Sobolik v. Vavrowsky

• Citation: 146 N.W.2d 761
• Decision Date: 01 December 1966
• Docket Number: No. 8268,8268
• Parties: Victor SOBOLIK and Lucy Sobolik, his wife, Plaintiffs and Respondents, v. Tim VAVROWSKY, Sr., and Louis Houska, Jr., Defendants and Appellants.
• Court: United States State Supreme Court of North Dakota

Page 761

146 N.W.2d 761

Victor SOBOLIK and Lucy Sobolik, his wife, Plaintiffs and Respondents, v. Tim VAVROWSKY, Sr., and Louis Houska, Jr., Defendants and Appellants.

No. 8268.

Supreme Court of North Dakota.

Dec. 1, 1966.

Syllabus by the Court.

1. A motion for directed verdict is a necessary preliminary motion to a motion for judgment notwithstanding the verdict.

2. Where parties to a contract for deed thereafter execute a release under the terms of which each of the parties releases the other from any claim arising under the contract, or the breach thereof, and no mention is made of a refund of a down-payment made on the contract for deed, no action for a return of such down-payment may thereafter be maintained against the sellers.

3. Generally, money paid to an agent for a known principal, to be returned upon nonperformance of certain conditions, cannot, when the payor becomes entitled to its return, be recovered from the agent, since the question of whether the payor is entitled to a refund is one that does not concern the agent, but is between the payor and the principal.

4. Where, however, an agent, by his own fraud, induces an innocent person to pay over money to him for his principal, such agent is liable for the money so paid notwithstanding he may have paid the money over to the principal.

5. Generally, no technical forms of pleading are required in this State, and a complaint need only contain a short and plain statement of plaintiff's claim. Where, however, fraud is relied upon, the circumstances constituting fraud must be stated with particularity so as to apprise the adversary of what acts are relied upon as constituting fraud.

6. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised by the pleadings. Any amendments necessary to make the pleadings conform to the evidence may be made upon motion of any party at any time.

7. Where a case is tried on the theory of fraud, and evidence is introduced, without objection, to support the theory of fraud, the fact that the complaint does not allege circumstances constituting fraud with particularity will not be grounds for setting aside the verdict.

8. In an action tried on the theory of fraud, where none of the parties have demanded a jury trial, but where the court submits to a jury the issue of fraud, the court has the power, after the jury returns its findings on the issues submitted to it, to determine the amount due the plaintiff.

Dahl, Dahl & Greenagel, Grafton, for plaintiffs and respondents.

Stokes, Vaaler, Gillig & Warcup, Grand Forks, for defendants and appellants; Lorene Whitesides Larson, Park River, of counsel.

STRUTZ, Judge (on reassignment).

The Herschbergers, owners of certain farm lands in Walsh County, decided to sell a portion of their real estate holdings, and entered into an option agreement with the defendant Houska, a real estate broker, to secure a buyer for the same. Houska, in turn, secured the services of the defendant Vavrowsky to assist him in making a sale. The plaintiff Victor Sobolik was looking for a farm, and contacted the defendant Vavrowsky in regard to purchasing the Herschberger land. After a few preliminary contacts in regard to this land, the plaintiffs were interested to the extent that they went to inspect the land on several occasions. Eventually, they entered into a contract for deed with the Herschbergers, the plaintiffs' attorney preparing the agreement. At the time of the execution of the contract for deed, the plaintiffs made a down-payment of $1,000 on the purchase price.

Some time after the contract for deed had been executed by the buyers and all of the sellers, the plaintiffs contacted the sellers and advised them that certain misrepresentations had been made by the defendant brokers which had induced them, the plaintiffs, to sign the contract for deed and that, having discovered such misrepresentations, the plaintiffs were seeking to be released from the contract. They contended that one of the real estate brokers had falsely advised them that the yield on this land for the years 1959 and 1960 had averaged forty-five bushels per acre on the allotted wheat acreage, whereas the county average was twenty-six or twenty-seven bushels per acre. They further claimed that one of the brokers had told them that they had an offer of $5,000 cash rental per year for the land described in the contract, and that they had discovered that such representation was untrue.

