Minch v. Winters

• Decision Date: 12 February 1927
• Docket Number: 26,818
• Citation: 122 Kan. 533,253 P. 578
• Parties: BLOOMFIELD H. MINCH et al., Appellees, v. HARRY WINTERS et al., Appellants
• Court: Kansas Supreme Court

253 P. 578

122 Kan. 533

BLOOMFIELD H. MINCH et al., Appellees, v. HARRY WINTERS et al., Appellants

No. 26,818

Supreme Court of Kansas

February 12, 1927

Decided January, 1927.

Appeal from Allen district court; ROBERT E. CULLISON, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. JOINT ADVENTURE--Action for Accounting--Relief on Ground of Fraud--Equitable Action--Sufficiency of Evidence--Limitations of Actions. In an action for an accounting, for relief on the ground of fraud, for an adjudication of the rights and liabilities of the litigants, and to wind up the affairs of a joint adventure in which twenty-two plaintiffs and three defendants had been engaged, the record examined and held (a) that defendants' objection to the introduction of evidence was properly overruled, (b) that the action was one of equitable cognizance, (c) that the demurrer to plaintiffs' evidence was properly overruled, (d) and that the action was not barred by the statute of limitations.

2. PLEADING--Misjoinder of Parties. Rule followed that misjoinder of parties is not a ground of demurrer.

3. PLEADING--Misjoinder of Causes. Plaintiffs' petition was not subject to demurrer for misjoinder of causes of action and a demurrer to evidence is not a proper way to raise a question of such misjoinder.

4. TRIAL--Reception of Evidence--Reopening Case--Discretion of Court. It it within the sound discretion of the trial court to grant or withhold permission to reopen a case for the introduction of further evidence, and to grant or refuse a continuance; and where the record does not show abuse of such discretion error cannot be predicated on such rulings.

5. CONSPIRACY--Evidence--Admissibility. Error based on the admission of hearsay testimony considered and held that the testimony was competent under the rule concerning the admissibility of evidence of the acts and words of one of several conspirators touching a detail of such conspiracy.

6. TRIAL--Instructions--Advisory Jury. Error based on instructions to an advisory jury, given and refused, examined and not sustained.

7. JOINT ADVENTURE--Liability of Parties on Contract--Relief on Ground of Fraud. Where defendants sought to induce plaintiffs to raise a fund of $ 300,000 to purchase a number of oil leases, oil wells and equipment, and assured plaintiffs that two of defendants would each put $ 25,000 in cash into such adventure, and defendants assured plaintiffs that there was no "graft or commission" in the proposition and that all would come into it on an equal basis according to the extent of their several investments, and plaintiffs relying on such inducements and representations raised $ 220,000, out of which sum the leases and related property were purchased for $ 160,000, and defendants and persons associated with them divided among themselves $ 60,000 of the cash so raised by plaintiffs, a judgment requiring each of defendants to restore the several sums they received out of the $ 60,000 which belonged in common to those who were participants in the adventure and to perform their respective promises to contribute $ 25,000 each to such adventure, and for cognate equitable relief, is without prejudicial error.

F. J. Oyler, W. H. Anderson and G. M. Lamer, all of Iola, for the appellants.

E. S. McAnany, M. L. Alden, T. M. Van Cleave, all of Kansas City, G. R. Gard, of Iola, Robert F. Spraggins and C. W. Hewgley, both of Jackson, Tenn., for the appellees.

OPINION

DAWSON, J.:

This was an action for an accounting, for relief on the ground of fraud, for an adjudication of certain rights and liabilities of the litigants, and to wind up the affairs of a joint adventure in which they were engaged.

Plaintiffs were eighteen citizens of New Jersey, two of Mississippi, and one each of Indiana, New York, and Tennessee; and all of them were alleged to have been the dupes of the two principal defendants, Harry Winters and John Connors, both of Iola, in a speculative venture in Bourbon county oil leases. Roscoe C. Davis, of Bronson, and his brother, Morris Davis, of New Jersey, were involved with Winters and Connors in the matter which gave rise to this lawsuit.

Prior to the autumn of 1920, some of the plaintiffs had been interested as investors in oil-development projects in southeastern Kansas, and the Davis brothers had been intrusted with certain of plaintiffs' business affairs of that character. Some of the plaintiffs had formerly dealt with Winters and Connors in business transactions or speculations.

