Kallberg v. Newberry

Bikdzeli., J. This is an appeal from an order entered in the district court of Foster county, setting aside the verdict of a jury in favor of the plaintiff for $1,440, and directing the entry of a judgment non obstante for the defendant. The facts are as follows: Plaintiff Kallberg, being indebted to the First National Bank of Carrington, of which the defendant Newberry was cashier, and there being liens outstanding upon his land in considerable amount, was apparently desirous of disposing of his property and paying his debts. The bank was also apparently desirous of collecting the amount owing to it by Kallberg. In carrying'out this purpose, Kallberg, in the fall of 1914, talked w7ith the defendant concerning the proposed sale of his land, and on October 20th gave Newberry a fifteen-day option upon — 526 — the land at $25 per acre. During the life of this option, some prospective deals were discussed and investigated by the plaintiff and defendant, but inasmuch as they involved trades which, for one reason or another, were regarded as undesirable, the sale was not consummated. During this same year, Kallberg had listed his land with at least two real estate men in Carrington at $25 per acre. He had also offered it for sale to one Herman at the same price. On November 19th, Kallberg gave to the defendant a second option for thirty days, on the terms of $25 per acre. The stated consideration for each of these options was “$1, receipt of which is hereby acknowledged.” While there is some conflict in the testimony relative to the understanding of the parties at the time the second option was given, it is not disputed that on the morning of the day the option was signed, New-berry, in company with one A. T. Johnson and a prospective purchaser by the name of Ganske, and the wife of the latter, went to the Kallberg farm for the purpose of inspecting it with a view to the purchase thereof by Ganske. It appears that Johnson was interested in the matter by reason of the fact that he held a lumberman’s lien against the land, amounting to about $900, which had been assigned by him as collateral to his indebtedness to the First National Bank. Furthermore, it appears that Johnson had found the prospective purchaser, having learned from one Nolton, with whom the Ganskes were stopping in Carrington, that they were desirous of purchasing land in the locality. Newberry’s explanation of the reason why he desired the option is that Johnson also had other land which he could show to these people, but that, inasmuch as he, Newberry, was desirous of selling this land for Kallberg, he would like Kallberg to execute the option, so that he, Newberry, would be protected in making the deal. While there is a conflict between the testimony of Newberry and Kailberg regarding the conversation at the time of the signing of the option, the former contending that it was understood that the option was a straight proposal to sell the land at $25 per acre, and the latter-contending that it was intended that he should have all of the money-realized from the sale, over and above his indebtedness, in the view that we take of the case this conflict is immaterial, as will later appear. The deal was later consummated, the land being sold to Ganske at-$29.50 per acre. A few days after* the option was given, Kallberg gave — 527 — Newberry a deed for the land, and Newberry entered into contract with Ganske and wife, whereby the latter was to make his first substantial payment on March 15, 1915, following, it being understood that Kallberg was to retain possession of the land until that date. A few days prior to March 15, 1915, while Kallberg was making preparations to conduct a sale of his personal property, preparatory to giving up the possession of the premises, a question arose relative to some indebtedness owing by Kallberg to the First National Bank, as security for which the bank held a chattel mortgage on some property which Kallberg desired to sell. The merits of the controversy respecting this chattel indebtedness are not involved in this action, and are unimportant here, except as this transaction furnished the occasion for the discussion between the parties relative to the interest upon the purchase price during the interim between the date of the sale of the land and the date of the settlement, the following March. During this controversy the whole deal was rehashed, and the parties, through their respective agents, attempted to negotiate a settlement of the entire matter in dispute. For some reason the settlement failed, and Kallberg instituted a suit for the rescission of the sale contract and the cancelation of the deed. This suit was later terminated by the entry of a judgment for the dismissal of the action. It should be stated here that, after the termination of the rescission suit, the defendant settled with Johnson for his and Nolton’s participation in the deal. This action was then brought for the purpose of recovering the difference between the price recited in the option of November 19th, or $25 per acre, and the price at which the land was sold to Ganske, namely, $29.50 per acre, which difference amounted to the sum of $1,440. The complaint is founded upon an alleged agreement, whereby the defendants obligated themselves to pay or account to the plaintiff for whatever sum was received for the land in excess of $25 per acre. Upon this appeal the appellant asks for a reversal of the order of the trial court and the entry of a judgment on the verdict of the jury. In support of his position appellant contends: First; that the bringing of the rescission suit was not an election of remedies; second, that under the doctrine of res judicata he is not precluded from pursuing this action; and, third, that the evidence going to establish the oral — 528 — agreement as to additional consideration was admissible and afforded sufficient foundation for tbe verdict of tbe jury. It is clear that this suit is founded upon an alleged contract between plaintiff and defendant, whereby the defendant became bound to pay to the plaintiff not $25 per acre