Opinion
No. 21354.
November 20, 1950.
APPEAL FROM THE CIRCUIT COURT, JACKSON COUNTY, JAMES W. BROADDUS, J.
Byron E. Mintonye, Kansas City, for appellant.
C. W. Prince, Wm. Dennis Bush, Kansas City, for respondents.
Appellant, plaintiff in the trial court, sued the respondents in two counts for damages under a contract for the sale of real estate. Plaintiff recovered a verdict and judgment on her Count 1, but the court granted defendants a new trial thereon and no appeal was taken from such action of the court. At the trial the court refused to direct a verdict for plaintiff on Count 2 of her petition, refused an instruction submitting the issues thereof to the jury, and, on defendants' motions, directed a verdict in their favor on said count. Plaintiff's motion for new trial as to Count 2 having been denied, she has appealed from the above rulings of the court in disposing of that count.
Count 1 of the petition was based on an alleged false representation by the defendants that the heating system in the house to be sold was in good condition and was adaptable to conversion from a coal to a gas heating system, and that an adequate supply of gas was available. It was stated in that count that because of such misrepresentations, relied upon by the plaintiff, she was fraudulently induced to enter into a contract dated June 20, 1947, to purchase said property, and later repudiated the sale and demanded the return of the $350 deposit paid thereon, for which amount she asked judgment as actual damages, and $2500 punitive damages and costs.
The substance of Count 2, from the judgment on which this appeal was taken, was that the defendants Seigfreid, through their agent, defendant Tracey, received from the plaintiff a deposit of $350 on the contract dated June 20, 1947, for the sale of the same real estate to plaintiff; that defendants breached that contract by failing to furnish to plaintiff, within ten days after the date of the contract, an abstract of title to that property, or to furnish a title guaranty policy within that time; that demand was made for the return of the deposit of $350 because of such breach, but defendants refused to return the same. Judgment was asked for $350, with interest from July 3, 1947, and costs.
The contract, a copy of which is attached as an exhibit to the petition, acknowledges receipt of the deposit by the defendant Tracey, agent for the owners, and provides, among other things, for the payment to the owners of $4500 proceeds of an FHA loan to be obtained by the buyer, and any other balance of the purchase price of $7000 to be made at the closing of the sale. The contract further provides that the sellers shall, within ten days from its date, deliver to the buyer, or at the office of the agent Tracey, a complete abstract of title showing all instruments of record and liens affecting the property to the date of the contract, "or in lieu of an abstract of title an Owners' Indemnity Title Insurance Policy * * * insuring a fee simple title in the buyer as of the date of delivery of the deed. Subsequent acceptance of abstract by the buyer waives time of delivery". There were other provisions of the contract not material here.
By their answer to Count 2 defendants admitted the contract, as alleged, the receipt of the deposit of $350 thereon under the terms of the contract, which was to remain the property of the defendants upon the failure by the plaintiff to comply with her contract. Further answering, the defendants denied that they breached the contract, but alleged that the same was breached by the plaintiff in notifying the defendants that she did not care to go through with the contract and had canceled her application for loan provided for to be used as a part payment of the consideration under the contract. The answer stated that plaintiff's demand for the return of her deposit was in violation of the terms of the contract. All other allegations of Count 2 were denied.
Because of the view we take of this case, we deem it unnecessary to state the evidence. The question before us is a matter of law as to whether or not the court erred in refusing plaintiff's request for a directed verdict in her favor on Count 2, in refusing to submit to the jury the issues on said count under Instruction G, offered by the plaintiff, and in granting the motion of the defendants for a directed verdict on said count in their favor. Plaintiff in her appeal argues that such action of the court was error because, as she contends, the evidence shows that she did not repudiate the real estate contract within the first ten days after its date, and that under the contract defendants were clearly required to furnish an abstract of title or title policy. The respondents confine their argument to the contention that the contract made it optional with the sellers to furnish a title policy in lieu of the abstract, and they were not required, nor was it necessary to furnish a policy within ten days after the date of the contract and, further, contend that the evidence shows that the plaintiff, within the ten day period, repudiated and canceled her contract and refused to proceed under it.
The court did not assign any reason for its actions complained of as above stated. If, however, there exists any lawful reason for such actions, the court cannot be charged with error therein.
