McLennan v. Investment Exchange Co.

JOHNSON, J. — Plaintiff sued to recover damages for fraud and deceit practiced by defendants in the sale of a farm. At the conclusion of the evidence the jury in obedience to a peremptory instruction returned a verdict for defendants. Plaintiff appealed and contends that his evidence discloses he has a good cause of action. Defendants Heimbrook, Hoefer and Layne were the managing officers of the Investment Exchange Company, a corporation engaged in the business of real estate broker in Higginsville. August Elebracht employed the company to sell a farm of 153 acres he owned in Lafayette county and defendants effected a sale of the farm to plaintiff for $13,005 or $85 per [392] acre. Plaintiff paid the purchase price less $76.50 which defendants gave him under the pretense that it was part of their commission which they had offered as an inducement to him to purchase on their principal’s terms. Elebracht received only $11,500 for the farm, the remainder of the purchase price, $1428.50, being retained by defendants. The position of plaintiff is that defendants made false representations to him that entitle him to recover the large profit secured out of the transaction for their corporation. Plaintiff, a practicing physician in Higginsville, has had extensive dealings in real estate in Lafayette county, is familiar with the values of land and did not buy the farm in question until after he had inspected it. He relied entirely on his own judgment of the value of the farm and does not claim that any false representations were made concerning it or its value. He concedes the farm is worth the price he paid but claims- that defendants took advantag-e of his friendship and confidence to deceive him about the price at which their principal had authorized them to sell. At first Elebracht had priced the farm at $85 per acre but sometime before the sale had authorized defendants to sell it for $12,000, and had agreed to pay defendants the usual commission which would have amounted to $130. 'After learning that plaintiff would buy the farm at that price they deferred the negotiations with him until after they had induced their principal to enter into a contract for the sale of the land to them for $11,500. After securing this contract they returned to plaintiff and still claiming to be the agents of Elebracht, represented that the lowest price their principal would put on the farm was $13,005; that their commission would be $130, and that they would give him $65, which was one-half of the commission, to effect the sale. Plaintiff compelled them to allow him an additional sum of $11.50, and the sale was closed at a net cost to him of $12,928.50. [393] Plaintiff endeavored to establish, the existence of some sort of confidential relationship between defendants and himself bnt his evidence on this issue amounts to nothing. He admits that he knew defendants were acting not as his agents but as the agents of the vendor and, being a man of more than ordinary experience and acumen in business affairs, he dealt with them at arm’s length. He did not rely on their statements relating to the farm and its value but, mindful of the rule of caveat emptor, made his own inspection and exercised his own judgment. He knew what he was buying, received what he bought and admits he made a shrewd bargain. To allow him to recover in this case would be to give him damages when he had sustained none and to give him a court-made bargain better than the one1 he had made, or intended to make, for himself. The cases of Hokanson v. Oatman, 165 Mich. 512, and Kice v. Porter, 21 Ky. L. 871, 53 S. W. 285 and 22 Ky. L. 1704, 61 S. W. 266, are dissimilar in some essential features to the case in hand, but if they could be said to be in point we would not follow them since to do so would require us to ignore the well-settled rule in this State that “fraud must concur with damages to be actionable.” [Johnson v. United Railways Co., 152 S. W. l. c. 368; Thompson v. Newell, 118 Mo. App. 405, and cases cited.] The conduct of defendants as portrayed in the evidence of plaintiff deserves censure. They were guilty of fraud and deceit but the man they injured was their principal, not plaintiff. It is idle to talk of plaintiff having a right to buy the land at the lowest price the owner would take for it. Let us suppose that plaintiff had pierced through the guard defendants artfully threw around their principal and had entered into direct negotiations with him. Would plaintiff be heard to complain that the owner had charged a higher price for the land than he would have gold it forf And if a broker obtains a [394] higher price for land than that placed on it by his principal, would the principal be bound to return the excess to the purchaser? Under the rule of caveat emptor which recognizes the parties to a sale as business antagonists dealing at arm’s length, the purchaser has a right to buy at as low price as his skill will secure and the vendor has the corresponding right to sell at the best price he can obtain. Neither has a legal right to the other’s best price and, therefore, the representation of either that he has made his best offer cannot be said to be a representation of a material fact. To say otherwise would be to impose a restriction of the right of persons to make their own bargains. We agree with plaintiff that defendants in law and in fact were the agents of Elebracht in the transaction. The trick by which they pretended to purchase the property themselves was nugatory as to their principal'. The law would not permit them to do such violence to the trust and confidence their principal had reposed in them. Therefore the representations they made to plaintiff were the representations of their principal and as they did not relate to a material fact and did not damage plaintiff, he has no cause of action. The judgment is affirmed. All concur.