In the autumn of 1920 one E. J. Miller, an Iola banker, and five associates owned six oil leases covering certain Bourbon county acreage, with some oil wells thereon, and they owned some miscellaneous tools, tanks, pipe and equipment pertaining thereto. These leases, and the related chattel property were being offered for sale for $ 160,000.

Winters, Connors, and the Davis brothers represented to some of the plaintiffs that these leases and related chattels could be advantageously bought for $ 300,000, and urged that a syndicate be formed to buy them at that price. They also represented to plaintiffs that they would invest their own money in such a project--Winters to the extent of $ 25,000, Connors $ 25,000, Morris Davis $ 10,000, and Roscoe Davis $ 5,000.

Acting on this proposal, plaintiffs raised $ 220,000 in cash, which was intrusted to Morris Davis. He paid $ 160,000 for the property, and the remaining cash, $ 60,000, was divided among Winters, Connors, Morris Davis and E. J. Miller.

By common consent Morris Davis took title to the leases and related property in his own name, and he executed certificates to the several plaintiffs showing their respective fractional interests, and also made certificates to Winters, Connors and Roscoe Davis for fractional interests based on their pretended investments therein.

Morris Davis returned to New Jersey and died. It was disclosed that he had brought back from Kansas an unexpectedly large sum of ready cash. E. J. Miller also died, and it was disclosed that he, too, was in possession of an unusually large sum of ready cash. Naturally these disclosures stimulated conjectures as to their possible connection with plaintiffs' investment in the Bourbon county oil leases and eventually precipitated this lawsuit.

The principal matters outlined above were alleged in plaintiffs' petition.

Winters and Connors answered with a general denial and alleged that in the autumn of 1920 they obtained from E. J. Miller a verbal option on the leases and related property for $ 175,000, and that they had sold the same to Morris Davis for $ 200,000 upon an understanding with him that each of them was to have and retain a one-twelfth interest in the property, and that each of them did receive $ 12,500 from Davis pursuant to this transaction, but that Davis was no agent of theirs in any capacity.

The evidence for the litigants was developed at length. That given in plaintiffs' behalf tended to support their cause of action. It showed the raising of $ 220,000 by plaintiffs and its delivery to Morris Davis; that Davis was their trusted agent; that he bought the property for $ 160,000; that out of the $ 60,000 raised by plaintiffs in excess of the total price paid for the property, Winters and Connors got $ 12,500 each, E. J. Miller $ 15,000, and Morris Davis appropriated $ 20,000 to his own use; that the latter sum was promptly handed over to plaintiffs by the widow of Davis after his death; and the widow of Miller likewise handed over to plaintiffs the $ 15,000 he had similarly received. The various and sundry fiscal maneuvers of defendants to give ostensible color to their pretended investments of $ 25,000 each in the $ 300,000 syndicate were also revealed.

The jury answered certain special questions:

"SPECIAL QUESTIONS SUBMITTED BY THE COURT.

"1. Did Winters and Connors or either of them, during the entire transaction comprising the negotiations for and purchase of the oil and gas properties in controversy, know that Morris Davis was acting as agent for the plaintiffs as well as for himself? A. Yes.

"3. Did defendants Winters and Connors or either of them conspire together to deceive the plaintiffs as to the purchase price the owners of said oil and gas properties demanded for same? A. Yes.

"4. Did said Winters and Connors or either of them, and Morris Davis, conspire with said Morris Davis to deceive the plaintiffs into the belief that said defendants were joining with plaintiffs to purchase the said oil and gas properties and were paying for the shares of same which they were to receive? A. Yes.

"6. Were the plaintiffs, as a result of any conspiracy between the defendants Winters and Connors and Morris Davis, or by any false statements of said defendants Winters and Connors as to the actual purchase price of said properties, or as to whether said Winters and Connors were becoming buyers with plaintiffs and paying for whatever shares they were to receive, if such statements were made, deceived into the belief that the purchase price of said properties was greater than it actually was, and into the belief that said Winters and Connors were buyers with them of said property and not sellers of the same either personally or as agents for some other persons, and that said Winters and Connors were actually paying for the shares of said property they were to receive? A. Yes.

"SPECIAL QUESTIONS SUBMITTED BY THE PLAINTIFFS.

"3. Did Winters and Connors or either of them in the presence of the other tell the people from Mississippi, Bridgeton and Kokomo [some of plaintiffs] that the leases could be bought for $ 300,000, and that that was a reasonable price for them? A. Yes.

"4. Did Winters and Connors or either of them in the presence of...