227 P. 791 | Utah | 1924
Lead Opinion
The pleadings in this case are voluminous, but it is not necessary to state them in detail. The transcript of the evidence having been misplaced and not available, we are compelled to rely upon appellant’s abstract on appeal.
At all times mentioned in the pleadings the defendant company was engaged under the laws of Utah in the operation of a “Carey Act” project in what is known as the Pahvant Valley in Millard county, Utah. The plan was to permit each person to enter not exceeding 160 acres of land with the state board of land commissioners, and in connection therewith to purchase from the defendant company 160 shares of the capital stock of the Delta Canal Company at the rate of $70 per share, which shares of stock would represent a water right for the land so entered equivalent to one and one-half acre feet of water for each acre of land. In addition to this the purchaser was to pay annual dues for maintenance of the water supply.
In 1915 the Western Securities Company, a corporation, was sales agent for the defendant both in Millard county, Utah, and in the state of California, and by way of advertising the business published and circulated in both states circulars intended to induce purchasers to become interested in the said project. These circulars came into the hands of the plaintiffs, father and son, who resided at Garden Grove, Orange county, Cal., and who were owners of land at that place part of which had been planted to oranges. They became interested in the contents of the circulars so published by defendant and statements made by persons purporting
Plaintiffs sue in this action to recover damages both actual and exemplary in the sum of $65,700, basing their right of action upon the alleged false representations of the defendant as to the quality of the land as appears in the circulars referred to and statements made by defendant’s agents by which they were induced to enter the land and purchase the stock. The contents of the circulars referred to in the foregoing statement were set out in part in the complaint. For the sake of brevity we have omitted them in this connection,
The answer of defendant, briefly stated, admits the existence of the Carey Act Project and defendant’s relation thereto. It admits that the Western Securities Company was its agents, and that plaintiffs entered the land in question and purchased water stock by exchanging therefor their California land as alleged in the complaint. It denies the agency of Murphy, Dunn, and McClain, and denies specifically every allegation of the complaint tending to show defendant’s liability for the alleged wrongs of which plaintiffs complain. Defendant also filed a counterclaim for damages alleging false and fraudulent representations concerning the California land. At the close of plaintiffs’ evidence the counterclaim was dismissed on motion of the defendant.
Prior to the filing of its answer defendant moved to strike from the complaint certain allegations thereof, particularly such as may have indicated mere expressions of opinion as to the quality of the land and predictions as to its productivity. The motion to strike was denied, and defendant’s demurrer filed therewith was overruled.
The trial of the case to a jury resulted in a verdict for plaintiffs in the sum of $14,845. Motion for a new trial was denied, and final judgment entered from which judgment defendant appeals. (
Appellant in its brief defines the paramount issues to be:
“(a) As to whether the plaintiffs in the selection and entry of their land relied upon and were deceived hy the statements in the pamphlets, which admittedly referred to no particular tract' of land, hut merely to the Pahvant Valley as a whole;
“(h) As to whether Murphy, Dunn, or McClain made the statements attributed to them hy plaintiffs in respect to the productivity of the lands or the absence of alkali in the soil; .and, if so, their authority to hind the defendant by such representations as well as to whether the plaintiffs relied upon and were deceived by their statements;
“(c) As to whether the land entered by the plaintiffs was in fact worthless for agricultural purposes, and, assuming it to be so, was the water right represented hy the shares of stock so irrevo*503 cably attached to and a part of the land as to he wholly useless and of no value for that reason;
“(d) As to the measure of the plaintiffs’ damages, assuming their right to recover in the action.”
The pamphlets referred to in subdivision (a), snpra, are the circulars to which reference has been made in the foregoing statement. They are designated in the record as Plaintiffs’ Exhibits 1 and 2. Appellant objected to their admission in evidence and afterwards moved that they be withdrawn from consideration by the jury. . The objection was overruled, the motion denied, and exception reserved. We quote in this connection such portions of the pamphlets as are set forth in plaintiffs’ complaint:
“An Introduction by C. R. Stuart.
“In December, 1914, I was commissioned to go to Pahvant Valley, Utah, and interview the first 20 to 30 farmers I saw. I was instructed to •secure from them, if possible, written statements and facts duly signed and properly acknowledged before a notary public relative to the Pahvant Valley soil, the water conditions, climatic advantages, transportation facilities, markets, etc.
“During the week I spent in Pahvant Valley I interviewed 21 farmers — the first 21 men I saw. I didn’t know one man from another — never saw one of them before. I went direct to their farms and secured their written, sworn statements, straight from the shoulder facts about results obtained.
“The men were selected at random, and their statements were given in an easy, offhand way. They were reduced to writing in the form of testimonial letters, and eleven of them are reproduced in this booklet.
“The Free Services of Two Prominent Soil, Crop, and Irrigation Experts at the Disposal of All Purchasers.
“One of the ablest irrigation engineers and one of the best soil and crop experts in the west is employed by the company to cooperate with all settlers.
“His time is devoted entirely to assisting farmers in solving their various problems. His advice on all matters pertaining to practical, scientific farming is absolutely free to all purchasers of land.
