Hallen v. Martin

167 N.W. 314 | S.D. | 1918

Lead Opinion

McCOY, J.

Ini December, 1909, the plaintiff, pursuant to an agreement in writing theretofolre made, conveyed -to' defendant, subject to incumbrances, 360 acres of New Mexico land, and a lot in thie oi:ty of Brookings, S. D., and gave defendant a -bill of sale of a blacksmith shop on said lot. As¡ a consideration therefor plaintiff received- a deed -of 640 acres -Of New Mexico land, -and gave to defendant a mortgage of $2,880 thereon. Plaintiff took up hi.s residence upon his liewfy 'acquired- l'andl in January, 1910, and 'in Jume, 191-1,’ disposed of thie sarnie-. In 1912 he brought thi-s action for $10,100 damages for fraud and' deceit in defendsantis representations -as to the kind, quality, v-al-ue, and fitness ficlr .agriculture -of 'the' land -traded for, whereby' he -w-as induced to enter into the agreement for exchange. Trial' was (hlad to th-e jury, which- rendered a verdict-for plaintiff in the s-u'm of $3,680, •with interest. Brom the jud^^ment and an arder denying a new trial defendant appeals.

Motion) to' diiislmliis-s appeal -has been made based on the ground that since tíre appeal was' perfected the appellant has taken a plasMon (inconsistent with his right to) further maintain- this appeal’; but a majority olf the membersi of this court are of tire view that s-uicih motion is without merit, and the sarnie is therefore denied.

There was. much 'conflict in tíre evidence upon the issues of fact, 'as we view the evidence, the same was sufficient to sustain tihle verdict.

[1] A vital question urged1 by appellant is that tire trial •court, by instructions, submitted toi the jury an erroneous measure of damages. The tidal court instructed the jury that the measure of plaintiff’s damages was the difference between what the property be traded for was; worth and what it would have been worth if it had been as represented. Appellant contends that tíre measure of plaintiff’s damages was the difference in value between what plaintiff got and wlfait' he parted with. This is a tort action, sounding in damages, for fraud and deceit. Plaintiff alleged, .and the jury so. found, that defendant fraudulently deceived plaintiff as to the quality of the New Mexico, land:. Plaintiff didi not seek a rescission of due contract of sale, but, electing. toi stand on tíre contract, brought this action for fraud and deceit. The only question here involved is, what is tire proper rule or measure of damages applicable to a case of this character? There 'is what .is -termed a “majority” andl a “minority” rule. 153 Iowa, 274, 133 N. W. 709, 38 L. R. A. (N. S.) 465, Ann. Cas. 1913E, 274. Under the minority rule in such cases, ¡the measure of damage is the difference between the actual value of tire property sold at the time of sale and- the price paid therefor by plaintiff. The “minority” seem is to be the -rule adhered to by s-ome of the federal courts and a very few of the state courts. The “minority” rule is well stated! in Smith v. Bolles, 132 U. S, 125, 10 Sup. Ct. 39, 33 L. Ed. 279. By reason of the overwhelming weight of judicial decision of the state courts, -th-e views of -the best text book writers, and the provisions of our Code, we are inclined ito the view) (that the “majority” rnl-e is the sounder and the'one established in this state by our Civil Code. Under the “majority”' -rule, the measure of damages, in tort actions for fraud and deceit, is the difference between the actual value óf the property as it was at 'the time of -sale and what it would have been worth if the representation® bad been true. In Stoke v. Converse, 153 Iowa, 274, 133 N. W. 709, 38 L. R. A. (N. S.) 465, Ann. Cas. 1913E, 270, a very recent case, .the Supreme -Court of Iowa said:

“The overwhelming weight of authority in this' country approves'the allowance, as the measure of-damages, of the difference between the actual value of the property at the time of the purchase andi its value if it -had been what it was represented to be.”

'The opinion in this Iowa case by Mr. Justice Ladd is well ■considered!, review® the authorities thoroughly, and should be carefully read anld considered in passing upon this .rule.

In Gunderson v. Mining Co., 22 N. D. 329, 133 N. W. 554, the Supreme 'Count of North Dakota, with a Civil Ooidle .precisely the same as exists lin this state, said:

“This ¡is an action for deceit, not for 'rescission. There is a vast difference between the actions, and ¡the difference must conistamtly be kept in mind. * *• * The plaintiff * * * demands that the representations of the sellers be made good in damages. * * * His damages would be the difference between -what his stock would have been worth at the time of the sale if as represented and what At was ¡actually worth at that time. Or, stated a little differently, hie can compel the sellers -to make good their- representation's by paying ¡damages fiotr those things they have misrepresented. We must go- back to the day the stock wlas sold, and determine how much more plaintiff’is ¡stock wlould have been worth had the statements made to him been true.”

In Fargo Coke Co. v. Fargo Elec. Light Co., 4 N. D. 219, 59 N. W. 1066, 37 L. R. A. 593, a prior decision, the Supreme Court of Niaritb Dakota also ¡said:

“It is obvious .that ¡these two¡ mies cannot ;be reconciled. One gives to the party deceived thle full' benefit otf his bargain. • Tire other does not. We are -clear that the best reason is with the doctrine that, where one is deceived and defrauded, he can recover as damages the difference between thie value of what he would have obtained had the statement 'been- true and the value of what he actually .received. This represents his actual lo’ss by ■reason off the fraud of the seller, on the theory that he does not rescind' the 'contract. Of course, if hie sees fit to rescind' for fraud, he can. only recover back what he has paid. But if he desires to stand by tine agreement, as he has a perfect right to d'oi, he can logically say to tire wtfongdber: 'If jtou had told me the truth, the property would have 'been worth bo much. It 6s not worth so much, because it is not as you represented it. I demand that you make good1 the difference in money/ ”

Tire logic and reasoning of this Ntorth Dakota decision by Mr. Justice Corliss seems to ns to he unanswerable. In Spreckles v. Gorrill, 152 Cal. 383, 92 Pac. 1011, the Supreme Court of California, under a Civil Code also precisely the same as sections 2293 and 2312 of the Civil Code of this state, speaking of this rule, said:

.“’One who buys property is: lawfully entitled to' all the benefit of 'the purchase — that is, to> thie full v'alue of the property he buys — regardless of the price he paid. And it is a fundamental principle of the law of fraud that where one has, by false and fraudulent representations as to the quality of property, led another to believe it to - he possessed of valuable qualities, and thereby wrongfully induced the other to buy the property, presumably in order to' obtain the benefit of property possessing those qualities, the seller will not be allowed1 to show as a defense to an action for such fraud that the property in its actual condition' was wiolrth the price paid or more. The real question in all suich cases is whether or mot the property, if it had been as represented, would have been of substantially greater value than its actual' Value in its real condition. • The price actually paid is immaterial as an element in the cause of action, ■ though it may he admissible evidence on the question of value.' * * * For example, in Murray v. Jennings, 42 Conn. 9, 19 Am. Rep. 527. the plaintiff exchanged a pair of oxen for a horse, upon the representation of the defendant that tire horse was sound'. The horse proved unsound, and the plaintiff sued for damages for the deceit. Thie horse, in its unsound state, was worth $125. If it had been sound it 'would have been worth $225. The -oxen were worth oinly $100. Plaintiff recovered $100 as the differemce between the value of the unsound horse and its value if it 'had been. sound'. This iwias said to be correct, and ¡the value of the oxen held Elmimaberial, the count saying: ‘Tine law gives, her [plaintiff] the benefit of the 'contract, and plaices1 heir with respect to it, and1 to all her rights under it, in the same position as if no fraud had! been practiced upon he'r, and as if the hlolrse was as sound 'and valuable as she had a right, from the defendant’s representations1 to her, to believe it was.’ ”

