Werckley v. New Orleans Homesite Co.

CHARLES F. CLAIBORNE, JUDGE. This is a suit oy a vendee to recover from his vendor the purchase price of property paid oy him under a contract of sale which he alleges he signed under false rep resentations sne through error. The plaintiff alleges that he signed the following contract "The New Orleans Homesite Co., Ltd. herein agrees to sell to Geo. B. Tarckley of Bogalusa, La., who also agrees to ouy 2 lots, as per location and measurements of plan on the reverse side hereof, an^ os 1 ot Ho.102 on said plan, for the price and sum of $780 payaole $50 cash, receipt of which is hereoy acknowledged, and balance in monthly payments of $15 oearing 6% interest from date, When one half of the purchase price hereof has been paid, the sáid Company agrees to transfer this property and purchaser agrees to accept title ny act before Felix; J.Drey-fous, ITotary Public, free from all incimbrances, except the unpaid portion of tne purchase price. Purchaser to assume taxes of 1914 ane subsequently. Should toe purchaser fail to make two consecutive payments before the sale one half of the purchase price has been paid, it may oe co^nieered as an aoandonnent of his interest in this contract, and it may Decios forfeiture, unless the Company ■]}''<*9 an extension of ^ time." "Repurchase Clause. This Company agrees to re-our-chase this property when called upon as hereinafter stipulated, at the price herein sold, plus 10% profit, upon written notice to this Company within ninety days prior to the date of maturity of the las^t note and subject to the agre ment then entered into to oe banding apon both — 184 — parties. Signed in duplicate this 11 day of ■February, 1914, Signed New Orleans IIom«e3ite Co,, Ltd. Jno. YF. Cavanaugh P Witnesses: George B. YYerckley " R. L. Sanford. The plaintiff further alleged tbnt the said R.L.Sanford was the representative and sales-agent of the defendant, the New Orleans Homesite Co.; that he obtained the signature of the plaintiff to the above contract; that both before and at the time of signing of said contract the said Sanford repeatedly represented to petitioner that the above contract would and did obligate the defendant Company to buy the t.vo lots of ground back from petitioner at a profit of ten per cent on the amount of the purchase price; that said representations, so made by said Sanford were the sole inducement to petitioner to sign the contract, and that he would not have signed it Dut for said representations; tha» petitioner placed his faith in said representations, and believed that bhey were embodied in the clause above quoted designated in said contract as the "Repurchase Clause"; that several months after signing said contract he consulted legal connsel upon the same, and was adbised that the said "Repurchase Clause" contained no obligation on the part of the defendant Company to repurchase said lots at a ten pjr cent profit or otherwise; that this constituted an error on his part on the principal part of the contract produced by the representations of defendants ag^nt and by said "Repurchase Clause that said clause was designed to make petitioner believe jnd he did believe that it imposed the obligation upon the Company to repurchase the lots at a ten per cent profit, and he •■was induced by said belief to sign said contract; petitioner alleged that under the terms of said contract 5ie had paid the defendant Company £-245 for «hich he claims judg-u»snt, The defendant for answer admitted the contract of sale above set forth, and that R.L,3~nford was its agont, but denied all the other allegations in said petition contained. This answer is a specific dsnial even of the allegation that the plaintiff paid the defendant any part of the purchase p^ice, and is sworn to by J. *V. Cnvanah, President of the defendant — 185 — Company, although the contract of sale is annexed to the petition and is signed Dy J.W.Cavanah and contains the specific admission that plaintiff has paid $50 cash "receipt of which is hereoy acknowledged". V/e take this occasion to call the attention of the har to the fact that such contradictory and careless pleadings, sometimes presented to us, hut often not attributable to their clients, are in oppesition to the spirit and object of the Practice Acts of 1912 and 1914, and are not calculated to place their clients in a favorable light before the Courts. The'-e was judgment for the defendant and plaintiff has appealed. Plaintiff filed in evidence one check of $50 dated on the day?of the contract Pebrudav 11th, 1914, to the order of R. L. Sanford and by him endorsed, and his 12 promissory notes for $15 each payable Iliarch 20th, 1914 and on each successive month thereafter until February 20th, 1915, all of which are marked "Paid" with the stamp of the liew Orleans Homesite Co., Ltd1! ; and one receipt for $15 signed by the same Company; making in all $245, and the plaintiff swears he paid that amount to the defendant Company. The plaintiff and his wife are also examined, as witnesses, without objection to th« admissibility of their testimony, except that it is "irrelevant under the pleadings". That testimony corroborates every allegation of the petition. 'To evidence whatever was introduced on behalf of the def endant. The only question, therefore, is, does plaintiff’s petition disclose a cause of action? •7c are not dealing here with an attack upon a contract on the bare ground that it contains a clause of the existence of which the plaintiff was not fiwarc, or that it does not coutain a clause which the plaintiff thought it did contain, without the suggestion of deceit or fraud on the part of the vendor. If this war© the case, the plaintiff might be dismissed under the rul*-t'iot h-% spoilt have read he was signing and th«t he cannot take advantage of hia neglect to use his senses. But the charge made by th .