“Pahvant Valley in Southwestern Utah.
“On main line of Salt Lake Railroad. $70 per acre for land and perpetual (gravity) Water right.
“Pay $25 an acre cash — Balance in 10 equal annual payments.
“A thoroughly proven general farming district.
*504 “A valley of enthusiastic, contented settlers.
“A valley of abundant crop yields.
“A valley of prosperity.
“A ‘No. 1’ alfalfa country.
“The best alfalfa seed district in the west.
A remarkable grain country.
“Why Farmers Have Succeeded in Pahvant Valley.
“ ‘Because the soil is deep; rich, and responsive.’
“Because Pahvant Valley lands produce bumper crops of alfalfa, alfalfa seed, grain, sugar beets, etc.
“Because one crop of sugar beets alone has netted Pahvant Valley farmers the entire cost of the acreage which they planted.
“Because alfalfa seed has returned more than $100 in seed alone on one acre in one year.
“Because Pahvant Valley farmers have soil a-nd agricultural experts to advise and guide them.
“Alfalfa seed from Pahvant Valley farms is shipped all over the country.
“Read carefully the following sworn statements, under oath, of men not engaged in selling farm lands, who have no object in giving testimony other than to guide their fellowmen to where opportunity waits.
“These are messages of neighborliness — your prospective neighbors speaking to you, telling you what they have done, the success they have made — honest,, simple, straightforward facts that will eventually be proven to you when you come to Pahvant Valley.
“You will meet these men when you go to Pahvant Valley, these men and scores of others equally successful and enthusiastic.
“Prosperity Pictures in Pahvant Valley.
“Actual scenes on lands we have sold, photographed three weeks ago by Livingston of Los Angeles.”
Tben, as alleged in, the complaint, there follows in said circular pictures of a prosperous farming community with harvest scenes, scenes of thinning sugar beets, and beautiful farm buildings. And following the pictures in said circulars appears the following:
“Go to Pahvant Valley and meet the ranchers shown above face to face. Talk direct to them and scores of other California ranchers. Let them tell you about conditions as they know them from actual experience.
“It is now harvest time, and the real proof of what these rich lands will do is in evidence everywhere. Dig into the deep, rich soil. ' Investigate the $1,000,000 gravity irrigation system. See wheat fields that will yield better than fifty bushels to the acre.*505 See sugar beet fields that will average twenty-five tons to the acre. See thousands of sleek hogs on all sides.
“You’ll see another Imperial Valley, with none of that section’s drawbacks. Pahvant Valley has high elevation, delightful climate, pure lithia drinking water, mild health-giving winter climate, cool summer nights.”
It is then further alleged in the complaint:
“That by all of said advertising literature the defendants intended to and did imply and cause plaintiffs to believe that the lands which the defendants would select and procure for the plaintiffs in said Pahvant Valley were rich, fertile, and of the character of land described in said advertising pamphlets and circulars.”
Appellant’s contention is that the contents of these circulars are mere expressions of opinion and not representations of fact, and therefore afford no basis for an action for damages.' In support of its objection to the admissibility of the exhibits as evidence appellant indulges in a lengthy discussion of the elementary principles involved in an action of this kind. The principles referred to are more tersely stated in 26 C. J. 1062, cited by appellant, from which we quote the following:
“It may be stated generally that the elements of actual fraud consist of: (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance upon its truth; (8) his right to rely thereon; (9) his consequent and proximate injury.”
The foregoing principles in actions for fraud, except as they may be, and have been modified by the facts and circumstances of the particular case, are matters of common knowledge among members of the bar and judicial tribunals of the country. Counsel for appellant, in their illuminating brief, cite numerous authorities, both text-writers and judicial decisions, illustrative of the principles inferred to, and quote therefrom at considerable length. It is impracticable within the limits of an opinion of ordinary length to review all of the authorities cited by appellant relating to this question. It is practicable, however, to refer to the rule as enunciated by standard authorities to which
“If the representation is as to a matter not equally open to both parties, it may be said to be a statement of fact as such; but if it is as to a matter that rested merely in the judgment of the person making it, and the means of deriving information upon which a fair judgment can be predicated are equally open to both parties, and there is no artifice or fraud used to prevent the person to be affected thereby from making an examination and forming a judgment in reference to the matter for himself, the representation is a mere expression of opinion, and, however incorrect, does not support an action for fraud. Generally statements as to the value of property, real or personal, which the purchaser has an opportunity to inspect for himself, and in reference to which, upon reasonable inquiry, he could ascertain facts upon which to predicate a fair judgment, are mere expressions of opinion, and, however erroneous or false even, are not actionable. In reference to all such matters, where the opportunities for information are equally within the reach of both, the doctrine of caveat emptor applies.”