In Drew v. Beall, 62 Ill. 164, the Supreme Court of Illinois, in a case involving an exchange of lands, said!:

“The defendant had received the consideration agreed to be paid .by the plaintiff, and the latter, was entitled to have such a •tract of land as this was represented: to be, and if he has not gelt it ¡his damages, by reason of not getting it, and the proper measure of dkmages, we think, is the difference between the actual value of the land and the value of such a piece of land as this was represented to be by the defendant.

“Such is the measure of damages' in an action for breach of a warranty on a sale of personal property. * * * And it is the same in 'an action for a deceit in a sale. * * * And the same rule seems to obtain upon the sale lof real estate where the action is for deceit in relation to its quality or condition.”

In Antle v. Sexton, 137 Ill. 410, 27 N. E. 691, affirming 32 Ill. App. 437, the Supreme Court of Illinois also* said:

“The theory of the action is that for the fraudulent and deceitful representation of the defendant, inducing plaintiff to make a contract which he would not have made other wfee, and by which he has been damaged, he should have his remedy, and: this regardless of any remedy the law might afford upon the con.traiclt itself. * * * We also agree with the views expressed in the appellate court: 'opinion in respect to ith'e measure of damages. * * * The rule adopted was the difference in value between tine saiw timber obtained and what wtouM have been obtained if there had been eighty aares of it; that is, calculate a shortage of fifty acres' at the price per aore which it -was shown to be worth. * * * In Field, Dam. § 706, the rule is stated thus: ‘In cases, of fraudulent representations of the quality of property .sold, the general rule of damages is- tihle difference between the value of the property as it is and whiat it would.be if the representations had teen tru'e.’ To the sarnie effect see 2 Sedg. Dam. 559, where, after a similar statement of the rule with regard to personal property, the author add®: ‘The same rule, I apprehend, holds upon the sale of real estate where the 'action is 'far deceit.’ ”

In the case of Whitney v. Allaire, 1 N. Y. 305, in consider-mg this rule, thé New York Court of’ Appeals said:

“The last question relates, to the damages. The rule given to the jury was as favorable as the plaintiff had a right to require. T-lxe measure of damages' (in> an a'ctoon upon a warranty, and for fraud in the sale of personal property, aire the same. In either case they are .dfetermiined by the difference in vtalue between the article sold and what it should be according toi the warranty or representation. * * * The same rule obtains, I apprehend, upon the sale of real estate, where the action is for deceit.”

In the state of New York the Gaunt of Appeals has at all times applied this rule in. deceit actions. Benedict v. Trust Co., 91 App. Div. 103, 86 N. Y. Supp. 370; Krumm v. Beach, 96 N. Y. 398; Hubbell v. Meigs 50 N. Y. 480; Vail v. Reynolds, 118 N. Y. 297, 23 N. E. 301. In Morse v. Hutchins, 102 Mass. 439, the Supreme Court of Massachusetts, in a tort action far deceit, said:

“It fe nlclw Well settled that, ’in actions for deceit or breach of warranty, the measure of damages is' the difference between the actual value of the •,property at the time of tine purchase and its vialúe if the property had been what it was represented, or warra-nted ta be. * * * This is the .only rule which will- give the purchaser adequate damages’ for mat having the tiling which the defendant undertook to sell him. To allow to the plaintiff (as the learned' Counsel far the defendant argued in this case) only the difference between the real value of tine property and the price which he was induced to ipay for it would be to make any advantage lawfully secured ta the innocent purchaser in the original bargain inure to the benefit of the .w-roagdloer, and', in pro*portioo as the original price wla® low, would afford ito' .a protection to .the party wha bad broken, at the expense of .the party who was ready to aibildle by the terms of the 'contract.”

The clear philosophy of tiilis' Massachusetts case is that to apply the minority rule is toi place a premium on fraud, and deceit, because oftentimes the defendant, under the minority rule, woluldl get out much easier by virtue of his fraud and deceit than if he had only been guilty of a .breach of contractual warranty. The clear ■ import .of ithe foregoing cited decisions is that the rule or measure of damages, in -.toirt actions for deceit is precisely the same as' in actions ex contractu for breach of warranty.

Logical demonstration and .proper interpretation, and -construction of the provisions of the Civil -Code of this- state clearly and unerringly indicate that the measure of dlamages for breach of warranty of 'contract is identical with the measure of damages in tort aictfonis based on fraud and .deceit. Section 2293 of the Oivlil Ood'e pHoivides that the measure of 'damage for breach of contract “is ithe amount which will' comp ensate the party aggrieved for the detriment * * * caused thereby.” Section 2305 provides that the detriment .caused by ithe breach of a warranty of the quality of personal property -is the excess, if any, of .the value which the property would have had, at the time to whiioh the warranty referred, if. it had been complied with, over its actual value at that time. Thes'e twoi sections of our Civil Code aire merely 'declaratory -of the common-law rule as to' the measure of damages, for breach of warranty, to the effect that the purchaser, in ease of breach of warranty, tíouldi recover as. damages the difference between the actual Value of the property and wihat the property would have been worth had it been as warranted. Section 23x2 provides that in tort actions the measure of 'damage “is the amount whioh will compensate for all the detriment sproximately caused thereby.” Precisely .the s'ame rule or measure olf damage provided for by section 2293 for breach of oontraot. Both these sections 2293 and 2312 are declaratory of the common law. Fairbanks v. Williams, 58 Cal. 241. And both sections establish the same measure of damages. Crow v. Canal Co., 130 Cal. 309, 62 Pac. 562, 1058. Section 2329, Civil Code, provides that, notwithstanding the provisions of this chapter, no person can recover a greater amount of damages for the breach of an obligation than he could have gained by the full performance thereof on- both sides-. These sections of our statute should all be construed together, 'and so as to give force and effect to each and a© thereof. The clear import of 'section 2329 is that a person- may recover in damages for the breach of an obligation all that he could have gained 'by a full performance thereof on both sliicfes. This is a general section, •applicable alike to damages arising from breach' of contract 'as ‘well -as those arising from the breach of am obligation not arising from, a contract. Where there has been a 'breach of am obligation' not arising from a con* tract, s'ulcih as a tort based1 on fraud and deceit, under the minority rule it would be impossible for the plaintiff to recover the amount he would' have gained' by full performance on the part of the defendant, because, if the property had been as represented by defendant, the plaintiff would' have received the value of the property as it .wias represented to be. We are therefore of the view 'that this section 2329 comprehends and establishes the majority rule in tort actions; that is, that tire respondent is entitled to recover the difference between, the actual value of the property and wlhiat it wlould have been worth if it had 'been asi represented by appellant.

