Mayo v. Wahlgreen

• Decision Date: 14 June 1897
• Citation: 50 P. 40,9 Colo.App. 506
• Parties: MAYO et al. v. WAHLGREEN. [1]
• Court: Colorado Court of Appeals

50 P. 40

9 Colo.App. 506

MAYO et al. v. WAHLGREEN. ^[1]

Court of Appeals of Colorado

June 14, 1897

Appeal from district court, Arapahoe county.

Action of deceit by G. Albert Wahlgreen against Oscar Mayo and Abraham L. Hess. From a judgment in favor of plaintiff defendants appeal. Reversed.

Geo. C. Norris, for appellants.

Clay B Whitford and H.A. Lindsley, for appellee.

BISSELL J.

It is not infrequently useful to define and classify the action which is the subject-matter of an appeal, for it serves to limit the application of what is held to be the law, and to facilitate its apprehension. This is an action in deceit. The plaintiff's cause depended on proof of material representations, their falsity, and his damage. A little history outside of the matters necessarily involved in the suit will tend to present the real issue with greater clearness. Early in the year 1889 the Denver Chamber of Commerce initiated a plan to create a summer resort. The persons in charge of the enterprise selected as the place of the resort Lookout Mountain, which is a few miles west of Golden, and in the foothills. A corporation was organized called the Denver Lookout Mountain Resort, Land, Transit &amp Improvement Company. Another corporation was then organized, known as the Denver, Apex & Western Railway Company, to build a railroad from Denver to the resort and other places. Upon the organization of these two corporations, the Lookout Mountain Company bought a large tract of land of one of the defendants and appellants in the present suit, Abraham L. Hess. The company bought 680 acres of him on the mountain for $10,000. Hess was an old-time resident in the country, and had lived in the vicinity of Mt. Vernon gulch, near the mountain, since 1870. On the completion of this purchase, and the commencement of work by it, a boom of extraordinary and unwarranted proportions sprung into life in this vicinity. The apparent values of all lands increased, and many people who were dealing in real estate, and those who were residents there, commenced picking up different pieces of property, procuring options on them, purchasing them outright, and holding them for the purposes of the profit which might result from their resale. Hess bought other property, got options on some, and finally obtained, in the fall of 1889, a title to 40 acres of land which had theretofore belonged to Mr. Craig, and was a part of the estate left by him at his death. The history of the acquisition of that title need not be given. It is enough to state the ultimate fact that the title to the property became vested in Hess prior to the making of the contracts and transfers which led to the present suit. Hess paid $31.25 an acre for the land. The other appellant, Mayo, was somewhat familiar with the locality, had been there in the summer time to spend part of his vacation, and had considerable knowledge of the situation of the property. He was infected with the mania which seized all who went into the speculation, and, after making several attempts to secure options on properties, negotiated with Hess with reference to this particular 40. These negotiations culminated in an agreement between Mayo and Hess, which was expressed in two papers, which were produced in evidence, although the main features of both were the same. These papers were executed in February, 1890. The month was given, but no definite date was put in either. According to the terms of the one which was said to have been executed first, Hess authorized Mayo to sell the 40 acres of land described, and make whatever profit he could, provided Hess received $4,000 for it; $1,000 in cash, $1,000 in 6 months, $1,500 in 12, and $500 in 18, months thereafter. The deferred payments were to be secured by trust deed, and were to bear interest. The other paper was an agreement to sell the 40 acres of land to Mayo, and to three other parties one individual quarter. The consideration was to be $500 cash, $500 in 6, and $500 in 12, months. The only substantial difference between the two papers was in the price per acre which Mayo was bound to pay; the first being $100 an acre, and the second $150. It is quite clear from the testimony that the agreement first referred to was the one which was originally executed by the parties, and contained the exact agreement between them, to wit, that Hess had agreed to sell at $100 an acre, payable at definite dates, and in entirety was to receive $4,000 as the consideration money. The purpose of the execution of the second option is not clear from the testimony, for the witnesses were not totally disingenuous in their statements; but we regard this as unimportant, because, according to Wahlgreen's testimony, he knew nothing of either of the papers. For this reason the matter will not again be referred