Appellant also quotes from the same author, same edition, section 1175:
“In determining whether the representations are mere expressions of an opinion or statements of fact as such, reference must always be had to the subject-matter to which they relate, the circumstances under which they were made, and the difference in the means of knowledge in reference to the matter between the plaintiff and the defendant. If the plaintiff ought, by reasonable diligence, to have known the truth or falsity of the statements, or had equal facilities for knowing as the defendant, he cannot, by blindly believing where he ought not to have believed, or trusting where he ought not to have trusted, or shutting his eyes when he ought to have kept them open, charge the defendant with the consequences of his folly. Each man is bound to exercise his judgment when he can do so; but when the means of forming a correct conclusion are peculiarly possessed by him, then, if that person misrepresents and deceives another to his damage, he is liable, otherwise not.”
Appellant also quotes the following excerpt from Black on Rescission and Cancellation, § 113:
“It is a rule of great antiquity, and supported by a great body of authorities, that a person about to enter into a contract or as*507 sume an obligation should exercise reasonable care and prudence in the matter of accepting at their face value representations concerning the subject-matter made to him by the opposite party; and, although the representations were false and fraudulent, and he was deceived by them and misled to his injury, yet he cannot rescind or repudiate his contract on that ground, if it appears that he might have discovered their falsity by mere inspection of the subject, or by the exercise of reasonable diligence in referring to sources of information which were equally open to him as to the other party. There are exceptions to this rule: * * * Where a fiduciary relationship subsisted between the parties, where the matter was exclusively within the knowledge of one of them, where an examination of the subject-matter would require unusual pains, expense, or trouble, and involve special training or technical knowledge, and so on. But in the absence of such circumstances the rule applies that, where the subject-matter of false representations is at hand, and the truth easily ascertainable, one cannot be heard to say that he has been defrauded by such representations if he neglected to avail himself of a present and reasonable opportunity to learn the truth.”
In Pomeroy’s Equity Jurisprudence (3d Ed.) § 892, the author distinguishes the cases in which a party is justified or not justified in relying upon alleged fraudulent representations :
“(1) When, before entering into the contract or other transaction, he actually resorts to the proper means of ascertaining the truth and verifying the statement; (2) when, having the opportunity of making such examination, he is charged with knowledge which he necessarily would have obtained if he had prosecuted it with diligence; (3) when the representation is concerning generalities equally within the knowledge or means of acquiring knowledge possessed by both parties; (4) but when the representations concerning facts of which the party making it has, or is supposed to have, knowledge, and the other party has no such advantage, and the circumstances are not those described in the first or second case, then it will be presumed that he relied on the statement.”
In Addison on Torts (6th. Ed.) American Notes by Baylies, § 796, the author says:
“When the representation is made concerning something which is mere matter of opinion, which every man can exercise his own judgment upon and inquire about, it is the plaintiff’s own fault if he suffers himself to be deceived.”
In the same work, section 798, it is said:
*508 “If a man undertakes positively to assert that to be true which he does not know to be true, and which he has no grounds for believing to be true, in order to induce another to act upon the faith of the representation, and the representation is acted upon and turns out to be false, and the person who has acted upon it has been deceived and damnified, he is entitled to maintain an action for compensation. Whoever pretends to positive knowledge of the existence of a particular fact, when in .truth he knows nothing at all about it, does in reality make a willful misrepresentation, which he knows to be false; and, if the representation is made in order' that another may rely upon it and act upon it, and it is acted upon, and damage .flows from the false representation, the person making it is, in principle, guilty of willful deception and fraud.”
The excerpts quoted undoubtedly reflect tbe general rule. Appellant’s counsel also cite, and quote from numerous adjudicated cases, among which are two Utah cases dealing with the question of fraudulent representations. Campbell v. Zion’s Co-op. Home Building & R. E. Co., 46 Utah, 1, 148 Pac. 401, and Hecht v. Metzler, 14 Utah, 408, 48 Pac. 37, 60 Am. St. Rep. 906. These two cases are very instructive in illustrating when a false representation is actionable and when it is not; in other words, when the representation is a mere expression of opinion and when it is a representation of fact.
Counsel for appellant also refer us to cases from other jurisdictions, many of which involve alleged fraudulent representations in the sale of land and tend to illustrate appellant’s theory of the instant case. Such, for instance, are the following : Ott v. Pace, 43 Mont. 82, 115 Pac; 39; Lee v. McClelland, 120 Cal. 147, 53 Pac. 300; Randell v. Scott, 70 Cal. 514, 11 Pac. 779; Holton v. Noble, 83 Cal. 7, 23 Pac. 58; Parker v. Moulton, 114 Mass. 99, 19 Am. Rep. 315; Gordon v. Parmelee, 2 Allen (84 Mass.) 212; Saxby v. Southern Land Co., 109 Va. 196, 63 S. E. 423; Hegdale v. Wade, 78 Or. 349, 153 Pac. 107; Doukhobors v. Hecker, 83 Or. 65, 162 Pac. 851; Merritt v. Dufur, 99 Iowa, 211, 68 N. W. 553, and other cases.
