Petersen v. Graham, 28098.

• Decision Date: 14 February 1941
• Docket Number: 28098.
• Citation: 110 P.2d 149,7 Wn.2d 464
• Parties: PETERSEN v. GRAHAM et ux.
• Court: Washington Supreme Court

110 P.2d 149

7 Wn.2d 464

PETERSEN v. GRAHAM et ux.

No. 28098.

Supreme Court of Washington, En Banc.

February 14, 1941

Action by George Petersen against M. L. Graham and his wife, to recover damages for fraudulent representations made by named defendant in a real estate transaction and for an overcharge for revenue stamps. From a judgment for plaintiff, defendants appeal.

Affirmed.

Appeal from Superior Court, King County; Donald A McDonald, judge.

Wright & Wright, Eugene A. Wright, and E. W. Hoffman, all of Seattle, for appellants.

Mattew W. Hill and Lee L. Newman, both of Seattle, for respondent.

MAIN Justice.

This action was brought to recover the sum of eight hundred dollars on account of alleged false and fraudulent representations made by the defendant M. L. Graham in a real estate transaction, and for an over-charge of three dollars for revenue stamps. The cause was tried to a jury, and resulted in a verdict in favor of the plaintiff in the sum of $773.80, with interest. The defendants moved for a judgment notwithstanding the verdict, and, in the alternative, for a new trial both of which motions were overruled. Judgment was entered upon the verdict, and the defendants appealed.

The appellant M. L. Graham will be referred to as though he were the only one of the appellants involved upon the appeal. The facts, in so far as they are not in dispute, and as the jury had a right to find them when they were in dispute, may be summarized as follows: June 22, 1936, the respondent, George Petersen, being then the owner of a tract of land in Kitsap county consisting of approximately twenty-four acres, entered into a contract to sell the same to James Somerville. The contract price was thirty-three hundred dollars, of which sum five hundred dollars was paid at the time the contract was made. The balance was to be paid in installments in the sum of one hundred dollars, the first of which was to be October 20, 1936, and thereafter a like sum on or Before the 20th day of every four months thereafter. After these recitals, the contract contained this provision: '* * * It is agreed that if, within three years from the date hereof, the party of the second part [Somerville] shall pay the entire balance then due in one payment, so that the entire payments made amount to $2500, exclusive of interest, the parties of the first part [respondent] will waive $800 on account of the purchase price.'

This provision appears to have been put into the contract on account of the fact that the respondent had previously sold the property to Somerville, and, after a considerable sum had been paid, had forfeited it.

June 14, 1939, and a few days Before the three-year period expired in which Somerville could take advantage of the waiver of the eight hundred dollars, the appellant and one Alfred A. Knoernschild appeared at the office of Andrew J. Balliet, an attorney at law in Seattle, and stated to him, in effect, that the appellant had arranged with Frank W. Howe, the administrator of the estate of James Somerville who had previously died, to loan the estate the sum necessary to enable it to take advantage of the eight hundred dollar waiver. Without consulting with the administrator and relying on the representations made to him, Mr. Balliet, who was the attorney for the estate, wrote a letter on that day to the respondent in which it was stated that the administrator of the Somerville estate was arranging to pay the balance in full upon the contract, and, after restating certain provisions thereof, the letter continued:

'Mr. Howe is making that arrangement with Mr. M. L. Graham, whom, it is believed, you know.

'The contract further provides that you shall furnish and deliver with the deed a policy of title insurance. That will have to be ordered by you and should be done without delay. It may be ordered either in Port Orchard, or in Seattle.

'In order to protect Mr. Graham in providing the payment to be made to you, he wants the deed for the land to be made to him and the contract you now hold to be assigned to him.'

On the 18th day of June, 1939, the appellant and Knoernschild went to the home of the respondent, which was a short distance from Kingston, in Kitsap county, and Knoernschild at that time introduced the appellant to the respondent. After some talk, they went to the week-end home of Mr. Balliet, which was not far distant, and the matter was there discussed. The particular point of the discussions appears to have been the waiver provision in the contract. The respondent was a man with little education and, apparently, rather slow of understanding, and seemed not to understand the matter of the waiver. As the result of this conversation, Mr. Balliet wrote, in a blank space at the end of the contract, the following:

'Kingston, Wash., June 18, 1939

'In consideration of one dollar in hand I hereby extend the time for making the final lump sum payment from June 22, 1939, long enough to procure a policy of title insurance on the above described real property and the examination of the policy after it will have been issued not to exceed thirty (30) days. If the said policy of insurance shows a marketable title, I will deed the above described property to M. L. Graham upon he paying me within said 30 days $1600 in cash and assign to me [him] the contract for the sale of it, dated June 22, 1936, to James Somerville (now deceased).

'George Petersen

'Owner

'Witnessed

'A. C. Knoernschild.'

It will be observed that this writing extends the time thirty days in which the waiver provision of the contract may be taken advantage of, and provides that the respondent will deed the property to the appellant upon the payment, within thirty days, of $1,600 in cash, and assign the contract. Mr. Balliet had not talked with the administrator of the Somerville estate with reference to the matter prior to this time. The administrator of the estate testified that he had made no arrangement by which the appellant was to loan any money to the estate.

June 25, the respondent went to the summer home of Matthew W. Hill, an attorney at law, which was not far distant from respondent's home, and asked Mr. Hill to come over to his place and look at the contract. When Mr. Hill got to the home of the respondent, the appellant was there, with a prepared deed and a certificate of title. Mr. Hill read the original contract, the letter of Mr. Balliet to the respondent, and the writing at the foot of the contract, and then engaged in a conversation with the respondent and the appellant. Mr. Hill testified that he was trying to find out a way in which the arrangement with the appellant could be set aside. In the course of this conversation, Mr. Hill testified that the appellant repeatedly assured him that he was loaning the money to the Somerville estate so that it could take advantage of the waiver in the contract of sale, and that he relied on those representations. The documents, on their face, all appearing to be regular and there appearing at that time no legal way that the transaction could be disturbed, Mr. Hill advised the respondent to sign the deed and assign the contract, which he did, and at the time the appellant gave the respondent a check in the sum of $1,556.50, or $1,600, as provided for in the writing of the 18th, less the cost of title insurance and $7 for revenue stamps. A few days later, Mr. Hill, being in Port Orchard, the county seat of Kitsap county, on other business, examined the record in the Somerville estate, and found that no authorization had been given by the court to the administrator of the estate to borrow any money from the appellant. He thereupon notified the respondent to come to Port Orchard to see him, with the result that Mr. Hill advised him that he could either bring an action for rescission or one for damages. Thereafter, the present action was instituted, with the result as above stated.

The first and principal question to be considered upon this appeal is whether the evidence as to fraud in the transaction was sufficient to take the case to the jury. From the evidence, the jury had a right to find that, when the appellant and Knoernschild went to Mr. Balliet's office it was represented by them that the appellant was loaning the estate money in order that it might take advantage of the waiver provision in the contract, and that this statement was not true; that Mr. Balliet relied upon the statement; that the respondent believed that he was extending the time when he signed the writing of June 18 for the benefit of the estate, and did not know that the...