121 P. 475 | Mont. | 1912
delivered the opinion of the court.
This action was brought to rescind a contract for the sale of real estate and personal property, to recover a portion of the purchase price, and for damages. The complaint alleges that on July 27, 1910, the parties hereto entered into a written contract by the terms of which plaintiffs agreed to purchase, and defendant to sell, 780 acres of land in Fergus county, described by government subdivisions, together with certain
Each of the plaintiffs testified unequivocally to the representations made by defendant as alleged in their complaint. They also called one J. L. McCormick, who corroborated them, in a measure at least. There was also introduced in evidence the written notice given by plaintiffs to the defendant of their election to rescind the contract, and the answer thereto from the defendant. So much of the letter written by plaintiffs to the defendant as is pertinent to the inquiry here is as follows:
“Lewistown, Mont., Nov. 2, 1910.
“Notice to Joseph Liberty, Geyser, Mont. — Dear Sir: We have caused to be surveyed the lands which we agreed to buy from you according to that certain written agreement of date July 27, 1910, and have discovered that approximately (200) two hundred acres are located east of the public road which traverses said land, and not on the west side of it, as you represented to us. On account of said fraudulent representations, we hereby rescind said contract. * * * ”
And such portions of defendant’s answer thereto as reflect upon the inquiry are as follows:
“Geyser, Mont., November 7, 1910.
“Post Bros., Lewistown, Mont. — Gentlemen: I am in receipt of registered notice dated November 2nd in which you state*8 that I misrepresented the lands on the Cameron ranch; I am sorry yon see it that way. There was no misrepresentation on my part whatsoever. I showed you the north line, the west line and the east line of this property and I told you that the road along the bluff was the line, or about that. * * * I told you as near as possible where the land was on this entire tract and if there is, according to your statement, 200 acres across on the south side then there are 200 acres of land more than I thought I had or that I was selling. ’ ’
It will be observed that plaintiffs refer to the rough land as lying east of the road, while defendant refers to it as lying south. The road runs southwesterly, and the land is properly described as south or east of the road. There is not any question but that both parties refer to the same land. The record also identifies the road referred to in defendant’s letter as “along the bluff” as the same road which plaintiffs contend was pointed out by defendant as the east boundary line of the land.
The plaintiff Menus Post further testified that in November, 1910, he met the defendant in the office of Mr. Coleman in Lewistown, and had a conversation with him, in which the defendant made substantially the same statements as are contained in the letter above, and that during the course of the conversation defendant drew a map or plat of the land to show its location; but on the plat thus made defendant located the land a quarter of a mile, or, to use the witness’ own language, “one eighty,” west of the actual location as given in the contract. This conversation is not denied, and there is not a word in explanation of the statements in defendant’s letter.
Defendant in his oral examination denied that he mentioned the lines to Menus Post; admitted that he showed the east line to the plaintiff Chester Post, but denied that he ever stated that the land was all west of the road. However, he did testify: “I always did think that the [east] line was just about the middle of the creek there.” The evidence shows
From a remark of the trial judge in sustaining an objection, it would appear that the cause was determined upon the theory that plaintiffs ought to have caused the land to be surveyed before they purchased, or ought to have taken some pains to ascertain the boundary lines themselves before executing the contract. The jury found that the defendant did not represent that the land lay west of the road, and that the contract was not entered into by reason of any false representations made by the defendant. But these findings are wholly inconsistent with the evidence as presented. Each of findings 3 and 9, adopted by the court, should have been answered in the affirmative.
Having determined, as we do, that the plaintiffs established the facts claimed by them, with reference to the representations made by defendant respecting the location of the east boundary line of the land which he sought to sell; that they did not know the location of the land, but relied upon the representations made by defendant, believing them to be true; that they would not have purchased the land, had they known that more than 200 acres lay east of the road, and that the land shown them was of much greater value than the same quantity, including these 200 acres, of rough, hilly land east of the road,
In Roberts v. Holliday, 10 S. D. 576, 74 N. W. 1034, a similar state of facts is presented. The agent of an owner of land took a prospective purchaser upon it and pointed out a fence as the west boundary line. The sale was effected, and the purchaser afterward ascertained that the fence was in fact sixty rods from the line. The court held that the purchaser had a right to rely upon the representation made by the seller’s agent, and could recover damages for the loss sustained by reason of the misrepresentation.
In Davis v. Nuzum, 72 Wis. 439, 1 L. R. A. 774, 40 N. W. 497, the facts were that the owner of certain lands pointed out to a customer two fences which he said were on the north and west lines,- respectively, of the land he was seeking to sell. The purchaser relied upon the representations and entered into a contract to purchase. Afterward it was found that neither fence was on the line it was supposed to represent. The purchaser was compelled to give up a strip of land twenty-one rods wide on the north and a strip fifteen rods wide on the west, and accept inferior lands on the south and east. The purchaser was adjudged entitled to recover damages because of the false representation; the court following the two earlier Wisconsin cases—Bird v. Kleiner, 41 Wis. 134, and Cotzhausen v. Simon, 47 Wis. 103, 1 N. W. 473. In Bird v. Kleiner the court said: “When the vendor undertakes to point out to the purchaser the boundaries of
In Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 9 Am. St. Rep. 727, 18 N. E. 168, the owner of a leasehold interest in a mining property represented to an intending purchaser a certain line as the boundary line of his claim. If the line thus pointed out was the true line, the claim contained from eight to ten thousand tons of iron ore. Relying upon the representation, the purchaser concluded the purchase, and afterward ascertained that the line pointed out was not the true boundary, and that the ore bodies were not within the property he had purchased. He was held entitled to recover damages for the misrepresentation.
