Popejoy v. Eastburn
| Citation | 241 Iowa 747,41 N.W.2d 764 |
| Decision Date | 07 March 1950 |
| Docket Number | No. 47609,47609 |
| Parties | POPEJOY et ux. v. EASTBURN. |
| Court | Iowa Supreme Court |
Ralph H. Munro, of Fairfield for appellants.
Thoma & Thoma, of Fairfield, for appellee.
Plaintiffs' action is at law. In their pleading they demand judgment against defendant for $1,200, interest and costs as damages suffered by them in the sale of their property in Fairfield, Iowa; that in said sale, defendant, while purporting to advise and act for plaintiffs and without their knowledge or consent, bought such property for himself and wife and at the same time sold it to other parties for $1,200 more than the price paid plaintiffs. When plaintiffs rested, upon motion of defendant, the court directed a verdict in favor of defendant. This appeal followed.
We will briefly summarize the claim of appellants as set forth in their pleadings: That in December, 1946, they owned and resided in their residence in Fairfield, Jefferson County, Iowa; that they were then contemplating the purchase of an 85 acre farm near said city; that while so doing Lester M. Popejoy, one of the appellants, went to the Iowa State Bank & Trust Company of Fairfield, and consulted its president, appellee herein, as to said contemplated purchase and the financing of said transaction, stating that they desired to secure a loan of $2,000 on the residence property, and did secure said loan from said bank through appellee and did execute and deliver to appellee a promissory note and mortgage on said property to become due March 1, 1947. That thereafter appellants entered into a contract to purchase the 85 acres for $6,600 and used the $2,000 to make the down payment and contracted to pay the balance on or about March 1, 1947; that about February 15, 1947, the appellants, in seeking to finance the balance of the purchasing price on the 85 acre tract, again consulted appellee and advised him that they were trying to raise funds for that purpose by selling the residence; that appellee advised appellants that he knew of some people who he thought might be interested in purchasing the town property and also, that he (appellee) would try to see these people and find out how much they would be willing to give for it; that a few days thereafter appellee informed appellants that he had seen these people and also, that they would give $3,200; that appellants advised appellee that they could not afford to take such amount; that appellee advised appellants that he would see the people again and see if they would pay more for the property; that about February 27, 1947, appellee told appellants that he had seen the people again and that the best they would do would be to pay $3,300 for the property; that appellants then informed appellee that if the $3,300 was all he could get for the property they would have to take it in order to complete the purchase of the 85 acres on March 1, 1947; that appellee stated that if he sold the town property to these people he had mentioned that there would be no commission charged on the sale and that the entire selling price could be applied on the farm.
That appellee then prepared and presented to appellants a contract to be signed by the appellants, the pertinent parts being as follows:
Appellants further allege that on February 27, 1947, appellee presented to them, Wilbur W. Smith and Kathryne Smith, and represented them to be the purchasers of said town property and caused appellants to execute a warranty deed to the alleged purchasers that thereupon appellants executed said warranty deed conveying to said Smiths the town property; that appellants later learned that the actual price which the Smiths paid appellee for said property was $4,500 instead of $3,300 as stated by appellee to appellants; that the appellee in carrying out the transaction was acting as the confidential adviser and agent of the appellants and that he had fraudulently concealed from them the actual purchasers and the selling price of the town property; that he had advised appellants that the purchase price was $3,300 whereas the selling price was $4,500 and that appellee thereby obtained $1,200 of the said selling price and has since retained it and refuses to pay or account for same.
The answer of appellee is a general and specific denial of the parts of appellants' petition wherein they charge him with being the agent and confidential adviser of appellants; alleges that he was simply acting in behalf of the bank in advising as to the sale of the town property and the purchase of the 85 acres and that he did not take advantage of them; that after he had contracted to purchase the town property he interested Wilber W. Smith and Kathryne Smith in said property and that he entered into a contract to sell said property to them; that he so advised appellants and they agreed to make the deed to said Smiths; that appellee specifically denied any agency for appellants or that as such he sold said town property to said Smiths.
Appellants in their reply make specific denials of the affirmative allegations of appellee's answer and allege that they had no knowledge that appellee was selling the town property for himself and his wife and deny that they ever consented to selling it to said persons.
I. The principal issue in the case is whether appellee was the agent, confidential adviser of appellants--or whether he acted in a fiduciary capacity for them in making the sale of their property in Fairfield, or whether in the transaction his acts and conduct constituted a fraud upon them.
The trial court in directing a verdict against appellants held as a matter of law that the evidence in regard to the pleaded claims was insufficient to warrant a verdict for the appellants.
II. Appellants set forth and rely upon three errors. Such claimed errors may be summarized as follows:
First: The action of the trial court in directing a verdict that there was no evidence of any confidential relation existing between the parties and that there was no evidence of any breach of duty owing by defendant to plaintiffs.
Second: That there was no evidence of any kind of false representations made by the defendant in connection with the sale of the property.
Third: That the evidence was insufficient to sustain the submission of any question raised upon plaintiff's petition.
Appellants in their brief state that the errors claimed present closely related propositions of law and fact and that the brief points and arguments will be presented in one division. In this opinion we will to some extent follow the same outline.
When we examine the appellants' petition we find an allegation that the defendant, in carrying out the transaction, was acting as the confidential adviser and agent for the plaintiffs. That the defendant fraudulently concealed from the plaintiffs the actual purchase price at which the Smiths agreed to and did actually purchase said town property.
In another paragraph of their petition, appellants alleged that in the various transactions appellee was their confidential adviser.
Summed up, appellants' claim is that, taking into consideration all of the facts and circumstances of the whole transaction, there was evidence from which a jury would find in their favor on one or more of the issues tendered. The trial court ruled against them. This we hold was error.
III. The court's ruling calls for a review of the evidence. In passing upon the evidence, appellants are entitled to have the same considered in the most favorable light in their behalf.
It appears from the record that on December 10, 1946, appellants owned a residence in Fairfield, Iowa; that they were then contemplating the purchase of an 85 acre farm tract near that place at a price of $6,600; that in case they purchased this farm they would have to finance the transaction by placing a loan on the city property and the 85 acres; that appellee was then president of the Iowa State Bank & Trust Company of Fairfield, Iowa; that on that date Popejoy went to the bank and told appellee of the contemplated deal for the 85 acres and asked his advice, stating that if made he would have to borrow money to finance it. Popejoy asked appellee to inspect the 85 acres and advise him how much could be borrowed thereon. Appellee looked at the farm and told Popejoy that it looked like a good deal and that he would loan $3,600 thereon. Popejoy advised him that he would have to make a loan on his Fairfield residence and, at the request of Popejoy, appellee arranged such loan and took from appellants their note and mortgage for $2,000 due March 1, 1947. This $2,000 was deposited in appellee's bank. Following this, Popejoy contracted to purchase the 85 acres for $6,500 using the...
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