the fact that he held a lumberman's lien against the land, amounting to about $900, which had been assigned by him as collateral to his indebtedness to the First National Bank. Furthermore, it appears that Johnson had found the prospective purchaser, having learned from one Nolton, with whom the Ganskes were stopping in Carrington, that they were desirous of purchasing land in the locality. Newberry's explanation of the reason why he desired the option is that Johnson also had other land which he could show to these. people, but that, inasmuch as he (Newberry) was desirous of selling this land for Kallberg, he would like Kallberg to execute the option, so that he (Newberry) would be protected in making the deal. While there is a conflict between the testimony of Newberry and Kallberg regarding the conversation at the time of the signing of the option, the former contending that it was understood that the option was a straight proposal to sell the land at $25 per acre, and the latter contending that it was intended that he should have all of the money realized from the sale, over and above his indebtedness, in the view that we take of the case this conflict is immaterial, as will later appear. The deal was later consummated, the land being sold to Ganske at $29.50 per acre. A few days after the option was given Kallberg gave Newberry a deed for the land, and Newberry entered into contract with Ganske and wife, whereby the latter was to make his first substantial payment on March 15, 1915, following, it being understood that Kallberg was to retain possession of the land until that date. A few days prior to March 15, 1915, while Kallberg was making preparations to conduct a sale of his personal property, preparatory to giving up the possession of the premises, a question arose relative to some indebtedness owing by Kallberg to the First National Bank, as security for which the bank held a chattel mortgage on some property which Kallberg desired to sell. The merits of the controversy respecting this chattel indebtedness are not involved in this action, and are unimportant here, except as this transaction furnished the occasion for the discussion between the parties relative to the interest upon the purchase price during the interim between the date of the sale of the land and the date of the settlement, the following March. During this controversy the whole deal was rehashed, and the parties, through their respective agents, attempted to negotiate a settlement of the entire matter in dispute. For some reason the settlement failed and Kallberg instituted a suit for the rescission of the sale contract and the cancellation of the deed. This suit was later terminated by the entry of a judgment for the dismissal of the action. It should be stated here that after the termination of the rescission suit the defendant settled with Johnson for his and Nolton's participation in the deal. This action was then brought for the purpose of recovering the difference between the price recited in the option of November 19th, or $25 per acre, and the price at which the land was sold to Ganske, namely $29.50 per acre, which difference amounted to the sum of $1,440. The complaint is founded upon an alleged agreement, whereby the defendants obligated themselves to pay or account to the plaintiff for whatever sum was received for the land in excess of $25 per acre.

Upon this appeal the appellant asks for a reversal of the order of the trial court and the entry of a judgment on the verdict of the jury. In support of his position appellant contends: First, that the bringing of the rescission suit was not an election of remedies; second, that under the doctrine of res judicata he is not precluded from pursuing this action; and, third, that the evidence going to establish the oral agreement as to additional consideration was admissible, and afforded sufficient foundation for the verdict of the jury.

It is clear that this suit is founded upon an alleged contract between plaintiff and defendant, whereby the defendant became bound to pay to the plaintiff, not $25 per acre for the land, according to the option, but whatever sum defendant received therefor in making the resale of the premises. It is equally clear that in the rescission suit the plaintiff sought relief upon the ground that the contract between him and defendant was not binding, and that the relief asked was founded upon a disaffirmance of the contract. These remedies, as applied to the transaction of the parties, are therefore clearly inconsistent. The appellant does not contend that at the time he instituted the rescission suit he was not fully apprised of the facts surrounding the transaction in question. It appears, however, on the contrary, that, with full knowledge of the facts, the plaintiff instituted the rescission suit,...