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Keywords

plaintiffdefendantdamagesappealtrialleaserescissionsecurity deposit

lawsuitplaintiffdefendantdamagesappealtrialwilllease

Related Cases

Salter v. Heiser, 39 Wash.2d 826, 239 P.2d 327

Facts

David H. Salter and others brought an action against Richard P. Heiser for fraudulent misrepresentations in connection with the leasing of a resort property. After an initial trial where judgment was entered for the defendant, the plaintiffs appealed, leading to a reversal and remand for a new trial on the issue of damages. During the second trial, the plaintiffs introduced evidence of their alleged damages, but the trial court found in favor of the plaintiffs based on a theory of joint enterprise, which neither party had advocated.

At the conclusion of the first trial of this case, to the court sitting without a jury, judgment was entered for defendant.

Issue

The main legal issue was whether there was sufficient evidence to support the trial court's finding of an implied agreement for a joint venture between the lessees and lessor.

The only evidenc now before us that was not before the court in Salter v. Heiser, supra, is evidence relating to the amount and nature of plaintiffs' damages.

Rule

The court applied the principle that a joint enterprise requires a consensual relationship between the parties, and that damages for fraud can be recovered for losses proximately caused by the defendant's misrepresentation.

Since it is the law of the case that defendant is liable to the plaintiffs for damages on account of the misrepresentation that the premises were free and clear for a tavern license, we will restrict our inquiry to a determination of the items of damages to which plaintiffs are entitled.

Analysis

The court analyzed the evidence presented during the trials and concluded that there was no indication of an implied agreement for a joint venture between the parties. The court emphasized that the relationship was strictly that of lessees and lessor, and the trial court's findings of fact and conclusions of law based on the joint enterprise theory were not supported by the evidence. The court also discussed the appropriate measure of damages, indicating that the plaintiffs had waived their right to rescission by continuing to operate the resort after discovering the fraud.

The trial court, in its oral decision, indicated that the joint enterprise theory was adopted in the hope that it might appeal to the litigants as a compromise and thus result in the termination of an unusually protracted and bitter lawsuit.

Conclusion

The Supreme Court reversed the trial court's judgment and remanded the case for a new trial limited to determining the difference in value of the leasehold with and without a tavern license. The court also ordered the division of the security deposit held in the bank.

Thus, the $1,600 on deposit in the Peoples National Bank should be divided $400 to plaintiffs and $1,200 to defendant.

Who won?

The prevailing party was Richard P. Heiser, as the Supreme Court reversed the judgment in favor of the plaintiffs and remanded the case for a new trial.

The judgment of the trial court must be, and hereby is, reversed and the cause again remanded for a new trial limited solely to the issue of the difference, if any, in the value of the leasehold on April 1, 1947, with a tavern license and the value of the leasehold on that date without a tavern license.

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