In many of the cases cited the representations relied on were undoubtedly mere expressions of opinion. In Merritt v. Dufur, supra, some of the representations were regarded
Hegdale v. Wade, supra, relied on by appellant as peculiarly applicable, was also a case in which many of the representations were treated as representations of fact, but they were denied by the defendant, and judgment was entered in his favor. The judgment was affirmed. There are other cases among those above mentioned that are not helpful to the court because they are distinguishable for reasons similar to those above mentioned. Our time will not permit an extended review, nor is it necessary, as the cases speak for themselves.
The immediate question before the court is the admissibility of the circulars in evidence. It will be conceded, no doubt, that, if there is a reasonable doubt as to whether any of the representations made in the circulars were actionable representations, as contradistinguished from mere expressions of opinion, it was the duty of the court to admit them in evidence. The court would not be justified in rejecting them as evidence, unless the representations were undoubted expressions of opinion. Our attention is called to the rule on this point as stated in 27 C. J. at page 74:
“When the form of a statement and the subject-matter of the circumstances under which it was made are such that it cannot fairly be construed as anything but an expression of opinion or belief, it is proper for the court so to hold, and to refuse to submit the question to the jury. But, if, as is often the case, a statement is of such a nature that it may be interpreted either as a mere expression of opinion, or as a statement of fact, and there is any question as to how it was intended and understood, whether it amounts to fraud or not is a question of fact, and is for the jury. So ordinarily it is for the jury to say whether representations as to value, solvency, or a third person’s financial ability are statements of fact or of opinion.”
This brings us to a consideration of the contents of the circulars. Undoubtedly nearly all of the matter published therein is simply “puffing” setting forth in exaggerated form the excellent qualities of the land in Pahvant Valley
However, there is at least one statement in the circulars that purports on its face to be a representation of fact. It represents Pahvant Valley to be “a thoroughly proven general farming district.” It is conceded by-appellant that the representations in the circulars relate to the Pahvant Valley as a whole. This is obviously time, even if it were not conceded. Pahvant Valley as a whole means Pahvant Valley including all its parts. It certainly includes the lands entered by plaintiffs. The very purpose of the circulars obviously was to advertise the unoccupied lands which were open for entry. The cultivated lands had already been taken. So that, in view of the only possible purpose for which the circulars must have been published and circulated, it seems illogical to contend that the representations did not refer to every tract of land within the district, and especially to land open to entry. Just what was meant by “a thoroughly proven general farming district” is somewhat indefinite, especially as to the nature and character of the proof. Where valuable crops were being grown, that itself would be satisfactory proof; where crops had not been grown, the fair implication is that the soil had at least been tested and found suitable for farming purposes, otherwise it could not be truthfully said that it was
It does not appear that any suggestion was made to segregate the statements made in the exhibits so as to exclude only such as may have been inadmissible. There was no error in admitting the exhibits in evidence nor in refusing to withdraw them from the consideration of the jury.
The next contention made by appellant is that the court erred in admitting, over defendant’s objection, the alleged statements of Murphy, Dunn, and McClain as to the quality of the land and absence of alkali therein, and also erred in refusing to strike said evidence at the close of plaintiffs’ case in chief.
The objections made by appellant are: (1) That the alleged statements, if made, were expressions of opinion, irrelevant and immaterial, and under the facts could not have been relied on by the plaintiffs, as they are presumed in law to have acted on their own investigations and judgment; (2) There is no evidence that the statements, if made, were within the actual or apparent scope of the authority of the agent making them; (3) the court, both in admitting the evidence and in its instructions to the jury, misconceived the principle of law applicable to the liability of a principal for representations of his agent in cases of this character.
Plaintiffs testified at the trial that Murphy, Dunn, and McClain unqualifiedly assured them at the time they were looking over the project that there was no alkali in the land which plaintiffs afterwards entered. They testified that Murphy had so stated before the plaintiffs left California. Plaintiffs also testified that other representations were made concerning the qualities of the land — that it was all similar— both the cultivated lands which were shown plaintiffs and the land open to entry.
The evidence as to these statements was objected to by defendant as irrelevant and immaterial. No objection was
1. Were the statements of the selling agents, Murphy, Dunn, and McClain, irrelevant and immaterial on the grounds that they were expressions of opinion and not representations of fact? Upon this question but little need be said. It is clearly covered by the rule already announced in this opinion. The rule is sustained by authorities quoted from appellant’s brief. As far as the question of alkali is concerned, plaintiffs testified they were unfamiliar with alkali, especially on desert land. Whether or not a given substance is alkali can only be determined by experience or technical knowledge. Plaintiffs testified that when they inquired of these selling agents as to whether a certain substance seen upon the land they afterwards entered was alkali the agents informed them it was not alkali but gypsum and was not deleterious to the land. They also informed plaintiffs that every 40 acres of the land had been tested and that there was no alkali. These statements, together with the fact that it
2. The nest contention is that there is no evidence that the statements, if made, were within the actual or apparent scope of the authority of the agents making them. We have already referred to the fact that this specific objection was suggested for the first time in defendant’s request for instructions. In defendant’s motion to strike the testimony of plaintiffs relating to the alleged statements of Murphy, Dunn, and McClain counsel refers to them as selling agents, and such they undoubtedly were. Murphy testified positively that he was a selling agent of' the Western Securities Company, and it is admitted in the pleadings that the Western Securities Company was a selling agent of defendant. McClain also testified that he was an agent of the Western Securities Company. Dunn does not so testify specifically, but the testimony of all these men show conclusively that they were engaged in inviting and inducing persons, including plaintiffs, to make entries upon the land and purchase from the defendant shares of stock in the Delta Canal Company as a water right for said land. That the very purpose of these men in conducting plaintiffs and other persons to and upon the land, both cultivated and uncultivated, was to induce them to become purchasers of the water stock and entrymen upon the land is conclusively established by their own testimony as witnesses for the defendant. That they were in fact selling agents, as denominated by defendant’s counsel in his motiop to strike, is equally well established. They were there evidently to show prospective purchasers the land
This brings us to a consideration of the law applicable to the question under review. Before entering upon a discussion of the law, we deem it fair to appellant to refer to one feature of the argument upon which appellant relies, and to which its counsel have evidently devoted considerable time and research.
