Knauf & Tesch Co. v. Elkhart Lake Sand & Gravel Co., 153 Wis. 306

Knauf & Tesch Co. v. Elkhart Lake Sand & Gravel Co.

153 Wis. 306 | Wis. | 1913

Marshall., J.

Tbe appeal presents this for solution: If an agent induces another to contract for the purchase of the principal’s land by fraudulently pointing out its boundaries so as to include land of his own, and such other is let into possession accordingly and, later, such agent hands such other a deed and abstract, careful examination of which would disclose the facts, but it is reasonably delayed, the purchase money being as matter of accommodation paid in advance thereof, and such other within a reasonable time discovers such facts, insists upon having the omitted part and is not barred of right thereto by negligence, and the agent thereafter, by successive conveyances, causes title thereto to be vested in a distant party, each concerned having knowledge, or reasonable means of knowledge, of the truth, — may such person efficiently claim it and have relief in equity to confirm title thereto in him of record ?

The trial court ruled in the negative, since, as was supposed, an agent cannot lose title to his land by estoppel because of having fraudulently represented it as the property of his principal in conducting a sale of the latter’s property, not referring to any authority, elementary or judicial, in support thereof. There is none of which we are aware. On the contrary, the inquiry seems to be plainly ruled in the affirmative by the familiar elementary principle of estoppel in pais by which title to the land of one who has fraudulently induced a person to buy the property as that of another, is taken from him and vested in such person, if otherwise, without want of due care on his part, he would be pecuniarily injured.

In general, he who in dealing with another negligently or designedly misrepresents the facts, or, when he ought to speak, omits to disclose the truth for the purpose of inducing such other to, or with reasonable ground to expect he will, change his position in reliance thereon, is estopped to assert the truth to such other’s injury. Two Rivers Mfg. Co. v. Day, 102 Wis. 328, 78 N. W. 440; Frels v. Little Black F. *315M. Ins. Co. 120 Wis. 590, 98 N. W. 522; Marling v. Nommensen, 127 Wis. 363, 106 N. W. 884. Tbe rule bas no sucb infirmity tbat an agent can fraudulently represent bis own property as tbat of bis principal, and induce a purchase by means thereof, and then escape from losing what be so misrepresented because of bis having falsified while acting as agent. Tbe doctrine of estoppel penalizes for tbe wrong and so as to effectually remedy it as practicable. In a case of tbe sort before us, from tbe very logic of tbe principle, it bears on tbe person committing tbe fraud and those claiming under him with knowledge, as tbe only way of affording, as to tbe person wronged, tbe very thing which tbe wrongdoer fraudulently represented sucb person would obtain by dealing as be proposed. Tbe instrumentality operates in favor of tbe one who bas been misled though tbe fraud, — acts upon tbe wrongdoer and any one responsible for tbe mischief, respondeat superior, or because of ratification, and it is effectual to take title to land from one and vest it in another, where justice requires that to be done. It is a rule of last resort, but, as said in Marling v. FitzGerald, 138 Wis. 93, 101, 120 N. W. 388, when it is aroused into activity:

“It stays tbe operation of other rules which have not run their course [with tbe possible exception of tbe statute of limitations], when to allow them to proceed further would be a greater wrong than to permanently enjoin them. It is a rule of justice which, in its proper field, bas a power of mastery over all other rules,” tbat it is “entitled to tbe distinction of being one of tbe greatest instrumentalities to promote tbe ends of justice which tbe equity of tbe law affords.”

Many illustrations are found in our own books of tbe application of the doctrine of estoppel in pais to change title to realty from one person to another to save the latter from tbe consequences of tbe former’s fraudulent representations on tbe faith of which sucb other acted. The following are a few of them: Peabody v. Leach, 18 Wis. 657; North v. Henneberry, *31644 Wis. 306; Two Rivers Mfg. Co. v. Day, 102 Wis. 328, 78 N. W. 440; McCord v. Hill, 117 Wis. 306, 94 N. W. 65; Mariner v. Milwaukee, 146 Wis. 605, 131 N. W. 442. In Kingman v. Graham, 51 Wis. 232, 8 N. W. 181, it was distinctly Held that one may lose title to bis land to another by active fraud, but not by mere silence with no more than a mere moral obligation to speak, quoting this from Brant v. Virginia C. & I. Co. 93 U. S. 326:

“And it would seem that to the enforcement of an estoppel of this character with respect to the title of property such as will prevent a party from asserting his legal rights, and the effect of which will be to transfer the enjoyment of the property to another, the intention to deceive and mislead, or negligence so gross as to be culpable, should be clearly established.”

This case would satisfy, fully, the aggravated characteristics thus mentioned though later authorities seem to indicate that, to designedly or inexcusably mislead another is sufficient, as in Two Rivers Mfg. Co. v. Day, supra, and Mariner v. Milwaukee, supra. There the more modern doctrine, as gathered by text-writers from the trend of judicial administration, was adopted. 2 Pingrey, Real Prop. § 1220. One should not be misled, in a case of this sort, by failing to distinguish between estoppel by covenant and estoppel in pais. Each operates in its appropriate field and is quite as effectual as the other, as indicated in North v. Henneberry, supra.