* i" .,V.fc r. "r-pivchase clause" was inserted — 186 — in the contract, ^.nd that he was told by hie vendor that the meaning of that clause wa3 that the Company would buy back the lots with ten per cent profit, after he had made a certain number of payments, and that the Oowpany would do so, and that he put full faith in that interpretation of that clause made by the Company, and, on the faith of that interpretation, signed the contract, made 14 payments and was prepared to make all future payments; but that he has been advised by attorneys learned in the law, that he has been deceived by those representations and that the repurchase clause imposes no such obligation on th'e Company and binds it to nothing. We have analysed and criticised that atlause and wer- are inclined tb conclude that the attorneys consulted by the plaintiff were correct in their opinion. But whether their opinion is correct or not, one thing is certain, and that is, that the clause is of such ambiguity as to throw upon the defendant the burden of making it clear. Article C.C. 2474 (2449) provides: "The seller is bound to explain himself clearly respecting the extent of his obligations; any obscure or ambiguous clause is construed against him". When the basis of plaintiff's action consisted in the alle-f gation that defendants agent had repaesented to him that it would buy back the lots at ten per cent profit, but that the repurchase clause in the contract of sale embodied no such obligation, it would have been in the power of defendant to dispel any uncertainty in the meaning of this clause by an an*w-r to those allegations which would havs put the question at rest, by a cor.did and categorical admission of the Company's interpretation of the clause. But the Company denies specifically e«ch and every allegation of the petition; it denies that the Company made any representations to th« plaintiff that it would ouy back the property with ten per cent profit; and at the -name timf it denies that the Company is not liable to repurchase on thns terms, thus leaving the subject matter in the same ambiguity and uncertainty. It is perfectly evident that if the plaintiff was made oy the defendant to believe that he was buying under certain conditions and that defendant denies those conditions, that the minds of thetwo parties did not agres upon the contract and that there was error on both sides which invali-JU. 33# — / 3 ¿3.177 dates the contract — 187 — It is the Settled jurisprudence of this State that a purchase* cannot be .nade tp accept a title with a cloud, and that whenever he has ’nade payments on account, under those circumstances he may recover his money. 40 A., 571. In 46 A., 499 (50$) the Court said: "The law will not hold a party bound vfoen his consent is the result of error bearing on the substance of the contract, caused by fraudulent representations of the other party to the contract". 25 A., 292. C. C. 1847 (1841) ^9: "If the artifice be practiced by a party to the contract, or by another with his knowledge or by his procurement, it vitiates the contract11, // ^ ^ The representations made by the defendant were calculated to enchance the selling price of the lots and this daiange^piain-tiff, and allured him by the assurance that he could never lose on his oargain, and would be sure to make a ten per cent profit. The case of Prescott vs. Cooper, 37 A., 553, does not support the defense. In that case the plaintiff bought of defendant his fcharea of Citizen’s Bank Stock and transferred the mortgage securing the payment of the stock upon hia own property and assumed -the payment of the stock and of a stock-note of $1840. He subsequently filed suit to annul the transaction upon the ground that the Bank had called upon him to pay stock contributions of $2 a share which he had paid; th^.t Cooper had falsely represented to him that he would have to assume only the stock-note of $1840 and that Ryan, Cooper's attorney, had informed hi.r. that the assumption of the stock-mortgage was n mere formality and imposed upon him no liability. The Court found thnt the contract signed by Prescott had been read to him by the Notary and discussed, thatm its texins were clear and unambiguous, that the allegations against Cooper were not estaolished, and that Ryan was not Cooper's attorney. In the course of the opinion the Court said; "If the formidable allegations of this petition were sustained by convincing evidence, the plaintiff would certainly present a strong claim for relief". 36 A., 620. The same may be said of Ray vs. Mc Lain, 106 La., 780 (791); 6 Toullier 6 93. 94- S 32-- 2 — 188 — In th# cas# under consi¿«ration th# allegations of fait# representations are fully proven; no attempt is made to question their truth,and the representations were made by the President himself of defendant Company, and by their acknowledged sales-agent by which they are bound. 7 R., 406 (415); 1 Story Equity-4193 (a). — // In Allen vs. Whetstone, 35 A., 846, the opinion is summarized in the syllabus thus: "A party to a written contract cannot avail himself of error resulting from a failure, to read the same before signing, where not induced to do so by the other party thereto." 22 A., 14; 11 La., 77 (80); 10 La., 376. ’ The converse of the proposition is equally true, that the plaintiff is entitled to relief when he was induced in error by the defendant. Lopez vs. Mc Adam, 7 A., 58, the Court said: "When a party has been induced by misinformation and suppression of material facts x x x he is entitled to have the contract annulled, and to recover from the other party any sums he may have paid". In the case of Theriot vs. Chaudoir, 17 La., 445, the Court said: "When there is doubt as to the error in the motive, the Court willi incline in favor of a party striving to avoid a loss, and against one seeking to obtain a gain". "Error consists in believing as true or existing, that which is false or non-existing". 33 Dalloz p. 79 Sill. The plaintiff believed from his reading of the contract and from the representations of the defendant that it was obligated to repurchase v'ith ten por cent profit -the lots* he had bought; and the defendant well knew that the plaintiff purchased with that understanding^ although no such obligation was contained in the contract. Plaintiff was in error and therefore the contract as to him never existed. 1st. Story Equity;§134; 138 (c) («) (k), 155, 190 (’o), 191, 022; 13 Ct. App., ^ "Whenever one persons misrepresents, or conceals, a material fact, that is, a fp-ct which is peculiarly within his own knowledge, such transaction will be void, on the — 189 — ground of fraud". Story Equit^b212 (a). "If consent is obtained "oj^medfijiktid' imposition, circumvention, surprise, .or>1ilKéú#'"f¿f 1 uenc«, it is to be treated as a delusion, and not as a deliberate and free act of the mind". *222. It is therefore ordered that the judgment herein he reversed and annulled; and it is now ordered that there he judgment in favor of the plaintiff condemning the defendant to pay to him the sum of Two Hundred and f.orty-five Bollara with five per cent per annum interest from June 28th, 1917 till -,id and all costs of suit. January 26th, 1920