Papanikolas v. Sampson

• Decision Date: 03 January 1929
• Docket Number: 4660
• Court: Utah Supreme Court
• Parties: PAPANIKOLAS et al. v. SAMPSON et al

274 P. 856

73 Utah 404

PAPANIKOLAS et al. v. SAMPSON et al

No. 4660

Supreme Court of Utah

January 3, 1929

Appeal from District Court, Third District, Salt Lake County Ephraim Hanson, Judge.

Action by K. Papanikolas and others against Louis Sampson and another. Judgment for defendants, and plaintiffs appeal.

AFFIRMED.

Carlson & Carlson, of Salt Lake City, for appellants.

F. W James, J. D. Rice, and Dey, Hoppaugh, Mark & Johnson, all of Salt Lake City, for respondents.

THURMAN C. J. CHERRY, HANSEN, and GIDEON, JJ., concur. STRAUP, J., being disqualified, did not participate.

OPINION

THURMAN, C. J.

This is an action to recover damages occasioned by alleged promises and representation made by the defendants. The complaint, in substance, alleges that on or about November 10, 1922, and for some time thereafter, plaintiffs were the owners of three parcels of real property located near Magna, in Salt Lake county, Utah. Each parcel is especially described in the complaint, but for convenience here we will designate them as tracts A, B, and C. It is alleged that tract B was the home and residence of plaintiffs. It is then alleged that in December, 1918, plaintiffs executed a mortgage to defendant Sampson on tract A to secure the payment of a promissory note in the sum of $ 11,500, due January 1, 1922; that on tract B plaintiff executed a mortgage to Harry Bews, of date March 12, 1919, to secure payment of a promissory note in the sum of $ 2,000, due March 12, 1920; that on tract C they executed a mortgage to A. Richter & Co. October 14, 1919, to secure a promissory note, due October 4, 1922, for $ 6,000. The complaint then alleges that on or about November 10, 1922, when said promissory notes had become due and payable, the defendants and each of them represented to and promised plaintiffs that defendants would purchase an assignment of the mortgage given on tract B to secure the note for $ 2,000, and would also purchase an assignment of the mortgage given on tract C, together with said promissory notes for which said mortgages were given, and that by said purchases the said defendant Louis Sampson would be then the owner and holder of all of said mortgages and promissory notes, and that the total amount due under all of them on said last-named date was $ 20,184; that defendants would institute proceedings against plaintiffs and all their judgment creditors to foreclose said mortgages, provided plaintiffs as defendants in said foreclosure proceedings would forbear answering or in any way defending said proceedings, and providing further that plaintiffs would pay defendant H. L. Mulliner the sum of $ 175 as an attorney's fee in said foreclosure proceedings; that defendants would then obtain judgment against plaintiffs herein by default and would purchase all of said mortgaged property at sheriff's sale and that when and after defendants had so purchased said property defendants would immediately sell all of said property back to plaintiffs for the sum of $ 20,184 and all taxes that had been paid thereon by defendant Sampson; that all of said property would be sold to plaintiffs for said sum on the following terms: The said purchase price to be paid in full within seven years from date of sale in monthly installments of $ 250 each, with interest on unpaid balances at 7 per cent. per annum, provided that plaintiffs herein would assign to defendants all the rentals that would become due on tracts A and C and that all such rentals, when collected, should be applied and credited on the said purchase price and the installments to be paid as aforesaid, said assignment of rentals to be effective only until the full purchase price to be paid by plaintiffs was fully paid.

