Great Western Land & Improvement Co. v. Sandygren

The plaintiff, Great Northern Land Improvement Company, commenced two separate actions seeking recovery upon two promissory notes executed and delivered by the defendant, Mrs. Sandygren, to C.W. Brockman, by him transferred to the First Exchange National Bank of Coeur d'Alene, Idaho, and by that bank transferred to the plaintiff improvement company. One of the notes is for the principal sum of one thousand dollars and one for the principal sum of four thousand dollars. The two actions were consolidated for the purpose of trial, and were so tried in the superior court for Spokane county sitting with a jury.

The notes were executed and delivered on the same date by Mrs. Sandygren to Brockman for a single purchase by her of shares of stock in an oil company. The notes fell due at different dates, which seems to account for the commencement of separate actions thereon. The defense is, in substance, that Brockman made false and fraudulent representations to Mrs. Sandygren touching the condition of the oil company's properties and resources, which were in fact worthless, and by such false and fraudulent representations induced her to execute and deliver the notes to him as the purchase price of the stock; and also that both the Idaho bank and the improvement company did not acquire the notes in good faith, but with knowledge of such fraudulent acquisition of them by Brockman.

At the conclusion of the trial the jury returned a general verdict reading as follows:

"We, the jury in the case of Great Western Land Improvement Co., plaintiff, vs. Amanda Sandygren, Defendant, find for defendant."

Accompanying this general verdict, the jury returned answers to five special interrogatories as follows:

"Special Verdict No. 1 "Did the First Exchange National Bank of Coeur d'Alene, Idaho, purchase the two notes here in suit?

"Answer: Yes.

"Special Verdict No. 2 "If you answer special verdict No. 1 in the affirmative, state when and for what amount said notes were purchased by the First Exchange National Bank of Coeur d'Alene, Idaho.

"Answer: $4,100.

"Special Verdict No. 3 "If you answer special verdict No. 1 in the affirmative, state if the First Exchange National Bank of Coeur d'Alene, Idaho, purchased said notes in good faith?

"Answer: No.

"Special Verdict No. 4 "If you answer special verdict No. 1 in the affirmative, state if the First Exchange National Bank of Coeur d'Alene, Idaho, had at the time of purchase any notice of any alleged false and fraudulent representations made by Brockman to the defendant by which she was induced to sign the notes?

"Answer: No.

"Special Verdict No. 5 "If you answer special verdict No. 4 in the negative, then answer if the plaintiff was a party to any fraud or illegality affecting these notes?

"Answer: Yes."

While there was but one set of these special and general verdicts, they are all treated by the court and the parties, as they manifestly were intended by the jury, as being applicable to both actions. Counsel for the improvement company moved for judgments in its favor upon the special verdicts notwithstanding the general verdict, upon the theory that the special verdicts are inconsistent with the general verdict and are such as to entitle the improvement company to judgments awarding to it recovery upon the notes. Counsel for Mrs. Sandygren moved for judgments in her favor upon the general verdict, upon the theory that the special verdicts are not so inconsistent therewith as to render the general verdict of no effect; and, in the event of that motion being denied, that she be awarded a new trial. The trial court granted the improvement company's motion for judgments upon the special verdicts notwithstanding the general verdict, and rendered a judgment in each action awarding recovery against Mrs. Sandygren upon the respective notes with interest, attorney's fees and costs; denied her motion for judgment upon the general verdict and also denied her alternative motion for a new trial. From this disposition of the actions by the superior court, Mrs. Sandygren has appealed to this court.

As we view this record and the argument of respective counsel, our problem seems to be this: (1) As to whether or not the special verdicts clearly, affirmatively call for judgment as rendered by the trial court in favor of the improvement company notwithstanding the general verdict in favor of Mrs. Sandygren. (2) If that inquiry be answered in the negative, then as to whether or not the special verdicts are, in any event, so inconsistent with the general verdict and with each other as to negative the right of Mrs. Sandygren to have judgment rendered upon this record in her favor; and (3) If that inquiry be answered in the negative, what disposition should be made of the case by us.