to, and it is simply stated as explanatory of the situation. After Mayo had made this agreement with Hess, he attempted to find other parties to help him carry out the contract, for he was without the capital requisite to take the 40 acres at $4,000, and according to the contract the whole only could be taken, and it could not be subdivided, and sold in sections, as against Hess, the owner. Mayo approached divers parties, and finally succeeded in procuring Wahlgreen, Hassel, Walker, and Nightengale to take portions of the 40 acres, and thus complete the purchase. It was originally intended that each party should take 10 acres, but Wahlgreen was unable to take more than 5, and his interest was reduced accordingly. Contracts were executed by Wahlgreen, Hassel, Walker, and Nightengale running to Hess, and contained stipulations that the parties should take certain specified proportions of the tract, and pay a designated price, which was at the rate of $150 an acre, paying a certain percentage of cash, and the balance by notes secured by trust deeds on the property. The parties came together, and, to determine which particular portion of the 40 acres each should have, their rights were decided by lot, and when this was settled the purchasers paid the cash agreed on, gave the notes and trust deeds, and took title to their portions in severalty. Wahlgreen paid the cash consideration, gave his notes, and took his deed. By some inadvertence the deed which was executed did not correctly describe the part he took, and, after differences had arisen between the parties, Hess executed a new deed with the correct description, and left it with Wahlgreen, who put it on record. When the notes matured, Wahlgreen paid them, with the interest, and afterwards brought this suit. We have thus far omitted to state the gravamen of the action because it would less clearly appear if put in its chronological position in the case rather than in the conclusion of its history. During the time Mayo was negotiating with Wahlgreen and attempting to induce him to buy part of the property, he made sundry statements respecting its situation, its value, both present and prospective, the existing condition of affairs at the resort, and the terms on which Wahlgreen was to be taken into the scheme. Wahlgreen learned that he had paid more for his proportion than the sum at which Hess had agreed to sell it to Mayo, concluded that he had been defrauded in the transaction, and brought this suit against both Hess and Mayo. He charged that Mayo had particular knowledge respecting the situation and value of the property, and that he represented it to be worth a very large sum beyond its actual value; that a great amount of work was being done by the resort company to improve its property, and prepare for the erection of a large hotel at the resort; and particularly charged that in the negotiations between him and Mayo, Mayo agreed and represented that, if Wahlgreen took an interest in the purchase of any part of his 40 acres, he should come in on the ground floor with him as a purchaser. These were the specific representations charged which were alleged to be false, to have misled the plaintiff, and to have caused him damage. During the trial Wahlgreen testified that he never saw Hess from the time he first began talking about the purchase until after he had agreed to buy it, and up to the time the money was paid, the notes given, and the deed secured. It is very clear from the testimony that Hess had nothing whatever to do with Wahlgreen, or with any of the parties who united in buying this 40 acres, other than to execute the deeds, and take the consideration money and notes as the parties paid and delivered them under the contracts. The testimony of Hassel and Walker was offered, and it tended to establish, as between Mayo and each one of those parties, a transaction very similar to that detailed by Wahlgreen. All agree, however, that the trade was carried on by Mayo, and that they had nothing whatever to do with Hess, and that he was unknown in the transaction until the time mentioned. Hess likewise testified that he knew nothing of Mayo's negotiations, and that his agreement with Mayo was simply to sell the property at a definite price, and on fixed terms. The testimony tended to show that prior to the time of the completion of the agreement Wahlgreen went to the locality to look the ground over, and failed to see the teams which were reported by Mayo as at work on the resort property, remarked about it, and was told by Mayo that they were probably beyond and over the hill. During the progress of the trial the plaintiff introduced testimony respecting Mayo's statements concerning the value of property, and the price at which property was sold in that vicinity, but when the defendants came to their proof they were not permitted by the court to show the representations in this respect to be absolutely true. There was evidence given by them in...