It is suggested that the doctrine aforesaid is in violation of the statute of frauds when applied to real-estate titles. Not so, as uniformly held. The statute of frauds' was not designed to enable the evil-disposed to possess an instrumentality with which to perpetrate fraud. It is the weapon of the written law to prevent fraud while the doctrine of estop-pel is that of the unwritten law to prevent like evil. Each is effective in its appropriate field. Roth are essential to prevent and redress wrongs. Courts elsewhere, as well as our own, have uniformly dealt with this subject as not impairing *317tbe integrity of tbe statute in case of tbe taking of title to realty from one and vesting it in another being necessary to prevent tbe latter from suffering loss in consequence of having acted upon that one’s false representations. Bell v. Goodnature, 50 Minn. 417, 52 N. W. 908; Richardson v. Chickering, 41 N. H. 380; Louks v. Kenniston, 50 Vt. 116; Stanwood v. McLellan, 48 Me. 275. Tbe cases decided here and these authorities well illustrate bow effectually tbe principle of es-toppel in pais operates in such circumstances as were disclosed in this instance.

If tbe foregoing were not sufficient to dispose of this case in appellant’s favor, a reversal would be necessary because of tbe trial court having taken too narrow a view of its competency to deal with a situation in equity, upon its appearing that there is no sound basis for other than legal relief, and tbe facts were known to tbe plaintiff in tbe beginning. There is no question, even from tbe trial court’s point of view, but that a cause of action was stated in equity and, if that were not so, yet tbe action was commenced in tbe good-faith belief that equitable relief was obtainable on tbe facts. Moreover, no objection was made by answer or demurrer to tbe court’s dealing with tbe matter.

Tbe mere circumstance of itself that appellant knew tbe facts when tbe action was commenced would not require a dismissal because of facts not being established warranting equitable relief if, notwithstanding, good cause for legal relief was shown. Having properly acquired jurisdiction, in such a case, a court of equity has very broad power to wind up tbe entire controversy appearing from tbe pleadings and evidence, whether legal or equitable relief, or both, be required, as tbe following will show: Franey v. Warner, 96 Wis. 222, 71 N. W. 81; Cole v. Getzinger, 96 Wis. 559, 71 N. W. 75; Stevens v. Coates, 101 Wis. 569, 78 N. W. 180; Gates v. Paul, 117 Wis. 170, 94 N. W. 55; Luetzke v. Roberts, 130 Wis. 97, 109 N. W. 949.

*318It should .not be thought that the facts of any one of those cases clearly indicate the- entire scope of the rule. Difficulty often happens from taking the circumstances of some particular controversy as measuring the r.ule of the decision in respect thereto, instead of the rule merely applying to the facts as it might to many somewhat similar conditions. The principle itself is stated as fully, perhaps, as anywhere in Gates v. Paul, supra, thus:

“If one sues in equity in good faith and fails to establish his cause but shows a state of facts entitling him to recover at. law, the court, having rightfully obtained jurisdiction for a proper purpose, may retain the cause and grant just such relief as upon the facts the plaintiff appears entitled to, whether at law or in equity.”

The different adjudications on the subject are, to some extent, reviewed in Stevens v. Coates, supra.

I may be permitted to say for- myself, in passing, that where warrant can be found in the Code for dismissing an action, under any circumstances, merely because relief was sought in equity and the nature of the redress warranted by the proven facts is legal only, I have never been able to find. Neither have I been able to appreciate how the practice to the contrary, to any extent, was retained under the Code. We have but one form of action, one form of complaint, one method of forming issues, and one court for the trial thereof. There is no jurisdictional question, in the technical sense, which could arise as to whether a cause of action should be constructively in a court of equity or in a court of law. The court having jurisdiction in one aspect has jurisdiction in the other. In either case the complainant is required in plain and concise language to tell his story, and he is entitled thereon, the facts being established, to just such relief as is appropriate to redress any wrong or vindicate any right which is within the competency of the court to grant. In case the matter requires interference by a jury, it is under the control of the court to give it that direction as matter of administra*319tion. The cause can be dismissed as to some parties, other parties may be brought in if necessary, and the whole subject dealt with according to the real necessities of the case, as indicated by the facto pleaded and properly established. Why then need a party entitled to judicial relief of some sort on the pleaded and established facts, be turned out of court without it ?

It follows from what has been said that the judgment appealed from must be reversed and the cause be remanded for judgment in appellant’s favor, establishing its title to the disputed premises, against all parties to the action and, if neces-jary, charging the one holding it of record as trustee for plaintiff and requiring a transfer from that one in an appropriate way; that is, by the party or by the court under its equity power in that regard in lieu thereof.

The costs for printing on the appeal must be specially limited because of the case being needlessly long. No more than $75 can be allowed.

By the Court. — The judgment is reversed, and the cause remanded for judgment in appellant’s favor as indicated in the opinion.