Shannon v. Gaar

• Decision Date: 28 July 1944
• Docket Number: 46516.
• Parties: SHANNON et al. v. GAAR et al.
• Court: Iowa Supreme Court

15 N.W.2d 257

234 Iowa 1360

SHANNON et al. v. GAAR et al.

No. 46516.

Supreme Court of Iowa

July 28, 1944

Rehearing Denied Sept. 23, 1944.

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

Stipp Perry, Bannister, Carpenter & Ahlers, of Des Moines, for appellees.

HALE Justice.

Plaintiffs-appellants seek to recover damages claimed to have been sustained by reason of the breach by defendants-appellees of an alleged oral contract to represent such appellees as brokers in the purchase of the Eddy Apartments in Des Moines. Appellants claim that during the existence of such contract they contacted and reported to appellees the name of a loan company through which $52,600 was obtained by appellees and used in payment of the purchase price of said apartment; and that after reporting the name of such loan agency, appellees conspired to deprive them of their commission by causing C C. Shive, a real estate broker, to bid for and purchase the property in his own name. Appellants allege the existence and performance of the contract until prevented by appellees conspiracy between appellees to deprive appellants of the benefit of the contract after partial performance by appellants by employing Shive to bid for and obtain such property, and claim exemplary damages. Appellees by separate answers admit the purchase of the property for Keith W. Gaar by Shive, deny appellants' agency, and deny generally all allegations of the petition not admitted. On motion the claim for exemplary damages was struck from the petition. On trial the jury returned a verdict for appellees. The court overruled objections to instructions and motion for new trial, and the case is before us on appeal.

This is the second appeal in this case. At the first trial, in which C. C. Shive was a party defendant, the court directed a verdict for defendants at the conclusion of plaintiffs' testimony, defendants offering no testimony. On appeal this court sustained the district court's ruling as to Shive, but reversed as to defendants Gaar. See Shannon v. Gaar, Iowa 1942, 6 N.W.2d 304, 308. The holding of this court in that case was that there was sufficient evidence as to the Gaars to submit the case to the jury, and the district court was therefore in error in directing the verdict for them.

At the second trial, which began September 20, 1943, both sides offered testimony. The evidence, with the exception of the testimony of appellees, was in substance much the same as in the former trial, and need not be reviewed here, the facts being fully set out in Justice Garfield's opinion in Shannon v. Gaar, supra.

In this appeal four errors are assigned.

I. Appellants allege that the trial court was in error in giving instruction No. 8, which was to the effect that appellee, Keith W. Gaar, would not be bound by the acts of his wife unless he had full knowledge thereof, and in the light of such knowledge, accepted the benefits, if any, flowing from the acts and statements of his wife; and in failing to instruct the jury, in accordance with the opinion filed in the former appeal to this court, 'that by taking the loan from Hunter, Gaar accepted the benefits of his wife having acted in his behalf and he is in no position now to claim that his acts were unauthorized.'

Appellants argue that the legal principles announced by the Supreme Court on a former appeal, whether right or wrong, become the law of the case upon retrial thereof. This proposition is not disputed. It is further argued that by accepting the benefits of persons assuming to act for another, the person accepting the benefits ratifies the acts of the other and becomes bound therefor. As an abstract principle of law this also is true. But in applying this rule as to the law of the case, appellants insist that the trial court in the present trial disregarded our former opinion.

Appellants quote only part of Division I of the former opinion, which throughout, not only in Division I, but in Divisions III, IV, V and VI, decides only the question whether or not there was sufficient evidence to warrant submission to the jury and does not make findings of fact. Under the previous record the only question at issue was whether the court was justified in directing a verdict. This court held that there was sufficient evidence of certain facts to require submission to a jury, and the opinion so states. It is held (Division I) that there was evidence that Mrs. Gaar purported to act for her husband and that her husband has 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, and by taking the loan from Hunter accepted the benefits of his wife's action. But it will be noted that, as in most cases of directed verdict, the opinion does not assert these as established facts, but applying the rule as to viewing the evidence in its most favorable aspect for plaintiff, states that these were the facts which the jury could find, and not that they were established or determined by this court. And throughout the opinion this is its full purport, as in Division V on conspiracy: '* * * we think the evidence was sufficient to warrant a jury finding,' and in Division VI: 'Even if there were insufficient proof of a conspiracy * * * appellants would still be entitled to have the case submitted to the jury upon proof that these appellees acted wrongfully * * *.' Even upon the first appeal appellants did not claim that a verdict should have been directed for them, only that the direction of the verdict against them was erroneous. The trial court based his instruction on our opinion in the former case, and we think, correctly.

Appellants in argument object to instruction No. 8 for the reason that the court stated therein that the appellee, Keith W. Gaar, would be required to have had full knowledge of his wife purporting to act for him and for herself and in the light of such knowledge accepted the benefits, 'in order to constitute a ratification of her acts.' This is a correct statement. In order that acceptance of benefits may be equivalent to authorization, it must be with knowledge, and in the former appeal it is stated as one fact which the jury could properly find from the evidence, and by inference a necessary fact. This is the rule many times stated by this court. See Roberts v. Rumley, 58 Iowa 301, 12 N.W. 323; Welke v. Wackershauser, 143 Iowa 107, 120 N.W. 77; Young & Inman v. Nelson, 146 Iowa 492, 125 N.W. 177; Windahl v. Vanderwilt, 200 Iowa 816, 203 N.W. 252; Miller v. Chatsworth Sav. Bank, 203 Iowa 411, 212 N.W. 722. See also Restatement of the Law, Agency, Par. 98.

Appellants cite Eadie, Guilford & Co. v. Ashbaugh, 44 Iowa 519, many times cited in our decisions. That case states the general rules as to ratification of an agent's acts by the principal. In that case, while the notes were accepted at first without knowledge, the court states that plaintiffs were seeking to avail themselves of the benefits accruing to them under the sale to Allen and at the same time avoid the burdens of such contract; 'theyhaving now at least full and complete knowledge of the terms and conditions of such contract.' (Italics ours.) One of our recent cases citing the Eadie case is Chismore v. Marion Sav. Bank, 221 Iowa 1256, 268 N.W. 137, and cases cited.

We hold that the instruction was correct.

II. Appellants next complain of the action of the court in sustaining objection of appellees to the evidence of W. W Risser to the effect that at the time of the adjourned sale of the apartment, C. C....