[2, 3] These sections of our Civil Code being- declaratory of the common law, what was the common law, prior to the existence, of lotur Civil 'Code must be considered in construing these sections. The 'decision's, heretofore cited from states not hlavhig a Civil Code like ours clearly indicate what was the commion-law rute in relation to, this subject. In Drew v. Beall, Antle v. Sexton, Whitney v. Allaire, Krumm v. Beach, and Morse v. Hutchins, supra, it is held that the measure of damages for breach of Warranty under a contract, and for fraud and deceit in a tort action, are 'the same. In some’ jurisd'icti’O'ns it was held that in tort actions the minority rule was the measure of damages,. With these two aommon-law ■rules in view — 'the majority and minority — it is clear that the legislative mind of this state, by the enactment of sections 2286, 2293, 2312, and 2329 of our Civil Code, intended! to, adopt a compensatory damage rule, being the majority rule, as indicated by tiie ' foregoing cited) decis'Üotas' from Ne>w York; Illinois, Massachusetts, and Connecticut, and other decisions' of like import of other jurisdictions. Sections 3300 and 3333 of the Civil Code of California, in tlreir language establishing'' the rule f'or measure of damages, are precisely the same as sections 2293 and, 2312 of our Civil Code! .The Civil Code of California also, contains a section precisely the'samé as'section 3305 of ou;r Civil Code, and the Civil Code cif California a’oo contains 'a section precisely the 'same as section 2329 of our Civil Code, and it must foe presumed that the Supreme Gourit of California in rendering the decision in Spreckles v. Gonrill, supra, had these is'ections of their Civil Code in mind. The Civil Code of North Dakota also contains identically itihe sarnie provisions, and we cainUot presume that the Supreme Colurt of North- Dakoita in- rendering the decisions in Fargo Coke Co. v. Elec. light Co. and Gunderson v. Mining Co., supra, didi not have in mind1 these sections of their statute law. We are also of the view that the Supreme Court of this state in the case of McCabe v. Desnoyers, 20 S. D. 581, 108 N. W. 341, being a case wherein the -trial -court -instructed the jury in a deceit action that the plaintiff was -entitled to -damages for 'the value of a horse such as was represented by defendant and what the horse in fact .proved to be, had in view the provisions, of our statute, when, it held that such instruatioo stated the law correctly as applicable to sai-d -case. Cooley on Torts (3d Ed.) 932, supports thle majority rule, and states that th-e seller" is bound to malee its false representations goad in- damlages. Sutherland -on Damages -al-sO' approves -the majority rule. Sutheirlandi on Damages (3d Ed.) §§ 1171, 1172.

[4] Damages under the majority rule are not “speculative” within thie meaning of speculative damages. Speculative damages are “prospective” in their nature, s-uch .as the value of crops expected to be grown- in -the future upon lands whi-ch were- the subject of sale, or the future earnlogsi, rents, and profits of personal -property .which was the subject of is'ale. But damages or detriment .sustained fo-y reason oif .the loss of the bargain, already 'consummated-, are n-ot wi-thin itihe rule of speculative damages,• and never have been so considered. The plaintiff was entitled to- the benefit -of his bargain. Drew v. Beall and Murray v. Jennings supra. Dlamages for loss of the benefits of a bargain are compensatory in their nature- .’and" the -direct and proximate oon-seqjuence of thie fraud. In these- cases th-e plaintiff recovers for the direct results of the fraud and deceit. This is the logic of the majority rule, as disclosed by the 'decisions sustaining that rule.

There i's one other proposition that should not he lost sight of in -'connection wlith toe application of the majority rule in connection with .the element of .that '-rule that the price paid by pl-ainiff is immaterial, as Illustraated- by such" cases as Murray v. Jennings. There is a class of cases where ¡there bad been an exchange ¡oif .properties, and! where the defendant by counterclaim charged tine plaintiff with fraud and ¡deceit in connection with the property received hy defendant. In such cases, which is not this ¡case, that which represented the price palid by plaintiff ¡would then be material and the subject of ¡consideration., as there would then be a croiss^application of the majority ¡rule. But in all those oases, • such .as this, where río fault ¡or fraud1 is charged against tine plaintiff by the ¡pleadings, the plaintiff is entitled to the full benefit of bis bargain, regardless of -what consideration he paid; he reoovers what he lost by reason of defendant’s fraud and deceit, whlicfa would be the .difference between the value of What be actually received and whiat its value would have ¡been, if it had been as ¡represented by defendant. As stated hy Ooicley, under such1 circumstances the .defendant would then be placed in the some position as if the contract bad ¡been fully performed on both sides, ¡being the rule 'established by section 2329 of our Civil Code.

[5] It -must 'also he observed that the rule of damages in 'relation to tire sale or trade of personal property Is applicable to the ¡sale or trade of real property. Drew v. Beall, Antle v. Sexton, Whitney v. Allaie, supra; 2 Sedg. Dam. 559.

It must he kept in ¡mind that ithis is not a case for the rescission or repudiation of'a contract on the ground of fraud, but is a case ¡where the ¡respondent plaintiff relies on the contract, and is seeking to recover damages which are the proximate result of defendant’s false tad fraudulent representations of tine quality of the thing sold1; where the .defendant must make good In money damages that ¡which] plaintiff has last by reason of such fraud and deceit; that is ¡the only ataouint ¡which' ¡would compensate plaintiff for the detriment caused by ¡such fraud ¡and deceit; that is the rule established by our Civil 'Goldie; that is. the web and wtoof of the substance of the majority rule. Hence we are of the view, tad therefore bold, that the learned trial- court committed no error by giving the instruction complained of. Other assignments ¡of error have been am'die, all of which have 'been considered.

Biniding"'mo error in' thte record, the judgment and order appealed from are affirmed.

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Concurrence Opinion

SMITH, J.

(-concurring). I am fully persuaded' that section 2312, Civil Code, presctffibes .the same rule oí damages in deceit actions as in all other tort actions, viz. am amount which- will compensate the injured party for the loss proximatefy .caused- by the tort, -and that the common-law rule of damages in deceit actions was not intended to be, and was not, -changed by the -statute. The real question, therefore, is, What was the rule of damages in deceit -actions at common Haw? In this, as in- -other matters, common-law courts differed in) their views. The real conflict in ithie decisions lies' in .the adoption of different methods O'f determining the amount to be alwlarded a-s -Compensation for the injury. I think, therefore, the assumption that at common law -the rule -of -damages in deceit constituted -an- exception to the genera! rule of damages in ‘ tort actions is erroneous. A suggestion not infrequently found' in- cases which support the minority rule is that tihle result of the majority rule is' toi make the injured party 'better off than if no, deceit (had been practiced-. The conclusion is 'biased upon the proposition that “if there had 'been no deceit, .there would have -been no bargain.” This statement is incorrect and in itself deceptive. Wherever an action of deceit lies, there must have been false representations. The false representations were the direct moving cause which brought the bargain into existence. But -the bargain would have been made just 'tilie same had the representations been- true. The correct proposition, therefore, is, “If the representations' had- been true, and not false, there would h-ave been no damagés” not that there would have been no- bargain-. Is it true, then1, that damages under the majority rule make the injured party better off -than he wioiu-ld have been -had there been no deceit?

