126 Minn. 229 | Minn. | 1914
Lead Opinion
Plaintiff, the vendee in an executory contract for the purchase of certain lands, seeks by this action to recover damages for the vendor’s misrepresentations concerning its quality and character which induced plaintiff to enter the contract. The court gave defendant judgment on the pleadings,. and plaintiff appeals.
These facts appear from the pleadings: On April 18, 1910, the parties hereto entered a written contract whereby defendant agreed
This appeal presents the question whether a vendee in an executory contract for the conveyance of land may recover damages for the vendor’s misrepresentations respecting the character of the land where it appears that, after the vendee’s default in making the required payments, the vendor was permitted to terminate the contract by statutory notice, without any effort of the vendee to perform or keep the contract in force. At the outset it is to be noted that the action is not for rescission. For the deception practiced upon him plaintiff might seek redress in two ways: He could rescind and recover what he had parted with, or he could retain what he obtained, and recover damages for its being of less value than the amount paid or agreed to be paid therefor. Choosing
Appellant makes a plausible argument to this effect: The moment the contract induced by defendant’s false representations was made, a cause of action arose in plaintiff’s favor, and the subsequent conduct of either party in respect to their contract obligations cannot affect or destroy this cause of action. Plaintiff agreed to make certain payments, defendant accepted the promise to make them, it had the right to enforce the promise and need not have cancelled the contract. In short, plaintiff maintains that this suit for damages is independent of defendant’s remedies upon or under the contract, and remains to plaintiff no matter what course plaintiff may pursue relative to the contract.
As above stated, when this suit was brought there was past due and unpaid under the terms of the contract more than the damages plaintiff claims. And further, when the pleadings were closed, plaintiff had suffered the contract to be terminated and cancelled because of his failure to make any of these overdue payments. For such failure both the statute, section 8081, G. S. 1913, and the contract provide for a cancelation. The contract is legally terminated. Defendant cannot now enforce the payment of the purchase price for this land. Warren v. Ward, 91 Minn. 254, 97 N. W. 886. And it ought also to follow that plaintiff has no contract upon which to predicate damages. There is no longer any property received or to be received by plaintiff, the value of which could be deducted from the agreed purchase price. It cannot be that a person may enter a contract to buy property for a large sum to be thereafter paid, never make the payments agreed upon, suffer the other party to cancel the contract by reason of the default, and then sue and recover heavy damages for deceit, inducing him to buy property which he
Appellant confidently relies on Stearns v. Kennedy, 94 Minn. 439, 103 N. W. 212. Language there used when considered without regard to the facts of that case may lend plausibility to plaintiff’s contention. However, it is apparent that no departure is there made
But it is said, through, defendant’s false representations plaintiff was induced to part with $464, and a recovery should be allowed for that amount if for no greater. We have pointed out that he could have avoided this loss by rescission. He rejected that remedy and selected the one by which he affirmed the terms of his contract. The loss of this money is in no sense naturally or proximately due to the misrepresentations of which he now complains and is not part of the damages arising from receiving property inferior to that which
Had plaintiff sought to recover only the money paid on the contract tainted by defendant’s fraud, it might have been accomplished by an action at law for money had and received, notwithstanding defendant’s cancelation of the contract. Such an action might be considered virtually the same as one for rescission and would be governed by the principles which are applied in equity suits to rescind for fraud. Brand v. Williams, 29 Minn. 238, 13 N. W. 42; Todd v. Bettingen, 109 Minn. 493, 124 N. W. 443. We do not decide, or intimate, that a defrauded vendee in an executory contract for the sale of land may not, after discovery of the fraud, entirely ignore the existence of the contract, and sue the vendor for instalments paid as for money had and received. Should the vendor in such a suit set up the defense that the money was received under a contract, we apprehend that it could be successfully met by pleading and proving that his fraud induced the contract and therefore as to the vendee it is void. See cases cited in note to Martin v. Hutton, 36 L.R.A.(N.S.) 602. But if anything is to remain of the well-established doctrine that one defrauded in a bargain has the choice of two inconsistent remedies, so that the selection of one precludes resorting to the other, we must from the pleadings determine which one of the two plaintiff has selected and hold him to it. He cannot have both. It is not to be presumed that he has attempted to do what is not permissible — cover the two. With full knowledge of the alleged fraud and of the fact that defendant had taken measures to cancel because of the three years’ default, plaintiff deliberately elects to affirm the contract and use it as a basis for the recovery of heavy damages. The action is
The judgment is affirmed.