The entire discussion of this question by appellant proceeds upon the theory that in the instant case there is a question as to whether or not the alleged statements of Murphy, Dunn, and McClain were within the actual or apparent scope of their authority. We have already assumed from the undisputed facts that these agents were authorized to effect sales of the property and are therefore what is known as selling agents. If in such cases the law holds the principal responsible for the representations of his agent, whether authorized or not, it necessarily determines the matter in question here without determining the consequences resulting from an election of remedies. As to the apparent scope of the authority of an agent authorized to negotiate sales of land we believe our position, already foreshadowed, is well sustained by authority.
In Copeland v. Tweedle, 61 Or. 303, 122 Pac. 302, which was a ease wherein a selling agent misrepresented the quantity of timber on the land, the principal was held bound, although personally innocent of the fraud. At page 308 of 61 Or., at page 304 of 122 Pac., the court says:
“It is beyond dispute that this representation was made while Corcoran [the agent] was empowered by the defendant Ellen Tweedle to procure a purchaser for the land in question. It was*516 within the scope of his authority to describe the land to an intending purchaser and to state what it contained in the way of improvements or timber or the like. Without making some such representations, it would be impracticable to procure a purchaser. There is nothing in the writings between him and his sister limiting the usual .and general authority thus given. The legal deduction from Corcoran’s statement so made is that it affects the defendant Ellen the same as if she was there personally present and made it herself. She is bound by this representation of her authorized agent, it being within the fair and reasonable scope of his authority. She placed it in the power of Corcoran to make a misleading statement with intent to deceive, and, that being the case, she cannot complain if he did defraud the plaintiff. Corcoran was familiar with the land, had been over it, and knew the conditions there, and his knowledge on that subject is imputed to his principal, Ellen Tweedle. The plaintiff and her husband both testify that they relied upon him, and we think they had a right to do so, because they had not equal opportunities of knowing the truth. The land was situated in a remote part of Clatsop county, inaccessible except by a little used trail through the timber. Under these circumstances, therefore, the defendant Ellen must abide the result of her agent’s misrepresentations. Although perfectly innocent of fraud herself, yet, having placed her brother in a position to defraud by putting her land in his hands for sale, the loss resulting from his deception must fall upon her as between herself and another equally innocent.”
In Mechem on Agency (2d Ed.) § 1987, tbe author says:
“The principal may, either expressly or by implication, put the agent in such a position, or charge him with such duties, that the making of misrepresentations will fall within the scope of his authority, as where, expressly or by implication, he refers persons to the agent for information or authorized him to do acts to which the making of representations is a necessary or usual incident.
“Where the principal thus authorizes the making of representations, it may be proved or conceded that he intended the agent to make only fair and honest ones. But a power to make representations, although fair and honest ones only were intended- or directed, involves the possibility of the making of false and fraudulent ones; and if the agent in such a case, whilq acting in the course of the principal’s business, and for the purpose of promoting the principal’s objects, and not those of the agent only, makes false and fraudulent representations concerning the subject-matter of his agency, not so extravagant, unreasonable or unrelated that a reasonably prudent man would not rely upon them, the principal will be responsible for them.”
“If it was not a corporate act, not being specifically authorized by the board of directors, nor within the general scope of the manager’s authority, then no case is made against tbe company, and it is not liable. It is to be noted, however, that, independently of the particular allegation quoted, the principal, who intrusts to an agent the duty of giving information to those interested therein, is liable to such persons for the consequences of false information given by the agent in the course of his employment, to the same extent as if given directly by the principal, even though the principal intended and directed that only true information should be given.”
In Matteson v. Rice, 116 Wis. 328, 92 N. W. 1109, an action for damages by a lessee, the headnotes read:
“A landlord authorized the janitor of his flat building to exhibit the premises to prospective tenants, execute leases, place the tenant in possession, and collect the first month’s rent. The tenant was induced to enter into lease of a flat by the janitor’s false assurance, not amounting to a warranty, that a wall, not open to inspection, between the flat leased and an adjoining building, was fire proof. The janitor had no express authority to make representations or warranties. Held, that the landlord was liable to the tenant for loss of goods by fire, the representations in question being so far within the scope of the business of the agency as to be deemed authorized.