Where the remedy chosen is for damages for the- deceit, the contract itself remains in full force and is. unaffected- -by the action. It will not be u-rgerf in- this court /and certainly cannot be urged! by the wrongdoer, that the injured party was not entitled!, under the contract, to receive an article -such as the wrongdoer described. The rights- icif bath parties- became fixed- -by the cfonitraot. Bach became the owner of that which- he received under lit. The wrongdoer received the thing he was1 entitled to receive. Bo-r that which he received) he gave the injured party a thing ¡which he represented to posses® attributes whioh gave it a certain value. Tlhie injured) party was entitled to receive that which he wtas induced to believe he was receiving,, and which he wiouid have received under am honest contract. H,is light to receive the liin.d o(f thing aootnacited' for was fixed1 by the -contract. That ¡foe did not receive it was due to the deceit which wrongfully induced him to believe -he -was receiving it when be was not -i-n flact receiving if. Pie had the right: to rely, and dlid rely, upon the representations. The essential wrong was in- the falsity of the representations relating to the value, or qualities, of' the thing -which Itifoe injured- party was induced to accept instead -o-f that which he was entitled’ to receive. It is a,p>piarent that, if -the representations had been true instead of false, fh,e injured party would ’have received property “answering to the representa tions1 made.” The -difference between its value, therefore, measures the loss or damage proximately -caused by the deceit. It is suggested that under the majority rule the damages are measured fo-y the enormity oif the toirt — the' size o-f the misrepresentations’ — rather than by the effect of the misrepresentations-. Precisely tine same objection would lie to> the rule of -damages far breach of -warranty. If the damages may be enhanced by .the size -o-f tire warranty, why mlay they not he enhanced- by the size of the false representations'?

Both !are .purely voluntary acts ,op tire part of the wrongdoer. In one -case, the injured party relies upon the warranty; in the other, -upon the representations for a tort -which, -in substance 'and in all its essential facts-, is the same as a warranty. One is an -obligation arising from a contract; the other, am obligation rising from a l'ega'll -duty. The breach of the obligation has the same effect -in -either case. That one is an express, and the oth'er an implied, obligation wo-ukl not sean, to- be material in determining the amount which in either case will compensate the -injury. In one -case -compensation is given for a false warranty; in the other, for a false representation. The majority -rule awards the injured! party an amount which maltes! good the representations’. B-elaring in mind1 that in actions both for breada of contract and for tort tine rule ¡is -the -same — compensatory damages — it is difficult to see why identical damages do not flow from false representations of facts which would flow from faitee warranties of the identical- flacts'. The fact that -the same -damage flows from the 'violation of a right created by contract, which flows from' the ■violation of the same right created! by law, is immaterial, so long as thie rule of compensation is the basis of recovery in both instances. It is sometimes suggested, that where the party -dtefrauided decidles to abide by the contract and) sues for damages’, hie is not- entitled' to receive anything except that which- he determined to keep, .together with damages for hdsi “change of position.” True enough; but' iwhat is meant by “change of position” ? 'What would have 'been his “position” if the representations had been- true' instead! of false? Plainly, he would have had an article of the kind -represented. What did he receive? Plainly, an article of a -different bind1. That situation presents the '“change of position” which was directly brought about by the deceit. If there had been no deceit there would have been a '“'change of .position,” but no damage.

It may be assumed that if the defendant had told the -truth about the property there would have been no sale or exchange, neither would there have been • .any deceit, nor .any action- for damages. On the contrary, the action is- based upon the fact that the -defendant did not tel the truth. It is- one thing to say that if he had! toldl the truth there would have been no- sale,— it is an entirely -different thing to say that if the representations had been true there would! have been no contract. The suggestion in certain of the derision® that rescission is an-¡alternative remedy, and may be resorted to in cases' of deceit ■■rather than an action for damages under the majority rule is not convincing. The relief obtained under the minority rule is substantially the same as in rescission., but when the injured party chooses the remedy by action, for 'damages for deceit he has the legal- right to, and -does-, stand upon his contract. He should not be compelled to abandon his bargain by seeking- rescission or accepting damages 'under the minority rule, which are merely the equivalent of .rescission. This court did- not adopt the minority rnle in Lunscheon v. Wocknitz, 21 S. D. 285, 111 N. W. 632. On the contrary', we said that:

“A purchaser of real estate has the right to rely upon- the representations of the vendor touching the quality of the property, and -may * * * recover -compensatory damages,”

Sections 2293, 2312, Civil Code; Ettlinger v. Weil, 94 App. Div. 291, 87 N. Y. Supp. 1049. Mr. Sutherland in his work on Damages states that the majority rule has been recognized in the following and perhaps other states: Connecticut, Alabama, Illinois, Iowa, Kansas, Massachusetts, Maine, Michigan, Missouri, New York, iQlfio,- Texas, Washington, California, Georgia, Indiana, North Carolina, North Dakota, Oklahoma, Pennsylvania, Wisconsin, New Jersey, Arkansas, Oregon, Florida, Kentucky, New Hampshire, Mississippi, Vermont, Colorado, Nebraska, South Carolina, Utah,' and Tennessee. Such 'an array of authoritjr can hardily be disposed of by the assertion that Ithe majority rule is founded upon unsound reasoning.

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Dissenting Opinion

WHITING P. J., and GATES, J.

('dissenting). We are unable ¡to concur in our colleagues’' views as to the proper measure of compensatory damages for deceit in inducing a purchase or exchange oif property, and wie feel that the importance of 'fehe 'question justifies ia statement of the reaesons for our dissent. Two thoughts naturally suggest themselves: What is the proper measure of damage where there is no statute Controlling-? What is the measure of damlages under section 2312, C. C.?. We will undertake to' .answer these questions in the order named.

