Robenson v. Yann

• Decision Date: 13 March 1928
• Parties: ROBENSON et al. v. YANN et al. (two cases).
• Court: Kentucky Court of Appeals

5 S.W.2d 271

224 Ky. 56

ROBENSON et al. v. YANN et al. (two cases).

Court of Appeals of Kentucky

March 13, 1928

Rehearing Denied, with Modification, May 1, 1928.

Appeal from Circuit Court, Jefferson County, Chancery Branch, First Division.

Suit by Frank Robenson and others against Christian M. Yann and wife for specific performance of land contracts, and suit by Frank Robenson and others against Elizabeth W. Yann and husband and others to recover deposits paid on land contracts. From the judgments, plaintiffs appeal. Judgments affirmed.

Doolan & Doolan, of Louisville, for appellants.

L. R Curtis and Allen P. Dodd, both of Louisville, for appellees.

WILLIS J.

These two appeals may be disposed of conveniently in a single opinion.

The first case was filed by Frank Robenson, Rose Hyman, and Harry Hyman against Elizabeth W. Yann and Christian Yann, her husband, for the specific performance of several written contracts for lots purchased by plaintiffs at an auction sale. The contracts were not denied, but performance of them was refused on the ground that the plaintiffs and the company which had charge of the auction had, without the knowledge or consent of defendants, conspired to defraud the defendants and deceive the public, and that the contracts sued upon were the fruits of the fraud. The case was prepared and submitted to the circuit court, which sustained the defense and dismissed the petition. The plaintiffs have perfected the first appeal to challenge the correctness of that judgment.

The second case was then filed by the same plaintiffs against Elizabeth W. Yann and Christian Yann, her husband, T. G Maddox and R. E. Kinkead and the Consolidated Auction &amp Development Company, to recover of the defendants jointly the deposit of $5,267.38, made by plaintiffs with defendants upon the execution of the several contracts involved in the first case to cover one-third of the purchase price which was then payable in cash under the contracts. A demurrer on behalf of Maddox and Kinkead and the Consolidated Auction & Development Company was sustained to the petition, and, when plaintiffs declined to amend, it was dismissed as to them. Yann and wife interposed the same defense employed by them to defeat the first action, and further pleaded the decree in the first case as a bar to the later one, exhibiting with the answer a copy of the opinion of the court in the first litigation. The circuit court sustained the defense and dismissed the petition. The second appeal is to review and reverse that result.

The questions presented for our determination are: (1) The propriety of the decree denying specific performance of the contracts; (2) the correctness of the ruling on the demurrer of Maddox and Kinkead and the Consolidated Auction & Development Company to the petition in the second suit; and (3) whether the circuit court was right in refusing recovery of the deposit by plaintiffs because of the facts found and decree rendered in the first action.

A brief statement of the ultimate facts is essential to a correct application of the principles controlling the decision of the questions presented.

Christian Yann and wife owned a boundary of land in Jefferson county on the outskirts of Louisville, suitable for subdivision into lots. On February 5, 1925, they entered into a written contract with the Consolidated Auction & Development Company, a corporation, by the terms of which the land was placed in the hands of the auction company for the purpose of subdividing, developing, advertising, and selling lots according to the custom followed in such situations by the auction company. The auction company was to pay all the expenses, and, as compensation and reimbursement for expenses incurred, was to have 25 per cent. of the gross amount for which the lots were sold.

The contract provided that the property should be sold at public auction, and the highest price obtainable on sale day was to be confirmed by the owner, regardless of what that price might be. The subdivision was made, and an auction sale advertised to be held on the premises on May 2, 1925, at which time the plaintiffs and many others attended. Some lots were sold to others, but 104 of the lots shown on the map of the subdivision were bid in by plaintiffs and knocked off to them. The initial payment on the purchase price required by the contract was made, and the remaining sum was to be paid in four equal installments due in 6, 12, 18, and 24 months thereafter, secured by a vendor's lien on the lots sold. The parties met shortly after the sale to conclude the transactions, when Yann refused to sign the deeds because the contracts presented on behalf of the plaintiffs did not correspond with his understanding of the prices at which the lots had been sold at the auction, except as to lots No. 93 to No. 104, both inclusive, which he offered to convey. Yann claimed that the other lots had been sold at public auction at a much higher price than that indicated by the contracts, and that, by an illegal and fraudulent agreement, without his knowledge or consent, the auction company and the plaintiffs had made private contracts for the property at much lower prices. He asserted that an arrangement had been made privately by the plaintiffs and the auction company whereby plaintiffs were to have the lots in blocks at a certain price, agreed upon by them in advance, no matter what the lots brought at the bidding, and that plaintiffs should keep on bidding until the lots were knocked down to them, at which time they would and did enter into contracts at the price privately agreed upon, disregarding the price publicly bid.

The plaintiff Harry Hyman testified that he had no arrangement whatever with the auction company, but that he saw the advertisements of the auction and appeared at the sale to bid on the lots. After arriving there, he entered into a partnership for himself and wife with Frank Robenson, who had just made some purchases, and thereafter they bid together until they had bid in for the firm the 104 lots. A man named Bloom was also in the firm at first, but assigned his bids to Mrs. Hyman, and retired from the arrangement before any controversy arose. He further testified that the prices shown on the contracts were the prices that he bid for the respective lots; that he paid one-third of the purchase price and was ready, able, and willing to execute notes secured by vendor's lien for the remaining consideration according to the contracts, and demanded deeds for the lots. They had executed the necessary notes and tendered them to the vendor.

He further testified that the lots were all purchased at open bidding, and were knocked down to him and his associates at the actual prices for which the property was sold by the auctioneer. He admitted, however, that there was a higher bid in some instances after the property had been knocked down to him by the auctioneer, but he claimed that the property had already been struck off to him at the prices specified in the contracts. He characterized such bidding after the sale as off-bidding or freak bidding. He admitted that he had himself bid on lots after he had purchased them. He explained that after some lots were knocked down to him others were bidding, and he put in higher bids. His explanation was that it would put a higher value on the ground in case he wanted to sell it and the bidding was done to stimulate prices on the property after he had bought it. He said there was not much of this bidding after sales, and he was positive it was all done after his bids had been accepted and the property struck off to him. He did not know whether Robenson had made any such fictitious bids or not. Robenson, however, denied that he had made any fictitious bids, and claimed that he purchased in every instance at the highest bid, and that his contracts corresponded therewith.

The auctioneer testified that he was employed by Maddox and Kinkead, who were the owners of the auction company, and that he was selling the property while others were on the ground taking contracts. He conducted the sale in the usual way, and, in every instance, knocked off the property to the highest bidder. It appeared, however, that this auctioneer, a few days after the sale, had made an affidavit that certain lots had sold for prices much higher than the contracts of plaintiffs indicated. He made a rather feeble explanation of his signing the affidavit, in view of his testimony as above related, and he is not entirely convincing that he was not aware of some secret arrangement between plaintiffs and the auction company. He admitted that he thought there was something wrong.

Maddox testified that he was one of the owners and president of the Consolidated Auction & Development Company...