Shannon v. Gaar

• Decision Date: 17 November 1942
• Docket Number: 46127.
• Citation: 6 N.W.2d 304,233 Iowa 38
• Parties: SHANNON et al. v. GAAR et al.
• Court: Iowa Supreme Court

6 N.W.2d 304

233 Iowa 38

SHANNON et al. v. GAAR et al.

No. 46127.

Supreme Court of Iowa

November 17, 1942

Walter F. Maley and F. G. Ryan, both of Des Moines for appellants.

Stipp Perry, Bannister & Starzinger and Donald D. Holdoegel all of Des Moines, for appellees.

GARFIELD Justice.

Plaintiffs-appellants both married women, are real estate brokers who were associated together in the matter in controversy. Defendants-appellees Gaar and wife own and operate a typewriter business and defendant-appellee Shive is another real estate broker. All live in Des Moines. On May 15, 1939, appellee K. W. Gaar acquired title to the Eddy Apartments in Des Moines. Appellants claim they were employed by the Gaars to act as their agents in the purchase of the property but that the three appellees conspired together wrongfully to deprive them of their commission. At the close of appellants' evidence the trial court directed a verdict against them apparently on the theory that the evidence was insufficient to sustain their claim. We will briefly review the evidence offered by appellants. Appellees offered no testimony. Appellants are entitled to have the evidence considered in the light most favorable to them.

Trustees appointed by the Polk County District Court had been ordered to sell the Eddy Apartments which were "in receivership." Accordingly the trustees listed the property for sale with several real estate agents. $90,000 was the original asking price. About March 24, 1939, Risser, the active trustee, told appellants the property was to be sold to the highest bidder and suggested they try to find a purchaser. Appellants then made an inspection of the apartment building. They then contacted Mrs. Gaar at the Gaars' place of business in an attempt to interest them in the purchase.

Mrs. Gaar manifested considerable interest and asked appellants to get full information on the income and expense of the apartment. Appellants obtained from Risser, the trustee, a statement of income and cost of operation and made an appointment with him for Mr. Gaar to look over the books in Risser's office. There is evidence that Gaar conferred with Risser pursuant to this appointment. Appellants showed the statement of income and expenses to Mrs. Gaar who told them again that she and her husband were much interested. "Believe me, we are hot prospects" were her words.

The question of financing was discussed. Mrs. Gaar instructed appellants to make every effort to get a loan on the apartment. They wanted to borrow as much as $60,000 if they could. Accordingly, appellants contacted six different loan concerns. Mr. Hunter told appellants that he thought his company could loan Mr. Gaar $52,000 on the apartment and asked them to have Gaar see him at an appointed time. Appellants reported to Mrs. Gaar the result of their interview with Hunter. There is evidence that Mr. Gaar conferred with Hunter pursuant to the arrangement made with appellants.

In the course of one of the above conversations between appellants and Mrs. Gaar, it developed that appellee Shive, a real estate broker, had done some business for the Gaars. They had previously listed for sale with Shive a property of their own known as the Colonial Apartments. It also appears that the trustees had listed the Eddy Apartments for sale with Shive, among others, and that he had talked to the Gaars regarding the Eddy property before appellants first contacted them.

When Mrs. Gaar informed appellants of their previous relations with Shive, appellants offered to withdraw if the Gaars preferred to have Shive represent them in attempting to purchase the Eddy Apartments. Mrs. Gaar then said she would talk to her husband regarding the matter and report to appellants. That evening Mrs. Gaar told one of the appellants over the phone, "My husband is sitting here now and he said for you to go ahead. Shive has known all along that we wanted the Eddy Apartments and he has not tried to get them for us. He has had his chance."

In the fore part of April, 1939, one Gulick had made an offer to buy the property from the trustees for $75,000 provided $2,500 of that amount would be paid to one Nielson, a real estate agent, who had interested Gulick. Upon learning of this offer, appellants told Mrs. Gaar about it and offered to cut their commission to $2,000. "Mrs. Gaar said she thought that would be all right." Appellant Mrs. Shannon testified, "We told them (Gaars) we would take $2000 commission which would make them a better offer but it would have to come from them as the court paid no commission. They said it was agreeable. They thought it was nice of us to cut our commission to help make the deal."