It appears that the plaintiff Victor Sobolik was an experienced farmer, and whether the production of wheat on the land or the statement of cash rent for the land was material, was a question of fact.

The sellers, on learning of such alleged misrepresentations, signed a release with the plaintiffs, by the terms of which the buyers and the sellers were given mutual releases from the contract for deed. Although the release as executed fully set out the terms of the release, and specifically provided that both vendors and vendees were released from any and all liability and obligation under the contract for deed, no mention or provision was made in such release for a refund of the down-payment.

After the plaintiffs had secured the release from the sellers, they made demand upon the real estate brokers for a return of the down-payment. This demand was refused. The plaintiffs then started an action against the broker Vavrowsky for the downpayment. The complaint was for money had and received. The defendant Vavrowsky filed his answer, after which the plaintiffs made a motion for summary judgment. This motion was denied, the court pointing out that the effect of the rescission presented an issue of material fact; that there is no rule of law which requires that restitution shall be made, or shall not be made, when an earlier contract is rescinded; and that this question must be determined on the facts in each case.

Thereafter, the plaintiffs served an amended complaint in which both real estate brokers were named as defendants. This amended complaint was also for money had and received. Still later, the plaintiffs served a further amended complaint in which the two brokers, and all of the sellers, were made parties defendant. The second amended complaint contained a paragraph alleging that, during the negotiations prior to the execution of the contract for deed--

'* * * the defendant Vavrowsky made certain representations to the plaintiff and based on these representations the plaintiff and the defendants Herschbergers entered into a Contract for Deed * * *.'

This second amended complaint had a further allegation to the effect that, upon investigation, the plaintiffs found some of the representations made by the defendant Vavrowsky to be false.

At the close of the plaintiffs' case, the trial court dismissed the complaint against the Herschbergers, as the sellers of the land, and submitted the case to the jury as against the brokers Vavrowsky and Houska. The jury was asked to bring in a special verdict in the form of answers to special interrogatories. The jury returned such special verdict, the answers to the special interrogatories stating that the defendants, with intent to induce the plaintiffs to enter into a contract for deed, had represented to the plaintiffs as facts certain assertions which were untrue; that the plaintiffs relied on such statements in entering into the contract for deed. On return of the special verdict by the jury, the trial court ordered judgment to be entered in the sum of $1,000, the amount of the down-payment.

The defendants Vavrowsky and Houska thereupon made a motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. This motion was denied by the trial court, and the defendants have appealed to this court from the order denying the motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, and from the judgment entered on the verdict.

Numerous issues are raised on this appeal by the defendants' specifications of error, and we will discuss such of these as are necessary for a determination of the case, although such consideration will not necessarily be in the order in which the issues are set forth in the defendants' specifications of error.

Did the trial court err in denying the defendants' motion for judgment notwithstanding the verdict? The record discloses that no motion for a directed verdict was made by the defendants at the close of the evidence. This court has repeatedly held that where there is no motion for a directed verdict, it is not error to deny a motion for judgment notwithstanding the verdict. Lueck v. State, 70 N.D. 604, 296 N.W. 917; Gross v. Miller, 51 N.D. 755, 200 N.W. 1012; Carson State Bank v. Grant Grain Co., 50 N.D. 558, 197 N.W. 146. Thus it is obvious that the trial court properly denied the defendants' motion for judgment notwithstanding the verdict.

The next issue which we will consider is whether the court erred in dismissing the complaint as to the sellers of the land. An examination of the release signed by the buyers and the sellers discloses that the plaintiffs released, relinquished, and quitclaimed to the sellers--

'* * * any and all right, title, interest or demand, possessed...