Webb Materials, Inc. v. Lacey

364 S.W.2d 473, 1963 Tex. App. LEXIS 1569
Court of Appeals of Texas·Decided January 9, 1963·No. 14036·Published·Cited by 6 cases

Opinion

POPE, Justice.

This is a double appeal. Plaintiff, Bate-man Bell Lacey, Jr., sued Webb Materials, Inc., for damages and rescission of a lease upon grounds of fraud. The jury found the elements of fraud, and the court awarded Lacey $1,750.00 damages. Webb Materials appeals from that judgment, which we must reverse because there is no proof of damages. Lacey appealed from the judgment because the court refused to order a rescission. We affirm that part of the judgment. The State of Texas intervened to claim ownership of an island in the Rio Grande and, upon jury findings, prevailed. Lacey appealed from that judgment. We affirm that part of the judgment.

We shall first discuss the appeal by Webb Materials from the money judgment against it. On August 4, 1959, Lacey was about to execute a lease from himself to *475 Webb Materials. The lease described an •eight-acre tract on the Rio Grande River, north of the City of Laredo, and was for a rental of $360.00 per year. It was to terminate in five years, with options to renew for two like terms. Webb Materials used the leased tract for its gravel business but did not mine any materials from that tract. It did, however, mine gravel from the island. Lacey urged that the lease was induced by fraud, because Webb Materials •expressly represented that it would mine no gravel from the nearby island which Lacey, Sr., claimed to own. The jury found that these fraudulent representations were made and were relied upon.

Webb Materials attacks the jury findings that it fraudulently induced Lacey to execute the lease. We need not examine all of those grounds, because in any event, Lacey did not prove any damages caused by the fraud. “Damages” was obscurely defined, but the term was apparently intended to mean the difference between the reasonable rental value of the leased tract used for the purposes represented and the reasonable rental value of the land for the use to which it was actually put. We fail to find any proof of the latter element.

The reasonable rental value of the land, if Webb Materials had made known that it intended to mine gravel from the island in the river, was not proved. Lacey, the lessor, testified that he would have charged more if he had known Webb Materials’ true intent. Beyond that he provided no evidence. Lessor’s father, Bateman Bell Lacey, Sr., testified that the tract had always been used for farming and pasturage until this lease was made to Webb Materials. He said that he would have advised his son not to lease the tract for $30.00 a month, or $360.00 a year, if he had known that Webb Materials was going to mine gravel from the island. This does not prove the rental value of the leased tract. Ross Watkins, vice-president of Webb Materials, testified that the company had previously used a site owned by another person, inside the City of Laredo, free of charge, until the dust and operations became so distasteful that the owner asked the company to move. After the company was asked to move, a charge of $150.00 per month was made, and the company then left. This is no proof of the rental value of Lacey’s eight-acre country tract several miles away. T. A. Bunn, a realtor, testified that the market value of the Lacey tract was a maximum of $1,600.00. He did not testify about rental values. If there is any evidence of rental values, we have failed to find it in the record. The jury reached its verdict by speculation, not from evidence, and the judgment for damages must be reversed.

The trial court correctly denied plaintiff’s prayer for rescission. One who enters into a contract that is induced by fraud, and who after knowledge of the fraud accepts the benefits of the contract, waives the right of rescission. Rosenbaum v. Texas Bldg. & Mortg. Co., 140 Tex. 325, 167 S.W.2d 506; Powell v. Rockow, 127 Tex. 209, 92 S.W.2d 437; Grabenheimer v. Blum, 63 Tex. 369; Witherspoon Oil Co. v. Randolph, Tex.Com.App., 298 S.W. 520; J. B. Colt Co. v. Head, Tex.Com.App., 292 S.W. 198; Roy Klossner Co. v. McIntire, Tex.Civ.App, 301 S.W.2d 197; 26 Tex.Jur. 2d, Fraud & Deceit, § 89. Plaintiff waived his right to rescission. The contract was executed on August 4, 1959. Within sixty days after he signed the lease, he knew the facts upon which he grounds his fraud. At that time he had collected the first and last years’ rentals in advance, and did not tender them back nor take any steps to dis-affirm. Webb Materials’ operations were open and plaintiff saw them all. He knew a bridge was built from the mainland to the island, that scores of trucks operated to haul thousands of loads of gravel from the island. In 1960 he received another year’s advance rental. In 1961 he did the same. He said nothing about rescission, even when he filed his original petition. He asserted grounds for recovery of damages based on waste and surface damage only. It was not until December 12, 1961, *476 that fraud and rescission were mentioned. He did this in his amended petition. For more than two years, plaintiff accepted all the benefits under the contract after he was in possession of the facts which he claims were fraudulent inducements. See, Anderson v. Wise, Tex.Civ.App., 345 S.W.2d 803, affirmed, Wise v. Anderson, Tex., 359 S.W.2d 876.

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Webb Materials, Inc. v. Lacey, 364 S.W.2d 473, 1963 Tex. App. LEXIS 1569 (Tex. Ct. App. 1963).

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