In Schwenck v. Naylor, 102 N. Y. 683, 7 N. E. 788, the owner of all the capital stock of a lumber company, doing business in Florida, represented to a prospective purchaser that the company owned certain lands adjacent to the city of Apalachicola, with a large water frontage, extensive docks, wharves, and buildings, and pointed out a certain ditch or creek which he represented to be the boundary line between the city and the company’s property. Upon the faith of this representation, the purchaser bought two-thirds of the capital stock, and afterward ascertained that the line pointed out by the vendor to him was not the true boundary line; that in fact the company owned but a small portion of the waterfront and wharves which were included within the lines pointed out by the vendor. The court held that the purchaser had a right to rely upon the representation made by the vendor as to the boundary line, and if the representation proved to be untrue, and the vendee was injured thereby, he had a cause of action.
In Freeman v. Gloyd, 43 Wash. 607, 86 Pac. 1051, the court considered a similar question in a suit to rescind a contract, and said: “Representations involving mere matters of opinion or questions of judgment, as much within the knowledge of one party as the other, cannot be made the basis of an action to i seind or for damages, even when not in accord with the truth.
If the vendor does not undertake to. point out the location or boundary lines of property he seeks to sell, the vendee must
In Kirkland v. Lott, 2 Scam. (Ill.) 13, 33 Am. Dec. 435, the plaintiffs brought an action upon a promissory note. The defense set up was that the note was given as the purchase price of certain lots of land, and that plaintiffs had misrepresented to defendant the location of the lots. The court, in treating the subject under consideration, said: “If the plaintiffs had made no representations as to the location of the lots, the defendant would reasonably have sought, and might have obtained, correct information from some other source; and it is not for the plaintiffs to say that it was his folly not to have done so, when their representations were the cause of his omission. Credulity on his part is no excuse for fraud on theirs.”
In some of the earlier cases involving facts similar to those
Section 5063, Revised Codes, provides that a party to a contract may rescind, if his consent was obtained by fraud, or if, through the fault of the other party, the consideration for the obligation fails, in whole or in part. The term ‘ ‘ fraud, ’ ’ as used above, includes: “2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true. * * * 5. Any other act fitted to deceive.” (Rev. Codes, sec. 4978.) The question of good or bad faith is not involved. The fraud arises from the fact that the statement is not true; and coming from
In Baughman v. Gould, 45 Mich. 481, 8 N. W. 73, the facts were that the land owner pointed out a lot which was inclosed, and represented that the property he was offering for sale included all the ground within the inclosnre. The sale was made; but the purchaser discovered afterward that a portion of the ground inclosed belonged to a third person. The court, in treating the subject, said: “There being in fact a misrepresentation, though made innocently, its deceptive influence was as effective, and the consequences to Baughman as serious in respect to actual damage, as though it had proceeded from a vicious purpose. The result was a fraud on Baughman, in contemplation of law, and it entitled him to contend, in Gould’s action for the purchase money, that the damage should be thrown on the latter. ’ ’
Facts practically identical are disclosed in Lynch v. Mercantile Trust Co. (C. C.), 18 Fed. 486, 5 McCrary, 623, in which the court said: “The owner of property, when he sells, is presumed to know whether the representation which he makes about it is true or false; and the positive statement thus made of a material faet, if false, is fraud in law. A purchaser trusts in the owner’s statements, and the law will assume that the owner knows his own property and truly represents it. So, if an injury results-from the statement of a material faet which influences the sale, and not from the statement of the opinion or belief of the vendor, an action will lie, if the representation is false; and it is not material whether the vendor knew to be false what was stated. If the representation as to a material point was relied on, and was stated as a fact, intended to convey the impression that the party had actual knowledge, the vendor cannot plead ignorance as an excuse, if the statement was false.”
In Hanson v. Tompkins, 2 Wash. 508, 27 Pac. 73, the vendor represented to the intending purchaser that a certain lot which he was offering for sale contained thirty-six and one-half acres. The sale was completed; but the purchaser afterward ascertained that the lot contained but twenty-six and one-half acres. In dis
The rule announced by section 4978, Revised Codes, above, and by these courts, is not a new one. It was invoked by the high court of chancery of England in 1803, in the case of Ainslie v. Medlycott, 9 Ves. Jr. 13, in which Sir William -Grant, Master of the Rolls, used this language: “No doubt by a representation a party may bind himself just as much as by an express covenant. If knowingly he represents what is not true, no doubt he is bound. If, without knowing that it is not true, he takes upon himself to make a representation to another, upon the faith of which that other acts no doubt he is bound, though his mistake was perfectly innocent. ’ ’
In 1835 Story announced the same rule as then in effect in this country, as follows: “Whether the party, thus misrepresenting a material fact, knew it to be false, or made the assertion without knowing whether it were true or false, is wholly immaterial; for the affirmation of what one does not know or believe to be true is equally, in morals and law, as unjustifiable as the affirmation of what is known to be positively false. And even if the party innocently misrepresents a material fact by mistake, it is equally conclusive; for it operates as a surprise and imposition upon the other party.” (1 Story’s Equity Jurisprudence, sec. 193.)
Our conclusion is that the plaintiffs have shown themselves entitled to relief. There is not any contention made that the complaint does not state a cause of action. Apparently court and
The judgment and order are reversed, and the cause is remanded, with directions to enter a decree in favor of the plaintiffs for the cancellation of the contract, for the recovery of $2,000 part payment, with interest at eight per cent per annum from July 27, 1910, for the further sum of $590, damages, as found by the jury’s special findings 6 and 7, and for costs.
Reversed and remanded.