Thompson v. Newell

94 S.W. 557, 118 Mo. App. 405, 1906 Mo. App. LEXIS 324

• Court: Missouri Court of Appeals
• Decided: May 7, 1906
• Status: Published

Opinion

JOHNSON,-J. —

Action to recover damages alleged to have been sustained in consequence of deceit practiced by defendant in the sale of land to plaintiffs. At the conclusion of the introduction of their evidence, plaintiffs were nonsuited and bring the case here on appeal.

The contiwersy arises out of the sale of a farm of four hundred and five acres lying in Jasper county some four miles from Carthage. On May 9,1903, the parties entered into a contract in writing, wherein it was agreed that “in consideration of the payment by the parties of the second part (plaintiffs) to the party of the first part (defendant) of the sum of $20,000, to be paid in the manner and times hereafter mentioned, the party of the first part agrees to sell and convey by good and sufficient warranty deed containing the usual covenants of warranty, free from all. incumbrances, the following described real estate,” etc. The terms of this contract are of no importance to the present inquiry and need not be stated. Before this suit was begun, it was fully executed by the payment in full of the purchase price and the delivery of a deed to plaintiffs. Possession of the premises Avas given them when the contract Avas made.

The deceit, Avhich plaintiffs contend gives them a cause of action in damages, will appear from these facts collated from the evidence introduced by them.

Defendant, a real estate dealer in Carthage, owned and for some two years had owned the farm and was endeavoring to sell it. He bought it from a man liAdng in Jasper county and paid $16,000 for it, but at his request the deed he received (duly recordéd) expressed a consideration of $20,000. Plaintiffs are husband and wife and at the opening of the story were farmers living in Indiana. They sold their farm in that state and contemplated a trip to Kansas in quest for another. There fell into their hands at this time (no matter from what source) some advertising pamphlets, which defendant sowed broadcast, descriptive of the excellence of Jaspfe. county farming lands in general and of those listed by defendant in particular. Thereupon, plaintiffs, accompanied, by a neighbor and his Avife (of the name of Patton), bought return trip tickets to Wichita, Kansas, by way of Carthage and stopped at the latter place to interview defendant. They went to the hotel and soon after called on defendant at his office. Defendant in the prosecution of his business of real estate dealer and agent Avas most diligent and enterprising. Carriages in charge of competent guides were furnished by him for the use of plaintiffs’ party in the making of various excursions into the country to inspect farms defendant had for sale. Plaintiffs say that during their stay in Carthage the attentions they received from defendant and his assistants Avere so unremitting that they had no opportunity for independent investigation and inquiry and their obsession AA-as so complete that they received no information relative to farm lands and their value save through channels of defendant’s selection. Finally, defendant’s efforts to make a sale Avere concentrated on the farm in question. Plaintiffs were afforded every opportunity to thoroughly examine it and, to defendant’s credit, no complaint is made of any misrepresentation respecting its acreage or quantity. The price asked by defendant Avas $24,000. Plaintiffs objected to this, thinking it too high and Mrs. Thompson expressed a preference for another farm on defendant’s list. The negotiations came to a head in this Avise. Mr. Thompson and his neighbor Patton visited the office of a Mr. Manley, another real estate agent in Carthage, and Avere engaged in conversation with him when one of defendant’s employees entered and told plaintiff that defendant Avishecl to see him at-his office and had concluded to sell plaintiffs the farm at just what it cost — $20,000. Plaintiff and Patton then left Manley’s office and went to the hotel where Mrs. Thompson was informed of the offer made. Mr. Thompson still accompanied by Patton then Avent to defendant’s office and had this conversation with him. “Q. What was the first conversation you recollect? A. We sat down and I asked Mr. Newell, I says to him, ‘This man tells me you would sell the place at cost and I come over to' see if Ave could make a trade.’ A. And what did he say? A. He says, ‘Yes, I propose to sell it rather than to lose you,’ or something of that kind. Q. Give his language as near as you can. A. ‘That I wall sell you the place at cost, $20,000.’ ”

Plaintiffs say they believed the statement and, knowing that defendant was an expert judge of real estate values, were convinced they would be getting a bargain if they could buy the land at what one so expert actually paid for it. This fact alone induced them to malee the purchase. Defendant prepared the written contract for the sale and before it was signed Mrs. Thompson, who was not altogether satisfied, announced in defendant’s presence her unwillingness to close the transaction, whereupon defendant exclaimed, “You can have it at cost rather than lose you — rather than lose this deal . . . we will let you have it at just what I paid for it. I am not making a penny on it.”

