Westerbeck v. Cannon, 27919.

• Decision Date: 09 August 1940
• Docket Number: 27919.
• Citation: 104 P.2d 918,5 Wn.2d 106
• Parties: WESTERBECK et ux. v. CANNON et al.
• Court: Washington Supreme Court

104 P.2d 918

5 Wn.2d 106

WESTERBECK et ux. v. CANNON et al.

No. 27919.

Supreme Court of Washington

August 9, 1940

Department 2.

Action by Ardian Westerbeck and Ida C. Westerbeck, husband and wife against R. C. Cannon and J. D. Cannon, husband and wife, and others, to have deeds an contracts canceled for fraud and to have the parties restored to the legal and equitable ownership of their respective properties. From judgment for plaintiffs, the named defendants appeal.

Affirmed.

Appeal from Superior Court, Skagit County; Willard L. brickey judge.

Henderson & McBee, of Mount Vernon, for appellants.

Dave Hammack and James R. Hammack, both of Mount Vernon, for respondents.

JEFFERS, Justice.

This is an appeal by defendants R. C. Cannon and wife from a judgment made and entered by the superior court for Skagit county, on November 9, 1938, in an action wherein Adrian Westerbeck and Ida C. Westerbeck, his wife, were plaintiffs, and R. C Cannon and wife, Harold C. Cannon, Arthur L. Christianson and wife, and C. R. Morgan and wife, were defendants.

The basis of this action, as shown by the complaint, is fraud which it is alleged was perpetrated upon plaintiffs by defendant R. C. Cannon, while acting as the agent of plaintiffs for the purpose of selling their farm.

It is alleged that in the deal, which was negotiated by defendant with the preconceived plan of defrauding plaintiffs, the latter were induced to sign an exchange agreement with defendant, agreeing to exchange their property for a house and two lots in Sedro-Wooley; that in order to carry out the scheme whereby defendant R. C. Cannon was to obtain the property of defendants Christianson, he induced plaintiffs to make a deed to their twenty acre farm in favor of Christianson and wife, and had the deed placed in escrow with John W. Brisky, an attorney of Mount Vernon employed by Mr. Cannon to prepare the papers in this transaction; that Mr. Cannon also had defendants Morgan and wife, who owned the Sedro-Woolley property, make a deed to their property in favor of plaintiffs, and place same in escrow, and he also had Christianson and wife make a deed to their property to Harold C. Cannon, his son, and this deed was also placed in escrow. It is further alleged that defendant R. C. Cannon had an option to purchase the Sedro-Woolley property for $675, which was not known to plaintiffs, although defendant had title insurance put upon the Sedro- Woolley property for $2,500; that plaintiffs were not informed that Mr. Cannon was to get the Christianson property out of the transaction, which property was to have title insurance in the amount of $3,000; that defendant R. C. Cannon paid nothing to defendants Morgan on the option until after the deed from Christiansons to Harold C. Cannon had been released, when a mortgage was given by the latter to Morgan and wife to secure a note for $640 given by defendant R. C. Cannon to the Morgans in payment of the option. It is further alleged that plaintiffs did not understand the effect of the exchange agreement or deed, but believed that they would receive from $1,000 to $1,500 in cash in the exchange of their property for the Sedro-Woolley property. It is further alleged that Harold C. Cannon took title to the Christianson property, and held same for and on behalf of defendant R. C. Cannon.

The prayer of the complaint is that plaintiffs be restored to the legal and equitable ownership of their property; that defendants Christianson and wife, and Morgan and wife, be restored to the legal and equitable ownership of their respective properties; and that the deeds and contracts made by the respective parties be canceled and held for naught.

The answer of defendants Christianson and wife is to the effect that they knew nothing of, and were not interested in, the deal made by Cannon, other than that they knew they were to make a deed to their property to Harold C. Cannon, and place the same in escrow with Mr. Brisky, and that when title insurance was obtained on their property for $3,000, and on plaintiffs' property for $5,000, they were to receive a deed to plaintiffs' property, which was subject to a mortgage of about $2,000, which they were to assume; that the deed from plaintiffs to them has been released by the escrow holder and placed of record, and that their deed to Harold C. Cannon has been released and placed of record; that subsequent to the release of their deed, Harold C. Cannon, on or about June 23, 1938, mortgaged a portion of the premises to C. R. Morgan, to secure the sum of $640, and also mortgaged a portion of the premises to one J. Reid Nelson, to secure the sum of $1,000; that these defendants at all times acted in good faith.

