McMillen v. Hillman

• Decision Date: 24 November 1911
• Citation: 66 Wash. 27,118 P. 903
• Court: Washington Supreme Court
• Parties: McMILLEN et al. v. HILLMAN.

118 P. 903

66 Wash. 27

McMILLEN et al. v. HILLMAN.

Supreme Court of Washington

November 24, 1911

Department 2. Appeal from Superior Court, King County; Mitchell Gilliam Judge.

Action by T. H. McMillen and others against C. D. Hillman. Judgment for plaintiffs, and defendant appeals. Affirmed.

Frederick R. Burch and Milo A. Root, for appellant.

Douglas Lane & Douglas, for respondents.

ELLIS J.

Action for damages for fraud and deceit claimed to have been practiced upon the respondents, plaintiffs below, by the appellant, defendant below, in connection with the sale of a steamboat by respondents to the appellant. The cause was tried to a jury, a verdict was returned for respondents, and from a judgment thereon this appeal was prosecuted.

We find it necessary, briefly as it may be, to review the evidence which is sharply conflicting in many particulars. In the latter part of July, 1909, the respondents, who had built and were the owners of the steamer Venus, and had been operating it upon Puget Sound, entered into negotiations with the appellant for the sale of the vessel to him. The selling price agreed upon was $16,000, which was some $6,000 less than it had cost to build the boat about two years before. Some talk was had as to respondents taking outside real estate in payment for the boat; but this they refused to do and never at any time agreed to accept real estate of any kind, either in payment or part payment. They did agree, however, to accept $5,487 in money, $1,133 by the transfer of a certain land sale contract of the appellant with one Gagne, and the balance of $9,380 by the transfer of another land sale contract of appellant with an alleged John P. Martin, whose existence or nonexistence was one of the controverted questions at the trial. It was this Martin contract upon which the charge of fraud was based. It purported to be a contract for the sale by the respondent of certain tracts of land near Pacific City, in King county, aggregating about 16.25 acres, for the sum of $13,400, on which $2,020 had been paid at its date (April 21, 1909,) and $2,000 on July 21, 1909. The remaining installments, according to this contract, were $5,000 to fall due January 21, 1910, and $4,380 on July 21, 1910, with interest at the rate of 8 per cent. per annum payable annually. The sale of the boat was consummated on July 30, 1909, the cash payment made, and the two contracts assigned by appellant to respondents. The appellant in the assignment, after reciting the above-mentioned payments upon the Martin contract and certain payments upon the Gagne contract, stated, 'I further guarantee that said payments above mentioned upon said contracts have in fact been paid.' This guaranty was inserted upon the request from respondents for assurance upon that point. The land covered by these contracts was also conveyed to respondents in order, as the evidence shows, to enable them to carry out the contracts, and convey the land when fully paid for. The appellant testified that he personally negotiated the sale to Martin, at Pacific City, on the date of the contract; that he received at that time the $2,020 in money, which the man Martin took from his pocket and paid to him in the place of business of one H. B. Cook, and that Cook was then conducting a grocery store in Pacific City, Wash.; that the appellant personally received the second $2,000 on July 21, 1909, also in cash, from Martin. Cook testified that on April 21, 1909, appellant introduced to him a Mr. Martin, in his store at Pacific City; that Martin and the appellant used his desk, and he saw Martin hand to appellant some money; that he (Cook) afterwards had some talk with Martin with a view to selling him wire with which to fence the land. Cook insisted that he was conducting the store at Pacific City in April, 1909. One Earnest Bateman, a cousin of the appellant and in his employ, testified that the appellant introduced to him a Mr. Martin, in April, 1909, at Pacific City; that he was present when Martin paid some money to the appellant, and heard the 'jingle' of money as it passed hands; that Cook was then out of business; and that the transaction took place in the store of one Cox. Edward J. Manning, accountant for Hillman Investment Company, testified that the books of that concern showed that the payments on these contracts had been made by check; that he made the entry at Hillman's direction, but that the money never went through the office, either in the form of money or checks. Appellant explains this by saying that the entry was made merely to keep track of the matter, and that he himself deposited the money in the bank. He testified that he never saw the man Martin, either before or after this transaction; never received any letter from him; made no inquiries regarding him; did not know where he lived at the time; and knew nothing about him at the time of the trial. One O. O. Rowland, a surveyor in the appellant's employ, testified that Hillman, in 1909, introduced to him a Mr. Martin, and that he talked with Martin in regard to the corners of the land included in this contract, pointing them out upon a map.

One Leonard C. Hargiss, who was in the appellant's employ as assistant cashier of the Hillman Investment Company in 1909, testified that on April 21, 1909, when Hillman claimed to have made the sale to Martin, Hillman was not in the state of Washington, and did not return to this state till in the month of May, and the evidence of the respondent McMillen tends strongly to corroborate this. He testified that he called at Hillman's place of business several times in April, and was told by different employés that Hillman was in California, and that he finally found that Hillman had returned about May 10th. Hillman alone was called to rebut this testimony, and stated that he returned from California on April 9, 1909. Hargiss further testified that the Martin contract was written up in its entirety in the latter part of July, 1909, by S. B. Smith, cashier of the Hillman Investment Company; that he and Smith signed it as witnesses; that it was a 'dummy' contract, made for the sole purpose of turning in on the purchase price of the boat; that he never saw the man Martin; that, he, on Smith's request, signed as a witness, and made the indorsement of the $2,000 payment on the contract, Smith suggesting that it would look better in his handwriting; and that Smith went into another room with the contract, and, returning with it, signed with the name 'John P. Martin,' said: 'That signature, you know who wrote it. Nobody could tell that, I guess.' S. B. Smith, the other witness to the contract, testified that he wrote the contract and signed Hillman's name to it; but, owing to the large number of contracts which he had written, he could not remember ever to have seen such a person as John P. Martin. He could not say whether the contract and the indorsements thereon were written at one and the same time, because, he said, 'I really don't remember.'

The respondents made a slight examination of a part of the land covered by the Martin contract, but the evidence shows conclusively that they knew little of land or land values and that they were induced to take the contract by appellant's representation that it was a bona fide contract; and because of his assurance that Martin had already paid $4,020 upon the purchase price they believed he would pay the balance. Respondent J. J. Griggs, when asked why he consented to take the Martin contract, testified: 'Why, because it was represented that there was about one-third, or quite a little portion, had already been paid in, and, to use their expression, it would be a cinch we would get the balance in the time specified in the contract, and would get part of it within six months, and the other part within a year--the balance within a year.' There was much other testimony of this witness, and also of the respondent McMillen, to the same effect. The evidence also shows that the respondents...