101 Kan. 54 | Kan. | 1917
The opinion of the court was delivered by
In this action the plaintiffs, A. A. Kurt and F. C. Kurt, asked a recovery of damages as against Clinton Y. Cox, Tipton Cox, F. M. Newcom, Tom Mott, F. M. Hamilton and Lawrence Bowers for misrepresentations and fraud in the exchange of a stock of goods for a tract ‘of land. Plaintiffs entered into an agreement with Clinton Cox whereby they traded their stock of merchandise, valued at about $14,-000, for 9,60 acres of land in Oklahoma and for $4000 cash,
He contends that the evidence did not sustain the charge of fraud nor the findings and verdict of the jury. It is insisted that it was not shown that Clinton Cox made any representations to Kurt as to the quality and character of the land, nor that he had knowledge that the representations made were untrue. There was evidence introduced that several days before the exchange Clinton Cox, under án assumed name, had gone to Herington, where plaintiffs’ stock of merchandise was located, and made an examination of it, and had also had his father, Tipton Cox, who was experienced in such matters, examine it and give his judgment upon its value. Kurt testified that during the negotiations for the trade he was told that as the Coxes were reliable people and were willing to guarantee the land he ought to be willing to exchange his stock for it without waiting to look at it, and that Clinton Cox not only
In view of the direct and positive testimony of Kurt, that Clinton Cox just before the agreement of exchange was effected made a statement as to the quality of the land, which he also reduced to writing, and which was material, untrue and was relied upon by the plaintiffs, it must be held that the verdict was not without support. The statement was not qualified as to the source of his information nor as to the grounds of his belief. The jury, in effect, found that he made the false representations upon the day when the contract was closed .by guaranteeing that the land had good soil, a good growth of saw timber, a good growth of grass, and that there was a quantity of it that was good tillable land, and that the representations were false. It is true that the jury found that he had told Kurt that he had never seen the land, and also that the statements which he had made as to its character and description were statements which he had obtained from others. The fact that he had gained his information from others and had never seen the land does not protect him from liability if he made positive and unequivocal statements and the guaranty that has been mentioned. If he made the statements, as Kurt has testified, knowing them to be untrue, with the intention of deceiving plaintiffs and inducing them to part with their property, it amounts to a fraud and he can not
In Westerman v. Corder, 86 Kan. 239, 119 Pac. 868, where false representations were made by the grantor in the sale of property and the excuse was that they were made in good faith, the court said:
“While admitting that the representations were made and that they were untrue, it is contended that because they were made in good faith, believing them to be true, and no fraud was intended, therefore an estoppel was not created. It must be conceded that the effect is the same as it would have been if guilty knowledge had been shown. It does not repair the loss of the grantee to be told that the grantor supposed he was telling the truth.” (p. 241.)
The court was applying the doctrine of equitable estoppel in that case, but in disposing of the case it was remarked that—
“It has often been held that false representations made and acted upon to the injury of another, although not known to be false by-the party making them, may nevertheless in a proper case afford ground for the recovery of damages.” (p. 241.)
The supreme court of Michigan, in Holcomb v. Noble, 69 Mich. 396, stated:
“Careful examination of the cases adjudicated in this State satisfies me that the doctrine is settled here, by a long line of cases, that if there was in fact a misrepresentation, though made innocently, and its deceptive influence was effective, the consequences to the plaintiff being as serious as though it had proceeded from a vicious purpose, he would have a right of action for the damages caused thereby either at law or in equity.” (p. 399.)
(See, also, Aldrich v. Scribner, 154 Mich. 23; Bullitt v. Farrar, 42 Minn. 8; Johnson v. Gulick, 46 Neb. 817.)
The authorities are not in agreement as to whether or not good faith and intention to tell the truth will relieve the speaker from liability if the representations are untrue. A distinction is made in some cases where the representation is made by a mere volunteer who has no interest in the transaction and one who has a contractual relation to it. The one, it is said, has no higher duty than to answer honestly and in good faith, while it is the duty of the latter to be careful and accurate, and hence ignorance and mistake will not relieve him from liability. (Note, 7 L. R. A., n. s., 646.)
