Matlock v. Reppy

Geo. W. Caruth, Special Judge. Samuel A. Reppy, the appellee, in 1873 was the owner of an improved fruit farm in the State of Missouri, and put it on the market for sale or exchange. On the 26th day of October, 1873, one R. E. Arrington, in company with others, came to Reppy’s farm, looked over the place, including the orchard and premises generally, an-d closely examined the house. Nothing came of this visit Í but about seventeen days thereafter Reppy received a letter from Arrington, in which he proposed to purchase the farm, and pay for the same by assuming certain incumbrances thereon, amounting to about $10,000, and pay the balance in lands, “situated near the largest and one of the best towns in the state —Camden, in Ouachita county, lying on the west bank of the Ouachita river, abounding with the best and most splendid timber, and at least half of it the very best of river bottom land, all lying within from two to five miles of Camden, embracing upwards of three thousand acres, all in one body. •This tract I will put in the trade at $5 per acre; worth the money I think today.” Two days later Reppy received a telegram requesting him to meet Arrington in St. Louis, which he did on the 16th or 17th day of November, 1873. At which time Arrington reiterated the statements of his letter, and, on being questioned, stated that two-thirds of the Arkansas lands were above overflow, and that out of any 3000 acres Reppy might choose to select there would be 2000 acres in a body, high, dry and level. These Arkansas lands were the property of John Matlock, the-appellant, who was Arrington’s brother-in-law, and who was-the party making the trade, through Arrington, his accredited., agent. Upon this state of case, Reppy agreed to trade as Arrington proposed, and immediately executed a deed of conveyance to Matlock, reciting the consideration as $25,600 cash in hand paid, and delivered the same to Arrington, who went with it to Reppy’s farm (the same purchased) and had Mrs. Reppy acknowledge it, Reppy being on the federal jury at St. Louis and could not leave. At the time of the delivery of the deed Arrington gave Reppy a writing binding Matlock to comply with the terms of the trade, to-wit, pay the incumbrances of' about $10,000 and convey the 3000 acres of land. Rfeppy delivered possession of his farm to Matlock, and subsequently discovering that the land he was to receive in Arkansas was. worthless, and not such as it had been represented, declined to accept a deed therefor, and brought suit in the nature of an action for deceit against Matlock, claiming $15,000 damages. There was a jury trial and a verdict of $10,000 found in favor of Reppy; motion for a new trial was made, overruled, and. Matlock prosecuted this appeal. The motion was based on numerous grounds, but those-which require the notice of this court may be grouped as follows : First. Errors in giving and refusing certain instructions therein set out. Second. Errors in permitting or refusing the introduction of certain evidence. The following are the instructions given and refused, to which action of the court objection is taken : “ I. If the jury find from the evidence in this case, that R. E. Arrington, as the agent of the defendant, John Matlock,, on ■or about the 15th day of November, 1873, or theretofore, for the purpose of inducing the plaintiff, Samuel A. Reppy, to sell to defendant his residence and fruit farm, and take in part pay therefor three thousand acres of land of the defendant, to be selected by plaintiff out of a body of seven thousand acres, did falsely, fraudulently, knowingly and deceitfully make to plaintiff •representations concerning the quality, character and condition •of said land of defendant as facts, and did by such representations knowingly lead plaintiff to believe that of any three thousand acres of land which plaintiff might select in a body out of defendant’s said seven thousand acres of land, two-thirds •or a greater portion thereof was entirely above overflow, susceptible of, cultivation, and that the plaintiff had never been in the ■vicinity of said lands, and had no opportunity to know, and did not know, anything of the character, quality and condition of .said lands of the defendant, and relied on said representations •concerning the same, and believed them to be true, and was "thereby induced to convey to the defendant his said residence ■ and fruit farm, and to agree and did agree to take in part payment therefor three thousand acres of said land of the defendant, to be selected by plaintiff in a body, at five dollars per acre; and further find that said lands of defendant, except a small portion thereof, were not susceptible of cultivation by any ordinary means, but were almost wholly subject to annual overflow so as to be unfit for cultivation, and the plaintiff was misled, to his injury, by such false and fraudulent representations, then •they, the jury, will find the issues fqr the plaintiff, and assess his damages as herein directed. “2. If the jury find from the evidence that R. E. Arrington, as the agent of the defendant, John Matlock, on or about the •eighteenth day of November, 1873, or theretofore, for the purpose of inducing th'e plaintiff, Samuel A Reppy, to sell to defendant his residence and fruit farm, and take in part payment therefor three thousand acres of land of the defendant, to be selected by plaintiff in a body out of a body of seven thous- and acres, did falsely, fraudulently, knowingly and deceitfully represent to plaintiff as facts, and lead plaintiff to believe that out of any three thousand acres of said land of defendánt the plaintiff might select in a body, at least two-thirds thereof was above high-water mark and susceptible of cultivation, or words to that or like effect; and if the jury