Larimer County Land Improvement Co. v. Cowan

Elbert, C. J. This was a bill filed by Andrew Cowan, praying the cancellation of a deed made by him to the appellant. — 321 — Andrew Cowan having deceased, the appellees were substituted as parties. The bill represents that defendant “ is a corporation, doing business in Larimer county, with a chief characteristic and object of establishing colonies, acquiring lands, and building up of towns thereon.” On December 3, 1872, defendant was seized and possessed of certain lands near the old town of Fort Collins. “ Orator was seized in fee of a large amount of land, including a forty-acre tract on which the old town of Fort Collins was located, a part of which had theretofore been platted into streets, etc. In 1872 defendant opened an office in or near Fort Collins, pretendedly to cany out the business for which it was formed, but really to acquire land in and near the old town of Fort Collins. In November, 1872, officers and agent of defendant approached orator to negotiate for transfer of certain lands of his to defendant, and with fraudulent intent, to induce him to convey, fraudulently represented to him that defendant had organized a colony of people, and would locate on his land if he would convey a portion to defendant (describing the tract as in deed). Designing to cheat him, they represented if he would convey to defendant said portion, they would plat same, open it to sale and settlement, and cause valuable improvements to be erected thereon, and locate a colony of people, and thus the lands reserved by him would be so enhanced in value as to more than compensate him for conveying to defendant. Believing them, he, on December 3, 1872, conveyed a portion of said forty-acre tract (describing what was conveyed, as appears in deed), for the expressed consideration of one dollar, but really none, except belief in their representations.” “ On obtaining the conveyance, intending to injure him, they laid out the town and located a colony on a different tract, and caused valuable improvements to be erected thereon; withheld the land so conveyed from market; refused to locate a colony thereon; would not allow others to do so, or erect any im — 322 — provements thereon; and laid out streets and alleys in the new town, so as not to harmonize with those in the old town before platted in part upon the tract conveyed by him.” “ Defendant so managed in the location of new town as to render orator’s lands as valueless as possible, which conduct was from a desire and intent to cheat and defraud orator; defendant had no intention of carrying out its representations when made; and they were made to cheat and defraud him and get the land without consideration. He would not have conveyed but for such representations. Defendant is bankrupt in fortune, and an action at law would be unavailing.” The answer denies Cowan’s deed was obtained by fraud or through fraudulent representations of defendant or its officers; admits that a portion of the tract conveyed had been laid off in town lots; denies that he relied upon the representations as charged in the bill in conveying to defendant, and denies the claim that such representations were the only consideration. Since the conveyance, defendant’s conduct clearly proves and tends to show all representations or. promises-in consideration of conveying to it were made in good faith, and have been carried out and performed to the strict letter, and none that were false or fraudulent have ever béen made by defendant or on its behalf to orator, as set forth in bill. Denies laying out addition after conveyance, causing lots and streets to run in different directions from those already laid out. At time of conveyance to defendant there was no legally organized town or a town platted with maps duly recorded. In laying out town by defendant, great care was taken to lay out broad and regular avenues and streets, and with especial reference to buildings already erected, so as not to disturb or injure owners; denies using any means or doing any acts tending to render his lands worthless or depreciate them in value. Defendant renders them more valuable by expending large sums of money in developing the country in and about said town; induced large numbers of people to locate there; made valuable improvements thereabouts by constructing large irrigating canals; setting out — 323 — and cultivating large numbers of shade-trees on streets and avenues. All this had tended to and has greatly enhanced orator’s lands in value and rendered them more valuable; denies refusing to sell any lots or parcels of the land so conveyed, or withholding from market. Defendant says orator is not entitled to relief against it, touching matters complained of in bill. The evidence was taken by a master, and upon the final hearing the court below entered a decree canceling the deed. We are of the opinion that the evidence does not warrant the decree. All the witnesses agree that the consideration of the conveyance by Cowan to the Improvement Company, was in part, at least, the location of its colony ■ at the town of Fort Collins. To this extent, it sufficiently appears that it engaged, and its engagement in this respect was fulfilled. A large emigration and settlement were induced, and extensive improvements in building, and the construction of irrigating canals were inaugurated and completed. It is insisted, however, that the location of the business center of the new town-at the common corner of the four forties, or what seems to be regarded as substantially the same thing, to leave the business center of the old town undisturbed, entered into and formed a part of the consideration moving to Cowan. While it appears from the evidence that this would have been to the interest of Cowan, and would have enhanced to a greater degree the value of the lands reserved by him, it does not sufficiently appear that the company, through its agent engaged with reference to it, or that it definitely formed a part of the consideration inducing the conveyance. The treaty for the Cowan forty extended over a period of two weeks, and was participated in by a number of persons at different times. Bhodes, Mason and Matthews, who engaged in the earlier negotiations as agents of the company, testify, that they represented to Cowan that it was not the intention to disturb the old business center, or, as they sometimes put — 324 — it, it was to be located at the common corner of the four forties. Howes, Meldrum and Cameron, who also engaged in the negotiations on behalf of the company, and who finally consummated them, testily that there was no understanding touching the-location of the business center, and that the controlling and only consideration was the location of the colony at Fort Collins instead of at La Porte—a location talked of and contemplated by the agents of the company in case of failure to secure the Cowan forty. It cannot be said that the representations testified to by Rhoades, Mason and Mathews were intended or received as a stipulation; they do not show that the location of the business center formed a substantive part of the contract. “ In order that a misrepresentation may support an action or be of any avail whatever as a ground of relief in equity, it is essential that it should be material in its nature, and should be a determining ground of the transaction. The misrepresentation must be, in the language of the Roman law, dolus datos locum contractui. There must be the assertion of a fact on which the person entering into the transaction relied, and in the absence of which it is reasonable to infer that he would not have entered into it at all, or at least not on the same terms. Both facts must concur; there must be false and material representations, and the party seeking relief should have acted on the faith and credit of such representations. * * * A misrepresentation goes for nothing unless it is a proximate and immediate cause of the transaction. It is not enough that it may have remotely or indirectly contributed to the transaction, or may have supplied a motive to the other party to enter into it. The representation must be the very ground on which the transaction has taken place.” Kerr on Fraud and Mis. 78. In the later and final negotiations which resulted in the conveyance by Cowan, the location of the business center does not appear to have been' mentioned. Great and permanent benefits have flowed to the complainant by reason of the location of the appellant’s colony at Fort — 325 — Collins, as agreed upon, and bis conveyance to the company should not be canceled except upon much clearer proof of fraud than appears in this record. The decree of the court below is reversed, and the cause remanded. Decree reversed.