Grismore v. Utley

Hart, J., (after stating the facts). The chancellor found that W. L. Brennan, the duly authorized agent of the Crismore-Hyman Company, falsely represented to appellees that the land in question was not in a drainage district, and that this false representation was a material inducement to appellees in making the contract for the purchase of the land. It is first contended that appellees should be denied relief because they did not examine the records to see whether or not the land purchased by them was in a drainage district. It would be inequitable to say to one who, in good faith, has relied upon the express declaration of another that the land he owned was not in a drainage district, that he might have learned its falsity by going to the county seat and examining the records. The obligation of ordinary good faith precludes the vendor from seeking shelter under such a claim. The vendor is in no position to assert that, because the record of drainage districts was open to inspection, the representations were immaterial. It is enough that the purchaser believed the statement, that inquiry was necessary to discover the truth, and that he executed the contract on the strength of the representation. As said in Gammill v. Johnson, 47 Ark. 335, “when the representation is made of a fact that has nothing to do with opinion, and is peculiarly within the knowledge of the person making it, the one receiving it has the absolute right to rely upon its truthfulness, though the means of ascertaining its falsity were fully open .to him. It does not lie in the mouth of the declarant to say it was folly in the other party to believe him.” To the same effect see Evatt v. Hudson, 97 Ark. 265, and Bennett v. Farabough, 154 Ark. 193. In the latter case the court recognized that a false representation that the land was not in a drainage district would be a ground for the rescission of the contract for the sale of the land, but denied the purchaser relief on the ground that the testimony did not warrant it. In the case at bar it is not denied that Brennan was the duly authorized agent for the sale of the land and had the authority to make the representation that the land was not in a drainage district, if in fact he did make such representation. Appellants contend, however, that Brennan made no such representation, and this presented a question of fact for the chancery court. The burden was upon the appellees to show that they were induced to purchase the land by false and fraudulent representations of appellants or their agent. Grayling Lumber Co. v. Ebbitt, 134 Ark. 175, and English v. North, 112 Ark. 489. To sustain the burden, Mr. Carey and Dr. Utley both testified in ’ positive terms that they did not wish to purchase any land in a drainage district, and expressly told Brennan that their experience was such that they would not, under any consideration, purchase land in a drainage district. Brennan assured them- that he had examined the abstract and knew that the land was not in a drainage district. It turned out that the land was in a drainage' district, and that the assessment of benefits amounted to over $4,000, and it was estimated that it would take about one-half of this to construct the drainage ditch. This was a material matter to he considered in the purchase price of a tract of land sold for $8,000. It was the assertion of a positive fact by Brennan, and appel-lees iyere justified in relying upon it. It is true that Brennan denied having made the representation, and that he is corroborated to some extent by Grismore and by the cashier, who both testified that Carey and Utley had come to them separately and asked for an extension of the time of payment of the first land note, on account of the financial depression which had spread over the country since the contract for the purchase of the land. The chancellor believed the testimony of appellees on this-point, and his finding is warranted by their testimony. Therefore the decree will be affirmed.