“The fact that the agent believed the representations to be true, and had no intention to deceive the tenant, would not affect the landlord’s liability.
“While an agent may not do everything his principal may do, where a representation by the agent directly appertains to and becomes a necessary part of the transaction under consideration, and an inducement to its acceptance by the party to whom the representation is made, it may be said that such matter falls ‘within the scope of the agency.’ ”
In Sandford v. Handy, 23 Wend. (N. Y.) 260, tbe first paragraph of tbe syllabus reflects tbe nature of tbe case and tbe opinion of tbe court:
“An agent empowered for a special purpose, e. g., to obtain subscriptions to a project, of forming a joint stock company in relation to lands, may use the ordinary means of accomplishing the object of his appointment; such as representing the location and*518 quality of the lands, and the like; and if he make false representations, inducing purchasers to enter into contracts, the principal is affected by such representations, the same as if made by himself.”
In 31 Cyc. at pp. 1582, 1583, 1584, tbe text reads:
“The liability of the principal for torts committed by his agent is not limited to torts which he has expressly authorized or directed; he is liable for all the torts which his agent commits in the actual or apparent course of his employment; and if the agent commits a tort in the apparent course of his employment the principal is liable therefor even though he was ignorant thereof and the agent in committing it exceeded his actual authority or disobeyed the express instructions of his principal. Thus a principal is civilly liable to third persons where his agent, while acting within the scope of his real or apparent authority, is guilty of assault and battery, conversion, fraud, or trespass.”
An extensive note pertaining to tbe identical question presented here is found in L. R. A. 1917F, p. 962. Tbe question is treated under tbe title, “Implied or Ostensible Authority of Agent for tbe Sale of Land as to Representations. ’ ’ Tbe note is botb illuminating and exhaustive. Some of the cases considered are for rescission and some are actions for damages. It would be a useless consumption of time and space to quote from tbe cases referred to as tbe note itself succinctly states tbe questions involved and tbe decisions of tbe courts thereon.
We are not unmindful of tbe fact that upon this question there is a conflict of authority. Appellant refers us to tbe following cases! which appear to support their contention in a greater or less degree: Samson v. Beale, 27 Wash. 557, 68 Pac. 184; O’Daniel v. Streeby, 77 Wash. 414, 137 Pac. 1025, L. R. A. 1915F, 634; Ellison v. Stockton, 185 Iowa, 979, 170 N. W. 437; Hodson v. Wells & D. Co., 31 N. D. 395, 154 N. W. 193, L. R. A. 1917F, 958; National Armor Co. v. Brumer, 19 N. J. Eq. 331; Lansing v. Coleman, 58 Barb. (N. Y.) 619; Dellwo v. Peterson, 32 Idaho, 72, 180 Pac. 167. Without commenting upon these cases or attempting to distinguish them, it is sufficient to say that in so far as they conflict with the cases1 which we have quoted and the cases in the note above referred to we are not inclined to' follow them. It would, in our opinion, be an imposition upon the general
The cases cited and relied on by appellant protect the innocent principal against the fraud of his own agent whom he has clothed with apparent authority and cast the burden of the loss resulting from the agent’s fraud upon the adverse party who was also innocent. This, in our opinion, is palpably inequitable and unjust. It ignores the wholesome rule stated in numberless cases, including Copeland v. Tweedle, supra, in wdiich it was said:
“Although, perfectly innocent of fraud herself, yet, having placed her brother [the agent] in a position to defraud by putting her land in his hands for sale, the loss resulting from his deception must fall upon her as between herself and another equally innocent.’’
This rule has received recognition and approval in at least one ease decided by this court in which an agent’s fraud constituted the basis of the action against an innocent principal. In Sullivan v. Evans-Morris-Whitney Co., 54 Utah, 293, the court, at page 304 (180 Pac. 435, 439), uses the following language:
“As an instance of moral obliquity, as far as we are informed the case has no parallel in the annals of human frailty. We believe that morally the defendant is entirely innocent; that it, too, was a victim of the dishonesty of its own trusted agent. We believe defendant’s character as a business concern is above reproach; but one or the other of these parties must suffer the consequences of Taylor’s dishonesty, and we have no dubiety in arriving at the conclusion that the burden should fall upon the party that held Taylor out and gave him the character and standing of an honest man.”
It is unnecessary to multiply cases in support of a rule so wholesome and just and well supported by authority.
In addition to their reliance upon the fact that the representations made by Murphy, Dunn, and McClain were within
“You are instructed that, if you believe from the preponderance of the evidence that Murphy or Dunn or McClain or any or all of them, in dealing with plaintiffs in reference to the exchange of property involved in this cáse, acted as the defendant company’s agent or agents, whether employed to so act or not, or known to have so acted or not, then the defendant company would he liable on account of the acts and representations of Murphy or Dunn or McClain or any or all of them in effecting the exchange, and, if the plaintiffs were induced to make the exchange by one or more material false representations made by Murphy or Dunn or McClain or any or all of them, on which the plaintiffs relied, then in contemplation of law it is the same as if the defendant company ma'de such representation or representations, since it claims the benefit of the transaction.”
