English v. North

Wood, J., (after stating the facts). In Kincaid v. Price, 82 Ark. 20-24, we said: “To justify a court of equity in rescinding and cancelling a written contract for the conveyance of land on the ground of misrepresentation, a clear case should be made out by the evidence. Where the parties have deliberately entered into a written contract for the sale of property, it ought not to be set aside by a court unless there be clear and satisfactory evidence to show that there was a misrepresentation by the defendant as to a material fact, that plaintiff relied upon it, and was induced thereby to make the contract. ’ ’ As early as Yeates et al. v. Pryor, 11 Ark. 66, this court announced the following rule: ‘ ‘ The misrepresentation, in order to affect the validity of the contract, must relate to some matter of inducement to the’making of the 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 have not so informed themselves, must abide the consequences of their own inattention and carelessness. Such representations, therefore, to amount to fraud, must be of a decided and reliable character, holding out inducements, to make the contract, calculated to mislead the purchaser and induce him to buy on the faith and confidence of such 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.” These principles have been often recognized by this court. See Hill v. Bush, 19 Ark. 528; Matlock v. Reppy, 47 Ark. 164; Neely v. Rembert, 71 Ark. 91; Ryan v. Batchelor, 95 Ark. 375; Carwell v. Dennis, 101 Ark. 608. In Matlock v. Reppy, supra, the court prescribed four tests to determine whether the rescission of contracts upon the ground of fraudulent representations could be maintained, as follows: “ (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 statements of the other, and did he have a right to rely upon them?” There can be no misapprehension, therefore, of the law governing cases of this kind. The difficulty always is in making application of the principles to the facts in hand. Each case must depend, of course, upon its own peculiar facts. Applying the principles above announced to the facts in this record, we are of the opinion that the chancellor erred in denying the appellant the relief sought. If the representations of North had related exclusively to the value of the land, they would have afforded no ground for rescission of the sale or exchange of property between the appellant and appellees; for representations as to value are generally matters of opinion about which there might be a divergence of views, and mere inadequacy of consideration, unaccompanied by circumstances showing fraud or imposition, is not sufficient to warrant the cancellation of an executed or executory contract'. Storthz v. Williams, 86 Ark. 464. But appellee, Arthur North, in addition to the representation as to the value of the land, made further representations as to the nature and character of the land, giving such a detailed statement of facts concerning same as to justify appellant in relying upon the truth thereof. While appellant would have been satisfied in acquiring land in the trade that was of the value of $15 per acre, appellee North stated facts which were calculated to induce appellant to believe that the land in Sharp County was of the value that North had represented it to be. The evidence shows clearly that North represented that at least the larger part of the land — all - except a few acres, not exceeding ten — was agricultural or tillable land. Appellee Arthur North himself testified that he told English that “maybe eighty or eighty-five acres of it could be put in cotton and corn, and that seven or eight acres, possibly ten acres, would not be fit for anything unless he used it for a pasture; that the other land would make good fruit land.” P This testimony of appellee Arthur North shows that he represented that all of the land except possibly ten acres was susceptible of cultivation in some form,, either for agricultural products or fruit, whereas the great preponderance of the evidence shows that not more than forty-five acres, according to the highest estimate of any witness, was tillable land. It therefore satisfactorily appears by a clear preponderance of the evidence that North’s representations as to the character of the land for cultivation were untrue. This was a very material fact in determining its value, and if his representations as to the character of the land for agricultural and fruit purposes had been true, this would have constituted a fact tending strongly to show that his representation as to the value of the land was also true. English told North before the negotiations were closed that he would take the land on the representations that he (North) had made. The representations North had made as to the character of the land had “a whole lot of influence” with him in causing him to make the trade. When the bank replied to his letter of inquiry as to the value that the land was worth $15 an acre, he took that statement, together with North’s statement, as showing that the land was worth that much, and on that account traded. North had special information in regard to the character of the land in Sharp County, acquired by personal observation of it, that English did not have. English reminded him of this, and North replied that English,, upon inquiry of the bank at Hardy, would find it just as he (North) had represented it to be. The proof clearly warrants the conculsion that appellant English did rely upon the representations of North, and that he had the right to rely upon them in the belief of their truth. It is clear that, while English sought information from the bank as to the value of the land, he would not have made the trade upon this information from the bank as to the value of the land if it had not been for the representations of North concerning the situation and character of the land. In Winter v. Bandel et al., 30 Ark. 363-373, we said: “If, however, the plaintiff mainly and substantially relied upon the-fraudulent representation, he will have his action for the actual damage he sustains, although he was in part influenced by other causes.” Carvill v. Jacks, 43 Ark. 454. Suppose North had stated that the land was of the value of $15 per acre, but that only ten acres of it was susceptible of cultivation, and that it was stony and rocky ground, having scarcely any timber thereon, and not suitable for agricultural purposes? In such case, can it be doubted that English would have refused to make the trade, even though North represented that its value was $15 per acre, and even though the bank corroborated such statement? Stating the proposition in this form shows clearly that English relied upon the representations of fact made by North as to the character of the land. When English advised North that he was relying upon his representations, North was bound to make correct and truthful statements, for he and English were not placed in the same relative situation in regard to the property. Their means of information as to the particular description of the land was not the same. In Neeley v. Rembert, supra, we said: “A vendor who makes a false statement regarding a fact material to the sale, either with knowledge of its falsity, or in ignorance of its falsity, when from his special means of information he ought to have known it, and thereby induces his vendee to purchase, to his damage, is liable, in an action at law, for the damage the purchaser sustains through the misrepresentation, or to have the sale rescinded in a suit in equity, at the option of the purchaser.” A clear preponderance of the evidence shows that English was injured by reason of the exchange of properties. Therefore, under the facts, he has,met every test which the law requires to entitle him to a rescission. The decree of the court will therefore be reversed and the cause remanded with directions to cancel the deed from English to North, and from the Norths to English, and for such other proceedings as may be necessary not inconsistent with this opinion.