We believe little consideration should be accorded a legal proposition, simply because it is a “majority” holding. The weight of judicial authority rests, not upon the number of jurists or text-writers that may unite in declaring the law upon a given subject, but Upon the soundness — -the convincing force — of the reasoning by which, the views of such jurists or writers may be supported. When judicial 'authority is so weighed it will be found that the balance is Oiverwhehning on the side of what our colleagues have termed the “minority” holding. We would commend a consideration of the reasoning found in Smith v. Bolles, 132 U. S. 125, 10 Sup. Ct. 39, 33 L. Ed. 279; Sigafus v. Porter, 179 U. S. 116, 21 Sup. Ct. 34, 45, L. Ed. 113; Rockefeller v. Merritt, 76 Fed. 909, 40 U. S. App. 666, 22 C. C. A. 608, 35 L. R. A. 633; Crater v. Binninger, 33 N. J. Law, 513, 97 Am. Dec. 737; Wallace v. Hallowell, 56 Minn. 501, 58 N. W. 293; Weaver v. Schriver, 79 Md. 530, 30 Atl. 189; Nelson v. Gjestrum, 118 Minn. 284, 136 N. W. 858; Zcbrist v. Estes, 65 Or. 573, 133 Pac. 644; High v. Berret, 148 Pa. 261, 23 Atl. 1004; George v. Hesse, 100 Tex. 44, 93 S. W. 107, 8 L. R. A. (N. S.) 806, 123 Am. St. Rep. 776, 15 Ann. Cas. 456; Peck v. Deery, 37 Ch. Div. 541-549; and Sedgwick on, Damages (9th, Ed.) §§ 780 and 781.

We are not now1 called upon to 'determine whether, in case of deceit practiced flor the purpose of and resulting In, inducing a purchase or exchange of property, it míay Uolt often1, with sound reason, -be held that there is .an implied warranty that the representations are truie, and1 that, basing bi'si 'claim, of damages, upon the breach of such warranty, the injured ptirlty should not be allowed to recover, for the breach of the contract, the warranty, just what Is allowed under the “majority” rule in an- .action based 001 ¡the tout. Cooley, at page 951 of his wiorlc on Touts, says:

“Where 'one, in selling personal property, makes positive representations of material facts, -upon which the other relies, the vendor is held to the truth of these representations in a suit at law as much as he would have been in; a suit in equity. But this is upoq the ground that they constitute a warranty.”

Neither are we Called upon to discus® the wisdom of allowing damages in accordance with the “majority” rule. What we question is the sound'nies of the argument that the “majority” rule allows compensatory damages and .that only; and that such nude is ndt an exception to the general rule governing damages for fraud ior deceit, under which the injured party is held entitled to “such’ damages as will compensate him, for the loss or injury actually sustained, as will place him, in .the same position that he would have occupied had he not been defrauded.” 12 R. C. L. 451. If those whoi contend for the “majority” rule would frankly confess that Iff is based upon a promise entirely foreign- to- that upon which damages for deceit is ordinarily based' — that it utterly disregards the principles1 that govern -in actions for damages for -all other torts — there would be left büit''4ihe' question of tble wisdom of such a departure. We would announce these propositions, which we contend admit Wf no dispute, and which should be borne in) mind -at all times in the discussion of the questions before us': Etvery tort is a wrong by or through which the innocent party-’® position or condition, a® such position or condition relates to his person or property, is changed for, the worse. The injury suffered is by Virtue of or an account of such change in position or condition. The damages suffered' are measured by 'such injury — by the amount or extent in which .the innocent party’s personal or property rights have been changed' from what they were prior ito- the tort, by or on account of such itoint. Tibe “majority” 'decisions are 'based on the theory that -the defrauded party is entitled to tibe benefit of his .contract. Such decisions 'attempt to base such holding upon 'the 'absolutely false premise — that, if .there had been no deceit, (there would have 'been a purchase or exchange of property under which pl'alintiff would have received property answering to' the representations' made. An action fiolr damages for deceit in 'all cases, whether those involving sales or exchanges' of property or whatsoever the nature of fhle case, must 'be basied upon the premise that, if it had not ■been for the deceit, there would have been no purchase or exchange whatsoever. In this 'case our colleagues s'ay that the innocent party is 'entitled toi his bargain, when the very thing that the injured party -’is complaining of, exactly as he would1 in. an action for rescission based on ,thie deceit, is that, owing -to deceit, he never got a contract that gave him such bargain. The gist of the cause of action for deceit is that there has been .a- change in the innocent 'party’s property — in his estate — brought about by the deceit, and that this Change was to plaintiff's loss.

Without loss..there can properly be no cause of action for deceit regardless 'of what representations were made. As said in Alden v. Wright, 47 Minn. 225, 49 N. W. 767:

“The essential' elements which constitute a cause of' action for deceit are well stated in Busterud v. Farrington, 36 Minn. 320, 31 N. W. Rep. 360, and oine is that the parity induced to, act 'has been damaged. He must have acted on the falith of the false representations to* his damage. A party cannot sustain an aation of this character where no harm has odmie to him. Deceit and injury must concur (Doran v. Baton, 40 Minn. 35, 41 N. W. Rep. 244); or, as it has frequently been put by the courts, fraud Without damage, or damage without fraud, will not sustain the action for deceit.”

And it is the amount of loss' that limits, the recovery. As said in Smith v. Bolles, supra:

“Wblat thb'T'l'aintiff -might have gained is not the question, but ‘whiat he had lost by being 'deceived into the purchase.”

And as stated in High v. Benret, supra:

“His actual! loss doss not -include 'the extravagant dream-a which /proved illusory [the expectation has-ed upon, tlhie representation], -but -the money ¡he ¡has parted! With without receiving an equivalent therefor.”

Or as stated in Sigafus v. Porter, supra:

“If the plaintiffs were inveigled 'by the fraud; * * * a judgment of the character just indicated would make them whole. * * * More they are not entitled to have at the hand's -of the law in this action.”

Or as stated in Crater v. Binninger, supra:

“The principle of justice, and, as I understand, of law, is, that itihe party injured i-si to be /compensated, at least to the extent that redress is awarded judidiaü'y, for the' actual lo-s-s sustained. The effort is to reach this measure as near as possible, and unless in cases fit for punitive damages, nothing more than this is to be given. But the criterion contended for -is in no sense compensation, but a mere arbitrary amount, bearing, it may be, nip just relation to the quantum of damage.”

We think no better or clearer statement of the reasons supporting the “minority” rule co-uld be made than the following from George v. Hesse, s-upra, a deceision which has been treated as a leading authority by the editors of three series of annotated reports:

“There is a -conflict o-f authority upon the point; h-uit it seems to u-s that the difference -oif -opinion grows out of a confusion as to the nature of the cause of ithie action. This is not a case in Which, the plaintiff sues1 for the breach of a contract, for the contract has been performed by both- parties. But iit is a case in which the plaintiff sues to recover damages- for a fraudulent representation by which be has- been induced to enter into a contract Ito his loss. Clearly, .we think the extent of hi-s loss is the difference between the value1 -of that which -be bias parted with- and. the value of that ■which h!e ihas .received under the -agreement. The contract in this case Was nolt to convey a tract of land with a ‘gusher’ c|n- it, but was' to convey a certain tract of land, which was falsely .represented' to ¡have a ‘gusher’- on it, which false representation- was an inducement Which led to the contract.”

