Booth v. Coward

STAYTON, J. The sole assignment of error in the application raises the question of the proper measure of damages for deceit in the case of a contract of exchange. Plaintiff owned certain real estate in Falls county; defendant a half section in Hartley. Against each were incumbrances securing notes to third persons. While negotiating an exchange of these parcels, defendant showed to plaintiff’s agent, as the land he was to put 'into the deal, a tract with a well and windmill on it. This induced the contract and the subsequent deeds, whereby the parcels actually belonging to the respective parties were exchanged, certain notes assumed by each party, and additional notes given by plaintiff to defendant. If the trade had been consummated as represented and intended instead of as expressed, plaintiff would have received, in property and by defendant’s assumption of notes, a value exceeding what she did receive, by some .$1,000. But, even as the deal was expressed and consummated', she acquired in property and by defendant’s assumption, a value exceeding that which she gave in exchange. Under these circumstances, plaintiff having sued for damages, the district judge held that she was not injured and awarded her nothing, excluding all testimony bearing upon the comparison in value between the land that was actually conveyed and that which was intended to be conveyed to her. The Court of Civil Appeals,- however, was of the contrary opinion, holding that the measure of damages was the difference in value between what plaintiff received and what she ought to have received under the representations that were made, and not the difference in value between what she gave and what she received. (Tex. Civ. App.) 251 S. W. 550. Which measure of damages was correct, is the question now presented. The basis of the holding of the Court of Civil Appeals was the assumption that the case was one where the property contracted for was not conveyed, and hence where George v. Hesse, 100 Tex. 44, 93 S. W. 107, 8 L. R. A. (N. S.) 804, did not apply. In other words, that court regarded the case as one of breach of contract. This view is considered to be in error. The cause of action was upon a tort. The plaintiff alleged that “she entered into a certain contract with defendant, Z. A. Booth, whereby and by the terms of which the defendant agreed, obligated, and bound himself to convey” to her by way of exchange the property that he actually did con [1027] vey, but that be induced ber into tbe contract 'by fraudulently pointing out to her agent other land witb a well and windmill on it and falsely representing that it was tbe tract wbicb was to become, and did after-wards become, tbe subject of bis contraband deed, wben to bis knowledge it actually was not. Sbe averred that rescission was not proper because of a change of conditions, alleged tbe value of tbe tract witb and without a windmill and well upon it, tbe value of tbe land that sbe exchanged for it, tbe amount of tbe assumed notes, and tbe amount of tbe additional notes sbe gave, and prayed for compensation for ber loss and for general relief. So tbe case, as alleged, was one of deceit. This, moreover, was tbe theory of tbe trial. The testimony was to tbe effect that in tbe contract of exchange tbe plaintiff’s agent and defendant “traded for tbe half section of land described in tbe deed” instead of that pointed out. Tbe district court recited in tbe judgment — which was upon special issues — that the defendant exhibited tbe wrong tract “and that plaintiff upon such representation traded” for tbe half section sbe actually received by tbe deed, “believing that sbe was getting what was in truth and in fact” tbe land that was wrongly pointed out. It is thus seen that the case as alleged, ■ as well as that proved and found by tbe trial court, was one of deceit and was not one of breach of contract, as assumed by tbe Court of Civil Appeals. Tbe contract was, as tbe whole record shows, that plaintiff’s land, tbe obligation sbe assumed, and tbe obligations sbe gave, were to be exchanged for tbe land that belonged to defendant and that was "afterwards deeded to plaintiff by him, and for tbe assumption on bis part of certain notes; but it was induced, according to plaintiff’s petition and some slight evidence, by deceit. It should be mentioned that the evidence established, too, that defendant was not aware of the falsity of bis representations. George v. Hesse, above cited, involved a case of tbe same nature, it not being indicated, however, whether the falsity of tbe representations was known or unknown to the defendant, a difference that Russell v. Industrial, etc., Co. (Tex. Sup.) 258 S. W. 462, and Ford v. Sims (Tex. Civ. App.) 190 S. W. 1165, show to be unimportant; and it was decided that since tbe cause of action was not upon breach of contract but to recover damages for fraudulent representations, tbe measure of compensation was tbe difference between tbe values that were exchanged and not tbe difference between tbe value of tbe land received by plaintiff without a well on it and tbe value of that land if a well had been upon it. Quoting from Smith v. Bolles, 132 U. S. 125, 10 S. Ct. 39, 33 L. Ed. 279, the court said: “What tbe plaintiff might have gained is not the question, but what he had lost by being deceived into the purchase.” Since tbe action here is of tbe same nature, it is controlled by George v. Hesse, and by tbe following opinions of tbe Commission of Appeals, which adhere to the rule announced in it: Rea v. Luse (Tex. Civ. App.) 207 S. W. 942; Moore v. Beakley (Tex. Com. App.) 215 S. W. 957; and Brown v. Searls (Tex. Com. App.) 228 S. W. 173. If, under that rule, tbe value received by plaintiff was more than that delivered by her, sbe sustained, as tbe trial court decided, no loss, and can recover no compensatory damages. See Russell v. Industrial, etc., Co. (Tex. Sup.) 258 S. W. 462, and authorities cited, and Lott, etc., Co. v. Harper (Tex. Civ. App.) 204 S. W. 452; Id. (Tex. Com. App.) 228 S. W. 189. We recommend that tbe judgment of tbe Court of Civil Appeals be reversed, and that of tbe district court affirmed. CURETON, C. J. Tbe judgment recommended in the report of tbe Commission of Appeals is adopted, and will be entered as tbe judgment of tbe Supreme Court.