McCaw v. O'Malley

• Decision Date: 23 February 1923
• Docket Number: No. 21895.,21895.
• Citation: 249 S.W. 41,298 Mo. 401
• Parties: McCAW v. O'MALLEY.
• Court: Missouri Supreme Court

249 S.W. 41

298 Mo. 401

McCAW v. O'MALLEY.

No. 21895.

Supreme Court of Missouri, Division No. 2.

February 23, 1923.

Appeal from Circuit Court, Phelps County; L. B. Woodside, judge.

Action by H. R. McCaw against W. F. O'Malley. From decree for defendant, plaintiff appeals. Reversed and remanded, with directions.

Lofts & Breuer and Frank E. Farris, all of Rolla, for appellant.

J. Crites and W. D. Jones, both of Rolla, and W. L. Hiett, of Houston, for respondent.

Statement.

REEVES, C.

Action on contract for sale of real estate.

Plaintiff sued for damages for an alleged breach of said contract, and defendant answered by invoking equity for a rescission, on the grounds of plaintiff's alleged failure to perform and for fraud in its procurement. Defendant prevailed below, and had a decree in accordance with his prayer.

After conventional motions, plaintiff has appealed to this court, averring sundry errors, chief of which is that the judgment or decree is for the wrong party. The contact sued on is as follows:

"It is agreed by and between E. R. McCaw, party of the first part, and William O'Malley, party of the second part, that said first party has sold and second party bought the following described real estate in Phelps county, Mo., described as the east half of the southwest quarter of section 26, and the east half of northwest quarter of section 35, all in township 37, range 8 west, containing 160 acres, for the price and sum of $12,500, which second party agrees to pay the first party as follows: $500 cash, the receipt of which is hereby acknowledged, $3,000 to be paid within two weeks from this date; second party further to assume and agree to pay as part of the consideration thereof a deed of trust against said lands for $2,500, with accrued interest thereon; the balance of said purchase price to be paid by a good and bankable note given by second party, and being such a note as first party will be able to negotiate to the bank for its face value without recourse on said first party. It is further agreed that second party is to have wagon, wheat drill, and corn planter now on farm without further payment therefor. It is further agreed that possession shall be delivered to second party within two weeks or as soon thereafterwards as legally possible. It is further agreed that first party shall convey to said second party said lands by good and sufficient warranty deed upon compliance by second party with the terms of this contract.

"It is further agreed that second party shall convey to first party by sufficient deed one quarter acre of ground near Piney river heretofore agreed to.

                "Witness our hands this 230 day of March
                1920.                       H. R. McCaw
                                           "W. F. O'Malley
                "S. N. Lorts, Witness."
                

The petition alleged the due execution and delivery of said contract and full compliance therewith by appellant, and that according to the terms thereof $500 was paid at its execution by respondent, and that, in lieu of the cash payment of $3,000, a bankable note for $3,000 was executed by respondent, and delivered to appellant, upon which appellant obtained $2,760, with the agreement that the discount of $240 should be added to the note to cover the balance, so that the final note contemplated by the contract should be for $6,740; that respondent went into possession of said real estate, but has refused to carry out the terms and provisions of said contract by executing and delivering to appellant a bankable note for $6,740, for which amount appellant prayed judgment. It was further alleged that respondent had agreed to convey to appellant a small parcel of ground (one-quarter acre) near Piney river, and for his failure so to convey appellant prayed judgment for the further sum of $100. Appellant averred that he had tendered deed to said premises and renewed this tender in his petition.

Respondent's answer admitted the execution and delivery of the contract sued on and the payment of $500, the execution and delivery of the $3,000 note mentioned in appellant's petition, and admitted that, said note having been given in lieu of cash, respondent had agreed to bear the expense of the discount in the sum of $240, and that it had been agreed that said discount, being the equivalent of one year's interest at 8 per cent., should be added to the note to cover the balance of the purchase price, making such balance $6,740.

For his affirmative defense respondent said that he had tendered to appellant a note for $8,740, representing the balance aforesaid, and had demanded of appellant a deed to said real estate, in accordance with said contract, but that appellant failed, neglected, and refused to accept said note in final settlement of the full consideration moving to appellant, and had refused to deliver to respondent a deed to said premises, as required by said contract.