Our colleagues have cited both Cooley and Sutherland in, support of their views, but an examination of itheir works discloses that neither of them attempts to give hiiis own views as to the correct rule. They both merely set forth wih'at different .courts have held. But it is qjuite .different with the learned author of Sedgwick oo¡ Damages. In the ninth edition of this work, after setting forth the .two rules, he (sections 780 and 781) discusses 'these rules, and to our ¡minds tire reasons he gives for supporting the “minority” rule are absolutely Unanswerable. He isiays:

“If the fraud had been perpetrated by same third person, inducing the vendee to purchase, there can he no ddub't as to the measure of damages; the plaintiff ¡would tiren be entitled only to the difference beltween what he paid 'and 'what lie received. Logically it should make noi 'difference that tire fraud was (perpetrated ¿by the vendor instead of by the third person. And to have a different rule might lead to peculiar results. Thus, suppose a fraud were jointly perpetrated by .the seller and a third' person. It is a strange rule of law which would give a different ¡measure of damages in an action against one joint tort-feasor from that given in an action against the other, yet that wioiuld’ seem to 'be the consequence of the old rule.”

Then, after announcing and discusáng the reason often urged in support of the “majority” rule, “that the misrepresentation gives rise to an action for breach of warranty as well as an .action for deceit, and it is absurd to apply a different rule of compensation according toi the form of action,” he says:

“It is true that the fraudulent -representation also, gives rise to an action >00 the warranty. But the converse is not true; an action of warranty may 'be brought when deceit dbes not lie. Hence it follows that the ¡additional element of fraud creates a wholly 'distinct wrong, with 'a remedy peculiar to itself. The fact that under ¡some circumstances tttsl ¡remedy does not give the vendee sio much as the remedy for another wrong incidentally done is simply a reason for seeking that other remedy. * * * Adherence to logical principles dan by no possibility work a hardship to the vendee; If his damages in an action of deceit, under the Smith v. Bolles rule, are .l'es-s than under the other rute, he 'has simply made a blunder in suing for the fraud. He has the right ¡to sue in assumpsit fdr breach of warranty.”

•And in 'Oond-usion be Calls attention to the three actions that are open to the yendee and! to what he can recover under each:

“The defrauded vendee has, accordingly, three alternative remedies; First, rescission and recovery of the consideration,; second, an action fdr 'deceit and recovery for his actual loss, i. e., the 'difference between the value of whalt he parts- with and of what he receives; third, an action for breach of any warranty contained in the contract of purchase, and- recovery of the difference in values between- the property as received and the value as warranted.”

By no juggling of words, by no legal' sophistry, can one advance any plausible reason -why, in an action sounding in tort, a court should grant to the 'injured party, ,as oompenisatory damages, an amount 'that would place him in better shape financially than he would have been in if there had been no deceit, and hence md change ini position as regards property. Sucia expressions as ¡the following, while pertinent in an action based upon a breath of warranty, are absolutely foreign to any question 'presented in an action based upon a tort: “Plaintiff demands that the representan one * * * be made gooid! in damages-;” “If he (purchaser) desires to stand 'by his -agreement;” “The law gives ■her the benefit of the ¡contract;” “The defendant ¡has1 received the consideration .agreed to be paid by the plaintiff, and the laitter wias entitled to have s-uch a tract of land as this was represented to be.” Such expressions disclose that the counts making sarnie have ¡in fact treated the representations complained of, not as a deceit — an inducement which brought about a contract .through which one’s estate was -depleted — 'but as pants of the contract itself, as warranties, just as conceded In the above quotation from Cooley on Torts.

We think the fallacy of the “majority” view can well be demonstrated -by a few 'illustrations. If A., through duress; perchance through the use of a gun, induces, B. to pay him $5,000, and to take in exchange for such money a deed for a farm- worth' $4,000, and B. 'afterwards sees fit to keep the land -and seek damages for the tort, it is perfectly clear that B.’s estate has been depleted $1,000, and the.limit of bis recovery, so fair as lit rests upon (the land transaction, is $1,000, that which , will malee him whole. Wioiuild1 B.’s estate have actually suffered! any greater depletion) — would: it have taken any greater amount to make whole B.’s financial toss, the “detriment proximiately caused1” by the tort - — if A., ini addition: to his more persuasive inducements, had falsely held out to B. that the farm possessed certain qualities which, if possessed by it, would have ¡marie lift wioirth $6,000? Or if A. had uisierii the more refined' and less dangerous method1, and through deceit alone had: led B. to pay his $5,000. for ‘the $4,000 fartm, .would1 the ‘‘’detriment proxknately caused” by the tort— the depletion df hii.s estate — 'have 'been any greater than, if B. had' .paid over the money through felar? Again, would it make any difference in the actual financial losis suffered by"B. — the “detriment praxfamtely caused” ¡by the tort — the actual depletion of his. estate — df B. gave the deed induced1 thereto, by representations' which, if true, would1 show the land to have been worth $10,000 instead of $6,000? Suppose the land' were actually worth $4,000, 'but A. makes, false rapresentaitiotns asi to four qualities! tine possession of which wtowld' enhance the value of land, each of 'which would enhance its Value $500, or $2,000 in all; and suppose B. relies on only one of these representations, and yet, being of poor judgment, purchases' the land, when he would not if this particular representation had not been made. Under the “majority” rule one cannot 'base recovery on representations not believedA-sueih representations Could not be treated' as warranties ■and suit be biased upon their breach — so that, except under the 'iminolrity’’ rUile, B. could not recover the amount ¡he actually suffered: from the deceit — the amount in which his. estate was actually 'depleted! through A.’s wrong. B.’® actual loss, is just as great, and A.’s tort is as morally wrong, whether B. is led to 'part with his money for the $4,000 farm through his belief in tine one representation as though he believed in them all. Suppose that B. baid), mi option oto C.’s $6,000 farm, under which option B. had the right to purchase it for $5,000, and A., through ¡deceit, leads B. to’ forfeit such! .option, thus depleting B.’s. estate to the value of such option, $1,000; should it make a-ny difference in the amount which, as Compensation, B. should recover against iA., whether A. made one or fifty false statements concerning C.’s farm, or whether, if such statements were in fact true, C.’s farm would be worth $5,000 or only $2,000? Certainly not. To our minds, Sit is no more illogical' to allow1 a recovery of $4,000 as compensa,toiry damages for the tort in case A. hadi represented G.’s farm, to he worth only $2,000 than! it would) be to allow B. (bo recover of A. $4,000 where A. induced) B. toi pay $5,000 for a $4,000 farm by making representations which, if’ true, would Show the farm, to he worth $8,000.

Our colleagues suggest that the “minority” rule encourages, and even often rewards, the wrongdoer. That might he good ground for holding that, in a proper case, punitive damages should' be 'alkwled. But the “majority” rule often prevents the innocent parity from recovering his actual loss, such) rule limiting damhges to) those allowed for'breach of warranty. Take the illustration above, where there were four false representations: The “minority” rule would give the injured party the actual datoia'ge suffered, '$1,000, and thus replete his estate, and this regardless of whether he was wronged' — his estate 'depleted— through hfe believing in .one or in four of the representations; while under the “majority’’ rule, his recovery would depend on hiolw many of the representations he believed. Thus the damage allowed) under the “majority” rule might be more, less, or the same as tíre actual1 ios's suffered.

