Waggoner v. Zundelowitz

231 S.W. 721, 1921 Tex. App. LEXIS 428
CourtTexas Commission of Appeals
DecidedJune 1, 1921
DocketNo. 226-3400
StatusPublished
Cited by28 cases

This text of 231 S.W. 721 (Waggoner v. Zundelowitz) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Waggoner v. Zundelowitz, 231 S.W. 721, 1921 Tex. App. LEXIS 428 (Tex. Super. Ct. 1921).

Opinion

POWELL, J.

This suit was filed in the district court of Wichita county, Tex., by A. Zundelowitz against Ed Waggoner and W. W. Silk, praying for a rescission and cancellation of a certain transfer and assignment of an oil and gas lease, executed by defendant in error on May 14, 1917, and further praying, in the alternative, for his damages in the sum of $18,000. All of the parties had been jointly interested in an oil lease covering 348½ acres of land, the interest of Zun-delowitz being an undivided one-fourth. On the date last mentioned, the latter conveyed his interest therein to Waggoner for a cash consideration of $37.50 per acre. Waggoner then conveyed to Silk an undivided one-half of this interest he had purchased from Zun-delowitz.

The petition alleged that an oil well was being drilled on tlie Burnett ranch about one mile from said lease; that about May 12, 1917, Waggoner and Silk became informed that the well above mentioned was being brought in, and was showing up for a good well; that they then conspired together to defraud Zundelowitz out of his interest in the lease on said 348½ acres; that in pursuance of said conspiracy they made certain false representations to him with reference to said well and lease, and concealed certain o£her information with reference thereto, thereby obtaining an option from the latter on May 13, 1917, covering his one-fourth interest in said lease; that the assignment was executed, as aforesaid, the next day; that at that time he was still in ignorance of the true facts about the oil well development near the lease.

Waggoner and Silk answered by general and special exceptions and general denial; they specially denied that they defrauded Zundelowitz, or concealed any information from him which it was their duty to impart; they further pleaded that Zundelowitz had the same opportunity to know of the development on the Burnett ranch and the bringing in of the Gulf Production well thereon, as they did, and that he was fully advised even before the option was signed; that in any event, before the final assignment was executed to Waggoner on May 14, Zundelowitz did have knowledge of all the material facts about the development on the Burnett ranch, and, even if he had been defrauded in the beginning, his act in executing the final assignment and completing the executory contract and option amounted to a waiver and condonement of the alleged fraud, and a ratification and confirmation of the option contract' which he alleged Waggoner had secured by misrepresentation and concealment. The answer further alleged that the actions and conduct of Zundelowitz in the premises estopped him from seeking to cancel his transfer of his undivided interest in said [723]*723lease, or to seek damages by reason thereof.

The case was tried before a jury, which, in response to a general charge of the court, returned a general verdict for Waggoner and Silk. Complying with the jury’s verdict, the judgment of the court was that Zundelowitz take nothing by his suit, and that Waggoner and Silk go hence and recover their costs.

In due course, Zundelowitz appealed from the judgment of the trial court to the Court of Civil Appeals at Fort Worth, whence the case was transferred to the Court of Civil Appeals at Amarillo. The latter court entered judgment reversing the judgment of the trial court and remanding the case for another trial. See 211 S. W. 598. Waggoner and Silk, in due time, filed a motion for rehearing in the Court of Civil Appeals, which was overruled. In due course thereafter they sued out a writ of error to the Supreme Court, which was granted.

The controlling questions on this appeal involve paragraph 6 of the general charge of the court, and special charge No. 2, requested by Zundelowitz in connection therewith, and refused by the court. Said paragraph No. 6 is as follows:

“If you find and believe from the evidence that Ed Waggoner did make the representations as alleged by A. Zundelowitz, and that said representations were false, and that said Ed Waggoner knew them to be false, and that A. Zundelowitz did rely upon the same, and was induced thereby to sell said lease to the said Waggoner, nevertheless, if you further find and believe from the evidence that A. Zundelowitz discovered the falsity of said representations, if they were false, before he signed the transfer of said lease to the said Waggoner, and, having said knowledge and knowing the falsity of said representations, if they were false, signed and delivered the transfer of said lease to the said Waggoner, you will find for the defendants.”

Said special charge No. 2 is as follows:

“In connection with paragraph 6 of the court’s charge, you are charged that, before you can find for the defendants under said paragraph, you must believe that A. Zundelo-witz, before hei executed and delivered the transfer of the lease, knew all the facts with reference to the transaction; that is, he must have known that the representations were false, and he must have known that Ed Waggoner at the time said representations were made knew the facts with reference to said well, or had information with reference to same, and failed to communicate the facts within his knowledge* and it would not be sufficient simply for you to find that A. Zundelowitz had information before he made said transfer that the well had been brought in.”

The Court of Civil Appeals, apparently ignoring the fact that both the pleadings and evidence account for many fraudulent representations as being involved in the issue of waiver, or ratification of the alleged fraud, limits its discussion of the correctness of the above charge to only one phase of the testimony, to wit: Zundelowitz testified:

“I wanted to set this trade aside because he [Waggoner] said it was to be a dry hole, and on the basis of that he was going to sell it. It made a big difference to me whether it was going to be a dry hole. If I had known the well was a producing well, I would not have sold it for $37.50.”

In line with the above limitation of the 'evidence, said court announces the following general principles of law;

“1. Ordinarily, misrepresentation of a material fact will be sufficient to support an action for fraud, whether the person making it knew that it was false or not. One making a statement of fact as a basis of negotiations is bound to know whether it is true, and bad faith is not in such cases a necessary element of an action for fraud. In this case, however, the statement in reference to the well was made in the form of the expression of an opinion, and it is generally true that a statement of an opinion will not form the basis of an action for fraud. There are exceptions to this rule, however. Where an opinion is expressed for the purpose of deceiving as to a matter which has within the knowledge of the person expressing it ceased to be a matter of opinion, and is thereby made the means of a misrepresentation or concealment of a fact, it may form the predicate for actionable fraud. Houston v. Darnell Lumber Co., 146 S. W. 1063; Olston v. Oregon Water Power & R. Co., 52 Or. 343, 96 Pac. 1095, 97 Pac. 538, 20 L. R. A. (N. S.) 926; 20 Cyc. 18; 12 R. C. L. p. 248; Mudsill Mining Co. v. Watrous, 61 Fed. 163, 9 C. C. A. 415.
“2.

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Bluebook (online)
231 S.W. 721, 1921 Tex. App. LEXIS 428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waggoner-v-zundelowitz-texcommnapp-1921.