Trumpf v. Shoudy

EoseNbeRuy, J.

Appellants assign error on tbe admission and rejection of testimony and in several particulars which we will not discuss here. Suffice it to say that we have carefully considered them and find no prejudicial error.

*358 It is contended tbat tbe contract made by the defendants is unconscionable and therefore should not be enforced. It is pointed out that the contract which the defendants made was to sell the Mercedes tract for $150 an acre; that the jury found that on September 0, 1914, it was worth but $16 an acre, and that to hold the defendants for the difference less the $1,000 commission is to hold them to a bargain which no man in his senses and not under delusion would make. The premise is wrong. Plaintiff parted with his property upon the representation of the defendants that the Mercedes tract was worth $150 an acre and marketable. The character of the contract, therefore, cannot be determined solely with reference to the contract price and the actual market value of the land, but must be considered ill its relation to the entire transaction. There is no finding and very little evidence as to the value of the Edinburg tract. The defendants are experienced real-estate men. There is nothing in the record to indicate that they were in any v;ay misled by the plaintiff. They claimed at the time the trade was made, claimed in their answer and throughout the trial that the land was worth $150 an acre. Plaintiff would not effect an exchange whereby he received this property except upon written assurance given in the form of a contract and bon'd by the defendants as to the value and marketability of the land. It cannot be said upon this record that the contract sued upon is an unconscionable one and for that reason not to be enforced.

Appellants make the further claim that the contract is void as against public policy for the following reason: That by the terms of the contract the plaintiff and the defendants were joined in an enterprise which, if the contract had been performed, would have resulted in the sale of land to third parties at a price of $150 an acre or more, the market value of which was in fact, as found by the jury, but $16 an acre. Citing Morrison v. Bennett, 20 Mont. 560, 52 Pac. 553, 40 L. R. A. 158; Twentieth Century Co. v. Quilling, 130 Wis. 318, 110 N. W. 174; McNamara v. Gargett, 68 Mich. 454, *359 36 N. W. 218; Knight v. Linzey, 80 Mich. 396, 45 N. W. 337; Schmueckle v. Waters, 125 Ind. 265, 25 N. E. 281; Merrill v. Packer, 80 Iowa, 542, 45 N. W. 1076; Shipley v. Reasoner, 80 Iowa, 548, 45 N. W. 1077; Hubbard v. Freiberger, 133 Mich. 139, 94 N. W. 727. Upon the strength of these cases we are asked to declare the contract void as against public policy.

The term “public policy” is admittedly one of a vague and uncertain meaning, and the power to declare a contract void as being against public policy should be exercised only in cases free from doubt. 6 Ruling Case Law, § 119, p. 710; 1 Page, Contracts, § 326.

In this case there is no evidence to show that the plaintiff, Trumpf, supposed at the time he entered into the contract that the land was of less value than $150 an acre. He was doubtful about its marketability, and his circumstances were such that he could not make the exchange unless those who stood back of him could be assured that the property he was receiving could be realized on. AYhile a question of fact is involved which was not presented to the jury in the form in which it is here presented, under the established rules of law we must treat the case as if it were found adversely to the claim of the appellants. Sec. 2858m, Stats. The jury by its finding expressly negatived the claim, of the defendants that the contract was entered into for the sole purpose of enabling the plaintiff to procure the consent of his creditors to the exchange. This in effect negatives the further claim that the contract was a fraudulent scheme entered into by the plaintiff and the defendants by means of which third persons were to be defrauded. Upon its face the contract is' fair and contemplates no illegal transaction, and in that respect this case is clearly distinguishable from the Bohemian Oats and Coupon Cases, supra, cited to our attention. In those cases it appeared upon the face of the contracts that if carried out a fraud upon third persons must be the necessary result. Ko such situation is presented by the facts in this case. The *360 jury and the trial court have negatived any unlawful purpose or intention on the part of the plaintiff. While upon its face it is a contract to sell to third persons, under the circumstances of this case it was in effect one which warranted to the plaintiff the value and marketability of the lands which he received in exchange for his property. Upon his part the contract has been fully performed, as the court and jury found. If the defendants at the time of the exchange had represented that the lands were worth $150 an acre when they were in fact worth hut $16 an acre, plaintiff would clearly have a right to recover the difference between the value as represented and the actual value. He recovers no more in this case. The defendants in effect reduced their representations to writing, entered into a contract by which the lands were to be realized upon at the price stated by them, .and gave their bond to insure performance of the contract. The purpose and object of the plaintiff in entering into the contract was not to defraud the public, but to secure himself against loss, and the mere fact that it now turns out that as a result of his relying upon the misrepresentations of the defendants he was led into making a contract which if carried out might have resulted in injury to third persons, does not malee the contract void or prevent its enforcement. Where it does not appear upon the face of the contract that a wrongful or illegal act is contemplated, it must be established as a fact that the contract is a part of a scheme or conspiracy to defraud. The mere fact that plaintiff, after an inspection of the lands, was doubtful as to their marketability and not satisfied as to their value, and protected himself against loss by means of the contract in question, does not establish the fact that he was a party to a fraudulent scheme or a conspiracy to defraud third persons. The fact that in the light of circumstances now known but not then known, had the contract been performed an injury to third persons might have resulted, does not, as between the parties, vitiate the contract. *361 12 L. R. A. n. s. 594; Gregory v. Wendell, 40 Mich. 432. The value of the lands in question depended very largely upon their availability for irrigation. Some engineers think they are available, some think they are not. The jury evidently took the view that they were not available for irrigation and were therefore of comparatively small value.

The question of whether or not the contract was a valid one must be determined as of the date it was made; its legality cannot be affected by reason of facts subsequently appearing and not previously known, or by what the parties or either of them did in attempting to carry out and perform the contract. The contract was fair upon its face. There is no evidence tending to connect the plaintiff with any conspiracy to wrong or defraud third parties and no evidence which indicates that he had any such purpose or intention. The defendants are experienced real-estate men, familiar with the real-estate business, and if they were mistaken as to the value of the lands which they gave in exchange for the hotel property, we see no reason why their contract, which in effect warrants their judgment, should not.be enforced.

It is claimed that the court in applying the rule of damages laid down in Dunn v. Mackey, 80 Cal. 104, 22 Pac. 64, 66, committed error. We think the court applied the correct rule of damages to the facts in this case. If it be contended that the defendants are unfairly dealt with by reason of the fact that they are compelled to pay the difference between the price at Which they agreed to sell these lands and the value found by the jury, they could very easily have relieved themselves from that situation by purchasing or causing the same to be purchased for their account before the expiration of the year.

By the Qourt. — Judgment affirmed.