176 Wis. 137 | Wis. | 1922
Lead Opinion
The following opinion was filed November 15, 1921:
Defendants’ counsel at the trial demurred to the complaint ore tenns on the ground that it did not state facts sufficient to constitute a cause of action.
It is argued that it did not appear that any steps had been taken to collect the note and second mortgage and hence it did not appear that they might not have been collected in full. For this proposition Foster v. Taggart, 54 Wis. 391, 11 N. W. 793, is relied on, and it is urged that fraud without damage or damage without fraud does not constitute a cause of action.
In that case the fraud was predicated on the representations as to the value of a note and first mortgage on which there had been no foreclosure, and it was held that the complaint was bad because it failed to show that the securities were insufficient and what would be the probable deficiency upon a sale on foreclosure. In the present case the complaint alleges the foreclosure of the first mortgage and the sale for an amount only sufficient to meet the mortgage, interest, and costs, thus wiping out plaintiff’s mortgage lien. These allegations and others that the mortgagor was not solvent at the time of the foreclosure of the mortgage, and has never since been solvent, seem to show beyond question loss or damage to the plaintiff.
In discussing the rule of damages for misrepresentation on the sale of a first mortgage, Mr. Justice Newman said:
“If the securities had already been foreclosed and applied, evidence of that fact would be pertinent and cogent to establish the actual amount of damage.” Beetle v. Anderson, 98 Wis. 5, 10, 73 N. W. 560.
There was conflict in the testimony as to the representations made by the agent, Stoll. On this subject we have
Whether plaintiff had the right to rely on these representations is perhaps a more serious question.
It has often been declared that mere statements by the seller as to the value of property are to be treated as expressions of -opinion and not as representations of value. But there is no such unbending rule. The fiduciary or non-fiduciary relation between the parties, the experience, or want of it, of the buyer, the nearness or remoteness of the subject of sale, the ease or difficulty of its inspection, all are subjects which may properly be considered in this connection ; and the decisions of this court hold that the mere fact that the statement takes the form of an expression of opinion is not always conclusive. Whenever there is any doubt as to whether it is made as a mere expression of opinión or as a statement of fact, the question must be determined by the jury or court.
In an opinion by Mr. Justice Rosenberry it was said:
“A study of the cases suggests the thought that, in the"' absence of an express intent to defraud, the determination of whether or not certain representations are statements of fact or of opinion depends upon whether or not the person to whom the representations are made may, under all the facts and circumstances of the case, including such person’s capacity or want of capacity, rely upon them. Where the person to whom they are made may rely upon them they are held to*145 be statements of fact; where the person to whom they are made may not rely upon them, without being guilty of a want of ordinary care and prudence, they are denominated opinions.” Miranovitz v. Gee, 163 Wis. 246, at p. 255 (157 N. W. 790).
See, also, Karls v. Drake, 168 Wis. 372, 170 N. W. 248; Swoboda v. Rubin, 169 Wis. 162, 170 N. W. 955; Becker v. Spalinger, 174 Wis. 443, 183 N. W. 173.
There are many authorities holding that false statements of the value of land far. distant may be relied on by the' buyer as matters of fact and not mere expressions of opinion. See cases cited in 35 L. R. A. 430 and 37 L. R. A. 610.
It is earnestly argued by defendants’ counsel that plaintiff had before bought and traded several farms; that he was advised by the defendants to go and see the Dakota land before the deal was closed (this, however, was denied by plaintiff) ; that he had full opportunity to make further inquiries about the value of the ranch; and that the finding of the jury that he had used ordinary care in relying upon the statements and representations should be set aside. ' All these subjects were proper for the consideration of the jury and were.no doubt ably presented by appellants’ counsel, and we cannot say as a matter of law that the answer of the jury was without credible evidence to support it.
It is also argued that there is no proof of misrepresentations by the defendant Sckroeder; that Stoll was a mere middleman for whose misstatements, if any were made, Sckroeder was not responsible. The testimony shows beyond any reasonable doubt that Stoll acted as the agent of Sckroeder during the whole transaction and received three per cent, commission. Plaintiff’s testimony is that he supposed Stoll to be the principal until the time came for the assignment of the note and mortgage. But this fact in no way changes the real relation of the parties.
It is argued that Sckroeder personally made no false representations and therefore cannot be held liable. By mak
It is also argued by defendants’ counsel that Schroeder had no knowledge that the representations had been made and therefore is not liable.
But in such cases the scienter or wrongful intent is not indispensable. If it were the rule that a principal is immune from loss when his duly authorized agent makes false representations inducing a bargain, there would be little safety in a large proportion of the business transactions of daily life. The seller is bound to know that the representations made by himself or his authorized agent to induce a sale are true. Beetle v. Anderson, 98 Wis. 5, 73 N. W. 560; Miranovitz v. Gee, 163 Wis. 246, 157 N. W. 790; Law v. Grant, 37 Wis. 548; Standard Mfg. Co. v. Slot, 121 Wis. 14, 98 N. W. 923. See many cases cited in 12 Ruling Case Law, “Fraud and Deceit,” p. 337, § 94.
