Schanzenbach v. Stoller

161 N.W. 329, 38 S.D. 303, 1917 S.D. LEXIS 19
CourtSouth Dakota Supreme Court
DecidedFebruary 16, 1917
DocketFile No. 3931
StatusPublished

This text of 161 N.W. 329 (Schanzenbach v. Stoller) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schanzenbach v. Stoller, 161 N.W. 329, 38 S.D. 303, 1917 S.D. LEXIS 19 (S.D. 1917).

Opinion

McCO'Y, J.

In- March, 19-11, plaintiff was ab-o-ut to purchase a certain portion of a quarter section of l'and from -defendant Haynes. The quarter section- w-as -covered by incumbrances in excess of the value of that portion sought to be purchased by plaintiff. The agreement between plaintiff -and Haynes -was that the portion of the quarter section should be deeded to plaintiff free and clear of all incumbrances. Plaintiff paid the frill purchase price of' $2,200, and -accepted a deed from Haynes reciting that the portion of the quarter section thereby conveyed was free from incumbrances. As a -matter of fact the land so- conveyed to plaintiff was not free from incumbran-ces1. In -order to -indiuce plaintiff to accept said land- and pay the full punchase p-rice therefor, the defendant Pl-aynes an'd the .appellant, S-toller -and Sp-iry, entered into a written contract guaranteeing and indemnifying plaintiff from any loss because of the existence of said- incum-brances. The Akaska Clay Works Company had some interest in-the -other portions of -s'ai-d quarter section, of -land, arid was -interested in the payment of said incumbrances. ’ Plaintiff alleged said [306]*306guaranty contract in his complaint .and a breach thereof consisting of the 'defendants’ failure to pay said incumbrances anil in permitting a mortgage to be foreclosed and said land sold at foreclosure sale and the time of. redemption to- expire, by. reason of' which plaintiff was deprived of his title and ownership to said land so conveyed to him. Defendants Stoller and Spiry answered, alleging that they executed, signed, and delivered said guaranty contract to plaintiff upon the understanding and intention of making the Alaska Clay Works Company., a corporation, the party of the first part; that Haynes and plaintiff falsely represented' to defendants Stoller and Spiry that said contract was to be binding and made by the said corporation, and falsely and1 fraudulently represented to them that said contract was' to be signed by all the officers and directors of said corporation, and that these defendants, Stoller and Spiry, signed said contract Ibeiieving the same to be the contract of said corporation, and1 signed by them as officers thereof, and that they signed said contract with the understanding that -all said officers and directors would sign the same; that said contract was not signed by all the said officers and ■directors; that no delivery of said contract was had; and that the same was void, without consideration, and not binding on them. There was verdict and1 judgment in favor of plaintiff, and the defendants Stoller and' Spiry appeal.

[i] Appellants’ first contention is that the complaint failed to state a cause of action against them, and cite Lowe v. Turpie, 147 Ind. 652, 44 N. E. 25, 47 N. E. 150, 37 L. R. A. 241, as sustaining their contention. We are of the view 'that such contention is not well grounded, and that the 'decision cited has no' application' to a contract like the one alleged in the complaint in this action. The contract considered) in Lowe v. Turpie was one to loan money with, which to pay incumbrances. The contract in question is one guaranteeing die payment of incumbrances: and saving-plaintiff harmless from the existence thereof; the consideration of said contract being that plaintiff pay to Haynes $2,200, the full purchase .price for land contracted to; be conveyed to plaintiff free from incumbrances. This contract to guarantee was made at the tíme and as a part of the original contract of sale and of which it formed a part, and was the inducement that brought about the sale and conveyance of the land, and the acceptance thereof 'by [307]*307plaintiff, and needed no other independent consideration. 'Section 1971, Civ. Cade.

[2] Appellants moved1 for a directed verdict at the close of the evidence on the ground that plaintiff failed to' show by any competent evidence any damages; that the contract was1 void and without consideration; that the contract, if delivered, was delivered conditionally; that the condition had never been complied with; and that said contract never went into effect. To the overruling of this motion appellants excepted, 'and1 now urge such resulting as error. We are of the opinion that this motion was properly overruled. The appellants contend .that there was no competent evidence upon which to base damages. This same proposition was1 presented by exceptions to the instructions to- the jury. The only proof of damages was that of the value of the said land! conveyed to plaintiff at the end of the year of redemption, at which time plaintiff was divested of 'his title under the foreclosure sale by reason of the failure of appellants to pay the said incumbrances guaranteed 'by them to' be paid. We are of opinion, under the circumstances of this case, that this evidence furnished the proper measure of damages. If the incumbrances had1 been less in amount than the value of the land conveyed to plaintiff, and plaintiff had paid the same in order to protect his title, then the rule or measure of damage would have 'been the amount of the indebtedness so paid by plaintiff; but In a case like this, where the indebtedness was almost double the value of the land, 'and -where plaintiff could' not protect his title and loss without the payment of the entire incumbrances, and where the amount of the incumbrances' would not represent the amount of -plaintiff’s loss' or damage, the value of the land at the time plaintiff was 'divested of title was his true measure of damage. The .measure of damage here applied was dearly within 'the provision of section 2329, Civ. Code, providing that no person can recover a greater amount of 'damage for the breach of an obligation, than he could have gained by full performance on both sides. If defendants had fully performed the contract sued upon, plaintiff would..have gained only the value of-the-land conveyed to -him. Plaintiff’s only lo's's was the title .and1 ownership of. the land .free and clear of all incumbrances.- •

[3] Appellants also urge as error the overruling of. an objection to and the reception in evidence of certain testimony of [308]*308cue Brown, a witness called on behalf of plaintiff. From the record' it appears that Brawn is ail attorney and was representing plaintiff in relation to the purchase and1 conveyance of said land from Haynes. One of the issues' raised by appellant’s answer was that other persons had also agreed to 'execute said guaranty contract, and that appellants only signed said 'contract upon the understanding that such other parties would also sign the same. The plaintiff controverted this claim of appellant, and there was sharp conflict in the testimony concerning this issue. There was evidence tending to show that the contract sued on was drawn up by Brown, without having seen appellants; that the contract was delivered to Haynes 'by Brown. While Brown was on the witness stand he was aslced the question:

“You may state what you said to Haynes in regard to Exhibit A [the contract sued on] at the time you delivered it to him, and who you were representing at that time.”

The question was 'objected to as hearsay, incompetent, and not proper rebuttal. The objection being overruled, the witness answered, in substance, that he told Iiaynes that he would advise Sohanzenbaoh, whom witness was representing-, to close his deal with Haynes if he could get any two of the names stated in the original contract to sign same, and ‘that without he did that he would advise Schanzenbaeh not to accept the contract.

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Related

Lowe v. Turpie
44 N.E. 25 (Indiana Supreme Court, 1896)

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Bluebook (online)
161 N.W. 329, 38 S.D. 303, 1917 S.D. LEXIS 19, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schanzenbach-v-stoller-sd-1917.