157 Mo. App. 370 | Mo. Ct. App. | 1911
opinion;
— I. Appellant assigns as error that the allegations of the petition are insufficient to sustain a judgment for deceit and that his demurrer to the petition on that account should have been sustained. The petition, after alleging the specific false representations, enumerates them in detail at great length and then proceeds to charge what is commonly called the scienter, in these words:
“Plaintiff further says that said representations so made by defendant were made to the plaintiff fraudulently and intentionally for the purpose of inducing plaintiff to enter into said contract and to make said exchange of his stock of merchandise and fixtures to defendant for said land.”
The objections appellant makes to this petition are, that plaintiff must allege and prove that the representations upon which his action is based were false; that they were known to be false by the defendant at the time they were made; or that the representations were made by defendant as of his own knowledge when in part he had neither any knowledge on the subject nor any reasonable grounds to believe the representations to be true; and that the plaintiff’s petition does not come up to these requirements.
It will be seen that the specific statements of the petition are “that the defendant fraudulently and intentionally for the purpose of inducing plaintiff to enter
Nor does this conclusion conflict with the statement of the law by our Supreme Court in the case of Remmers v. Remmers, 217 Mo. l. c. 557, 117 S. W. 1117, that in order to state a cause of action for deceit it is essential to aver that such representations were false and so known to be by the defendant, and that such representatations were made with the intention of deceiving plaintiff, and that plaintiff was deceived thereby, and relying upon such promises and representations he was induced to act to his injury. This opinion could not be reasonably construed to mean that the necessary allegations can not be substantially stated without the use of formal statement, nor that any particular set phrase or formal words are necessary in order to substantially make the charge. The opinion in that case turned on the elements necessary to be stated rather than the sufficiency of their statement. We conclude that the petition is sufficient to withstand the assault after issues joined and especially after verdict.
III. The further contention is made that the plaintiff cannot both rescind and maintain an action of deceit, and that if he elects to rescind he may recover what he has parted with under the contract but not recover any damages for fraud. The law is that the plaintiff in cases of fraud has a choice of remedies. And while his affirmance may preclude him from rescinding the contract, he may rescind and yet maintain an action for deceit. [Warren v. Cole, 15 Mich. 265; 20 Cyc. 87.]
IV. Appellant also objected to the introduction of certain evidence of the witness, Fishbum, who was the intermediary between plaintiff and defendant in making this trade. It appears that after the parties met at Sarcoxie at the store of the. plaintiff at a certain stage of the negotiations and after they had been partially concluded — the 'defendant’s, evidence tended to show —there was an agreement between plaintiff and defendant that at the request of the defendant the plaintiff would go to Arkansas and examine the land before, con-
“We were preparing to come back home, leaving Mr. Adams to go and see the land before he rendered final decision, but I talked to Mr. Adams and I told him that he had Mr. Barber’s written statement of the land, that I had known Mr. Barber, knew of his dealings here, and that I considered him fair and honest, and that he would find the land as represented. I told him in my opinion that if it was not that way he could come back at Mr. Barber. That is in general' the substance. . . . Then I called Mr. Barber in. I don’t remember whether he was just outside the door or out in front. Mr. Barber came back and then we all three talked it over and they agreed to trade without plaintiff going to see the land, and drew up the contract they traded on.”
The particular objection that appellant makes to the competency of this evidence is that the defendant and plaintiff had come to an agreement that the plaintiff should go and examine the land in person and the defendant had left the store and was not present at the time the conversation took place between Fishburn and plaintiff, and that the agency, if any existed, between Fishburn and defendant, was at an end. This objection seems to overlook a portion of the plaintiff’s evidence in this case in which he testified: “Q. What was said at that time, if anything, about going to see the land? A. I said I would go and see the land. Mr.- Fishburn
But aside from all this, there was evidence for the consideration of the jury as to whether the part performed by Fishburn at the time the trade was consummated and his representations to Adams in which he induced Adams not to go to Arkansas, was a part of the original design arranged between Fishburn and the defendant before they went to Sarcoxie to make the deal, in which Fishburn stated: “I knew of Mr. Barber having the land. I saw Mr. Barber, talked to him and framed up a deal which Mr. Barber would agree to make if the goods were satisfactory.” If . the program that was pursued at Sarcoxie at the time the deal was perfected in the store was in pursuance of an arrangement between Barber and Fishburn and a part of the “framing up” of the deal referred to by Fishburn, or if at the time of the conversation, which is objected to by appellant, Fishburn was acting as the agent of the defendant and made these representations to the plaintiff for the purpose of fraudulently inducing hint not to examine the land or make a personal investigation as to the representations that had been made to him, then the evidence was competent for the consideration of the jury. On the question of the intent of the parties, and whether plaintiff relied upon defendant’s representations, the evidence was properly admitted; and also as being a part of the res gestae.