As suggested by the court in Nelson v. Gjestrum, supra:

“Hioiwi easy, is it not, for the one with the most elastic conscience to establish misrepresentations and secure large amounts-on sharply conceived' bargains. If bargains can be recovered for in actions for deceit, may we not look for persons- going around seeking opportunities' to be duped, so .that they may recover for 'advantageous1 bargains? Suppose the defendant herein had been in a situation where he was virtually forced to sell at any price 'the property be believed to; be worth $12,000, and which he actually represented to plaintiff of that value, thereby inducing her to buy; should plaintiff ethically or morally he entitled, if dissatisfied1, to retain ibhe property she got and recover $4,500 besides, or would it he more consonant with proper ideas of right and1 fair dealing to give her back the farm, -or, if sire prefers to lce'eip the house and lot, to give her whalt'ever -the farm was worth above what she received;”

As a -matter of fact the “minority” view does not encourage sharp practice on the part of either grantor or grantee. The fact that an action based on .the breach' of. warranty cam' be brought sufficiently 'discourages wrongdoing, where 'damages, for breach of warranty 'would exceed .those for tort; and, in cases, where the damages for It'ort would be the greater, the fact that such action may be resorted' to 'discourages' fraudulent warranties..

There is an ol'd saying that, “It fe a poor rule that won’t work both ways.” Suppose the grantee, by 'deceit consisting in repres'enlbing to the grantor that grantor’s! land] is olf poor quality, induces the grantor to sell land for $5,000 which is actually wiorth $6,000, but which if as represented by .the grantee is. only worth $4,000. Tine “minority” rule would give the grantor damages in $1,000, Ihiis .actual loss. Knight v. Leighton, 110 Minn. 254, 124 N. W. 1090; Mountain v. Day, 91 Minn. 249, 97 N. W. 883. To be consistent, those courts, upholding the “majority” rule should, ini such la case, allow $2,000 damages, and' yet to do so would hardier upon the ridiculous.

It is clear that tine only premise upon which the “majority” rule could be biased and give support to. the claim that it is nio|t an exception to the ordinary rule governing' measure of damages for deceit — the rule that allows compensation — is: “If there had been no deceit there would have been a purchase or exchange of property under which plaintiff would have received property .answering to the representations' mlade,” or, as1 suggested by one of our colleagues, “If the representations had been true, the sale or exchange would have been made just as it was made.” If it were permissible, in air action for damages based on a tort inducing a sale or exchange, to> start from such premise, the* “'majority” rule would1 be no exception., Bult the premise upon which an action to recover damagesi for deceit inducing a sale, as evidenced by the necessary allegations- of a complaint, is: If there had been no deceit, there would! have been no sale or exchange. It is only where deceit prevents a sale that an action to recover damages is .properly based on the premise that, if tiñere had been no deceit, the sale iwoold have been made.

One of our colleagues has suggested that “under tile ‘minority’ ruile the falsie representation© have no- relevancy to the measure of damages,” and that “thie false 'reipresenbatioosi a© to quality and value are thus entirely eliminated! as the proximate cause of 'the d'am)ag.e, and bear no relation to the .compensation for -the wiióing.” Such statements are partly correct. We concede, in fiacit claim, that under the “minority” rute — (which is identical wiith the general rule governing measure of damages for tort — ■ there Us no relation between the tort and the amount of compensatory damages recoverable; but rwe dispute the assertion that the “minority” rule entirely eliminates' the tort itself — in the case hefioire ms, the false representations. It would seem that our •colleague is of the opinion, and it is clear that the “majority” rule is founded upon the assumption, that compensatory damages should be measured by the tort itself — iby the false representations; that the greater, the more numerous, ithie representations, in other words, the moire heinous the tort, 'the greater should be the recovery, and this regardless of the results that flow from the representations. Nothing could more clearly reveal the fundamental unsoundness of the “majority” rule, and prove that it is in fact .an1 exception to the rule governing the measure of damages far every other tort. Such rule places cause before effect when the whole law fixing the measure of (damages for tort is based upon the proposition that compensatory .damages should be, and ■in the case of every- other tort known to the law are, measured by -the result or effect of the tort rather /than.' by the tort itself. It is because of this very fundamental error — this very fact that tíre “majority” rule has, -as to this one -peculiar tort, disregarded the rule governing (damages for every other known tort — that the “majority” rule -stands upon a basis both unsound and exceptional. Attempt ta apply to- any Other tort the rule 'that there is a -direct relation between the amount lolf compensatory damages •that should be recovered .and the number, the moral gravity, or the enormity of tth-e torts committed1, add! see to what result one would .arrive. It is (true that there must be a tort, else there is no wrong upon which to base recovery; but unless the tort, as a cause, produces an effect detrimental to the innocent person, there can be no recoverable damages; and whenever compenis'atory damages 'are recoverable 'they should alwlays be measured by the effect produced by (the tort, and! not by the Itort itself. We cannot logically measure damages by ithie cause in the case of -one tolrt, and by ithie effect in the case of some other itort, but, if we da, we sbctoM ialti least concede that we are usling two rules for such measurements. If we are to measure 'damages by the tort, it must Ibe .because libe tort itself is a<n actionable wrong, regardless of the effect or result flowing therefrom. If, through the negligence of the carrier, the train, runs off the track, should' the right and extent of recovery be the Same to ial'l who were on the train —to him who escaped without any physical or nervous injury, to 'him who isi slightly injured .and to' him whose body is so badly injured as to leave' him a - cripple for life? If the confidence man addresses the multitude, and, through the same 'deceit, leads some to invest their thousands, others their hundreds., while others are too wary and are not caught, should toe amount recoverable by each be the same? It is clear that logically there should be one rule applicable alike to all cases, no •matter what toe mature of the tort may be, and that one rale is that compensatory damages folr every kind of tort must be such amount as will compensate the .injured party; in the one class of torts, for toe injury to his person; /in the other class of torts., for the injury to his property — toe 'depletion of his estate.

