Judd v. Walker

89 S.W. 558, 114 Mo. App. 128, 1905 Mo. App. LEXIS 289

• Court: Missouri Court of Appeals
• Decided: October 2, 1905
• Status: Published

Opinion

NORTONI, J.

(after stating the facts). — 1. There are cases which hold that where the parties go upon the land during negotiations and the seller points out the true boundaries thereof to the purchaser with the statement of the number of acres contained therein and upon this statement of the acreage the purchaser relies and purchases the land, no action of deceit can be maintained by the injured party on account thereof. The reason assigned in these cases seems to be two-fold; first, that parties ought not to rely on such statements, and second, that the parties were upon the land and the means of information were equally open to both, therefore, the rule caveat emptor applies, as the true number of acres could be ascertained by ordinary vigilance on the part of the purchaser. This doctrine is announced in the following cases: Gordon v. Parmalee et al., 2 Allen (Mass.), 212; Mooney v. Miller, 102 Mass. 217; Credle v. Swindell, 63 N. C. 305. The Kansas City Court of Appeals, in the case of Mires v. Summerville, 85 Mo. App. 183, following the Massachusetts case of Gordon v. Parmalee, supra, applied the same rule to the case therein decided. In that case as reported, however, it does not appear that the seller pointed out the true boundaries of the land, and this seems to be the principal fact upon which the judgments were predicated in the cases above cited. In fact, the Kansas City Court of Appeal^ in the case mentioned, carried the doctrine of caveat emptor to its extreme limit, if not beyond it, and we are confronted with their adjudication in the present controversy. After much careful and painstaking investigation, we are satisfied that the law is quite generally established throughout those jurisdictions where the common law obtains, to the effect that false statements and representations made by the vendor, positively as of his own knowledge as to the number of acres in a certain tract of land when the tract is being negotiated by the acre, are not regarded as expressions of opinion, but on the contrary, are considered statements of fact, and as such constitute fraud. This is certainly the doctrine of our Supreme Court. [McGhee v. Bell, 170 Mo. 121, 70 S. W. 493 (see also dissenting opinion, 170 Mo. 150-151); Buford v. Caldwell, 3 Mo. 335; Hitchcock v. Baughan, 44 Mo. App. 42; Brooking v. Shinn, 25 Mo. App. 277; Leicher v. Keeney, 98 Mo. App. 394, 72 S. W. 145; Starkweather v. Benjamin, 32 Mich. 305; Dunn v. White’s Admr., 63 Mo. 181; Foster v. Kennedy, 38 Ala. 359; Beardsley v. Duntley, 69 N. Y. 577; Conn. v. Atwell, 46 N. H. 510; Whitnet v. Allaire, 1 N. Y. 305; Clark v. Baird, 9 N. Y. 183; Weatherford v. Fishback, 4 Ill. 170; Griswold v. Gebbie, 126 Pa. St. 353; Hill v. Brower, 76 N. C. 124.] This view has become almost universally recognized and adopted by the courts throughout the country. The generally accepted doctrine on the subject is thus announced in 14 Amer. & Eng. Ency. of Law (2 Ed.), 45:

“Statements as to Boundaries and Acreage. — There are some cases in which it has been held or said that a false statement as to the boundaries of a tract of land, or as to the number of acres which it contains, will not support an action of deceit, but they base the rule on the ground that such statements ought not to be relied upon, and not on the ground that they are expressions of opinion. Statements as to such matters, if made by a person positively, and as of his own knowledge, are statements of fact, and have often been held to constitute fraud.”

In fact, the rule announced above is the same which applies in cases of fraud and deceit generally, and is to the effect that the party owning the property or article is presumed to know the facts. No one has prevented Mm from knowing them, and one dealing with him has the right to rely upon the positive statements and representations of fact pertaining thereto, even though the means of knowledge were specially open to him, provided the representations were relied upon and were sufcient to and did actually induce action, for the law will not hear the guilty party say, “You were yourself guilty of negligence,” or “You ought not to have trusted me.” [Bigelow on Frauds, 523-524; Kerr on Frauds (2 Ed.), 40-42; Cottrill v. Krum, 100 Mo. 397, 13 S. W. 753; Barker v. Scudder, 56 Mo. 272; Carter v. Black, 46 Mo. 384; Buford v. Caldwell, 3 Mo. 477; Smithers v. Bircher, 2 Mo. App. 499.]

