Shanks v. Whitney

ROSS, C. J. To constitute actionable fraud or deceit in the sale of property, the false representations or concealments must be of existing facts — not of facts that will exist, nor of promises, nor of matters of judgment, nor of opinion — relating to the subject matter of contract, affecting its essence and substance, known to be false by the vendor, not open to the knowledge of nor known by the purchaser, made by the vendor, aud relied upon by the purchaser, as inducements to the contract. Childs v. Merrill, 63 Vt. 463; Palmer v. Bell, 85 Me. 352; Burns v. Dackary, 156 Mass. 135; Nash v. Minn. Title Ins. Co. (Mass.), 34 N. E. Rep. 625. I. Tested by this rule, did the evidence have a tendency to establish a right of recovery in the plaintiff ? The subject matter of the contract, so far as needful to be considered here, was the equity of redemption in a building lot and the building thereon in the city of Boston. The premises were subject to a large mortgage which will fall due in less than three months after the contract of purchase. Before entering upon negotiations, the plaintiff informed the defendants that the value of the equity of redemption to him would — 411 — be nothing unless the mortgage could be replaced. Hence representations on the subject of replacing the mortgage were made material by the terms of the negotiations, and the value of the equity in the premises was made dependent upon whether the mortgage when due could be replaced, and whether at a lower rate per cent. Its value also was dependent upon whether the occupation of a portion of the lot for a street and sidewalk was under such circumstances that the city was legally liable to pay for its use of it. In reference to replacing the mortgage, the plaintiff’s testimony was to the effect that the defendant represented that he then had a man who was ready to replace the mortgage, when it became due, at a lower rate of interest, and that he could turn this opportunity over to the plaintiff. He also represented that the occupation of a portion of the lot by the street and sidewalk was under such circumstances that the city was legally liable and ready to pay therefor. The testimony tended to show that the defendants knew that these representations were false, and that they made them to induce the plaintiff to make the contract; that the plaintiff did not know, nor have reasonable means of ascertaining, their falsity, and was induced by them to enter into the contract. Hence the defendant was not entitled to have a verdict orderéd in his favor, as he requested. While these representations, found to be false by the verdict of the jury, led up to and induced the making of the contract, they were not provided for, nor attempted to be provided against, by the contract nor by the deed, and therefore were not merged in them. The deed conveyed the portion of the lot covered by the street and sidewalk, and doubtless conveyed any claim existing against the city, for taking this portion of the lot for highway purposes. 'The deed has not been furnished to this court, nor is it shown, whether it contained covenants against the occupation of this portion of the lot for highway purposes. We cannot assume it did. — 412 — The non-existence of this claim against the city for such occupation occasioned the damages on this point. Without a covenant in the deed against the use of this portion of the lot for highway purposes — which cannot be assumed — this cause of action did not become merged in the deed. Hence the contention for a merger of either of these causes of action in the contract or deed, is not sustained. II. Nor did the court err in rejecting the testimony offered to be shown in recoupment, on the ground that the plaintiff misrepresented in regard to the market value of the farm which he conveyed to the defendant in exchange for his pro perty. Such representations are matter of opinion and non-actionable. Each party must be held to form and act upon his own opinion in regard to the market value of the property, which he either examines or has an opportunity to examine. In thus holding, whether recoupment applies to actions of tort, is not considered. III. The defendant contends that there was a variance between the allegations in the writ and the plaintiff’s proof in regard to by whom a waiver to the right of damages for taking a portion of the lot conveyed for highway purposes, was made. In that, the declaration charged that such waiver had been made by the defendants and the proof was that, if made, it was by the defendants’ grantor. The question of variance was not made in the county court. Unless raised and passed upon by the trial court, it cannot be considered in this court “ unless such variance is material and substantial, affecting the right of the matter.” R. L. 1391. This variance does not affect the “ right of the matter.” If the defendants knew that the right to damages for this use of a portion of the lot had been waived, their representation that is still existed and passed by their deed to the plaintiff, was, as regards them, as false and as injurious to the plaintiff as though the waiver had been made by themselves. Nor was there error, as contended by them, in that por — 413 — tion of the charge which related to a waiver of this claim for damages, or a dedication of this portion of the lot to the public. It was to the effect that to constitute such dedication the former owner must have thrown open this portion of the lot with the intention thereby permanently to dedicate it to public use, and that it had ever after been occupied in recognition of such a right in the public. They contend that this did not require the jury to find an acceptance of such dedication. While the word acceptance is not used, we think what was said about it ever after having been occupied in recognition of such right in the public, was in law the equivalent of acceptance. The statute law of Massachusetts on this subject was not shown in the court below, and cannot be considered on this question in this court. At common law the use of this portion of the lot by the public, in recognition of the right conferred by the dedication, is an acceptance. IV. The defendants contend there was error in the charge of the court on the subject of damages. They say that the rule of damages, in such case, <£ Is the difference between the value of the property as it was represented to be, and its value as it was in fact at the time of the sale or exchange.” This is a correct statement of the rule. When applied to the subject matter and circumstances, it is the rule laid down by the county court. With reference to whether the equity of redemption in the lot covered a claim for damages for the usé of a portion of it for street and sidewalk, the court told the jury if they found that the defendants represented that such a claim was included in the equity of redemption of the lot conveyed, and if this representation was found to be false to the knowledge of the defendants, the plaintiff was entitled to recover therefor the £ ‘ Difference between the value of the property with such a claim as there was represented to be and its value without such a claim — that is the value of the claim.” — 414 — In this statement the court adopted nearly the language oí the rule as formulated by the defendants’ counsel. By adding “ that is the value of the claim,” the court neither added to nor took away from the rule it had just expressed in other language. The value of the represented claim was the difference between the value of the property if it was as represented, and its value as it was in fact. The language of the charge, on the other branch, must be read in the light of the evidence which was before the jury, and to which the court had carefully called their attention. When the defendants first met the plaintiff with reference to making the exchange of property, the plaintiff informed them that if the mortgage could not be replaced he would not look at the defendant’s property, for he was not able to raise the money to pay the mortgage when it should become due. This fully informed the defendants that if the plaintiff made the exchange, unless the mortgage could be replaced he would be obliged to let the property go on the mortgage, or that it would be of no value to him above the mortgage. In order to recover on this branch of the case, the court told the jury that the plaintiff must establish that the defendant, E. T. Whitney, acting for his wife, falsely represented that he had a man ready to replace the mortgage at a lower rate of interest, and that he would turn this opportunity over to the plaintiff, and that the plaintiff had used diligent effort to replace the mortgage ; that having established these facts, the plaintiff would be entitled to recover “ The difference between the value of the property as he would have had it with the mortgage replaced and the value of the deed with the property gone on the mortgage; that he would be entitled to the difference between the amount of the mortgage and the fair value of the property.” When applied to the facts of the case, and what had gone before in the charge on this subject, the language quoted, in — 415 — legal effect, is the same as the rule contended for by the counsel of the defendants. Judgment affirmed.