Turner v. Jarboe

• Decision Date: 23 January 1937
• Docket Number: 33294.
• Parties: TURNER v. JARBOE et al.
• Court: Kansas Supreme Court

64 P.2d 26

145 Kan. 202

TURNER v. JARBOE et al.

No. 33294.

Supreme Court of Kansas

January 23, 1937

Syllabus by the Court.

Person who has exchanged property and concludes he has been defrauded has remedy of action for rescission or for damages but cannot have both remedies.

In action for rescission of exchange of property on ground of fraud, allegations of damage and prayer for money judgment therefor held subject to motion to strike, since such allegations were inconsistent with remedy sought.

1. One who has made an exchange of property and concludes he has been defrauded has two remedies open to him--an action for rescission, or for damages. These differ so fundamentally that they cannot be commingled.

2. A petition in an action for rescission of an exchange of property on the ground of fraud contained allegations of damages because of the fraud and included a prayer for a money judgment therefor. Held, these allegations and that portion of the prayer should have been stricken from the petition on motion, and if that were not done a demurrer to the petition should have been sustained.

Appeal from District Court, Wyandotte County, Division No. 4; C. A Miller, Judge.

Action by Maude Turner against Holly Jarboe and others. Judgment for plaintiff, and defendants appeal.

Reversed with directions.

J. H Brady, and N. E. Snyder, both of Kansas City, for appellants.

David F. Carson and Carl W. Fincke, both of Kansas City, for appellee.

HARVEY Justice.

This appeal is from an order overruling the motion of two of the defendants to strike certain allegations from the second amended petition and from an order overruling their demurrer to the petition. A brief statement of the pleadings filed and rulings thereon will enable us better to understand the questions argued.

June 10, 1935, plaintiff filed her petition in the district court of Wyandotte county. The principal defendants were Holly Jarboe, Harriet Jarboe, and Leo McShane. Plaintiff alleged that in December, 1934, these defendants, wrongfully conspiring to defraud plaintiff of her property, falsely represented to her that the Holly and Harriet Jarboe, hereinafter called defendants, owned a described property known as the Hollywood Hotel in Kansas City, Mo., and the furnishings therein, which were clear of encumbrance; that the whole was worth $23,000; that it was being and for many years had been operated at a profit upon that value; that the hotel was fully occupied with paying tenants; that it was in good condition; and that the furnishings were what she had seen in the hotel a year prior thereto, all of which was represented as being in good condition. They proposed to trade this property for certain property owned by plaintiff. Upon her request to see and investigate the hotel property, they assured her she could rely upon their statements respecting the property, and relying thereon she exchanged therefor certain property she owned, namely, certain real property in Wyandotte county, thirty-four shares of stock in certain building and loan associations of Wyandotte county, executed a note for $2,000 secured by a mortgage on certain real property in Wyandotte county, and another note for $1,000 secured by a chattel mortgage on certain personal property in that county, all of the value of $6,000; that the representations so made by defendants and McShane were false in this, that the hotel property was not of the reasonable value of $23,000 and was not of sufficient value to pay the encumbrance of $16,000 against it; that the hotel property was not being, and had not been, operated at a profit, but had been operated at a loss of more than $10,000 since 1925; that instead of being occupied by paying tenants it had been filled with tenants who paid nothing and who were expected to pay nothing; that this was done for the purpose of deceiving plaintiff; and that more than one-third of them moved from the property soon after the exchange was made. It was further alleged that the hotel was not in good condition, as represented, but was out of necessary repairs to the extent of $2,000, and that much of the furniture represented as being in the hotel had been removed, and that the furniture therein was much inferior to that as represented. Among the defendants named were the two building and loan associations, the stock of which plaintiff had transferred, and W. C. Reynolds, a resident of Kansas City, Mo., who had been named as trustee in the mortgages executed by plaintiff. It was alleged that the defendants, other than the corporations named and W. C. Reynolds, were insolvent and plaintiff feared they would transfer the Wyandotte county real property and the shares of stock and mortgages which had been executed by plaintiff. Plaintiff asked that all these instruments be canceled and that defendants be directed and ordered to make the plaintiff a deed for the Wyandotte county property. She tendered a deed to the Hollywood Hotel property and bill of sale for the furnishings therein. It was further alleged that because of the willful, false, and fraudulent representations made, defendants should be required to pay the expense of the action, including reasonable attorneys' fees and rents they had collected from the Wyandotte county property, all amounting to the sum of $4,500. The register of deeds of Wyandotte county was made a party defendant, and the court was asked to enjoin him from entering of record any assignment of the mortgages executed by plaintiff or deed from defendants for the Wyandotte county property. Plaintiff also asked to enjoin the building and loan associations from transferring the stock on their books. The prayer was for judgment against defendants for $4,500, that the deed executed by plaintiff to defendants for the Wyandotte county property be canceled, and that her title thereto be quieted; that defendants be required to surrender the $2,000 and the $1,000 notes and the shares of stock; that appropriate restraining orders be issued; and for such other and further relief as to the court may seem just.

Personal service of summons was obtained upon the defendants in Wyandotte county. Holly Jarboe and Harriet Jarboe were nonresidents of the state and service by publication was had as to them. Thereafter and on September 23 they filed the following motion: "Come now the defendants, Holly Jarboe and Harriet Jarboe, for the purposes of this motion and this motion only, and for no other purpose, and in no way submitting to the jurisdiction of this court, but at all the times objecting and excepting thereto, and move the court to quash and set aside the purported service upon them purporting to have been made upon them by publication, which publication ran in the Kansas City Kansan. Because this court has no jurisdiction of the persons of these defendants or either of them. Because this court has no jurisdiction of the subject matter involved in this action for the following reasons, to-wit: That these defendants, as shown by plaintiff's affidavit for publication service, are non-residents of the state of Kansas, being residents of the state of Missouri. That no personal service of summons has been had or obtained upon the persons of these defendants or either of them. That no basis exists or has existed for service upon these defendants or either of them by publication."

Upon the hearing of this motion, November 21, the journal entry recites that the court "*** finds, that said defendants Holly Jarboe and Harriet Jarboe, should not be compelled to answer purely claims in personam, but that in so far as the action is one in rem, that the service by publication is good and should be sustained, and that if the plaintiff elects to withdraw from her petition all of her claims which is purely a claim in personam, that the motion should be overruled; and thereupon in open court plaintiff elects to withdraw all claims of a personal nature, and the court finds, that upon such election, said motion should be denied. It is therefore by the court ordered: That said claims in personam are, by reason of the election of the plaintiff, stricken from the petition and that said motion be and the same is hereby overruled." Whereupon the original petition was amended by plaintiff striking therefrom all claims in personam. No complete amended petition was filed, nor was the original petition then refiled, but it was permitted to remain as amended with all allegations in...