Ulch v. Wessel

• Citation: 166 N.W. 94,184 Iowa 134
• Decision Date: 17 January 1918
• Docket Number: No. 31729.,31729.
• Parties: ULCH v. WESSEL.
• Court: United States State Supreme Court of Iowa

184 Iowa 134

166 N.W. 94

ULCH

v.WESSEL.

No. 31729.

Supreme Court of Iowa.

Jan. 17, 1918.

Appeal from District Court, Polk County; Lawrence De Graff, Judge.

Action on five notes. The defense pleaded was that these were obtained by fraud, and by way of counterclaim defendant demanded judgment for the amount paid thereon. Verdict and judgment was for defendant, including recovery of the amount previously paid on the notes. The plaintiff appeals. Affirmed.

Salinger, J., dissenting.

Guy A. Miller, of Des Moines, for appellant.

Ryan & Ryan, of Des Moines, for appellee.

LADD, J.

Recovery is sought by plaintiff on five notes of the face value $2,795, on which $424 has been paid, with accrued interest. The defendant answered that the notes were procured by fraud, and prayed not only that he might go hence with his costs, but that he have judgment for the amount previously paid on said notes. Reversal is demanded on the sole ground that the verdict is not sustained by the evidence. It appears that one Harley came to Des Moines in the fall of 1913 as agent for the sale of lots in platted additions some nine miles from the city of Astoria, Or., though only about two miles beyond the city limits, and succeeded in selling 170 of these lots to the parties to this suit at the agreed price of $6,340. The contract of purchase was entered into January 6, 1914, by Ulch with Harley; the former executing his promissory notes therefor in the sum of $5,240 and conveying to Harley a lot in the city of Des Moines at the estimated value of $1,100, and Harley undertaking, in substance, to convey the lots as the notes were paid. These notes were negotiated by Harley, and subsequently taken up by Ulch, who received a conveyance of 66 lots described in the contract and 104 lots in another addition which were substituted by agreement of all parties for a like number included in the contract. On January 9, 1914, in pursuance of an arrangement had prior to the execution of the contract first mentioned, Ulch entered into a written agreement with the defendant, Wessel, reciting that the partieshereto previously had arranged to purchase equal and undivided interests in said lots, that besides these Ulch owned 43 lots in the same locality, that Wessel had executed to Ulch the notes in suit for an undivided interest in the 170 lots, that Ulch was about to open an office in Des Moines for the sale of lots in Astoria, and both parties desired the sale of at least a part of said lots, and therefore the parties undertook that Ulch sell any of said 213 lots at prices to be agreed on and keep accurate account of prices for which each lot should be sold and amounts paid thereon, that upon “the request of either party hereto there shall be an accounting between the parties hereto as to the lots which have been sold out of the two hundred and thirteen above described, and as to the moneys which have been received upon said lots, and any money found to be due to the said Harold O. Wessel, party of the second part herein, upon said accounting shall be applied upon the notes given by the said Harold O. Wessel to the party of the first part herein, in payment for his share of said one hundred and seventy lots, and after said notes have been paid in full, any balance found due the said Harold O. Wessel shall be paid to him.” The parties were to have equal access to the accounts. On the demand of either party the 170 lots were to be selected, separate accounts thereof kept, and provision was made for selection of lots in event they could not agree.

The defense as well as the counterclaim is based on the charge that the notes executed by defendant to plaintiff and the contract entered into by them were obtained by fraud, in that, as is alleged, plaintiff represented to defendant that he was familiar with said lots, and their value, and that inside lots were worth $35 each and corner lots $40 per lot; that said lots were covered with timber which when cut would sell for more than the price of the lots, whereas said lots in fact were not worth to exceed $2 or $2.50 each and had no timber whatever on them; that defendant knew nothing of said lots, but relied on said representations, and was induced thereby to execute said notes and contract with the intent on the part of plaintiff to defraud him.

