McLain v. Parker

• Decision Date: 31 May 1910
• Parties: McLAIN v. PARKER.
• Court: Missouri Supreme Court

129 S.W. 500

229 Mo. 68

McLAIN v. PARKER.

Supreme Court of Missouri, Division No. 1.

May 31, 1910.

On Motion for Rehearing, June 14, 1910.

1. MINES AND MINERALS (§ 54) — SALE OF MINING PROPERTY — FRAUDULENT REPRESENTATIONS — ACTS CONSTITUTING FRAUD.

One who fraudulently induced another to pay him $6,000 for a half interest in mining property, represented to cost $12,000, but which was acquired from a third person for $2,000, was guilty of fraud, and an action would lie to rescind the contract and recover the $6,000.

2. CONTRACTS (§ 113)—LEGALITY—INDUCING BREACH OF TRUST—TRANSACTIONS OF AGENT.

Where an agent in charge of his principal's estate induced the principal to exchange his property for other property which belonged to the agent, who did not disclose the fact of his ownership, the contract of exchange could be avoided by the principal, whether beneficial or not, on the ground that the contract was contrary to public policy.

3. PRINCIPAL AND AGENT (§ 79)—VOIDABLE TRANSACTIONS WITH AGENT—DAMAGES.

A principal rescinding a purchase of land made by his agent who was the owner of the land, and who did not disclose the facts to the principal, may recover the price and interest.

4. FRAUD (§ 34)—ACTIONS—CONDITIONS PRECEDENT— RESCISSION OF CONTRACT.

One induced by fraud to enter into contracts for the purchase of an interest in lands sold by third persons to himself and the person guilty of the fraud may sue such person for the damages sustained without rescinding the contracts.

5. LIMITATION OF ACTIONS (§ 100)—DISCOVERY OF FRAUD.

Where one guilty of fraud inducing another to pay him money for the purchase of an interest in real estate was guilty of deceit in concealing his fraudulent conduct, limitations did not begin to run until the discovery of the fraud.

6. CANCELLATION OF INSTRUMENTS (§ 58)— SCOPE OF RELIEF.

Where one induced by the fraud of another to pay the latter money for the purchase of an interest in property sued the latter for the fraud, praying for the cancellation of the contract between the parties and the recovery of the sum paid and for general relief, a judgment for the recovery of the sum paid, with interest, was authorized.

7. FRAUD (§ 31)—REMEDY—ACTIONS.

One induced by the fraud of another to purchase the latter's property may elect to hold what he received under the contract of purchase and sue for the damages arising from the fraud.

8. LIMITATION OF ACTIONS (§ 100)—DISCOVERY OF FRAUD—DILIGENCE.

One must exercise due diligence to discover a fraud complained of, and where he does not do so limitations run against his cause of action therefor.

9. LIMITATION OF ACTIONS (§ 100)—DISCOVERY OF FRAUD—DILIGENCE.

One who wrongs another by fraud, and who then further wrongs him by a later fraud calculated to disarm the former of suspicion and to prevent an investigation, may not charge the former with negligence or laches in not making an investigation and discovering the fraud.

Appeal from Circuit Court, Jackson County; John G. Park, Judge.

Action by Carey McLain, prosecuted after his death by Julia A. McLain, executrix, against M. V. B. Parker. From a judgment for plaintiff, defendant appeals. Affirmed.

E. P. Garnett and I. O. Pickering, for appellant. W. R. Thurmond, for respondent.

GRAVES, J.