further find that plaintiff had never been in the vicinity of said land of the defendant, and had had no opportunity to know, and did not know anything ■concerning their character, quality and condition, but relied upon said representations and believed them to be true, and was induced thereby to sell to defendant his said residence and fruit farm, and to agree to take in part pay therefor three thousand acres of the said lands of defendant at five dollars per acre; and also further find that said lands of the defendant were almost wholly subject to overflow so as they were* not susceptible of •cultivation by any ordinary means, and that plaintiff was misled to his injury by reason of such false and fraudulent representations, then the jury will find for the plaintiff and assess his damages as hereinafter directed. “5. If thejury find the issues for the plaintiff, they will assess his damages at .such sum as from the evidence they may find he has sustained, not to exceed the sum claimed in the complaint, .and will regard as the measure of damages the difference between the real value of said three thousand acres of land as shown by the evidence and the price agreed to be paid therefor.” And the defendant asked the court to instruct the jury, .among other things, as follows : “5. If the jury believe from the said testimony, that the plaintiff, knowingly and wilfully, made to defendant, or his agent, false representations as to the costs of the dwelling house on •said lands of plaintiff, and other improvements thereon, or as to the number of apple and peach trees growing on said lands, or as to the costs of said land and the improvements thereon, or as to the encumbrances on said lands, or any part thereof, or concealed from defendant, or his agent, information of encumbrances on said lands within his possession, for the purpose of inducing, and did indüce defendant to purchase said .land, or any part thereof, and that defendant had a right to rely, and did rely on said representations, or any part thereof, and that de- ' fendant has actually been damaged and injured by such representations, or any part thereof, they will return a verdict in favor of defendant, and assess his damages in whatever amount they find he has been damaged.” The court struck out that portion of the instruction commencing with "as to the costs of the dwelling house, etc.,” and ending with “the encumbrances on said land or any part thereof,” and gave the same as amended. “6. If the jury believe from said testimony, that plaintiff, before making the contract to sell, convey and exchange lands, as proven in the present trial of this action, the said contract being referred to in the complaint and answer herein, wilfully and knowingly made false representations to defendant, or his agent, with the fraudulent intent to cheat and defraud defendant, or in the making of said contract, was guilty of any fraudulent intention to cheat and defraud defendant,- they will return a verdict in favor of defendant.” This the court refused and amended the same by interlining after the words, “any fraudulent intent to cheat and defraud defendant,” and before the words, “they will return a verdict,” the words, “and that defendant or his agent, was in such condition and so situated as to have a right to rely, and did rely on said false and fraudulent representations of the plaintiff,” and gave the same so amended. The jury will wholly disregard and leave out of consideration all statements of defendant’s agent, Arrington, as to the prospects of Camden, Arkansas, and its railroad prospects, and as to the fertility of defendant’s lands in the valley of the Ouachita river, and its capacity of producing corn and cotton, and its susceptibility of cultivation, and its being the best of river bottom lands, as such statements can only be matters of opinion.” The court struck out the words, “and its susceptibility of cultivation,” and gave as amended. “9. If the jury believe from said testimony, that plaintiff ascertained the character of said lands of the defendant, in- the valley of the Ouachita river, and thereafter selected three thousand acres to be conveyed to him under his contract with defendant, without any complaint of misrepresentation on the part of the agent of the defendant, such designation was an acceptance of said lands, so far as the plaintiff was concerned, and that upon a tender of a deed by defendant, in compliance with the written contract of the nineteenth day of November, 1873, the plaintiff refused the same, they will find for defendant.” ■ The evidence in this cause tends*, to establish the facts that the trade out of which the controversy has arisen was entered into at St. Louis, Missouri, where the appellee was at the time serving as a juror in the 'federal court. Reppy had never seen the' Arkansas lands and knew nothing about them except what Arrington told him, which was, in effect, that two-thirds of it was above overflow, and that out of any three thousand ácres Reppy might select, there would be two thousand acres in a body, high, dry andjlevel — all of which was untrue. Reppy was so situated he was compelled to rely on the representations so made, and traded accordingly. Arrington, on the contrary, had inspected and examined Reppy’s fruit farm shortly before the trade, and had further opportunity to do so when he went there to have Mrs. Reppy sign the deed. The property was but a short distance.from St. Louis, and therefore easy of access to Arrington, had he desired to make further examination. The Arkansas land, valued in the trade and rep- . sented to be worth fifteen thousand dollars, was shown to be ■ worth three thousand dollars. Reppy refused to accept the ■ deed for it, and it remained the property of Matlock. The situation of affairs, therefore, when the suit was instituted, was^ that Matlock had Reppy’s fruit farm, valued in the trade at $25,000, in his possession, for which he had paid or assumed to pay certain encumbrances, which amounted to somewhere in the neighborhood'of eleven thousand dollars, and his own land . in Arkansas besides. 