After this the contract was signed by defendant and both plaintiffs; partial payments were made as agreed on the purchase price and plaintiffs took possession of the farm. They discovered the fact that the cost of the farm to defendant had been misrepresented before all of the purchase money was paid and before the delivery of a deed to them, but paid the full price and accepted the deed before bringing this suit.

Mr. Thompson was fifty-seven years old, an experienced farmer and had bought and sold to advantage several farms in Illinois and Indiana. From their testimony, we judge that both he and his wife are persons of more than averag’e intelligence and business capacity. He lived in Jasper county for about three years during the decade ending in 1880 and worked on a farm near the land he bought. Plaintiffs were diligent and thorough in their examination of the different farms they visited and were entirely too business-like for us to believe that they reposed undue confidence in the opinions of men with whom they knew they were dealing at arm’s length. Notwithstanding the efforts defendant' made to monopolize their time, he was by no means successful. Plaintiffs rode in his carriages and accepted the social attentions he offered, but found time and opportunity for enlightenment from independent sources. Their visit to Manley’s office was so timely that it smacks strongly off a strategic move designed by plaintiffs to beat down defendant’s price. We have closely considered and analyzed the testimony of both plaintiffs and are satisfied that the parties were well matched in shrewdness and business ability. It was a case of “diamond cut diamond” and plaintiffs themselves do not show that they were worsted in the encounter. Their own witnesses say the land was Avell worth the price paid and in this view of the testimony the only foundation, upon which an argument in favor of the cause of. action asserted may be based at all, is the bare fact that defendant said he paid $20,000 for the land when in fact he paid $4,000 less and that this statement was the predominating influence in the effectuation of the sale. Plaintiffs’ theory is that they had the right to affirm the sale after the discovery of the alleged fraud, as they did, and then recover of defendant in damages the difference between the price he actually paid and what he said he paid.

Despite our own conviction that nothing said or done by defendant imposed upon the credulity of plaintiffs or prevented them from the free exercise of their oavu judgment, we Avill not permit this to control our disposition of the case, but Avill give plaintiffs the benefit of the inference, which they say the jury should have been permitted to draw from the facts in proof, that they were isolated from outside means, of information by the conduct of defendant and influenced to their conclusion by his false statement of the cost of the land to him.

We see nothing in the conduct of defendant preceding the utterance of the false statements that plaintiffs in their situation should have suffered to interfere with their freedom of action. It is perhaps as old as barter and trade itself for a vendor, who has something to sell, to endeavor to keep a prospective purchaser to himself until he can accomplish a sale. Buyer and seller sustain no confidential relation to each other, but are business antagonists. Plaintiffs do not contend that they labored under any disability. Independent sources of information were at hand for their seeking. It is not suggested that defendant by fraudulent trick or artifice either corrupted apparently disinterested advice or made it inaccessible. It was there for plaintiff’s use and, if they chose to neglect opportunity and permitted themselves to be taken in hand by defendant and their whole time occupied by him, their own carelessness and indifference to their interest must be regarded as the responsible cause of any actual inequality in their position as compared with that of defendant. In law, if not in fact, the parties stood on an equal footing up to the point of the making of the false representation respecting the cost of the land.-

Plaintiffs virtually found the cause of action asserted upon the deception, which they say was accomplished by this false utterance, and argue that the proof adduced should be held sufficient to support the action for these reasons. The representation related to a material fact and was not the mere expression of an opinion on the subject of value: it was false and by defendant known to be false when made: was intended to deceive and did. deceive and but for their reliance in its supposed verity plaintiffs would not have bought the land at the agreed price.

