Court Opinion

ID: 6692526
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:39:29.923064+00
Date Added: 2024-06-11T08:37:10.050640
License: Public Domain

MISER, C.
(concurring). The trial court found that the value on January 22, 1926, of the half section was about $6,400, and that appellant later paid charges against this land amounting to $5,682.27. This leaves an equity in the half section of $717.73. The equity in the third quarter was worth $500, making a total equity in the three quarter sections of $1,217.73. Appellant bought respondent’s half interest in this equity .for $600, or only about $8.87 less than its value.
This finding is not to be discounted by the fact, however relevant, that appellant, by unexpected luck, sold the half section on March 23, 1926, for $28 per acre. Furthermore, the court found *474that on January 22, 1926, Potts dictated the letter to Mossman in the presence and hearing of Howard, and fully informed Howard as to its contents, before Howard signed the letter. Therefore Howard knew that Potts had stated to Mossman that he (Howard) wanted to accept the offer of $20 per acre referred to in the letter, and that Potts did not want to sell at $20 per acre. He knew that in that letter Potts said: “I feel that if I could offer reasonable terms * * * we might sell it at from $25.00 to $30.00 per acre.”
The facts then are that the price agreed upon between Potts and Howard was a close approximation of the fair value of Howard’s equity, and that Potts accepted Howard’s offer to sell for $600 after telling him the land would sell for more.
But the court also found that Potts had, in this letter, represented to Howard and Mossman that the incumbrances against the half section amounted to $6,162.35. At $20 per acre, this would leave a total equity therein of only about $237.65, for a half interest in which Howard was offered $600. The trial court found that it was on this basis that the deal between Potts and Howard was made and the basis on which Mossman approved. In this letter Potts did state:
“Against the Syi 32-18-28 there stand approximately the following liens and encumbrances: * * *
“Total ................................$6,162.35.”
Of the items listed the court makes no finding of misrepresentation as to taxes unpaid or amount required to pay off the First National Bank mortgage. As a matter of fact, it took slightly more the pay the taxes and slightly less to pay the mortgage. Among-the statements found to be misrepresentations is the following: 1st Mtg. to E. M. Grobel, now in default, due June 1, 1925. .$3,300.00 Int. on said sum at 10% from that date, approximately. .$ 475-00
As to- this the court found: “That the said defendant represented and stated to the plaintiff, James Howard, and to his advisor, E. D. Mossman, that there was due on the E. M. Grobel mortgage the sum of $3,300.00 and interest in the sum of $475.00 or a total of $3,775.00; that in truth and in fact the amount due upon said mortgage at said time amounted to approximately $3,511.75.”
The facts as disclosed by the evidence are that the principal of the note secured by that mortgage was $3,000, of which, elsewhere in the letter, Mossman was advised; that its due date was June 16, 1927; that the interest coupon of $300, due June 16, 1925, *475was also unpaid, causing default in the mortgage; that interest on the principal of $3,000 and on the unpaid interest coupon of $300 at xo per cent from June 16, 1925, to January 22, 1926, had accrued; that in his answer Grobel had set up a counterclaim asking foreclosure of his mortgage and for attorney’s fees in the sum of $300 and for other costs; and that Potts obtained his figures from this answer. Therefore neither the statement made by Potts nor the finding made by the trial court stated the exact and- complete facts. Whether the complete and exact facts reveal a situation more hazardous or less hazardous to Howard is a matter about which opinions might well differ. Grobel was actually asking judgment for more than $3,775, but $300 of this was for attorney’s fees on foreclosure. Potts does not state in the letter that Grobel and the First National Bank were asking foreclosure of those mortgages and for costs, including attorney’s fees. He does not state that Donaldson, a real estate agent, whose commission was to be $1 per acre, had tried for several months to sell the land for Hagen and -continued to try to sell for Potts and. Howard, but had been able to find only one buyer at $20 per acre, nor that the buyer so found had less than two-fifths of the cash necessary to pay the two mortgages and taxes against the land. Assuming that it woxtld not have -been apparent to Howard that the interest on $3,3°° at 10 per cent for less than eight months was not $475, it is pertinent to inquire, Would Howard have declined to sell or Mossman refused to approve the sale had all the facts been fully and accurately stated ? By affidavit on motion for new trial it appears that Mossman would have approved the sale. By his own testimony on the trial, it appears probable that Howard would have accepted the offer had he known every material fact. The evidence is uncontradicted that, after Potts bought Howard’s interest, Potts was willing to sell the land for $21 per acre and pay a commission, and, after he himself had sold it without any assistance, he paid the agent $100 for his former efforts. Well might Howard have done just what he did do on January 22, 1926 — accept $600. Had Potts not sold the land at about $8 per acre more than it was worth, it is unlikely that Howard would- have been seeking, under a claim of misrepresentation or concealment of material facts, to be reinvested with a half interest in that heavily incumbered property.
In re Ramsey, 24 S. D. 266, 123 N. W. 726, 728, this court said:
*476“That the purchaser was the accused himself * * * was a material fact, the intentional concealment of which constituted a fraud upon the owner of the judgment. The moral maxim ‘No man can serve two masters,’ is peculiarly applicable to the relation of attorney and client. The relation is one of the highest trust and confidence, requiring the attorney to observe the utmost good faith toward his client, and not to allow his private interests to conflict with those of his client. In re Egan, 22 S. D. 355, 117 N. W. 874. ‘In all matters connected with his trust a trustee is bound to act in the highest good faith toward his beneficiary, and may not obtain any advantage therein over the latter by the slightest misrepresentation, concealment, threat, or adverse pressure of any kind.’ Rev. Civ. Code, § 1617.”
Section 1617, Rev. Civ. Code, is identical with section 1195, Rev. Code 1919. Consequently, the foregoing states the rule applicable to the case at bar. In the Ramsey opinion it was repeatedly stated that the accused intentionally deceived his client. O’n the other hand, in the case at bar, the letter itself, of the contents of which Howard was fully informed, indicates, not intentional misrepresentation nor fraud, but the reverse. A lawyer intending to defraud an Indian client would scarcely write a letter like that to become a part of the files of the Indian Department. Perhaps no considerable class of client in South Dakota has greater need of honest counsel than fee patent Indians. . The offices of lawyers who are willing to report their transactions over their own signatures as Potts did should not be closed to that class of clients by a holding that it is prima facie fraudulent to fail to recite a transaction with all the scrupulous exactness and completeness of a hypothetical question propounded to a technical expert on the witness stand. The gist of this matter is, Did Potts take advantage or intentionally misrepresent? As I read the evidence, he did not. That, however, is matter for the trial court to decide. The utmost that was found in the case at bar was that the letter contained inaccuracies, did not contain all the facts, and that Howard contracted1 on the basis of the statements in the letter. The price agreed upon by respondent was a fair price for his equity- There is not within the trial court’s decision a finding of breach- of faith, of intentional taking advantage, or of intentional misrepresentation or concealment. In the absence of such a finding, respondent is not entitled to judgment. I concur in the reversal of the judgment.