2. This case reeks with fraud. The evidence shows conclusively that Walker made positive representations to Bourland as to the number of acres in the tract from the inception of the trade up to the time of drawing the contract, at which time he suggested that as he was not sure of the exact number of acres in excess of ninety, they would call the irregular tract ninety acres in round numbers, leaving the impression that in the interim, prior to the making of the deed, he would ascertain the true acreage. Bourland relied upon what he said and trusted to him to make good his representations. Walker himself drew the deed for one hundred and seventy-eight acres, and procured his principal’s signature thereto by giving to him an obligation of indemnity as mentioned, and collected the cash for the full number of acres as represented by him in the first instance, knowing at the time that he was then and there perpetrating a heinous fraud upon the purchaser. It would seem that in a case of such gross deception a recovery should be had without much difficulty. The respondent contends, however, that inasmuch as Bourland went upon the land twice and viewed the same, the parties were then upon an equal footing, and means of knowledge being open to him, the rule of caveat emptor applies; that it was the purchaser’s duty to use his senses and vigilance and ascertain for himself "the true facts, and not having done so, a recovery is precluded. The cases of Mires v. Summerville, Mooney v. Miller, Gordan v. Parmelee, and Credle v. Swindell, supra, are cited and relied upon as supporting this contention. Chancellor Kent says:

“The common law affords to every one reasonable protection against fraud in dealing, but it does not go to the romantic length of giving indemnity against the consequences of indolence and folly, or a careless indifference to the ordinary and accessible means of information. It reconciles the claims of convenience with the duties of good faith, to every extent compatible with the interests of commerce. This it does by requiring the purchaser to apply his attention to those particulars which may be supposed within the reach of his observation and judgment; and the vendor to communicate those particulars and defects which cannot be supposed to be immediately within the reach of such attention. If the purchaser be wanting of attention to these points, where attention would have been sufficient to protect him from surprise or imposition, the maxim caveat emptor} ought to apply.” [2 Kent’s Oomm. (14 Ed.), 484-485.]

The true test of the application of the rule caveat emptor is the liability of the defect complained of to the observation and judgment of one exercising ordinary and usual business attention, care and circumspection; that is, snch care and attention as is usually exercised by ordinarily prudent men in like business affairs. The law requires this much and no more. It does not reqnire nor expect the purchaser to exercise a degree of care and prudence greater than business men ordinarily exercise in like transactions. The rule is a reasonable one and its chief purpose is to require men to see and know such things as are open and patent to their senses upon penalty. It is where the defect complained of is open and patent to the senses of one exercising ordinary business care and attention only that the rule of caveat emptor applies. [2 Kent’s Comm. (14 Ed.), 479-484; Weatherford v. Fishback, 4 Ill. 170; Starkweather v. Benjamin, 32 Mich. 305.] The rule mentioned has been carried to its full extent in this State. In Morse v. Rathburn, 49 Mo. 91, the alleged false representations were that certain unimproved portions of the farms were well timbered and that the soil was good, whereas most of the timber had been cut off and the land was broken and rocky. The plaintiff, having been over the land during negotiations, the court very properly denied a recovery by the application of the rule aforesaid, on the ground that the matters and things about which the alleged false representations were made were open to the observation of the purchaser. To the same effect is the case of McFarland v. Carver, 34 Mo. 195, in which case the fraud and deceit alleged was as to certain representations regarding the quality of the lands, and it appeared that one hundred and twenty acres thereof were subject to overflow. The court held that if the defect was patent to observation, no recovery could be had therefor.