for the land, according to the option, but whatever sum defendant received therefor in making the resale of the premises. It is equally clear that in the rescission suit the plaintiff sought relief upon the ground that the contract between him and defendant was not binding, and that the relief asked was founded upon a disaffirmance of the contract. These remedies, as applied to the transaction of the parties, are therefore clearly inconsistent. The appellant does not contend that at the time he instituted the rescission suit he was not fully apprised of the facts surrounding the transaction in question. It appears, however, on the contrary, that, with full knowledge of the facts, the plaintiff instituted the rescission suit, in which he would have been entitled either to a return of the property, or, in case the property could not be returned, to its value. In so doing he must be held to have elected his remedy. The elements of an election are: First, the existence of two or more concurrent remedies; second, the inconsistency of the remedies; and third, a decisive choice between them. 15 Cyc. 252; 9 R.C.L. 958. An examination of the record in this case shows conclusively that all of the elements of a binding election are present. The judgment roll, which is in evidence, shows that the plaintiff claimed, in the former suit, that the defendant induced him to enter into the transaction for the purpose of reaping a profit measured by the difference between $25 per acre and the price at which the land was sold, while professing that he “was not getting anything personally out of the deal.” It is true that the complaint in the former action was drawn on the theory that the option contract bound Kallberg to sell the land at $25 per acre, but that such contract was voidable by reason of Newberry’s alleged fraud and breach of a confidential relationship'; whereas in this case the contention is that the real contract was that Kallberg should be bound to sell the land for not less than $25 per acre, and should receive, in addition to that, whatever sum Newberry would be able to obtain upon a resale. On either theory of the plaintiff’s right, however, that is, whether it be a right to have the contract rescinded and — 529 — the' deed canceled (or in lieu thereof money damages), or a right to have the alleged contract 'enforced, the substantial thing the plaintiff sought to recover in both actions was the same. He knew of the transfer to Ganske when the rescission suit was brought, and did not make him a party. The real object of that suit was the same as in this; namely, to recover the difference between $25 per acre and a higher valuation of the property which defendant would be precluded from disputing. While the prayer for relief in the rescission suit asked for a cancelation of the deed and for general relief, it is clear that a money decree would have been within the issue; and, when it was demonstrated that a cancelation could not be had by reason of a transfer of the land to persons who were not parties to the action, no relief; other than a money judgment, would have been appropriate. Nor does the fact that the plaintiff now claims that the true contract was different from that expressed in the option agreement alter the situation. A plaintiff who is apprised of all of the facts connected with his transaction cannot, for the purpose of maintaining a rescission suit, claim that the transaction had resulted in the consummation of one contract, and then subsequently, for the purpose of maintaining an action for breach of the contract, maintain that the contract was entirely different. Especially is this true where the pursuit of either remedy to its conclusion would result in substantially the same measure of recovery. We are of the opinion that the bringing of the former action and its prosecution to final judgment amounted to a conclusive election. See Sonnesyn v. Akin, 14 N. D. 248, 104 N. W. 1026; Cohoon v. Fisher, 146 Ind. 583, 36 L.R.A. 193, 44 N. E. 664, 45 N. E. 787; Board of Education v. Day, 128 Ga. 156, 57 S. E. 359; Wheeler v. Dunn, 13 Colo. 428, 22 Pac. 827; Sanger v. Wood, 3 Johns. Ch. 416. The appellant further contends that he is not precluded by the doctrinc of res judicata,. What has already been said, in referring to the judgment roll in the previous action, demonstrates the unsoundness of this contention. The doctrine of res judicata is founded upon the principle that litigation must not be so conducted as to be needlessly vexatious. It is not designed to preclude a thorough judicial injury into the rights of litigants which arise out of a given set of circumstances, but it must be and is properly employed to prevent litigants — 530 — from harassing their adversaries by compelling them to repeatedly litigate matters which have previously been at issue between them, or which, if not subjected to judicial scrutiny, were properly involved in the previous litigation. The court, in the previous action, having fully examined the option transaction and having determined therein that the plaintiff had in fact no equity in the land litigated the very matters now at issue. Such determination is conclusive upon the plaintiff in this action, where he asks to reverse this holding and to have it determined that he has an equity, as against this defendant amounting to $1,440. As to the admissibility of parol testimony to impeach the consideration recited in the option contract and to establish the true consideration existing between the parties, we feel that it is unnecessary to express any opinion, for it is quite apparent from what has been said that the appellant is precluded from maintaining this action. We are impressed that there would be much merit in appellant’s argument if the action were one to rescind, cancel, or reform the contract. Erickson v. Wiper, 33 N. D. 193, 157 N. W. 592. And it may even have some merit as applied to the present case; but, inasmuch as the decision of this question cannot affect the result, we prefer to express no opinion upon it. | Eor the foregoing reasons the order appealed from is affirmed.