All of this may be conceded for argument and yet plaintiffs must fail in this action because of the conceded fact that the land, when sold, was well worth the price stipulated in the written contract. To support an action at law for deceit actual damages must have resulted to the plaintiff from the deception. [Lenox v. Harrison, 88 Mo. 496; Crumb v. Wright, 97 Mo. 18; Lewis v. Land Co., 124 Mo. 688; McBeth v. Craddock, 28 Mo. App. 380; Live Stock Remedy Co. v. White, 90 Mo. App. 498; Edwards v. Noel, 88 Mo. App. 434; Paretti v. Rebenack, 81 Mo. App. 494; Bank v. Byers, 139 Mo. l. c. 652.]

As a general rule, the measure of damage is the difference at the time of sale between the contract price and the market value of the property, hut the basic principle underlying all rules for the measurement of damages in such cases is compensation to the injured party for the actual loss sustained as the direct result of the wrong.

Plaintiffs argue that they are entitled to the bargain defendant had in the land in the price he paid for it and say that- “if one agrees to sell property or an interest therein at what it cost him and fraudulently misrepresents the cost, the measure of the purchaser’s damages is generally the difference between the actual and the represented value,” citing Pendergast v. Reed, 29 Md. 398; Crater v. Brinninger, 33 N. J. L. 513; Salm v. Israel, 74 Iowa 314; 14 Am. and Eng. Ency. of Law, 185. This rule certainly should be applied to cases where the contract made by the parties, in terms, provides that the cost of the property to the vendor is to control the price to be paid by the vendee. Enforcing the rule under consideration in such cases is in effect nothing-more than the enforcement of the very letter of the contract through the medium of an award in damages for its fraudulent breach. Thus, in Pendergast v. Reed, supra, the contract made by the parties was as stated by the court “a purchase for certain considerations of one-eighth of the vessel at its cost price to the defendant and a false representation of this price.” The court very properly held the fact that the vessel was actually worth the value represented immaterial to the measure of damages because plaintiff agreed in the contract to pay, not one-eighth of the value of the vessel, but that proportion of its actual cost to the defendant. So, in Salm v. Israel, supra, the written contract signed by the parties contained the stipulation that the goods were “to be invoiced to second parties at the invoice price that first parties purchased same for.” The vendor fraudulently invoiced the goods to the vendee at a higher price and in an action brought by the latter it was held the plaintiff should recover the amount paid by him in excess of the contract price — the actual cost of the goods to the vendor. . In Crater v. Binninger, supra, the rule, we thinlc, should govern the case in hand, is adumbrated in this illustration. “Let us suppose land costing $5,000 to be sold under a false representation that it cost $10,-000. Now, it is obvious that the damage which the vendee will sustain under ordinary circumstances will be the difference between what he pays for the land and its actual value. If he pay $10,000, the price falsely represented as its original cost, and it be worth that sum and he actually sell it at that rate, he will sustain in point of fact no damage whatever. Can it be pretended then that in such state of affairs, sustaining no loss, he will be entitled to recover anything whatever because of the fraud practiced upon him?”

In the written contract before us, no reference to the cost of the farm to defendant is to be found, but plaintiffs agreed therein, without qualification, to pay the price of $20,000. Plaintiffs are not seeking to rescind the contract. They have affirmed it and accepted its benefits. Unlike the defendant’s in the Pendergast' and Salm cases, who did not fully perform the conditions of their respective contracts, defendant here conveyed the land at the price both parties understood, intended and agreed should be paid for it and thus fully performed the conditions imposed upon him under the written contract. Under circumstances such as these, the true rule, both in law and morals, for the measurement of damages in an action for deceit is the difference between the contract price and the reasonable market value of the land. It follows that, as plaintiffs have suffered no injury under this rule, an action in damages cannot be sustained.

Nor can we accept the suggestion that plaintiffs, at least, are entitled to recover nominal damages. In the absence of actual damage no cause of action at law inured to them. •

What we have said is sufficient to control the disposition of the case and, therefore, a discussion of the other questions argued would serve no useful purpose. The judgment is affirmed.

All concur.