Defendants R. C. Cannon and wife and Harold C. Cannon by their answer deny all the allegations of fraud. They admit that on March 28, 1938, plaintiffs listed their property with them for sale, but deny that this transaction was made pursuant to such listing agreement, and allege it was made pursuant to the terms of the exchange contract of June 1st. They admit the respective parties executed deeds, which were placed in escrow with John W. Brisky, and that the deed from plaintiffs to Christianson and wife has been released and placed of record, as has also the deed from Christianson and wife to Harold C. Cannon, and they admit they have refused to have the deal canceled. They further allege that at all times plaintiffs knew and understood the effect of the exchange contract and the deed, and that this matter was explained to plaintiffs Before the contract and deed were signed; that plaintiffs examined the Sedro-Woolley property, and did not rely on anything done, or statement made, by defendant R. C. Cannon; that after plaintiffs had signed the deed and contract, they expressed complete satisfaction with the deal.

The answer of defendants Morgan and wife is to the effect that they, at the request of defendant R. C. Cannon, executed a deed to the Sedro-Woolley property in favor of plaintiffs, and that the same was placed in escrow with Mr. Brisky, until such time as title insurance in the amount of $2,500 could be obtained on the property; that they have no knowledge as to the other matters and things referred to in plaintiffs' complaint.

The cause came on for hearing Before the court, upon these pleadings, and after hearing the evidence and arguments, the court made and entered findings of fact, conclusions of law and judgment. By the judgment, the court granted to plaintiffs the relief prayed for in their complaint, and also canceled the mortgage given by defendant Harold C. Cannon to defendants Morgan and wife. This appeal is by R. C. Cannon and wife.

In this opinion, R. C. Cannon will be referred to as though he were the only party appellant.

Appellant admits that the questions presented are questions of fact, and that if the lower court was correct in finding that the respondents were defrauded and overreached, the conclusion is correct; if not, the judgment should be reversed.

It is the position of appellant that respondents did not and could not meet the burden of proof, and that the evidence affirmatively shows that respondents were not defrauded.

It may be noted at this time that counsel for the respective parties proceed and argue from different standpoints and upon different theories. Appellant proceeds upon the theory that, in so far as this transaction is concerned, he was acting under and pursuant to the exchange contract of June 1st, was not acting as the agent of respondents, or acting in any fiduciary capacity; while respondents proceed upon the theory that at all times herein referred to respondents believed appellant was their agent, and that in fact he was their agent.

The following is, we believe, a fair summary of the testimony of respondents' witnesses, from which it appears that respondents spondents were elderly people, born in Finiand, and having had very little education; that Mr. Westerbeck had mined a little since coming to this country, but for many years had been engaged in farming, and for about nineteen years had lived on and owned the land involved herein; that while Mr. Westerbeck transacted the usual business connected with a farm, he did not read English well, and could write very little; that while at times he signed checks, he had them made out by someone else, except the signature; that neither of the respondents had had any experience with real estate agents or real estate deals; that Mr. Westerbeck's health had been poor for some time, apparently caused by hard work--he often complained of headaches and backache, and he was a little hard of hearing; that because of his physical condition, and the further fact that his boys did not want to stay on the farm, Mr. Westerbeck thought he might sell his place and move to town.

The testimony further shows that about this time, Mr. Westerbeck saw a blind ad in the Mount Vernon Herald, which stated 'I would like to buy a good farm for cash. Write Box 388, Daily Herald;' that Mr. Westerbeck had one of his boys answer the ad, and that thereafter appellant and a Mr. Yaeger, a real estate broker, came out to see respondents; that as a result of the visit of Cannon and Yaeger, respondents, on March 28, 1938, signed a listing agreement, whereby they gave to appellant, for six months, the exclusive right to sell their property. It further appears from this agreement that the agreed selling price was $5,500, this price including some livestock and farm machinery. The agreement further provided that the owner would accept the purchase price above specified, less five per cent commission, or a net price of $3,000 above the mortgage. This agreement was witnessed by Mr. Yaeger. The testimony money...