Respondents press the case of Langdon v. Green, 49 Mo. 363, upon us and insist that it is in point here. In that case the rule of caveat emptor was applied and recovery on account of false representations was defeated. By a careful perusal of that opinion, it will be observed that the case is quite different from the one at bar. There the misrepresentations complained of (in so far as the land was concerned) were that “only a certain amount of the land had been washed away by the Missouri river,” (l. c. 365) whereas a larger quantity had been washed, away, and at page 370 it is shown that the complaining party was familiar with the premises and had had the same in his hands for sale as agent for several months immediately prior to his purchase. It was upon this state of facts that the rule of means of knowledge was applied and, we think, properly, as in that case the complaining party being familiar with the premises, the amount of land washed away by the river was patent, the defect was open to the senses of the purchaser and the rule caveat emptor ought to apply. It was a proper case for its application, as we understand the law, for it goes without saying that a man may look over a piece of land and discover about how much it is damaged by the washing away of the soil, whereas it would be quite impossible for him to look at a tract and say how many acres are contained therein. That case is not an authority on the state of facts now under consideration. Each of these cases, and in fact all of the well considered cases, treat of the rule as one resting upon reason and applying only where the matters complained of were equally open to the senses of the parties and liable to discovery by the exercise of ordinary business sagacity, and in fact, it is said the principle is not applicable at all where there is a positive misrepresentation of a fact essential and material to the subject in question and proper diligence has been used by the purchaser in the course of the transaction; and proper diligence is only such diligence as is usually employed by prudent men in like affairs. [Kerr on Frauds (2 Ed.), 42; 14 Amer. & Eng. Ency. Law (2 Ed.), 119.] On the other hand, in Stebbins v. Eddie, 4 Mason, 414 and 420, Judge Story says: “Where the sale is fair and the parties are equally innocent, there is little if any hardship and much convenience in holding to the rule of caveat emptor ” We might add here that the general doctrine laid down in the books as elementary is, that the doctrine of notice and means of knowledge has no application where distinct and positive representations of fact have been made, have been relied upon and have induced action. [Kerr on Frauds (2 Ed.), 40-41; Bigelow on Frauds, 533-584; Herman v. Hall, 140 Mo. 270, 41 S. W. 733; Cottrill v. Krum, 100 Mo. 404, 13 S. W. 753.]

Entertaining these views, we are fully persuaded that the case under consideration it not one where the rule should find application. To apply it here we must find that the alleged shortage of acres in the tract was open and patent to the observation of the purchaser and within the range of his senses while viewing the lands. This we cannot do as it is a matter of common knowledge that a man cannot view a tract of land and arrive at anything like an accurate estimate of its contents. As said by the Supreme Court of Michigan: “It cannot be generally true that a person can judge of the contents of a piece of land by the eye.” [Starkweather v. Benjamine, 32 Mich. 305.] See also McGhee v. Bell, 170 Mo. 121, where in both opinions, this case is quoted and approved (Majority opinion, l. c. 135; dissenting opinion, l. c. 150); and also cited approvingly by the Kansas City Court of Appeals in Leicher v. Keeney, 98 Mo. App. 394, a case more recent than Mires v. Summerville, supra.

3. Considering the next proposition, that Bourland having viewed the lands, he should have used vigilance to ascertain the fact of acreage: To follow out this suggestion, a survey would have been necessary. The rule only requires that Bourland should use that degree of business circumspection usually exercised by prudent men in like transactions. This being true, he would be chargeable with neglect in that behalf only in event that prudent men usually cause surveys to be made under like circumstances. In dealing with this suggestion, we must apply a degree of common sense commensurate with the case in hand and view it in the light of common knowledge and every-day experience pertaining to like affairs. From these bearings, we all know that land in large tracts is bought and sold almost daily by the acre in this country without surveys. This arises no doubt from the fact that the original government surveys are usually accurate and men rely thereon, together with the presumption usually indulged that he who owns the land knows the acreage, and the negotiations are usually had on the faith of prior surveys and representation of the owner. The citizens of Missouri from time immemorial have been accustomed to deal with, the utmost good faith in matters of this kind and it would be a sad commentary indeed upon the moral sense and integrity of the State for the courts to say, even by inference, that our citizens can no longer be trusted in this behalf. Our conclusion is that in case of positive representation of a given number of acres in a tract, ordinary business prudence does not require a survey and measurement thereof and that the party relying upon such representations of fact is not precluded from recovery by not causing measurements to be made in advance of the purchase.

