Miles v. Lynch

191 Iowa 219
CourtSupreme Court of Iowa
DecidedApril 5, 1921
StatusPublished
Cited by1 cases

This text of 191 Iowa 219 (Miles v. Lynch) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miles v. Lynch, 191 Iowa 219 (iowa 1921).

Opinions

Evans, C. J.

The contract under attack was signed by the plaintiff on January 11, 1919. By such contract the plaintiff bound herself to convey to the defendants on March 1, 1920, an improved farm of 310 acres in Bremer County, for a consideration of $39,000. One thousand dollars of the consideration was paid at the time of the execution of the contract. The contract was, in fact, a very advantageous one for the defendants. The crucial question in the case is whether the defendant Schaum, who was the sole representative of all the defendants in the preliminary transaction, obtained the execution of the contract from the plaintiff by fraudulent pretense. The determination [220]*220of this question of fact involves also the question whether any fiduciary relation existed between the plaintiff and Schaum, and to what extent such relation existed. Schaum was conced-edly the agent of the plaintiff for the purpose of the management of this farm in the matter of renting the same and dealing with the renters. Such management of the farm comprised substantially all the business the plaintiff had. Such management was in the line of Schaum’s business. He conducted a real estate office at Oelwein. The plaintiff was a resident of Oelwein. She had never listed the farm for sale with Schaum, in any formal sense. The contention for Schaum is that, inasmuch as he was the agent of the plaintiff for the renting and management of the farm only, and as it had never been listed with him for sale, he sustained no fiduciary relation to the plaintiff in respect to the sale of the farm, as distinguished from the renting thereof; and that, in the matter of sale, he was as free to deal with her at arm’s length as any other purchaser.

For the plaintiff, it is contended that Schaum voluntarily assumed to aid and advise and represent her in the matter of such sale; and that he intended to gain her trust and confidence thereby; and that he did thereby gain her trust and confidence, as he well knew; and that she executed the contract in question in full reliance upon the good faith of his advice and representations to her, — all of which he well knew at the-time.

This brief statement presents the perspective of the case, and we turn to the details of the story. The plaintiff was the widow of P. J. Miles, who died in 1914, seized of the farm in question. She received the farm in the distribution of her husband’s estate. She was a woman of ordinary intelligence, with a high school education, and with several years of experience as a teacher before her marriage. She had never had occasion to transact business during the lifetime of her husband. Her brief experience, following the death of her husband, in attempting to manage her farm through tenants, discloses manifest unfitness to that end. At the close of litigation with her first tenant, and pursuant to the advice of her counsel therein, she determined to employ a trusted agent to look after the business. Schaum became that trusted agent. The details of the original employment are related by the plaintiff as follows -.

[221]*221“I met Mr. Schaum one afternoon in front of Dr. Cole’s residence. I stopped, and he also, and I think he asked about being agent, * * # and I said, ‘Yes;’ Mr. O’Brien had recommended him to me and I had not looked for anybody else; but I think I told Mr. O’Brien, when he spoke of it, I had thought of James Fay, a man who was a farmer, and was a good honest man. I thought he might look after it; but when he recommended Mr. Schaum, I thought he should know, and should tell me what was to my interest, and so at this meeting, * * * I told Mr. Schaum I had no other agent secured, and asked him what commission he wanted. He said 5 per cent of all money taken in, and that he would make 3 or 4 or 5 trips to the farm to look after things for me. I was up to the office after that, and he said: ‘Now, Mrs. Miles, you don’t have to look after anything; you don’t have to collect rents or look after seeding or anything like that, because I do all those things for my agents, or for my principals.’ I don’t think he used that word, but that is what it means. He says: ‘Why, there is a man at New Hampton, — he never looks after anything. I do everything for him; I collect his rents, and he don’t do anything about it; I turn his money over, and that is all there is to it.’ ”

The foregoing occurred in September,' 1917. Shortly thereafter, Schaum rented the farm to Holmes. From that time forth, the plaintiff had a number of conferences with Schaum. She was in poor health, and very nervous and worried. He urged her repeatedly to cast all her cares upon him. He assured her that he would advise her as he would his own mother. He frequently belittled the value of her farm; He urgently advised her to sell it, and not to ask too much for it. She said, on one such occasion: “I do not know how to sell land. I never sold any in my life.” Schaum replied: “Let me make the deal for you.” This was in the latter part of the year 1918. In the distribution of the estate, three years before, the duly appointed appraisers had fixed the value of the farm at $130 per acre. Schaum had voluntarily advised her that that appraisement was too high. The following excerpts from the testimony of the plaintiff will indicate the general character of her evidence, as bearing upon the question of fiduciary relation.

“I went up one morning to talk about oats, and when I [222]*222went into the office, he turned to me and said, ‘Mrs. Miles, did you ever figure on what your income would be if you should sell your farm?’ and I said, ‘No, I never did.’ ‘Well,’ he says, ‘I have been figuring it, and I find your income would be much greater if you would sell your land than to keep it and rent it. ’ I said: ‘Oh, is that so? I didn’t know that.’ ‘Yes,’ he says, ‘I have the paper here,’ and he fumbled around in his desk, ‘right here some place. I can’t find it, but you come in some day and I will show it to you and show you just how much better off you would be.’ And I said, ‘What is the use bothering with all the trouble I have if I can make more?’ He says: ‘No, not a bit. Why, there you would have that nice income, and wouldn’t have any worry or trouble, every year get your interest, and that is all there would be to it; and this way, it is nothing but worry and trouble all the time.’ * * * I told him my attorneys had advised me to take farm lands, as it would be a steady income for me, and I would get rid of paying heavy taxes and paving, and so forth. He said: ‘ It would be lots better if you sold this farm and had this nice income. Why,’ he says, ‘now I am just advising you as I would my own mother. I would not think of telling you to do anything that I would not tell her to do.’ I relied upon him. He was my agent. I had confided in him. * * * I had a conversation with Mr. Schaum about December 18, 1918. * * * One afternoon, I went to the office, and he turned to me and said, ‘I found that paper, Mrs. Miles, I was looking for the other day. ’ And he laid his hands on it right away. ‘ I have it here,’ he said. I think, before he read from the papers, he said to me: ‘Now, Mrs. Miles, what — how much do you want down, if you should sell your farm? How much would you want down?’ I said, ‘Well, I don’t know; would $5,000 be enough?’ And he said, ‘No, I should say about seven.’ ‘Well,’ I said, ‘Now, Mr. Schaum, you see I don’t know how to sell land; I never sold any in my life, and I have to depend upon what you tell me.’ ‘Now, of course,’ he said, ‘if you sell this farm, the deal would not be closed until a year from the coming March. That would be March, 1920.’ '* * *

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186 Iowa 958 (Supreme Court of Iowa, 1919)

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Bluebook (online)
191 Iowa 219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miles-v-lynch-iowa-1921.