In view of our holding that the defendant by defending and filing a counterclaim did not ratify the transaction, it follows as a necessary corollary that the instruction above quoted is erroneous, but, inasmuch as we have also held that Murphy, Dunn, and McClain acted within the apparent scope of their authority in making the representations in question, it is quite clear that defendant was not prejudiced by the instruction.
In the same connection appellant also invokes consideration of its second request for instruction which was refused. The request relates to representations made by an agent and the agent’s authority for making them. Appellant quotes the following portion of the request upon the refusal of which it bases its exception.
“ * * * it must reasonably appear from the facts or circumstances shown by the evidence that the person who made the representation was an agent of the defendant and was acting within the scope of his authority; or, in other words, that he was authorized by the defendant to make the particular representations of which complaint is made.”
It is needless to say the court did not err in refusing this request. If the representations were within the apparent
Appellant’s next contention is that the court erred in admitting evidence in relation to the value of the California land which the plaintiffs exchanged for the water stock sold to them by defendant and erred in giving instruction No. 10 relating to the measure of damages.
Instruction No. 10, so, far as material, reads:
“You are instructed that, if you find the issues in favor of the plaintiffs, then they would he entitled to damages as follows:
“First. The amount of the difference, if any, between the fair market value, as determined by you from the preponderance of the evidence, of the Utah land and water rights thereto appurtenant acquired by plaintiffs, and the fair market value, as determined by you from the preponderance of the evidence, of the California land and appurtenances thereto, conveyed by plaintiffs in exchange therefor at the time of such exchange. * * *”
As a foundation for this instruction the court had previously admitted evidence over defendant’s objection of the actual value of the California land which plaintiffs exchanged for the water stock in question. Plaintiffs had also testified that the lands they entered were worthless for farming purposes because of the alkali, and that the water stock was worthless because it was made appurtenant to the land. Plaintiffs also testified that the California land exchanged for the water stock was of the value of $20,000, and that, if the land they entered had been as represented, the land and water right would have been worth $70 per acre.
Defendant’s contention is that the true measure of damages in cases of this kind is the difference between the actual value of the land purchased and the value it would have had if it had been as represented. In support of this rule defendant cites: 27 C. J. 92; 12 R. C. L. 452; Sutherland on Damages (2d Ed.) vol. 3, § 1171; Hecht v. Metzler, 14 Utah, 408, 48 Pac. 37, 60 Am. St. Rep. 906; Averill v. Boyer, 76 W. Va. 642, 87 S. E. 259; Stoke v. Converse, 153 Iowa, 274, 133 N. W. 709, 38 L. R. A. 465, Ann. Cas. 1913E, 270, and note;
Finally, it is insisted by appellant that the evidence is insufficient to support the verdict, or any verdict for plaintiffs, and therefore the court erred in denying appellant’s-request for a directed verdict and in overruling its motion for a new trial.
Under this assignment appellant relies on many features of the case already considered and disposed of against its contention. For instance, it is argued that the representations set forth in the circulars as well as the statements made by Murphy, Dunn, and McClain were immaterial, or, if material, were not shown to be false, and that there is no evidence to' show that the persons mentioned had any authority to make said statements; that having examined the lands before making their purchase plaintiffs are presumed to have relied on their own judgment and investigations. As to these matters we have nothing to add to what has already been said. But defendant makes the further objection that the record fails to show that the water stock had no value separate and apart from the land, and that the amount of damages awarded by the jury cannot be reconciled with any evidence in the record. It is assuming a great deal for appellant to contend that there is no evidence that the water stock had no value separate and apart from the land when we consider the language of the certificates of stock which defendant gave to plaintiffs as representing their water rights for
But aside from this view of the case respondents take the position that plaintiffs abandoned their right to the water, and by their conduct are estopped from hereafter asserting a right thereto. Much could be said in favor of this concession on the part of respondents, but we do not deem it within our province in the instant case to determine that question. Neither do we deem it necessary to enter upon a discussion of the scope and meaning of the Carey Act as bearing upon the right to transfer water nor to review the authorities cited by appellant relating thereto.
The last contention of appellant is that the amount of damages awarded by the verdict of the jury cannot be reconciled with any evidence in the record. Upon this proposition it is perhaps sufficient to say that verdicts of juries, especially in actions for damages, can seldom be determined with mathematical precision even by the jurors themselves. If their verdicts can be set aside simply because the party in whose favor the verdict is rendered, or tlm court is unable to mathematically determine how the jury arrived at its conclusion, a very large percentage of verdicts would be set aside as unsupported by the evidence. If the verdict is. within the evidence and not obviously inconsistent therewith, that is sufficient and oftentimes all that can reasonably be expected. In this case the plaintiffs appraised their California land at $20,000 or $21,000. There is evidence in the record as to plaintiffs’ expenditures in connection with the transaction amounting to between $2,000 and $3,000. So that it appears conclusively upon more theories than one that the verdict of the jury is supported by the evidence.