The only controversy is whether the evidence was such that issues should have been submitted to the jury. Upon a careful examination of the record, we have no hesitancy in saying that the verdict may not be disturbed on this ground. On each issue the evidence is in sharp conflict, as is apparent from the following extracts from and recitals of the record: The parties were brothers-in-law, having married sisters, and had been acquainted about five years and had visited each other as might be expected. Defendant testified that:

He had previously purchased 20 lots near Astoria, Or., “through Ulch. Harley and Ulch came down to the office and talked to me about it. Ulch told me what a good investment this was and how good the property was, good lying property, and about the timber on it. He took me over to the Kirkwood Hotel to meet Harley, and they showed me pictures, purporting to be trees, and said that similar trees on the property would be worth more than the property was worth. Harley said this, and Ulch agreed with him. Ulch talked to me in August, going out to the State Fair, telling me about the property, and I guess on the average of three or four times a week he would come to the office and talk about it before I met Harley. Ulch told me that the property was in short walking distance of the business section of the town, and that it was a good lying property and had trees on it, and that a state highway went through there. He said timber on the lots was worth more than the price of the lots themselves and when we cut them would bring more than the price of the lots. The inside lots were $35 and corner lots $40, and he said they would sell for $75 and $100, and that the only reason I was getting in at that price was because I was his brother-in-law and was getting in on the ground floor. This was before I saw Harley. Ulch told me he owned 40 lots and wanted me to go in with him, which I did. He represented to me that he had paid for these 40 lots the same price that I was paying--$35 for the inside and $40 for the corner. He didn't say whether it was in cash or trade. After this conversation, at Ulch's request, both of us went over to see Harley. Harley did most of the talking, but he would say, ‘Isn't that so, Jim?’ and Jim would agree to it. He repeated what a good investment the property was and how well it laid, being level, and about the timber on it, and the value of them.”

The witness told of having bought 20 lots of Harley through Ulch, and proceeded:

“Most of my talking in regard to the value of the property was to Ulch entirely, and, when I went to see Harley, he merely repeated and showed me pictures of property around there and of the timber. After I bought these 20 lots, I had a number of conversations with Ulch. He told me that he had 40 lots and he knew the value of the property there, and I told him I didn't know anything about it. This was before I bought the 20 lots. After that, he came down there again and talked to me about buying a quantity of them, saying that he wanted to get the agency here, and that Harley wanted somebody to go in with him, and he wanted me to go in with him, and I told him I could not pay for it. Ulch had three or four lots in Warrentown, near there, and had been out there several times, and said he knew the property was worth more than we were paying. He showed me pictures at his house and at Harley's room in the Kirkwood. He said the timber on our property was the same as the picture. He again told me about how it laid and the timber on it and about the state highway going through there.”

The witness then explained that he was without experience in dealing in real estate, that he “never went to see Harley unless Ulch was with him. Ulch knew that I didn't know anything about the value of the property out there, and that I didn't know anything about Astoria at all. I told him I would have to depend on his word entirely, because he always investigated everything before he went into it, and that if he said it was all right I would go into it. I would not have purchased the 20 lots or gone into this contract with Ulch for the purchase of a one-half interest of 170 lots except for the representations made by Ulch to me.”

On the other hand, Heefner testified, in substance, that defendant was present at one time when Ulch declared that he knew nothing about the property or its value, that he merely took a chance, and that he and Ulch exchanged a picture show for some of these lots. Ulch denied knowing anything about the lots save as informed by Harley, and swore that he had said nothing to the contrary to defendant, and had not said what they were worth or anything concerning timber growing thereon or its value or what the lots would sell for. He testified that, as Harley would not take defendant's notes for one-half the price of the lots, for that they were not bankable, he executed to him nine notes for the aggregate sum of $5,240 and conveyed a lot at a consideration of $1,100 which was worth $150 more than that, under an arrangement with defendant to execute his notes as he did for an undivided one-half interest in the 170 lots, and that he paid the notes executed to Harley subsequent to their transfer by him, that he had had no arrangement with Harley for a rebate in price or that he should have a commission, and had received neither, and in substance that defendant was the aggressor in making the purchase. The witness further testified that he had never seen the lots, and had been no nearer there than the railroad came, but had been in Astoria three times and owned several lots in Warrentown, a suburb of...