But let us ask if there could be applied, in all .cases, of damages resulting from deceit, the rule that such damages should depend upon and be measured by 1 the deceit •practiced. On the other hand, can. we not, in every case, apply toe “minority” rule, and, ini every case where damages are 'sought for deceit, measure toe same by the result — toe change in the estate of toe 'injured person? Besides the illustrations we have already given, let us suggest the following: A. falsely represents to B. that B. is 21 years of age, .and thereby induces- B. -to be a candidate for .am office the salary of which is $2,000 per year. B. expends $500 li'm being elected, amid- then is held disqualified beclausle of minority. B. sues A. for 'damages. What can B. recover? 'Gam B. say to A., If the representations had been true, I wbuldl have had toe office, and you are l-iable to me for $4,000, the amount of two years’ «'alary — or $12,000 if it were a siix-yelar office — or can B. recover but for the money -he parted with and tone he spent ini Canvas's? Gould B. s'ay to A., You must make your representations, .good? ■

We repeat that every .aotiiotai seeking -compensatory dlamages f/or injuries alleged -to have resulted from a tort — tío/ matter what the nature oif toe tort may be — i.sl logically -based on this one premise: Prior to the ■ tort the innocent party occupied a certain position oír wiae in a .certain condition in relation to some personal or property right; by such tout such/ position or condition '.was changed) to his .detriment. ' And we insist 'that, based upon such premise, -the following /rale as to measure of .damages logically fblfows: The injured parity is entitled /to recover that amount which will recompense him in money for the loss or injury which he has suffered to his person or property through such Change of position or condition; suich loss suffered, and therefore the amount to be recovered, should not depend in any manner whatsoever upon the nature of the tort or torts that brought about the .change of position or condition.; neither should it depend upon, nor be measured by, the number of such torts, o.r the ixuoral atrooiousness thereof; but it should be measured solely by the nature and extent of the change of position or condition brought about by tire tort or torts. Whenever any person, through any line of logical reasoning, can demonstrate that, if a man pays $500 for a $300 horse, being led to do so because of ten lies told him, he really suffers in dollars and cents ten times as much damage, through the depletion of his estate, as he would have suffered if he had -paid the $500 for the $300 horse and been induced to do so through the influence of one lie, or through duress, then such person has laid the basis for a claim that the “majority” rule )is not in fact an exception to. tire recognized rule governing measure of damages for every other known tort.

It is clear /that -the courts which have adopted the “majority” rule, have engrafted upon ¡the law prescribing the usual measure of dameges for torts an exception allowing such damages to be measured by the cause — the tort — and not by the effect — the change wrought upon the person or estate of the property of the injured party. This undoubtedly came about through the fact that the courts, adopting the “majority” rule, believed: to hold otherwise encouraged wrongdoing. Morse v. Hutchins, 102 Mass. 439. And; yet, in actual practice, it is often found that such rule gives: to the injured party less than the “minority” rule, and in the great mlajority of cases gives either more or less than actual' compensation. "But whatever we might'think of'the advisability of providing one rule for a part of the cases that are based upon deceit, and another rule for all others based on torts including a large proportion of 'those based on deceit, we are not ait liberty to carry .out our judgments, as our lawmakers,- by section 2312, C. C., have prescribed the rule that must govern us and have- enacted no exception- thereto. lit ¡is well to note the several provisions of -our Ocidie applicable to the case before us. Section 1292, C. C., reads:

“One who willfully 'deceives another, wii't-h intent to induce him to 'alter this position to his injury or risk, is liable for any damage which he thereby suffers.”

Section 1297, C. C., provides:

“* *.* The extent of liability in such cases is- defined by the title on compensatory relief.”

Section 2286, C. C., reads:

“Every person who suffers detriment from the unlawful act •dr omission of another may recover from tire- person in fault a compensation- therefor in money, which isi calie-d- damages.”

Section 2287, C. C., reads:

“Detriment -is -a loss or harm -suffered in person or property.”

Section 2312, C. C., reads:

“Foir the breach of an obligation not arising from- contract, the measure olf damages, except where otherwise expressly provided by thlis Code, is the amount which will compensate for all the detriment pro-ximately caused thereby, whether it -could have been anticipated or not.”

One of ouir colleagues has very truly stated that section 2312, C. C., “inlay be paraphrased, without changing its meaning in the least, to say, ‘The measure of 'damages iis the amount which will make good tel the innocent party whatever loss was proximately caused! to him by the deceit.’ ” It will be found that but few of the “majority” states have a statute like our section 2312. We sire'dot at liberty to give this section such a construction' as will permit uis to place ¡an injured party in a better position financially —to -increase his- estate -over what it would have been if there’had been no ’deceit.

Tlhe question before us has never ¡been passed upon by this court. It was mat before the court in McCabe v. Desnoyers, 20 S. D. 581, 108 N. W. 341. Respondents have cited Lunscheon v. Wocknitz, 21 S. D. 285, 111 N. W. 632. We (hardly understand why, as the opinion shows that the jury allowed damages in acaontHamGe with the “minority” rule, and in sustaining tibe verdict this court -said:

“Under tibe facts and circumstances of the case, it is "well settled that a purchaser of real estate ¡baa a oi'ghlt to rely upon the representations of tihie vendor touching tibe quality of the property, ¡anid may either rescind! tibe transaction or recover compensatory damages.”

Our colleagues have quoted frota the decisions of the court of our sister state, which state has -our section 2312. We cannot ¡agree that the reasoning' oif the ¡court as revealed in those decisions is sound. As early as 1890 the federal -court speaking of this section, said in Glaspell v. N. P. R. Co. (C. C.) 43 Fed. 900:

“Upon this statute, and the 'cases of Smith v. Bolles and Atwater v. Whiteman [(C. C.) 41 Fed. 427], supra, I am of tilie ¡opinion that the court, upon the trial of this- -action, should have instructed the jury tfaait if they found for the plaintiff upon the other issues, that as to the measure of damages they should find the cash Value of the 1‘and in the condition if actually was -at the time of the ¡sale, and 'deduct such value from the sum of money invested) 'by the plaintiff in the land, and that difference, iwiitih interest added, in th-e discretion of the jury, would he the proper -amount which the plaintiff ¡was entitled to recover.”

Since the action- now before us was brought, the Circuit Court of Appeals, in Nupen v. Pearce, 235 Fed. 497, 149 C. C. A. 43, on appeal firomi the District Court of the United- States for the District o-f North Dakota, disregarding that rule generally recognized by tire- federal! courts under which such counts follow the aonstructiloo putt upon a state statute by the courts of such state, held in accord with the “minority” rule, saying:

“And notwithstanding the construction placed by the Supreme Court of North Dakota upon its statute fixing the measure of damages for (deceit and’ misrepresentation -in- the sale of personal property, we do not feel at liberty to depart from the rule so-approved by the Supreme -Court of the United States.”

In closing we would suggest that, if the lawmaking power of this state desired to establish, for deceit inducing the purchase or exchange of land, a -rule of damages other than compensatory, iit could, as it did in case of warranty of quality of personal -property (section 2305, C. C.), have enacted! -a statute expressly providing' therefor, and declaring itibe damage to be the difference between thie value of the piropelrty if it had been as represented and its actual value. Knowing that 'there were courts which, at colmaron, laiw, did' allow damages, in accordance with such rule, which rule was an exception, to the ordinary rule governing measure of damage for torts, it. would seem that, by 'omitting to recognize such exception, such lawmaking power had clearly 'disclosed an intention that in (this state the siamie rule was to govern in all actions for damages based upon deceit, even those where deceit induces a sale or exchange of property, as governs in every other action for damages based upon' tort. It is not for this court to usurp the power of the Eegfelatare, even though we might believe the “majority” rule toi be the wiser.