1. Action for-representations, The principles of law, applicable to an action of deceit for damages, under the state of case which the evidence' here tended to establish, have been well settled by the adjudications of this court. In Yeates et al. v. Pryor, 11 Ark., 58, this court, speaking through Mr. Justice Walker, held: “It is not every misrepresentation of the vendor, in regard to the property sold, which will amount to fraud, be it ever so exceptional in point of morals. The misrepresentation in order to affect the validity of the contract must relate to some matter ;of inducement to the making of the1 contract, in which from the 'relative position of the parties and their means of information ■the one must necessarily be presumed to contract upon the faith ' and trust^which he reposes in the representations of the other ’ on account of his superior information and knowledge in regard ■to the-subject of the contract; for if the means of information are alike accessible to both, so that with ordinary prudence or •vigilance -the parties might respectively rely upon their own /judgment, they must be presumed to have done so; or if they ijhave hot so informed themselves, must abide the consequences fof their ’own inattention and carelessness. Such representations therefore to amount to fraud must be of a decided and -celiablé ■ character, holding out inducements to make the contract,, calculated to mislead the purchaser and induce him to buy ■ on .the’faith and confidence of the representations, and in the absence of the means of information to be derived from his own observation and inspection, and from which he could draw, conclusions to guide him in making the contract independent of the representations of the vendor.” All subsequent opinions of this court are in perfect harmony with this statement of the law applicable to such cases. Yeates v. Pryor was a bill in chancery, seeking the rescission of an executed contract on the ground of fraudulent representation as to land being above overflow. The same principles are applicable to suits at law for damages, because of similar false and fraudulent representation. : 5, Same. Actions of this character should be subjected to four tests in order to determine whether they may be maintained. a. Was the fraud material to the contract; did it relate to some matter of inducement to the making of the contract? b. Did it work an injury ? c. Was the relative position of the parties such and their means of information such, that the one must necessarily be, presumed to contract upon the faith reposed in the statements of the other? d. Did the injured party rely upon the fraudulent' state-' ments of the other and did he have a right to rely upon- them, in full belief of their truth. Yeates v. Pryor, 11 Ark., 60; Winter v. Bandel, 30 Ark., 373; Wilson v. Strayhorn, 26 Ark., 28. Squared by these well established principles, the instructions' one and two as given for plaintiff were proper, and the fifth and sixth asked by defendant were properly refused. The principal objection urged to instructions one and two, is that the jury were allowed to consider representations con-‘ cerning the fertility of the lands and susceptibility to cultivation. This is not tenable as error for two reasons : 1. The instructions specially set out [the fraudulent representations, that is to say, that the lands were above overflow* and susceptible of cultivation, and make the finding of such representation to have been made the test. But it is said, the words “susceptible of cultivation” expressed a mere matter of opinion relating to the character of the soil as to fertility, etc. We do not so understand it. The deceit claimed was the representation that the.land was above overflow, and of course if it was it was susceptible of cultivation, whether it produced much or little. If it was covered with water of course it was not, and in leaving it to the jury to say whether it was susceptible of cultivation or not, the instructions did not require at its hands any inquiry as to the character, quality or fertility of the lands, but simply whether they could be worked at all,'or in other words were above overflow. 3. Damages : Measure of, for fillse representations, 2. Admitting that there might be some objection to the expressions employed in instructions one and two concerning representations as the quality, character and condition of the land, being mere matters of opinion, .the; matter was remedied by the seventh instruction given at the instance of defendant in which-the jury was instructed to; disregard-and leave put of consideration, all the Representations objected to except “susceptibility of cultivation” and we have already seen that it was proper to let that go to the jury. * -We come now-to consider the fifth instruction, defining the measure-of damages. • This is objected to on the ground that the court assumed.