Dissenting Opinion
(dissenting).
I dissent. Defendant admits for the purposes of this case that it induced plaintiff, by fraudulent representations, to enter into an executory contract for the purchase of real property, wherein he agreed to pay defendant therefor $1,440 more than its worth, actually then paying $464, the balance of the purchase price being payable in deferred annual instalments covering a period of 10 years.
The question is, can plaintiff recover the $464 in this action, it being conceded, under the rule in Sigafus v. Porter, 179 U. S. 116, 21 Sup. Ct. 34, 45 L. ed. 113, and our cases to like effect, that such is all he has lost by the transaction or which he could in any event recover. Defendant contends, and the court concludes, that he cannot, because of (a) the form of the action; (b) cancelation of the contract inaugurated before the action ivas brought and completed thereafter; (c) lack of proximate causal connection between defendant’s fraud and plaintiff’s loss; (d) the rule as to measure of damages.
Unquestionably, the complaint not only states a cause of action, but also, under defendant’s admission, sets out facts which, if they had been seasonably acted upon, would have entitled plaintiff to a rescission of the contract and a return of the money paid. Hence if defendant’s claims are sustainable, such must follow from its cancelation of the contract, or else because the law infers therefrom a deprivation of plaintiff’s right of recovery. Neither of these propositions should be sustained. It is wholly inadmissible to read into the contract any right of cancelation on defendant’s part for plaintiff’s failure to comply with the terms thereof if tainted with fraud, ■so as to cut off the remedy sought, or any authority to retain plaintiff’s money obtained by fraud; nor should use of the cancelation stat
In the supposed, and also the present, case, language cannot obscure the fact that defendant, after having obtained plaintiff’s money through fraud, secures legal sanction to its retention, without, as I think, either legal or equitable right, merely by invoking the terms of the tainted contract. Under the facts plaintiff could have re
The result reached in the majority opinion comes largely from supposed necessity of distinguishing here between actions based on affirmance and disaffirmance. While it may be said that technically plaintiff affirmed the contract by bringing this action, he should not be deemed thereby to have affirmed the fraud, which is the essence of his complaint. But, be this as it may, no rule of procedure, I think, should be allowed to bring about the result reached by the court in this case. Dorms of actions should not be allowed to cover a wrong, and logic of practice should yield to justice.
“As the law is a practical science,” said Allen, J., in Spade v. Lynn & Boston R. Co. 168 Mass. 285 [47 N. E. 88, 38 L.R.A. 512, 60 Am. St. 393], “having to do with the affairs of life, any rule is unwise if, in its general application, it will not, as a usual result, serve the purposes of justice.”
Now as to proximate cause. Did plaintiff lose his money through defendant’s fraud, which induced him to enter into the contract and to part with his money, or through his intervening failure to make
It is said that our rule as to measure of damages is an insuperable obstacle to plaintiff’s recovery, because his rights in the property had been divested by cancelation before trial, thus leaving nothing by which to measure damages. But the principle underlying this rule merely limits recovery to the direct pecuniary loss sustained in the transaction, to the exclusion of expected profits. Such loss being established in the sum of $464, it is necessarily within the rule, and plaintiff should not be deprived of a recovery thereof because he might have been entitled to more had he fully performed. The greater must include the less.
I think the judgment should be reversed.
Concurrence Opinion
I concur in the foregoing opinion of Justice Philip E. Brown.