The words “means of knowledge easily within reach” employed in some of the cases ought not to be construed to require the purchaser to seek out and employ a surveyor for the purpose of verifying a fact positively asserted by the seller.

4. There is yet an additional reason why this case should have gone to the jury. Respondents were in no position to avail themselves of appellant’s want of care and lack of attention. The general rule seems to be well settled that where the parties deal fairly or at arm’s length, the rule of caveat emptor as above indicated applies, but when fair dealing is departed from by the vendor making false statements of fact as of his own knowledge, the falsity of which is not palpable to the purchaser, the purchaser has the undoubted right to rely implicitly upon such statements and the principle has no application (authorities supra), and in event the purchaser is entrapped thereby and afterwards calls upon the vendor in a court of justice to make compensation for his deceit, the law will not permit him to escape by urging the folly of his dupe nor by admitting that he, the seller, was a knave and a scoundrel, and averring the defrauded party was negligent and careless in thus believing and trusting him, for this would be equivalent to saying, “You trusted me, therefore I have a right to betray you.” [Cottrill v. Krum, 100 Mo. 397; Leicher v. Keeney, 98 Mo. App. 394; Fargo Gas Light & Coke Co. v. Fargo Gas Light & Electric Co., 4 N. D. 219, 37 L. R. A. 593; Nead v. Bunn, 32 N. Y. 280; Redding v. Wright, 49 Minn. 322; Linington v. Strong, 107 Ill. 302; Labbe v. Corbett, 69 Tex. 509; Watson v. Atwood, 25 Conn. 320; Maxfield v. Schwartz, 10 L. R. A. (Minn.) 607; Graham v. Thompson, 55 Ark. 299; Keifer v. Rodgers, 19 Minn. 38; McGhee v. Bell, 170 Mo, 121.]

On this question, Mr. Bigelow states the law thus:

“The proposition has now become very widely accepted, at law as well as in equity, at least as general doctrine, that a man may act upon a positive representation of facts, notwithstanding the fact that the means of knowledge were specially open to him, or though he had legal notice, as, e. g., in the public registry, of the real state of things. It may be improbable that a man with the truth in reach should accept a representation made in regard to it, but the improbability can be no more than matter of fact. If the representation were of a character to induce action, and did induce it, that is enough. It matters not, it has well been declared, that a person misled may be said, in some loose sense, to have been negligent (in reality negligence is beside the case where the misrepresentation was calculated to mislead, and did mislead) ; for it is not just that a man who has deceived another should be permitted to say to him, ‘You ought not to have believed or trusted me,’ or ‘You were yourself guilty of negligence.’ This indeed appears to be true even of cases in which the injured party had in fact made a partial examination. Nor is the rule applicable merely to cases which in some respects stand upon special ground, as, e. g\, suits for specific performance; it applies to rescission equally, cund indeed is a general rule.” [Bigelow on Frauds, 523-525.]

Mr. Kerr, in his work on Frauds (2 Ed.), 40-41, says:

“If a definite or particular statement be made as to the contents of property, and the statement be untrue, it is not enough that the party to whom the representation was made may have been acquainted with the property. A very intimate knowledge with the premises will not necessarily imply knowledge of their exact contents, while the particularity of the statement will naturally convey the notion of exact admeasurement. The fact that he had the means of knowing or of obtaining information of the truth which he did not use is not sufficient. It is not indeed enough that he may have been wanting in caution. A man who has made false representations, by which he has induced another to enter into a transaction, cannot turn around on the person whom he has defrauded and say that he ought to have been more prudent and ought not to have concluded the representations to be true in the sense which the language used naturally and fairly imports. Nor is it enough that there may be circumstances in the case which, in the absence of the representation, might have been sufficient to put him on inquiry. The doctrine of notice has no application where a distinct representation has been made. A man to whom a particular and distinct representation has been made is entitled to rely on the representation and need not make any further inquiry, although there are circumstances in the case from which an inference inconsistent with the representations might be drawn. He is not bound to inquire unless something has happened to excite suspicion, or unless there is something in the case or in the terms of the representation to put him on inquiry. The party who has made the representation can not be allowed to say that he told him where further information was to be got, or recommended him to take advice, and even put into his hands the means of discovering the truth. However negligent the party may have been to whom the incorrect statement has been made, yet that is a matter affording no ground of defense to the other. No man can complain that another has relied too implicitly on the truth of what he himself stated.”