We find no reversible error in the record. The judgment is affirmed at appellants’ costs.
Rehearing
On Rebearing.
Appellant on application for a rehearing assigns numerous objections to the opinion. We will only consider such as are apparently meritorious.
In addition to objections urged in its original brief it is now insisted that the court’s instruction No. 8 is defective in not stating that the false representations of defendant’s agents upon which plaintiffs relied were made by such agents with knowledge that the representations were false. It is admitted by defendant, in its brief, that proper instructions as to this matter were given in instructions No. 4 and No. 5. The merits of the objection can be better understood by reading in this connection instruction No. 15:
“These instructions are to be construed and considered together as a whole. Bach instruction should he read and understood with reference to and as a part of the entire charge and not as though such instruction was intended to present the whole law of the case on any particular subject.”
It is not to be presumed that the jury, in the face of such an instruction, would assume that instruction No. 8 was "intended to present the whole law of the case on that particular subject.” It is our duty to presume that the jury considered all of the instructions of the court, • unless the contrary is clearly manifest. No substantial reason is given for repeating the instruction.
Appellant next assails the opinion, because we held as matter of law that Murphy, Dunn,> and McClain acted within the apparent scope of their authority as defendant’s agents when they made the false representations upon which the plaintiffs relied. They especially find fault, as far as McClain is concerned, who they say, "by all the testimony was only employed to locate, that is to say, point out, land upon the project still open for entry. ’ ’
It being assumed by appellant that the testimony as to McClain’s authority was weaker than that of Dunn and
In view of tbe record we were irresistably led to tbe conclusion, as matter of law, that Murpby, Dunn, and McClain were selling agents of appellant, and that when they made tbe representations concerning tbe land testified to by plaintiffs, they were acting within tbe apparent scope of their authority.
But it is further contended by appellant that there is no evidence that Murpby, Dunn', or McClain knew that their representations were false. In answer to that contention we suggest that when these selling agents, or some of them, informed plaintiffs, in answer to questions, that there was no alkali, in the land, that what plaintiffs saw and inquired about was gypsum, that the land had been tested for alkali and was similar in kind and quality to other lands in the vicinity producing good crops, they either knew they were making false representations, and did it with intent to deceive, or they knew nothing about the matter and were recklessly affirming as a fact something of which they were entirely ignorant. In either case it was a false representation in contemplation of law in an action of this kind. Addison on Torts (6th Ed.) American notes by Baylies, § 798, cited in the opinion.
We are still of opinion that notwithstanding instruction No. 8 was erroneous in assuming that appellant ratified the representations of its agents because it claimed the benefits, nevertheless the giving of the instruction was harmless error, and no right of defendant was prejudiced thereby, if the water stock in question is transferred to the defendant.
Appellant also contends there was no evidence that plaintiffs relied on the representations made by its agents. In addition to the representation that there was no alkali in the land it was also represented that the land located by plaintiffs was similar in kind and quality to other lands in the north tract of the Delta project upon which good crops were growing. The jury found that such representation was untrue, and also found that the land located by plaintiffs
Whether or not the plaintiffs relied on the false representations referred to is dedueible from the circumstances and conduct of the parties as well as from the positive statements of witnesses. These representations were made to plaintiffs before they made their applications to purchase either the land or the Avater stock. At the time they consummated their purchase they were evidently satisfied with their bargain. They exchanged their lands in California for the Delta land and water rights, moved to Delta with their farming equipment at considerable expense, and at further expense endeavored to produce a crop. The crop was a failure, because, as the jury evidently believed, the land was not as it had been represented. The plaintiffs entirely abandoned the land, together with the water right therefor, and returned to California. This court would be going a long way if it should assume to hold that there was no evidence upon which the jury might find that plaintiffs, when they made the purchase, relied on the false representations to which we have referred. We are of opinion that was a question for the jury to determine from all the facts and circumstances of the case.
The court is, however, not entirely satisfied Avith the opinion as written, because it leaves the title to the water stock, nominally at least, in the plaintiffs. We are convinced upon the whole record, including both findings and evidence, that the jury in arriving at their verdict must have concluded that the water stock was of no value to the plaintiffs, and that by their verdict it would revert to the defendant. The complaint alleged that it was worthless because appurtenant to the land which was also worthless. The evidence was to the same effect. The brief of plaintiffs on appeal also disclaimed any title to the water stock, and assumed that plaintiffs had abandoned it and were estopped from hereafter setting up any claim thereto. In these circumstances the court feels justified in modifying the opinion and order of the court heretofore made, so that defendant’s right and title
It is therefore ordered that plaintiffs shall within thirty days from receipt of notice of this order make proper transfer of said water stock to the defendants, and within said time file with the clerk of this court proper evidence of said transfer, in. which event the application for rehearing will be denied at defendant’s costs; otherwise the application for rehearing will be granted at the cost of plaintiffs.