Appellants’ counsel argue that the plaintiff failed to use proper effort to protect himself from loss. It is true that plaintiff was bound to exercise reasonable care and diligence to avoid loss and to minimize the damage; and that to the extent that his damages were the result of his failure to exercise such care and diligence he cannot recover.
It is claimed that it was his duty to accept the offer of Procter to extend the time of payment of both mortgages
It is argued by defendants’ counsel that plaintiff should have brought suit upon his note and thus made the attempt to collect of Turner. But the clear weight of testimony was to the effect that Turner was insolvent.
These were all subjects which were doubtless considered by the jury, and in their special verdict they found that the plaintiff did not fail to exercise ordinary care in taking such steps as an ordinarily careful and prudent man would have taken in protecting and securing the Turner mortgage. We cannot properly say as a matter of law that this answer should be set aside.
The jury found in their special verdict that the land included in the ranch when the trade was made was worth $10 per acre, and that the value of the Turner note at that time was nothing. Counsel for the defendants earnestly attack these findings, claiming that there was no credible evidence to support them and that the verdict was perverse. It is undoubtedly true that the preponderance of the opinion evidence indicated a greater value of the land than that found by the jury. Only one witness, Turner, estimated the land at $10 per acre. The average amount of all the values fixed by plaintiff’s and defendants’ witnesses was about $17. Green and defendant Schroeder valued the land at $20 per acre. Some estimated it at $12 and others at from $15 to $18. There could hardly be a better illustration of • the fallibility of human testimony when it is sought to
It is argued by plaintiff’s counsel that the same considerations apply to the findings of the jury as to the value of the note and mortgage, and that by reason of these facts and the existence of the large prior incumbrance they had no market value.
It is clear -that in fixing the value of the ranch the jury were not bound to take the average of the estimates of witnesses. Churchill v. Price, 44 Wis. 540.
Counsel for defendants criticise especially the testimony of Turner, urging that he was a willing witness who had come from North Dakota, and that he was strongly prejudiced and unworthy of credit. He had evidently not found the ranch-a bed of roses. He may have believed that he had been victimized and may have been prejudiced. Nevertheless the jury may have believed that he had much better knowledge of the land and its value than any other witness. The jury were not bound to accept the opinions of a majority of the witnesses. There was much conflict in the evidence as to values and there were many physical conditions described to the jury. It was the duty of the jury to consider and weigh the opinions of all the witnesses as expressed in this testimony, and the ultimate weight of that testimony was a question to be determined by the jury. In ■ making their determination they were not bound to ignore entirely their own knowledge and experience with respect
The trial court saw the witnesses, heard their testimony, and'refused to set aside the verdict. We do not feel justified in holding that there was no credible evidence to support the verdict of the jury as to the value of the land and the securities, or as to the other questions submitted to them, and hence the determination of the trial court should not be disturbed.
Exceptions were also taken to the introduction of evidence and the giving and refusing instructions, and to the refusal to submit certain questions. We have carefully considered these exceptions and find no prejudicial error.
By the Court. — Judgment affirmed.
Dissenting Opinion
(dissenting). I think the present judgment goes too far and beyond even the heretofore recognized wide field of relief in. such class of cases.
Here a man of mature years; of former business experience; dealing at arm’s length with others; no trust or confidential relationship existing; with the fullest opportunity to examine for himself; no fraud or artifice interposed in the slightest degree to prevent his learning the facts, purchases a second mortgage in alleged reliance upon a seller’s statement that it is “as good as gold.”
From its very nature a second mortgage, as a matter of common knowledge, is not, and cannot be, as “good as gold” so far as being considered an article of immediate and ready sale in the market. Its very nature implies the possibility of future need of the owner thereof being able to take some steps to protect it in case of any possible future default as to it or as to the large and known first mortgage. Such an instrument as purchased here carries on its face lengthy provisions for foreclosure proceedings in case of
It is evident that at the time of the purchase he did not rest as a matter of fact upon what, on the trial, he testifies was his blind confidence in the seller’s expression as to- value, because he then sought information from Mr. Procter, interested in the first mortgage, and Mr. Green, the former owner of the very real estate, and all of his questions to each of those persons were evidently fairly and honestly answered.
Any statement made to him as to the then owner of the property, Turner not thereafter defaulting, was of course a representation as to the future, into- which the buyer can look just as well and as far as the seller.
Representations as to -the then present value of this mortgage, in my judgment, were of no more material weight or basis for the recovery permitted herein than those held to be insufficient for such recovery in Farmers’ Co-op. Packing Co. v. Boyd, 175 Wis. 544, 185 N. W. 234 Furthermore, the overwhelming weight of the testimony was to the effect that at the time of the purchase by him of this second mortgage there was then a present sufficient equity in the property which made the second mortgage good in the reasonable acceptation of such an expression.
I think also that his delay in making any claim or in bringing this action should have been held fatal laches on his part, and that the judgment should have been reversed.
I am authorized to state that Mr. Justice Rosenberry concurs in this dissent.
A motion for a rehearing was denied, with $25 costs, on February 7, 1922.