Wells v. Holley

145 Tenn. 345
CourtTennessee Supreme Court
DecidedSeptember 15, 1921
StatusPublished
Cited by5 cases

This text of 145 Tenn. 345 (Wells v. Holley) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells v. Holley, 145 Tenn. 345 (Tenn. 1921).

Opinion

MR. L. D. Smith, Special Justice,

delivered the opinion of the Court.

This is an action for damages based upon an averment of fraud in the sale and purchase of a tract of land by the defendant to complainants. The facts necessary to be stated are:

The defendant A. H. Holley was the owner of a tract of land near Greenville, Tenn., which he desired to sell. He engaged a real estate agency, Tweed & Kelley, to find a purchaser. He represented to his agents that the tract contained one hundred and thirty-six acres, and authorized them to sell it at the price of f15,000. The complainant Wells desired to purchase a farm. He interviewed these agents and ascertained from them upon their representations that this farm contained one hundred and thirty-six acres, and, after looking at the property, entered into a contract with the defendants. This contract is in the following words:

“I, A. H. Holley, party of the first part, have this day bargained and sold my farm, containing one hundred and thirty-six acres, situated in the 24th civil district of Greene Co., Tenn., for the sum of fifteen thousand dollars— one-third to be paid on the 15th day of Dec., 1918; the balance, one, two, three, and four years of equal amounts. The following personal property goes with farm at the above price: A phone and interest in phone line, one hay fork, hay and fodder, and corn. Said Holley reserves the [347]*347right to feed Ms stock out of same until the 15th of December, 1918. Said Wells is to give said Holley fifty bushels of corn in addition to the amount used in feeding. Said Holley further agrees to give all loose lumber, boards and wood that is now on farm. In act of good faith said S. B. Wells, purchaser of said farm, and A. H. Holley forfeits the sum of five hundred dollars, should either of them fail to comply with the above contract.
“This 20th day of Nov., 1918.
his
“A. H. x Holley.
mark
“S. B. Wells/-’

The proof shows that Mr. Holley had acquired this property under several deeds; that he did not know just the number of acres in it, but he really believed that it contained one hundred and thirty-six acres, and it is quite certain that his representations made to his agents were made in good faith and without any intention to actually deceive. Before this contract was completed by the execution of the deed, Mr. Holley had a surveyor run out the lines in order to know just what description to put in his deed of conveyance. When the land was surveyed it was ascertained that it contained only one hundred and eight and two-fifths acres, or about twenty-eight acres less than he had supposed it had contained, and which he had represented to complainant that it'did contain, when the parties came to close the deal, the deed which had been drawn at the instance of the defendant Holley showed that the quantity of land was one hundred and eight and two-fifths acres. When this was brought to the attention of the complainant he at once raised the question of short[348]*348age in the number of acres which he had purchased, and insisted that he had bought the land by the acre. Mr. Holley, on the other hand, insisted that he had not bought it by the acre, but that he had bought it by the boundary. After considerable discussion of the question, and after complainant had consulted a lawyer, he finally agreed to accept the deed, paid the money, and executed his notes in accordance with his contract, but he says that he did it under protest, and with notice to Mr. Holley that he was reserving the right, to bring suit against him for damages for misrepresentations made to him with respect to the quantity.

• We concur in the views of the chancellor that the weight of the proof shows that, notwithstanding the complainant’s protest, he finally accepted the deed as being in compliance with his contract. But whether he did or did not, he knew before he accepted the deed or executed his notes and paid out his money, that the tract of land did not contain one hundred and thirty-six acres, but only one hundred and eight and tw,o-fifths acres.

The amount of the deficiency in acres ivas sufficient, under the rules of this court, even in the absence of actual fraud, to have entitled complainant to a rescission of the contract, and to such damages as he may have sustained by virtue of the shortage in acres. But when he accepted the deed, paid out his money, and executed his notes, and fully complied with the contract, knowing exactly what land was contained in the farm conveyed to him, he thereby waived any right he had to complain at the deficiency in acreage. Placing the proposition upon the ground as if an actual fraud had been committed, he would not be entitled to recover damages, because no damages resulted [349]*349to him, since he had the right and option to refuse to carry ont his trade. There must be some damage before fraud can be made the basis of an action. We are aware of the fact that in some jurisdictions carrying out of an ex-: ecutory contract does not Avaive the right to recover damages for fraud and deceit, but in practically all jurisdictions the right of rescission of such a contract is lost where the party carries it out and executes it after knowledge of the fraud. The principle applicable in this case was, we think, clearly stated and applied by the United States circuit court of appeals for the sixth circuit in Simon v. Goodyear, etc., in which opinion of the court was delivered by Mr. Justice Burton, and from which we quote:

“The case for the plaintiff, in its most favorable showing, may be thus stated: ‘The defendant has deceived and beguiled me into a contract which I would not have made but for reliance upon the willfully false statements of its agents, made to induce its execution. I discovered its deceit after beginning its execution. I could have stopped then, for the engagement Avas not obligatory, and by far the greater part of my contract was still executory. If I had stopped purchases'and deliveries when I acquired full knowledge of the falseness of its representations, my loss would have been limited to the difference between the price I had paid for the rubber waste I had theretofore delivered and the price I received under the contract, and this loss I might have recovered in an action for deceit. But when I discovered the deceit I sought to be relieved in whole or in part from its further execution, and appealed to the defendant to make concessions. The defendant denied the deceit and demanded full performance, granting me only an extension of time for performance. [350]*350In this situation, with full knowledge of the deceit, I accepted this concession in respect to time of performance, but notified it that I would hold it liable for the loss I should incur in buying to fill my contract when it should be fully performed, and went ahead and executed the contract according to its terms. Defendant has paid me the price it agreed to pay, but I now demand the damages I have incurred in carrying” out the contract according to its terms.’
“There can be but one answer to the case thus stated. The contract was not obligatory by reason of the deceit by Avhich it was procured. If it had been fully executed before full knowledge of the deceit which made it nonobligatory, the plaintiff’s remedy would have been in an action for the deceit.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Derryberry v. Hill
745 S.W.2d 287 (Court of Appeals of Tennessee, 1987)
Federal Deposit Insurance v. Newton
737 S.W.2d 278 (Court of Appeals of Tennessee, 1987)
Graham v. First American National Bank
594 S.W.2d 723 (Court of Appeals of Tennessee, 1979)
Bright v. Tennessee Electric Power Co.
2 Tenn. App. 506 (Court of Appeals of Tennessee, 1926)

Cite This Page — Counsel Stack

Bluebook (online)
145 Tenn. 345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-v-holley-tenn-1921.