Patten v. Downer

198 N.W. 722, 227 Mich. 95, 1924 Mich. LEXIS 607

• Court: Michigan Supreme Court
• Decided: May 8, 1924
• Docket: Docket No. 116.
• Status: Published

Opinions

I am unable to agree with the conclusions reached by my Brother BIRD in this case. As to defendant Ives, the most that is claimed by plaintiff is that he was a broker assisting in making the sale. I do not think the proof sustains this claim; but if we assume, in the absence of a request for a directed verdict as to him, that such was his interest, the instruction complained of was erroneous as to him. There was no testimony that would justify the jury in finding a conspiracy between him and defendant Downer to defraud plaintiff, no testimony that he profited in any way by the transaction or that he received any of the consideration. InWilliamson v. Hannan, 200 Mich. 658, recovery was sought against Devlin, the owner, Hannan, the real estate broker, and Gainey, his agent, for fraud in the sale of a rooming house. The instructions were similar to the ones before us. It was there said:

"The position taken by counsel for the defendants other than Devlin, the position indicated in requests to charge and in various motions, was that they could not be held liable unless the statements made by Gainey were known to be false and were made with intent to deceive and defraud. Upon this point the trial court did not entirely agree with them as the requests to charge refused and the charge given show. The requests preferred, or the substance and effect of them, should have been given."

In the recent case of Steele v. Banninga, 225 Mich. 547, the liability of an agent for false representations was again before the court and it was there said by Chief Justice WIEST, speaking for the court:

"Defendant was not plaintiffs' grantor; he was their agent in negotiating the purchase. As such agent defendant obligated himself to act without fraud or deceit. If defendant was only mistaken in what he said about the title and Stamp's rights and did not make the representations for the purpose of deceiving and defrauding plaintiffs then he is not liable to respond in damages for fraud and deceit. As plaintiffs' agent and not being a party to the sale by Mrs. Swanson and the purchase by plaintiffs, defendant could not be held liable for fraud and deceit unless the representations were made by him with intent to deceive and defraud plaintiffs. Williamson v. Hannan,200 Mich. 658. The facts and the relation of the parties bring this case within the rule requiring knowledge of falsity and intent to deceive and defraud."

See, also, Aldrich v. Scribner, 154 Mich. 23 (18 L.R.A. [N. S.] 379); Jackson v. West, 224 Mich. 578. I think the instructions were erroneous as applied to defendant Ives and the case for this reason should be reversed as to him.

I am persuaded that the portion of the charge covered by assignment of error No. 5 is subject to the objection made to it and that it does not correctly state the measure of damages in an action based on rescission. Plaintiff tendered the premises back to defendant Downer and he now has them with certain permanent improvements placed thereon by plaintiff. In so far as the value of the premises is enhanced by these permanent improvements defendant Downer should respond, if plaintiff is entitled to recover at all, less the rental value of the premises during plaintiff's occupancy. But we are cited to no authority which authorizes a recovery for plaintiff's labor in attempting to cultivate the farm, which in no way enhanced the value of the premises returned to defendant Downer and which was not necessary to keep the farm in its then condition. While not cited, Johnson v. Campbell, 199 Mich. 186, should be considered and distinguished. Plaintiff there had purchased a theatre known as the "Unique." It was a going concern. Upon rescission he was allowed to recover the expenses incurred in keeping it a going concern until he should have learned that he had been defrauded. But the case is distinguishable in two particulars: (1) no question was raised as to the correctness of the instruction, and (2) it was necessary that plaintiff tender back to defendant what he had received of him, i. e., a going concern. In the instant case no such situation appears. Under the instructions now being considered the jury was permitted to allow plaintiff the value of the improvements and also the value of his labor, some of which was devoted to the erection of the buildings, and this without deduction for the rental value.

I think the judgment should be reversed with a new trial and with costs to defendants.

CLARK, C.J., and SHARPE, STEERE, and WIEST, JJ., concurred with FELLOWS, J.