$15,000 as the price, paid. The .complaint charges.that $15,000 was the price at which the Arkansas land was.taken, and.upon the basis ofj which the trade was made. This, is admitted by.the answer, and the court was justified in assuming that to be the sum agreed upon. In actions of deceit, the injured party may insist on having his damages measured by the difference in the value of the property purchased as it really was, and what it would have befen had the" representations made concerning it been true; or, if he prefer, he may content himself with the difference between the real value of the property in its true condition and the price paid; or, the value placed upon the property in the transaction. In this case, the plaintiff chose to resort to the latter course, and inasmuch as the price paid was admitted by the pleadings, the instruction as given was proper. This court, in Goodwin et al. v. Robinson, 30 Ark., 540, held that: “A party who has been induced to enter into a contract for the purchase of property by the false representations of the vendor, concerning the -quantity or quality of the article sold, may have either of these remedies which he conceives it is most to his interest to adopt.” “ He may annul the contract, and by returning or offering to return the property purchased within a reasonable time entitle himself to recover whatever he had paid upon the contract; or he may elect to retain the property and sue for the damages he has sustained by reason of the false and fraudulent representations, and in this event the measure of the damages would be the difference between the real value of the property, in its true ..condition, and the price at which he purchased it; or, to avoid a circuity of action and a multiplicity of suits, he may plead such damages in an action for the purchase money, and is entitled to have the same recouped from the price he agreed to pay. 2 Kent Com., 8 ed., pp. 605 and 610; Sugden on Vendors, 381 star page; Sedgwick on Damages, pp. 445-6; Desha v. Robinson, 17 Ark., 246.” The instruction, as given, is in perfect harijiony with the ■doctrine laid down by us in Goodwyn v. Robinson, nor is it in any wise inconsistent with the adjudged cases'in other states, •as we understand them. It follows from what we have said, there is no error in'granting the instruction objected to. It is urged that the court improperly refused the fifth and sixth instructions as asked by the defendant. These instructions, as asked, did not express the law of the case, and ought not to have been given, even as amended, though as to that part of it, appellant has no right to complain. If they had been given, they would in all probability have ■ misled the jury,, and justified them in resolving against the plaintiff, upon a belief on their part, that the plaintiff had not made any fraudulent representation whatever, without reference to its being material, or to the relative position of the parties and their means of information ; and is condemned by the doctrine laid down by Judge Walker in Yeates v. Pryor, supra. 4. Waiver < the fraud:Estoppel. This brings us to the last error suggested in relation to the instructions. It is insisted the ninth, as asked by defendant, should have been given. This was properly refused on two grounds. It is entirely abstract. There is no testimony whatever upon which it might have been based. On the contrary, the letter, in which it is claimed Reppy selected the lands, expressly states it to be a conditional acceptance, subject to further examination. Secondly, it is not the law applicable to actions of deceit. In such cases the injured party, by accepting and holding on to the property concerning which the false-representations have been made, after ascertaining their falsity,, produces neither a waiver, nor does it operate as an estoppel, to prevent his suit for damages. He is entitled to all the benefits of his trade. These false representations are in the nature of warranties, and must be made good. He therefore waives-nothing by accepting what is offered, although not what he traded for. He may take that, and then bring his suit. Ahrens v. Adler, 33 Cal., 609; Murray v. Fennings, 42 Conn., 9; 3 Clark (Iowa), 584; 8 Ib., 370. Taking the instructions, as a whole, as given to the jury, we-are unable to perceive that any injustice has been done the defendant. In the course of the trial, the plaintiff was permitted to read the depositions of sundry parties, speaking to certain declarations of Arrington, shortly after the trade, describing Reppy’sfarm in glowing terms, and to have the benefit of the testimony of N. T. Richmond, to the same effect, over the objection of defendant. This would have been irrelevant and incompetent, even if the agency of Arrington had been sufficiently established to have been in operation at the time the statements were made, which was by no means the case, and it was error to admit it. It is not, however, every admission of irrelevant or incompetent testimony, which constitutes a reversible error. We cannot see how, under the state of the pleadings, and the circumstances of this case, it could have worked any injury to defendant’s case. The same may be said with much more force, as to the exclusion of the depositions offered by defendant to prove the value of Reppy’s farm, as estimated by numerous deponents, but that testimony was clearly incompetent. It is sought to justify it upon the ground that if it could be shown that Reppy’s farm was worth little or nothing, then the jury "might infer that he did not rely upon Arrington’s representations. We Cannot so conclude. The valuation of the Arkansas land is not an open question. The pleadings settle that. There was no issue to which this proof was responsive. Besides, Arrington did not buy a “ pig in a poke.” He had opportunities of examination and inspection. He, in his haste-to have the trade concluded, took the deed with him to Reppy’shome (which was the place traded for), to have Mrs. Reppy sign it, and there, in the absence of Reppy, on the spot, closed that part of the transaction. The valuation was agreed to — so-charged in the complaint and admitted by the answer. That being so, it was immaterial what the opinion of other people-might have been touching it. It could not affect the recovery-as to his false representations touching the Arkansas land. The judgment must be affirmed. Hon. B. B. Battle did not sit in this cáse.