Wooding v. Sawyer, 31541

• Decision Date: 30 March 1951
• Docket Number: No. 31541,31541
• Citation: 38 Wn.2d 381,229 P.2d 535
• Court: Washington Supreme Court
• Parties: WOODING, v. SAWYER et al.

Page 381

38 Wn.2d 381

229 P.2d 535

WOODING, v. SAWYER et al.

No. 31541.

Supreme Court of Washington, Department 1.

March 30, 1951.

Rehearing Denied May 8, 1951.

Elliott & Schneider, Rummens, Griffin & Short, Seattle, for appellants.

Ferguson, Burdell & Armstrong, Seattle, for respondent.

HILL, Justice.

The major issue presented here is whether or not appellants Fred F. Ludwick, Jr., and H. R. Sawyer, hereinafter referred to as Ludwick and Sawyer, were induced to enter into a written lease as the result of fraudulent representations by the respondent, hereinafter referred to as Wooding.

Wooding apparently was the moving figure in the development of the Auburn airport on leased land in 1945. He and Earl D. McPherson were co-owners from May, 1946, until August 28, 1947, at which time they entered into an agreement by which Wooding sold all his interest in the airport to McPherson, who took complete control of the property on that date.

The principal value of an airport such as the one here involved lies in its use in connection with a flying school, and McPherson operated such a school under the name of Auburn Flying Service. At that time practically all students in such schools were war veterans, and the compensation for their instruction, based upon their flying time, came through the veterans administration.

Because of the unsatisfactory character of McPherson's operation of the airport and flying school, Wooding and McPherson entered into another agreement, August 1, 1948, whereby Wooding purchased all of McPherson's interest and as of that date took possession and assumed active management of the property.

Ludwick and Sawyer were then successfully conducting a similar operation at Puyallup, and Wooding soon contacted them in an endeavor to interest them in buying or leasing the Auburn airport. They knew that the Auburn flying school had not been efficiently operated, that it was in trouble with the Civil Aeronauties Authority, that its operation had been suspended for thirty days (May 2 to June 2, 1948) and that another suspension was pending. They knew also that two of the three planes used in the operation of the flying school at Auburn were down for repairs.

Wooding furnished Ludwick and Sawyer with a list of all students enrolled with the Auburn Flying Service (August 24 or 25, 1948). This list, exhibit No. 7 herein, included thirty-four names, the course for which each student was enrolled, his flying time up to and including August 23, 1948, and the date by which his training was to be completed; and from it Ludwick and Sawyer computed the amount of revenue that might be derived from the students listed if they completed their training. The amount they arrived at after making certain deductions, in accordance with their experience, for those who would not complete the course was sufficiently large to induce them to lease the airport and its equipment, including three planes, for a period of one year beginning August 23, 1948, at five hundred dollars a month, with an option to buy. The lease was executed August 28, 1948.

Ludwick and Sawyer formed a corporation under the name of L & S Flying Service, Inc., and their agreement of October 6, 1948, with the veterans administration, was executed by the corporation. Their Auburn operations were conducted under the corporate name; however, the corporation never became liable on the lease, and the testimony was that the corporation never actually took over the operation of the Auburn airport and flying school.

Only eighteen of the students listed on exhibit No. 7 took any instruction after August 23rd, and only a comparatively few completed their training. The Auburn operation proved to be very unprofitable, and Ludwick and Sawyer paid no rent after November, 1948. April 9, 1949, Wooding caused to be served on them a statutory three-day notice to pay rent or quit the premises. Rem.Rev.Stat. § 812(3). The rent not being paid and possession not being surrendered, Wooding commenced simultaneously two actions against Ludwick and Sawyer, joining their wives as parties defendant. (Sawyer was unmarried; Mrs. Ludwick kept the books and records for both the Puyallup and the Auburn operations.)

One action was brought under the unlawful detainer statute, Rem.Rev.Stat. § 812 et seq., to regain possession of the airport and for double rent for the period during which the property was unlawfully detained. Rem.Rev.Stat. § 827. The other action was for past-due rent and for payments to which Wooding claimed to be entitled under the terms of the written lease. Sawyer and the Ludwicks answered by a general denial in both actions and, in the action for past-due rent, interposed certain affirmative defenses and a cross-complaint alleging that the lease had been procured by fraud and that they had been damaged by reason of that fraud in the amount of $7,300.

The cases were consolidated for trial. Wooding was allowed to make a trial amendment setting up another cause of action for the return of certain articles or their value. These items were on the premises when Ludwick and Sawyer took possession under the lease and were missing when they surrendered possession of the premises to Wooding, and had not been returned to him.

After an extended trial, the trial court found, inter alia:

'That at the time the defendants [appellants] entered into the said lease the defendants knew the condition of the airport and flying school and went into the said lease with their eyes open and calculated the possibility of profit against the risk and decided that it was a good gamble and that they would have a good chance to reinterest the students although they might have to work hard to do so and the defendants were not induced to enter into the lease by false representations on the part of the plaintiff [respondent], nor did they rely upon representations of the plaintiff in entering into the said lease. * * *

'That the lease [list] which is in evidence as defendants' Exhibit 7 was not given to the defendants as a list purported to be of 'active' students. That the defendants have not established by clear, cogent and convincing testimony that the plaintiff made fraudulent misrepresentations to them which induced these defendants to enter into the lease contract and upon which they relied to their detriment.'

It necessarily follows, if the affirmative defense of fraud was not established, that Wooding is entitled to recover the rent and other amounts due under the lease, and also for the unlawful detention of the premises.

There seems to have been no defense of the claimed wrongful removal of the items of personal property enumerated in the trial amendment except an expressed willingness (in a letter dated June 21, 1949) to return some of them which was never translated into action, and the court found a value of $195 for the articles removed from the premises and retained by Ludwick and Sawyer, and made that amount a part of the judgment.

Sawyer and the Ludwicks have appealed.

The trial judge in his oral decision said--and we agree--that the case hinges upon exhibit No. 7, heretofore referred to. Appellants urge that, with three exceptions, the persons listed were supposed to be 'active' students, i. e., students who were actively engaged in completing their training. As we have seen, the trial court found that exhibit No. 7 did not purport to be a list of 'active' students, and the...