The record in this case covers about 1,000 pages, and were it printed as records usually are would cover about four times that space. Since the trial of the cause nisi, Carey McLain, the plaintiff, has departed this life and is now here represented by an executrix, but for convenience we shall still speak of him as plaintiff, as was done nisi. The connection is better that way. The plaintiff and defendant were acquaintances of long standing; the one for years a farmer and stock raiser of Kansas, who by dint of hard work and good management had acquired much of this world's funds, the other, a lawyer, real estate and loan agent of the same state, who by business connections and otherwise had gained, to a degree, prominence and confidence in his sphere of action. Plaintiff, the farmer, was a Presbyterian by religious faith, and defendant, the lawyer, real estate and loan agent, as strongly Congregational in his beliefs and doctrines. Both, to the world, consistent members of the church. While we shall not undertake to quote from the Scriptures or other authorities in the statement of this case, but leave to those interested the task of getting together the proper phraseology and authorship for the thoughts we express, yet the thoughts suggested by the record in this case carry us back to our boyhood recollections of the good old doctrines taught by the inspired in the Good Book. The gist of the case is fraud and deceit, the petition of eight counts asking for the rescission of as many distinct contracts on the ground of fraud and deceit in the concoction thereof. Blandly stated (although not in language quoted from an authority well known) the plaintiff charges that the defendant donned the livery of righteousness to serve the cause of Mammon, and by so doing entrapped, by his fraud and deceit, this plaintiff. For a time matters of pleading and proof may be commingled in the interest of brevity. In 1868, the plaintiff came to the state of Kansas. Later, he was domiciled in Kansas City, Mo., and there resided until after the trial and perhaps until his subsequent death. Near the little town of Wellsville, Kan., plaintiff lived, and on one corner of his farm stood a "Congregational" churchhouse. Plaintiff, with Western generosity helped maintain this church (though not of his identical faith), and to it at times came defendant to preach what he called "lay sermons." Defendant lived at Olathe, Kan., not far from Wellsville, and for a while was in copartnership in the practice of the law with one John P. St. John, sometime Governor of Kansas and candidate of the Prohibition party for the high and honorable position of President of the United States. Plaintiff was interested much in the cause of prohibition — not as of the surface, but from the heart. So runs this record. Being thus interested, he had implicit faith in Mr. St. John. Whether his confidences were fully justified, we doubt much from the disclosures of the record before us. Defendant and St. John, in addition to their ties arising from business association and like political and economical eyeglasses, were brothers-in-law. Not only so, but it would appear that after Mr. St. John had resumed private life, yet having clustered around him the good wishes and confidences of those interested in the cause for which he stood and preached, he engaged in the alluring business of mining, with offices at Olathe, Kan., and Chicago, and with New Mexico as his field for real action. In at least some of his work in New Mexico, the defendant and St. John were jointly interested, and in one count of the petition before us, between lines and in the lines, may be read the charge that they jointly conspired to deceive and defraud the plaintiff, having drawn to their aid a cousin of defendant, and perhaps a Swede, Otto Hanson, by name.

The evidence upon the several counts of the petition must be taken together to properly comprehend the gravity of the offense charged against the defendant. Plaintiff claims, and we think properly, that all the transactions between plaintiff and defendant will have to be considered together, in order to see the real gist of the case. In general, the evidence shows that, long before any of the transactions pleaded and proven, the plaintiff had much confidence in defendant growing out of their continued friendship, their relation of attorney and client, their other business associations, and the relationship of defendant to St. John, in whom plaintiff had implicit confidence as aforesaid, of which last fact the defendant evidently knew.

With these general statements, we take up the several counts of the petition, together with the proof thereon. Suffice it to now say that after well-worded pleadings in behalf of the defendant the cause was heard, and the trial court found for the plaintiff upon seven counts of the petition. In the other count, as in all, was a tender to return the property, and the defendant accepted the tender, and thus obviated a trial of the issues. Among the issues raised by answer is the statute of limitations. We shall note both the pleadings and the proof on each count in separate paragraphs of the opinion.

1. We shall go more into detail upon the first count of the petition because it stands as the first alleged fraud between the parties. By this count of the petition the plaintiff charges fraud in the purchase of some mining claims in New Mexico. Plaintiff alleges the different things which went to make up the groundwork of his confidence in defendant. He alleges their business relations, their church relations, the brotherly manner in which defendant always addressed him as "Brother McLain," the fact that defendant was a lawyer and experienced not only in the law, but, as a real estate man, had dealt in mining claims and was familiar with the value thereof. He then charges that the defendant represented to plaintiff that he (defendant) knew where they (plaintiff and defendant) could get some good mining claims in New Mexico; that they would have to pay $12,000 therefor, and that the cost thereof would be $12,000; that such claims were valuable and exceedingly cheap at such price. The petition then avers that the cost of the said mining claims was only $2,000, and that the defendant knew such fact, and falsely represented the matter to the plaintiff, by reason of which false representation the plaintiff parted with $6,000 in money and property — $3,000 in cash, and 80 acres of land, worth $3,000. The petition also charges that the plaintiff did not discover the fraud until about August, 1903. The suit was instituted shortly thereafter.

It conclusively appears that plaintiff did in...