At about this time, appellants apparently were fearful that the Gaars would purchase the property through Shive or in some other way attempt to deprive them of their commission. They called upon Risser and at his suggestion saw his attorney, told them of their dealings with the Gaars and asked that they be protected on their commission. The Gaars learned of this move of appellants and professed that it offended them. On April 10 Mr. and Mrs. Gaar told appellants they had "made a mess of this" by seeing the attorney. Gaar asked appellants "to withdraw from this in favor of Shive" and offered them as an inducement an exclusive listing on Gaar's Colonial Apartments if they would "withdraw." This appellants refused to do. Gaar then told appellants he was through with them and that he would "have those Eddy Apartments" without going through them, intimating that he would deal through Shive. Appellants then "dropped out of the picture."

Two days later a hearing was had before the court on the sale of the apartments. Gulick through Nielson offered $75,000 with a deduction of a commission of $2,500. Shive made a tentative offer contingent upon obtaining a loan. The hearing was postponed for two days when on April 14 Shive made an offer of $75,500 net to the trustees without the deduction of any commission. The offer was accepted and the sale to Shive was approved. At this hearing Shive testified under oath he was purchasing the property solely for himself. On May 15, 1939, a deed from the trustees to Shive, a deed from Shive to Gaar, and a mortgage from the Gaars to Hunter's company for $52,600, were placed of record simultaneously. Shortly following the sale and before delivery of the conveyances Gaar had assumed at least partial control of the property. Notwithstanding Shive's testimony that he was purchasing for himself, there is ample evidence that Gaar was the real purchaser.

I. Appellees argue that appellants wholly failed to show that Mrs. Gaar was the agent of her husband in dealing with appellants. We are not impressed with the argument. There was sufficient evidence that Mrs. Gaar purported to act not only for herself but for her husband; that Gaar had full knowledge of this, knew what transpired between appellants and his wife, and by clear implication, if not expressly, intended to and did ratify the acts of Mrs. Gaar. Furthermore, by taking the loan from Hunter, Gaar accepted the benefits of his wife's having acted in his behalf and he is in no position now to claim that her acts were unauthorized. Community Sav. Bank v. Gaughen, 228 Iowa 18, 34, 289 N.W. 727, and cases cited; Smith v. Miller, 225 Iowa 241, 244, 280 N.W. 493: Edwards v. Foley, 187 Iowa 5, 11, 173 N.W. 914.

II. Appellants claim that appellees unlawfully conspired together to breach the contract between appellants and the Gaars and carried their plan into effect. As we hereafter point out, the claimed conspiracy is not essential to recovery. Nevertheless, we may observe that a combination between two or more persons to cause a breach of contract is generally recognized as an unlawful conspiracy. The right to the benefits of a contract is a property right which cannot be destroyed without entitling the injured party to damages. Kock v. Burgess, 167 Iowa 727, 733, 149 N.W. 858; Holsinger v. Herring, 207 Iowa 1218, 1225, 224 N.W. 766; Falstaff Brewing Corp. v. Iowa F. & P. Co., 8 Cir., 112 F.2d 101, 108; 11 Am.Jur., p. 582, sec. 50; 15 C.J.S., p. 1020, sec. 13; Annotation, 84 A.L.R. 43, 98.

Where, however, the parties are not liable severally for causing the breach of a contract, they are not liable jointly by reason of the allegation of conspiracy. McKay v. Barrick, 207 Iowa 1091, 1094, 224 N.W. 84; 11 Am.Jur., p. 582, sec. 50; Annotation, 84 A.L.R. 43, 99. Conspiracy does not give rise to a civil action unless something is done pursuant to it which, without the conspiracy, would create a right of action. Dickson v. Young, 202 Iowa 378, 380, 210 N.W. 452; Olmsted v. Maryland Cas. Co.,218 Iowa 997, 998, 253 N.W. 804, and cases cited; Community Sav. Bank v. Gaughen, 228 Iowa 18, 27, 289 N.W. 727.

III. The first essential of the cause of action here asserted is the existence of a valid contract. Anno. 84 A.L.R. 43, 48. We think there was evidence from which the jury could find a contract between appellants and Mrs. Gaar for herself and her husband whereby appellants were to act as brokers for them in the purchase of this property and be paid a commission by them for their services. In the court below appellees practically conceded there was evidence of a contract between appellants and Mrs. Gaar. Appellees' principal contentions in the court below and in their written brief here are that appellants failed to prove a conspiracy and failed to prove a contract with Mr. Gaar or the authority of Mrs. Gaar to act for her husband. Their motion to direct alleged in substance, "As to defendant K. W. Gaar plaintiffs have failed to show any agreement on his part to pay any commission to plaintiffs and have failed to show that Mrs. Gaar was the agent of...