It will be noted that by her Count 2 the plaintiff seeks to recover $350, the amount of her deposit on the contract, as damages for the alleged breach of same by defendants, the breach consisting in failing to deliver within ten days after date of the contract an abstract of title or title policy. The theory of that count, therefore, was and is that the contract was valid, subsisting and binding on all parties for at least the said ten day period following its date and until the plaintiff repudiated the same. But in the same petition under her Count 1, which had been submitted to the jury, the plaintiff pleaded that she was fraudulently induced to enter into the contract, relying on said false representations of the defendants, and had paid the defendants $350 as a deposit as a result of such representations and later repudiated the contract because of such fraud, wherefore she sought actual damages in the sum of $350, plus punitive damages. The theory, therefore, of plaintiff's Count 1 was and is that the contract is fraudulent and, therefore, void. The two counts, although arising out of the same transaction, state different causes of action. So far as pleading is concerned, this is permissible under our Code of Civil Procedure, Section 37, Laws of Mo. 1943, pp. 353-397, Mo.R.S.A. § 847.37. However, when two such counts are pleaded and one is so inconsistent with the other that the proof of one will disprove the other, the plaintiff will not be permitted to recover on both.
Upon discovering the fraud by which plaintiff claims to have been induced to enter into the contract, the contract thereupon became voidable and the right accrued to her to elect to treat the contract as binding on all parties, or to refuse to be bound by the same and to consider it void. It was stated in 13 C.J. at page 394: "On discovering the fraud by which he was induced to enter into a contract, the party defrauded may elect whether he will treat the contract as binding or refuse to be bound by it, but until he so elects it continues valid. An agreement procured by fraud is voidable and not void. As far as the guilty party is concerned, however, the contract is void". See, also, 17 C.J.S., Contracts, § 166.
Once a contract is entered into by competent parties and for valid consideration, and is not prohibited by statute or public policy, it is not void between the parties thereto however fraudulently obtained. Och v. Missouri, K. T. Ry. Co., 130 Mo. 27, 31 S.W. 962, 36 L.R.A. 442. While the contract cannot be considered void, but voidable only until the defrauded party elects to consider it void, yet when such election has been made, on the ground of fraudulent inducement, as here, the contract must be considered void from its inception. 17 C.J.S., Contracts, § 167, page 524. Applying such considerations of the law to plaintiff's Count 1, which she submitted to the jury and which she is still pursuing, awaiting new trial thereon, the theory of that count, so submitted, must require the contract to be treated as void ab initio. This being true, Count 2 would, therefore, be repugnant to Count 1 because Count 2 is predicated upon a contract valid and binding on both parties for at least ten days beyond its date. Under such a situation, it was not error on the part of the court to refuse to permit the plaintiff to submit her cause of action under Count 2 after having submitted her cause of action under Count 1. Houts Mo. Pleading and Practice, Vol. 1, par. 126, p. 263.
In Snyder v. Toler, 179 Mo.App. 376, 166 S.W. 1059, 1060, plaintiff undertook in one count of her petition to establish the invalidity of a Last Will and Testament and also to recover in her second count on the theory that the will created a precatory trust in her favor. The court held that proof of one count would disprove the other, and that "plaintiff should not be suffered to go on with the case unless [she] abandons one or the other of such mutually destructive causes". In Marx v. Marx, 89 Mo.App. 455, the plaintiff in one count alleged a cause of action for divorce and a second count for separate maintenance. The court held that the two theories of relief were diametrically opposed to each other, one predicated on a dissolution of the marriage status, and the other on its continuation, requiring the plaintiff to elect upon which of the two counts she would proceed.
While in the instant case the defendants did not move for an election as between the counts, yet by their motions for directed verdicts in their favor, and in the absence of any question made as to the sufficiency of such motions, they presented to the court all questions of law pertaining to plaintiff's right to submit to the jury the issues under her Count 2. The two counts were not alternative nor were they merely inconsistent, but proof of Count 1 would defeat Count 2. Having submitted to the jury in Count 1 her theory that the contract was invalid from its inception and on which she still relies, she is now in no position in her Count 2 to claim that the contract was valid for any period after its execution. Therefore, it was within the province of the court, under the pleadings and all the circumstances, to make the orders entered thereon and to refuse to submit the second count to the jury. The judgment on Count 2 is affirmed.
CAVE, J., concurs.
BROADDUS, J., not participating.