Special verdict No. 1, that the Idaho bank purchased the notes, is, of course, not inconsistent with the general verdict in favor of Mrs. Sandygren, since the bank, and also the improvement company, upon sufficient showing, could be charged with notice of infirmity in the notes, as well as Brockman, as the original payee, could be so charged.

Special verdict No. 2, that the notes were purchased for four thousand one hundred dollars, is not inconsistent with the general verdict in favor of Mrs. Sandygren. Indeed, it lends some support to the general verdict, since it finds, in effect, that the notes were purchased at the somewhat large discount of eighteen per cent, which is a circumstance lending some support to the general verdict in favor of Mrs. Sandygren, though not at all conclusive in her favor. First National Bankof Ritzville v. Egbers, 130 Wn. 221, 226 P. 492.

Special verdict No. 3, that the Idaho bank did not purchase the notes in good faith, is not inconsistent with the general verdict in favor of Mrs. Sandygren. That special verdict, standing alone, supports the general verdict.

Special verdict No. 4, that the Idaho bank, at the time of purchasing the notes, had no notice of any alleged false and fraudulent representations made by Brockman to Mrs. Sandygren by which she was induced to sign the notes, is inconsistent with the general verdict in favor of Mrs. Sandygren. That special verdict, standing alone, would call for the judgment which was rendered in favor of the improvement company notwithstanding the general verdict in favor of Mrs. Sandygren.

Special verdict No. 5 has no other effect than to place the improvement company in the shoes of the Idaho bank; that is, to render the improvement company chargeable with notice of infirmities in the notes as the Idaho bank was so charged.

[1] It seems to us, that these considerations call for the conclusion that the improvement company is not entitled to judgments upon the notes notwithstanding the general verdict in favor of Mrs. Sandygren, because special verdict No. 4, upon which such judgment must rest, is plainly negatived by special verdict No. 3. In other words, reading these two special verdicts together, they do not clearly show the improvement company entitled to judgments notwithstanding the general verdict. They are so contradictory as to destroy each other, in so far as either lends support to judgments in favor of the improvement company. We are, therefore, of the opinion that the trial court was in error in rendering judgments in favor of the improvement company upon the theory that the special verdicts call for such judgments notwithstanding the general verdict.

It seems to us that Mrs. Sandygren must also fail in her claim for judgments in her favor upon the general verdict, since special verdict No. 4 negatives her right in that behalf, though special verdict No. 3 supports her claim in that behalf. There is a sense in which these two special verdicts may be considered as destroying each other. They do have that effect in so far as either can be the basis, standing alone, of any judgment for or against either of the parties to this action. But we think special verdict No. 4 also destroys the effect of the general verdict in favor of Mrs. Sandygren. For, manifestly, if the notes were purchased by the Idaho bank without notice of the alleged false and fraudulent representations made by Brockman to Mrs. Sandygren inducing her to execute them, the general verdict in her favor could not have been correctly rendered by the jury. Noting this inconsistency between special verdict No. 4 and the general verdict, and the inconsistency between special verdict No. 3 and special verdict No. 4, it is plain, we think, that the jury did not at all comprehend the issues in the case, and that therefore Mrs. Sandygren, as well as the improvement company, is not entitled to judgment in her favor upon the general verdict. The problem is an involved one, by reason of this double inconsistency. We do not deem it necessary to here notice the numerous decisions of the courts touching the general subject. In 38 Cyc. 1926 and 27 R.C.L. 879 are found observations which we regard as lending support to our conclusion that no judgment can be rightfully rendered upon this record in favor of either the improvement company or Mrs. Sandygren.

What then shall we do with the case? The answer to this question, we think, is found in the fact that the case remains undisposed of, and without a record enabling the superior court or this court to lawfully pronounce a final judgment for, or against, either of the parties. This manifestly means that the case should be regarded as still pending and undisposed of, and that therefore a new trial should be directed; this regardless of want of timely motion by either party in that behalf. It is insisted that Mrs. Sandygren's alternative motion for new trial was not timely made.

The judgments rendered against Mrs. Sandygren are reversed, and the causes remanded to the superior court, with directions to order a new trial and take such further proceedings as may not be inconsistent with the views herein expressed.

TOLMAN, C.J., FULLERTON, MAIN, HOLCOMB, ASKREN, and MACKINTOSH, JJ., concur.