Respondent averred that the conduct of the plaintiff in failing and refusing to accept the note to cover the balance of the purchase price, and his failure to make, execute, and deliver to respondent a deed to said premises, had prevented the respondent from carrying out his part of the contract, and upon that ground he prayed the court for a rescission.

For another affirmative defense, respondent charged fraud in the purchase and sale of said premises, as follows: That the respondent was wholly unacquainted with the value of farm lands in Phelps county, Mo.; that one Fred King was the agent of appellant, and that respondent duly informed both King and appellant of his ignorance of farm land values in Phelps county; that he had the utmost confidence in the truthfulness and the integrity of both the appellant and the said Fred King, he having been acquainted with the latter since his boyhood, and had also known the appellant for many years; that the appellant and his agent, King, "for the purpose of inducing the defendant to purchase said farm, represented and stated to the defendant that said farm was well worth the sum of $12,500; that the plaintiff paid for said farm, when he purchased the same, the sum of $11,500; that all the lands inclosed in the fence on said farm belonged to the plaintiff; that said farm had 80 acres of bottom land on it in cultivation; that the said Fred King was not the agent of the plaintiff in the selling of said farm, and was to receive no commission from the plaintiff in the event the said farm was sold to the defendant; that the said Fred King was acting solely in behalf of the defendant on account of his friendship for the defendant"; that he relied on said statements and believed them to be true, and that he was thereby induced to execute the contract set out in appellant's petition. There were averments of the falsity of each and all of these allegations and a prayer for a rescission of the contract and for judgment against appellant for payments made, and that same should be a lien on the land in suit.

The replication put in issue all the matter set up in respondent's answer. Upon a trial respondent had a decree for a rescission of the contract and a further judgment for $3,260, representing moneys paid by respondent, with interest at 6 per cent. from the 15th day of April, 1920. In turn the respondent was adjudged to pay for the use of said premises, growing out of his possession, the sum of $30 per month from April 15, 1920, the latter judgment to be credited on the former. The court further adjudged in relation to the mortgage for $2,500 mentioned in the contract that either the respondent or appellant should have the right to pay off and discharge said obligation, both principal and interest, and that, when paid, such payments should stand as a valid lien against said property.

The evidence on the part of respondent showed that respondent, at the time he contracted for the purchase of said farm, resided in Texas county, Mo., about three miles from the Phelps county line, and that he had lived there for many years; that the farm in controversy was about 4 miles from Rolla; that Rolla had been used by respondent as his trading point; that he had been in the habit of "going to Rolla once or twice a year, and sometimes maybe a dozen times a year"; that the land in suit lay about one-fourth of a mile from the road used by respondent in going to Rolla; that respondent was a farmer and had pursued this occupation practically all his life in Texas county, which county adjoins Phelps county; that he knew the difference between bottom land and hill land, and was familiar with land conditions of Texas county, but said that he was "not familiar with farm values generally in this part."

On the evening of the 22d of March, 1920, the day before the contract was executed, respondent came to Rolla, where he made inquiries on the evening of that day—

"from first one and another, where I could buy a little place; a little place was what I wanted; and I run on to a jitney driver, who I had told to find out about this place that Mr. McCaw bought, after he sold my place. * * * The jitney driver directed me to McCaw; said that McCaw had bought a place a few days before that. I met McCaw on the street that night and asked him if he would sell the farm, and he said he didn't want to. * * * He told me to come down in the morning; that he would study about it. I went down next morning and asked him if he had made up his mind, and he said that he had made up his mind that he wouldn't take less than $100 an acre, and that there were 160 acres in the tract, 104 in cultivation, and 80, acres in the bottom. I said, if that was the price of it, I didn't want any $100 an acre land, and that I couldn't pay that; and about that time King took me off to one side and said, `I can get you the place for less than that, as I helped get the place for McCaw;' so we (Fred King and myself) went out and looked at the place. We went from McCaw's in King's car."

According to respondent's testimony, he "went...