V. Error is also assigned in the giving of plaintiff’s instructions numbered one and four which are as follows :
“1. . . . and if you further find that said representations so made by defendant were false and that defendant either knew that they were false or that*391 defendant made such representations without knowing whether true or false, for the purpose of inducing plaintiff to trade with him, then your verdict will be for the plaintiff. . . .”
“4. The court instructs the jury that, even though they may believe that the defendant never had seen this land, yet if the jury further believes from the evidence that the defendant made the representations as set out in the written statement offered in evidence, knowing that said representations were false, or made them without knowing whether they were true or false, then the defendant is bound thereby, and if they were false and the plaintiff made the trade with defendant relying on said representations, then your verdict should be for the plaintiff.
The propriety of the giving of these instructions in this case can only be satisfactorily determined by an examination of the nature of appellant’s defense and the evidence he offered as to his knowledge of the condition, the soil, etc., of the 480 acres of land. In this connection we give the following portions of the evidence material to this inquiry:
“I told Mr. Adams I had 2720 acres at this particular price that I had never seen except one corner of it. Q, State what you said to him? A. I told him the mountain land was good fruit land; it would grow any crop Missouri would; that I had raised alfalfa on part of my '2720; that I had- never seen this 480 except the corner, but that it had been represented to me to be the same kind of land by Mr. Oalhoun, from whom I bought it, and by Mr. Calhoun’s agent. And we agreed that Mr. Adams should go down and see the land. Q. What did you tell him about his going? A. I told him I was satisfied if he would go down he would trade; I wanted him to go down and he said he would. ... I told Mr. Adams also that it was represented to me that all of the oak timber on all of this 2720 was intact, had never been cut, but that the pine on all the 2720 acres, including*392 the pine on this 480 acres, had been cut. I have found since that I did misrepresent that — that it has not been cut. . . . Mr. Fishburn went back and talked with. Mr. Adams in the rear of the store, I don’t know whether-Mr. Adams called him back or not. I believe I stayed up-in front of the store and he came up and said, ‘We won’t, take this train; we will go out and get supper and come back and sign a. contract.’ ” -
This evidence, considered together, constitutes appellant’s defense and the evidence was evidently offered to show that the misrepresentations by appellant as to-the land were not made in the form of unqualified personal knowledge, but upon information and belief in which the speaker gave the sources of his knowledge,, and tended to show that though not true they were made-with defendant’s belief in their truth.
Whether actual bad faith must be shown in a common-law action for deceit, to justify a recovery, has been the subject of much controversy. The question was, however, settled in England by the decision of the House of Lords in Derry v. Peek, L. R. 14 App. Cas. 837, wherein it was finally held that there can be no recovery in such an action where the defendant made the statement complained of in the honest belief of its truth, however unreasonable such belief. The United States Supreme Court in Lord v. Goddard, 13 How. 198, 14 L. Ed. 111, seems to have taken the same view, and substantially the same holding Avas announced in Kimber v. Young, 137 Fed. 744, and in Pieratt v. Young (Ky.) 49 S. W. 964, that in an action for deceit, either knowledge on the part of the defendant of the falsity of his alleged representation or what in law is equivalent thereto must be proven or the action fails. Our own Supreme Court in Dunn v. White, Adm’r, 63 Mo. 181, said: “The now generally recognized doctrine is that in order to support a personal action for fraudulent representations, it is not sufficient to show that the party made statements which he didn’t know to be true and which were-
In the case of Paretti v. Rebenack, 81 Mo. App. 494, the instruction given and condemned was essentially identical with the one given in the case under consideraron. The court held that to recover damages caused by fraudulent misrepresentations in an action at law, it is -necessary, to allege and prove, first, that the representations were untrue; second, that defendant knew them •to be false when made, or that he made them as of his own knowledge when in fact he had no knowledge whatever on the subject; third, that the plaintiff had a right to and did rely upon the truth of such representations and suffered damage or loss by reason of their falsity. .And the court held that the plaintiff’s instruction having omitted, ‘0!r that he made the representations as of his own knowledge when in fact he had no knowledge ■ whatever on the subject,’ such omission rendered the instruction given by the court at the instance of the plaintiff vitally defective. And the court there said: “Hence in the case at bar when the triers of the fact were directed to find against the defendant (on the second -alternative upon which the law predicates an intent to -deceive) if he did not know ‘that they (representations) were true’ the jury might well have rested their adverse finding on the assumption that whatever reasonable grounds defendant had for believing his statements to be true, still he did not in fact know them to be true. This instruction was a clear misstatement of the law applicable to the facts as developed on the trial of this case, and necessitates a reversal of the judgment and a remanding of the case to be tried in conformity with this opinion.” [See also, Walsh v. Morse, 80 Mo. 568; Hamlin v. Abell, 120 Mo. 188, 25 S. W. 516.] On a retrial of this case, the instruction should be so framed
VI. Appellant contends that the court erred in giving instruction numbered two as follows:
“2. The court instructs the jury that if they believe from the evidence that the witness, Fishburn, was. the agent of defendant alone in making the trade between plaintiff and defendant, or was the agent of both plaintiff and defendant, then the representations and statements made by Fishburn to plaintiff while acting on behalf of the defendant were binding on the defendant. And if the jury believe from the evidence that the acts and statements of Fishburn to plaintiff, if any, to. induce him not to go to Arkansas to examine the land were made for and on behalf of defendant, then the defendant would be bound thereby.”
This instruction told the jury that if they found that Fishburn was the agent of defendant alone in making the trade, or was the agent of both plainiff and defendant, then the representations and statements made, by Fishburn to plaintiff while acting on behalf of the defendant were binding on the defendant. We think the court committed no error in giving this instruction as the statements of the agent, if acting within the scope of his authority, would be proper evidence for the consideration of the jury in arriving at a conclusion as to whether the plaintiff relied upon the false representations of the defendant as to the condition and quality of the land.
VII. The court’s instruction as to the measure of damages is contained in plaintiff’s instruction No. 1 and is as follows:
“If your verdict is for the plaintiff, you will assess plaintiff’s damages at the difference in the value of the*395 land as it actually is, and what the value of the land would be if said land had been as defendant represented, not to exceed $3840.”
The majority of jurisdictions apply the rule that the defrauded vendee is entitled to the difference between the value of the property that he received and its value had the representations made been true. [Shinnabarger v. Shelton & Lane, 41 Mo. App. l. c. 158; Caldwell v. Henry, 76 Mo. 257; Hicks v. Deemer (Ill.) 58 N. E, 252; McCready v. Phillips (Neb.) 76 N. W. 885.]
VIII. As this case is subject to retrial, attention is called to the fact that under the evidence in this record the doctrine of caveat emptor does not apply. The rule often announced by the courts of law is that where the vendor and purchaser are dealing at arm’s length and where the subject-matter of the sale is at hand and both parties have equal opportunities to examine, the purchaser must protect himself and cannot rely upon representations made by the vendor. In this case, however, there were not equal opportunities for examination and the plaintiff was not required to make investigation. The. 480 acres of land which was conveyed by the defendant to the plaintiff was in another state, one hundred or more miles away, and under those circumstances it would be unreasonable to apply the rule that the plaintiff was required to examine the land before making the purchase. To go and examine the land would involve expense and inconvenience, and the plaintiff had a right to trust to the representations made by the defendant as to the character, situation and surroundings of the land at such distant place when he could not, as we have stated, make a personal examination; and if the plaintiff had no knowledge or information of his own, he had a right to rely upon the statements made by the defendant if he made them as of his own knowledge. There is no rule of law which requires men in their business transactions to act upon the presumption that all men are knaves and liars and which de
IX. In the giving of the instructions in this case, both plaintiff and defendant ignored the fact that the action could be maintained without the plaintiff having made an examination of the land, and as the record nowj stands, neither party has any cause of complaint on account of error committed in that behalf, the court having instructed by their consent on that theory. But as the case is to be retried, attention is called to the fact that the doctrine of caveat emptor does not apply in this case.
The primary issues involved in this case are few and easily apprehended and in the retrial the jury’s attention should not be diverted from these issues nor their deliberations impaired and confused by instructions on collateral issues.
The judgment is reversed and the cause remanded.