The doctrine of the two learned authors above is evidently both sound and just, and it is the doctrine of our Supreme Court on the subject as appears from Cot-trill v. Krum, 100 Mo. 397, as well as McGhee v. Bell, 170 Mo. 121.

5. The cases of Dunn v. White’s Admr., supra, Green v. Worman, 83 Mo. App. 568, and Hitchcock v. Baughan, 36 Mo. 216, cited and relied on by respondents, are not in point here. Those cases are treated by the courts as belonging to that class in which no actual fraud is shown and the controversy arose out of honest error and mistaken opinion, as where the parties being on the land and the seller informs the purchaser that he did not know where the boundaries were, but pointed out what he thought to he such. Such statements, instead of being treated as a positive statement of fact, it is held, amounted to no more than an honest expression of opinion and was evidently so understood by the parties at the time, and inasmuch as the purchaser knew as much about the. boundaries as did the seller and the seller did not attempt to make any positive representations of fact pertaining thereto, a recovery at law could not be had thereon. Notwithstanding the very high opinion we entertain of the Kansas City Court of Appeals, and the very great esteem in which we hold the learned judge who wrote the opinion in the case of Mires v. Summerville, 85 Mo.. App. 183, after much careful and painstaking investigation and mature deliberation, we are constrained and persuaded to hold that the facts in this record make a proper case for the jury and that the learned trial judge erred in peremptorily directing a verdict for the respondents.

6. It is conclusively shown that while the respondent, Naxara, may have taken no part personally in the fraudulent representations, he became aware of the fraud being perpetrated in time to have prevented it, but instead of so doing, deliberately became a party thereto by executing a deed purporting to convey more land than he owned or claimed to own and took an obligation from his agent, Walker, to protect himself in event the fraud was discovered and be would be called upon for reimbursement on account thereof. He also accepted compensation for more land than he owned, all of which appears from his own testimony. It is a familiar principle that false and fraudulent representations of an agent, when acting within the scope of his authority, binds his principal, and to represent the acreage of a tract of land in his hands for sale is within the scope of authority of a real estate agent beyond question. It is likewise familiar law that a principal cannot take any benefit arising by virtue of the false and fraudulent representations of his agent, within the scope of his authority, although he may have been no party to the representations. He cannot adopt and take benefit for a contract or sale brought about and entered into by such fraud of the agent on his behalf, and at the same time repudiate the fraud upon which the transaction was built. The statements and representations in this case were clearly ratified and adopted by Naxara and he is jointly liable with Walker therefor. [Kerr on Frauds (2 Ed.), 82; Green v. Worman, 83 Mo. App. 568; Griswold v. Gebbie, 126 Pa. St. 353; Morse v. Rathburn, 49 Mo. 97; Short v. Stephens, 92 Mo. App. 151.]

7. Bourland had no interest in the subject of this controversy and is not a necessary party to the suit.

For the reasons above given, the judgment is reversed and the cause remanded to be proceeded with as herein indicated.

It appearing that the views entertained by this court and herein announced are contrary to and in conflict with those expressed by the Kansas City Court of Appeals in the case of Mires v. Summerville, 85 Mo. App. 183, this case is therefore certified, to the Supreme Court for final determination, in accordance with the constitutional mandate in that behalf provided. It is so ordered.

Bland, P. J., and Goode, J., concur.