Mitchell v. Coleman

Wood, J. (after stating the facts). The findings of the chancellor on the issue of fact as to fraudulent representations are not clearly against the preponderance of the evidence. There is a decided conflict in the evidence as to whether or not Porter, who showed appellant E. J. Mitchell the place in Benton county, and who made representations concerning it as testified to by appellant E. J. Mitchell, was the agent of the appellee for that purpose. The appellee testifies positively that he was not his agent. But the testimony of Mitchell and his wife and the circumstances as revealed by the testimony of the appellee as well as the testimony of appellants, show clearly that Porter was appellee’s agent and representing the appellee while showing appellant Mitchell the farm in Benton county, and the representations he made concerning the land were therefore binding upon the appellee. It was shown that Porter visited the home of Mitchell in Little Rock and talked to Mitchell’s wife about the place in Benton county. He had a photograph of the house and front yard which he exhibited to appellant E. J. Mitchell during this trip. Mitchell said Porter “made nearly the whole deal himself.” It was cold, bad weather, snow on the ground, and they would sink up to their knees in the mud. They stopped in the lane and did not go further to look over the place. Porter kept hold of Mitchell’s arm most of the time, never let him get three feet away, and Mitchell never talked to the tenant that was on the place in regard to it. The strenuous efforts put forth by Porter to sell or trade to appellants the farm in Benton county, as disclosed by the testimony of the Mitchells, are wholly incompatible with the conduct of a mere stranger or volunteer in the transaction. We conclude therefore, notwithstanding the testimony of .the appellee, that a decided preponderance of the evidence shows that Porter was the agent of the appellee in the transaction. Under familiar rules of law, the principal is bound by the acts and declarations of his agent while acting within the scope of his authority. Now, Mitchell, who acted as the agent of his wife in making the trade, was born and reared in the city, had never been on a farm, unless for a day, and had no knowledge or experience of farming or farm values, or of orchards and raising fruit. The conduct of Porter shows that he claimed to be perfectly familiar with the farm in Benton county and the property in that vicinity. The preponderance of the evidence warrants the conclusion that Mitchell was an unsophisticated city carpenter, and that Porter was a ■ shrewd real estate agent. Mitchell states that in his dealings he had never been imposed upon, that his transactions had been with honest men, and that he believed every word that Porter told him was the truth and relied upon it. It is fair to conclude that Porter knew that Mitchell was ignorant of farms and farm values. It could serve no useful purpose to discuss in detail the evidence and state in extenso the reason for our conclusions. It suffices to state that we are convinced from the evidence that Porter either knowingly made false representations to Mitchell concerning the farm in Benton county, or if he did not know that these representations were false, asserted them as if they were true; that he did this for the purpose of having Mitchell to act upon them and to enable him to consummate the deal they were negotiating; that these representations were an inducement to the trade; that the deal financially was disastrous to appellants; that the relations of Porter and Mitchell at . the time the representations were made were such that Mitchell relied upon the representations made by Porter, and that he had a right to believe them to be true and to rely upon them. The law applicable to such eases, under varying facts and conditions, has been announced and frequently reiterated by this court. Hanger et al. v. Evins & Shinn, 38 Ark. 334; Matlock v. Reppy, 47 Ark. 148; Neely v. Rembert, 71 Ark. 91; Evatt v. Hudson, 97 Ark. 265; Jarratt v. Langston, 99 Ark. 438; Bank of Monette v. Hall, 104 Ark. 388; Grant v. Ledwidge, 109 Ark. 297; English v. North, 112 Ark. 489; American Realty Co. v. Hisey, 113 Ark. 78. The conclusion of' the chancellor was therefore correct in cancelling the notes in suit and in dismissing appellee’s complaint for want of equity. II. Mitchell testified that at the time the trade w^s made he thought Coleman was the agent of Barry; thought he was doing business with Barry all the time. Witness made the notes payable $550 to Coleman, and the others to Barry for $3,000. Coleman made the deed and reserved a vendor’s lien in favor of Mrs. Barry for $3,000 and $550 for himself. Now, the record shows that deeds to the farm in Benton county were made from Barry and wife to Coleman and from Coleman and wife to Maud Ó. Mitchell. Both of these deeds were dated and acknowledged February 26, 1912. The Barry deed recites a consideration of $3,500, of which $500 was paid in cash, and five notes for $600 each executed by Coleman and wife to Barry for the balance. The Coleman deed to Mrs. Mitchell recites a consideration of $6,300, of which $2,750 was paid in cash, and the assumption of the payment of the five Barry notes and the execution of the five notes to the appellee on which the present suit is based. Upon these facts the chancellor found that Coleman and Barry jointly held and conveyed the farm to Mrs. Mitchell. Coleman was Barry’s agent to sell the farm. Barry did not desire the Little Rock property in exchange in the trade, but Coleman was willing to take it, and the transaction assumed the form shown by the deeds and the evidence to conserve the convenience and wishes of appellee Coleman and Barry. It was one transaction, and Mitchell understood it as such to enable Mrs. Barry, through Porter and Coleman, to sell her farm. While it would have been technically more accurate for the court to have designated it as a sale, perhaps, from Barry to Mitchell, yet it is true that Barry and Coleman were inseparably connected in the transaction which was consummated by the trade, and it is in this sense doubtless that the court made its finding that Coleman and Barry jointly held and conveyed the property. Barry was bound by the representations of Coleman and Porter within the scope of their real or apparent agency in selling her farm. It was therefore the duty of the Mitchells when Mrs. Barry instituted her suit to foreclose the vendor’s lien notes against Mrs. Mitchell, which the Mitchells assumed to pay as a part consideration for their trade, to set up in defense the alleged false representations that were made as an inducement to her and her husband to trade for the farm. Appellants were in possession of the land something over a year after the trade was made before foreclosure suit was instituted, and after this suit was instituted they continued in possession and set up no defense of fraudulent representations against the vendor Barry’s notes. If appellants had set up the fraudulent representations, they might have had the trade rescinded and the equity in the Little Rock property restored to them, and the chancery court might then have adjusted all equities and made such disposition of the cause as would have left all parties in statu quo. Appellants failed to do this, but on the contrary, while the suit was pending and after they had been in possession of the property for more than a year, by letter to J. K. Barry, concerning the suit Mitchell made no complaint of any fraud. Appellants, without setting up any fraud on the part of Barry or her agents, permitted the suit to progress to judgment and the land to be sold for the sum of $3,247.50, when the undisputed evidence shows that it was worth considerably more than that. Under these circumstances the court’s decree was correct in dismissing appellant’s cross-complaint in so far as it asked for affirmative relief in damages. Appellants, under the facts, were entitled to set up the fraudulent representations of the appellee in connection with the transaction as a defense to the notes sued on, but on account of their laches in not seeking earlier to rescind the trade for fraud and to recover damages growing out of such fraud, and by reason of their failure to set up any fraud in the foreclosure proceedings against them, they waived their rights and are not entitled to use such fraudulent representations to obtain affirmative relief by way of damages in this suit. In other words, under the facts of this record, while equity will allow appellants to use the plea of fraudulent representations as a shield, it can not permit them to use it as a sword. The decree of the chancellor is in all things correct, and it is affirmed. Humphreys, J., not participating.