“For Sale or Exchange: 960 acres of land located in Pittsburg County, Okla., oak, pine and hickory timber. Good ranch proposition, part tillable, well watered, within two or three miles of one of the largest coal mines in Oklahoma; also near the oil and gas developments, within ■two or three miles of the largest cement plant in Oklahoma. The timber alone should almost pay for this land. Located within three miles of interurban and railroad. Three miles from town of 4000 people. Legal description E % of sec. 30, all of sec. 31, twp. 4 N. range 17 E. Will exchange for good income property or merchandise. Address the owner direct and save commission.”
These facts and circumstances were sufficient to warrant the inference that Cox knew that the representations were untrue and were made with the purpose of defrauding plaintiffs, even if the written guaranty had not* been given. They are sufficient to overcome his declaration of an honest purpose and a lack of actual knowledge. To willfully shut his eyes to obvious facts within his control so that when called to account he might say that he had no personal knowledge of the facts is itself a fraud. ■
Complaint is made of instructions 10 and 11. The jury were advised that it was necessary for plaintiffs to prove that the representations were false and known to be false by the defendants and that their falsity might be proven by showing:
“First, Actual knowledge of the falsity of the representations by the defendants. In this case the proof must show that the representations were false and that the defendants had actual knowledge that they were false;
“'Second, That the defendants made the representations as of their own knowledge, or in such absolute, unqualified and positive terms as to imply their personal knowledge of the facts, when in truth, the defendants had no knowledge whether the representations were true or false. In this case the proof must show that the representations were in fact false and in addition that the defendants made the representations as of their own knowledge, when in fact they had no knowledge whether they were true or false, without belief in their truth, or recklessly careless whether they were true or false.
*60 “TMrd, That the defendants’ special situation or means of knowledge were such as made it their duty to know as to the truth or falsity of the representations. In this case the proof must also show that the representations were in fact false and in addition that the defendants’ special situation or means of knowledge were such as made it their duty to know as to the truth or falsity of the representations.” ,
The principal criticism is that as Kurt’s own testimony showed that he was informed that Cox had not seen the land and had derived his information from others there was no warrant for referring to statements that would imply knowledge, or for mentioning any substitute for actual knowledge. Knowledge might have been gained from other sources than a personal inspection of the land. It is immaterial whether it is designated as actual knowledge or just knowledge. As there was testimony of positive declarations by Cox, and also of circumstances tending to show that he must have known that the representations were untrue, the instructions appear to have been warranted.
Complaint is also made of instruction 18, which first stated that if the defendants Clinton Cox, Boyd Newcom and Tom Mott made representations as to the character and quality of the land believing them to be true, and informed the plaintiffs that they had derived their information from Tipton Cox and fully disclosed the source of their information without anything more, they would not be liable, and the court added:
“But, if you find that Clinton Cox or. Newcom or Mott or either of them went further and stated that Tipton Cox had seen the land and that his representations in reference thereto could be relied upon, then you are instructed that the person or persons communicating such facts, if you find it to be a fact, to A. A. Kurt,-are deemed to have adopted the representations of Tipton Cox as their own; and if the representations of Tipton Cox as to the character, quality and location’ of the Oklahoma land were not true, then you are instructed that the person or persons communicating the representations, if any, made by Tipton Cox, are responsible for them and they constitute fraud on their part. If you find that the defendants believed the representations which they made to Kurt were false then they will be liable to the plaintiffs, even though you may. find that they informed Kurt that they had never seen the land, that their own information as to the land was derived from Tipton Cox and others and from a written statement which was delivered to Kurt and that they fully disclosed to him the sources of their information.”
The findings of the jury support the judgment, and, no prejudicial error having been found in the proceedings, the judgment is affirmed.