Plaintiffs then allege that, in reliance upon said representations and promises of said defendants, and believing that said representations and promises were made in good faith by defendants and would be kept and performed by them, plaintiffs paid the said sum of $ 175 to the defendant Mulliner and on or about December 1, 1922, assigned to defendant Sampson all of said rentals that had accrued or might accrue on said tracts A and C; that in February, 1922, defendant Sampson filed and prosecuted three suits in the district court of Salt Lake county to foreclose said mortgages, and plaintiffs herein, relying upon the representations and promises made by defendants as aforesaid, refrained from answering or otherwise pleading in said suits, and said defendant Sampson obtained judgment thereon by default; that defendant Sampson bought all of said tracts or parcels of real estate at sheriff's sale made under said foreclosure proceedings; that said sale and purchase was made on May 14, 1923, and certificate of said sale was issued by the sheriff to said defendant; that immediately thereafter plaintiffs requested and demanded that a sale of said property be made to them pursuant to the representations and promises made by defendants herein as hereinbefore alleged; that thereupon defendants herein represented to plaintiffs that said sale to plaintiffs herein could not be properly made until the redemption period of six months had expired, as other judgment creditors might redeem and that at the expiration of said period defendants herein would sell said real estate and deliver to plaintiffs herein an agreement of sale upon the terms and conditions by defendants represented and promised as aforesaid; that, after said redemption period had expired and after defendant Sampson had received the sheriff's deed for said property, defendants herein refused and have continued to and do now refuse to sell said real estate to plaintiffs, or to execute and deliver an agreement of sale therefor as represented and promised by them on or about November 10, 1922, and at all other times, notwithstanding plaintiffs, on several occasions, have demanded that said defendants make such sale or enter into an agreement therefor pursuant to their aforesaid promises and representations; that plaintiffs in good faith and in reliance upon said representations and promises by defendants, and having been lulled into a sense of security thereby, paid to defendant Mulliner $ 175 as an attorney's fee and assigned said rentals on tracts A and C and refrained from answering or otherwise pleading in said foreclosure proceedings and permitted judgment in said actions to be obtained by default and permitted defendant Sampson to purchase all of said property at sheriff's sale.

Plaintiffs further allege that, had it not been for said representations and promises of defendants, plaintiffs would have answered in said suits for foreclosure and would have protected their interests therein and would have been able, and were in fact able, at all times after said suits were filed, to pay defendants the whole amount lawfully due them under the terms of said notes and mortgages, but that plaintiffs refrained from making payment of such amount because of the representations and promises that had been made by said defendants; that the promises and representations made by defendants on or about November 10, 1922, and at other times as herein alleged, were and each of them was fraudulent and were made by defendants with the fraudulent intent to mislead plaintiffs and enable defendants to acquire title to said real estate. Plaintiffs then allege, in substance, that defendants fraudulently conspired together to obtain title to said property in the manner and form hereinbefore alleged.

It is also alleged in the complaint that the three parcels of land, A, B, and C, at the time of the sheriff's sale on May 14, 1923, were, and ever since have been, of the reasonable market value of $ 56,000, or of a reasonable and market value of $ 35,800 in excess of the amount lawfully due under the terms of said notes and mortgages and $ 35,800 in excess of the sum for which defendants represented as aforesaid that they would sell such property to the plaintiffs after obtaining title thereto by virtue of said foreclosure proceedings.

It is further alleged that plaintiffs were at all times able and willing to pay the said sum of $ 20,184, together with accrued interest and taxes upon the said installment plan and upon the terms and conditions promised and represented by defendants; that immediately after the six months' redemption period expired plaintiffs offered to pay in full the said $ 20,184 and accrued interest and taxes that may have been paid by defendant Sampson for a deed of conveyance of said parcels of land, but defendants refused to accept said sum for said property and refused to perform as they had promised and represented, and have fraudulently retained, and do now fraudulently retain, said property; that defendants have received under the assignment of rentals the sum of $ 3,400 that should apply on the purchase price of said property under the terms promised and represented by defendants as hereinbefore stated.

Finally, plaintiffs allege their damages to be as follows: $ 3,400 on account of rentals collected and received by defendants; $ 175 as an attorney's fee paid to defendant Mulliner; $ 35,800 on account of the reasonable value of said property in excess of the amount defendants represented and promised plaintiffs might purchase said property for as hereinbefore alleged. Plaintiffs pray judgment for said amounts and costs.

We have stated the allegations of plaintiffs' complaint with considerable detail, for the reason that in our opinion the solution of the questions presented depends largely upon determining the precise nature of the action.

The defendants filed separate answers to the complaint. The answers are identical except as to the allegations that plaintiffs agreed to pay, and did pay, to defendan...