Owens v. Rector

Bliss, Judge, delivered the opinion of the court. The plaintiff brought suit, in the Buchanan Court of Common Pleas, upon a promissory note for $700 executed to him by defendant. Defendant pleads fraud, and alleges that the note was given for the deferred payment upon a purchase of certain lots in St. Joseph at the price of $3,100, the balance having been paid in cash at the time of the purchase; that the plaintiff, by his attorney for the sale, Jas. A. Gwens, executed a warrantee deed for the lots by number, being lots 6 and 7, etc.; that, before making the sale, plaintiff’s land agent and attorney went upon the premises with the defendant, and pointed them out to him— the same being inclosed with a fence, and containing a frame dwelling-house back about sixteen feet from the front of the lots as inclosed; ? and that, relying upon these representations of locality, the defendant purchased the lots without survey or further examination. Defendant further alleges that these representations were untrue, and known to be so by said Owens; that the said lots were only partially inclosed by the fence; that a portion of them are outside and below the ground fenced; that the street running in front of the lots will, when opened according to its true location, cut off some nine feet of the front of the house; and that the property is worth $2,000 less than it would [392] have been if located as represented by plaintiff’s agent, which sum is the damages he has suffered, and for which he asks judgment. The reply denies all the allegations of the answer except the consideration of the note. Upon the trial there was testimony tending to prove the defendant’s allegations, and the jury allowed him some $800 damages as an offset. The verdict ivas set aside by the court; and upon the next trial the case was taken from the jury by a positive instruction to find for the plaintiff the amount of the note and interest. Inasmuch as there was testimony in support of the answer, the defendant had a right to the opinion' of the jury upon the issue raised by it unless the answer failed to make a case that entitled him to relief. The plaintiff claims that the pleading is defective in not showing dispossession or an offer to rescind the sale. For aught that appears by the answer — and so the evidence shows the fact to be — the defendant and those claiming under him are still in peaceable possession of the house and land inclosed by the fence, and no offer has been made to re-convey the premises. This case is to be distinguished from cases where the title of the grantor fails, and the defense is that the purchaser gets nothing by his deed, and should not be compelled to pay the purchase money; or in a sale of parcels of land for a sum in gross, where the title to a portion fails, and the purchaser seeks to avoid the payment of a part of the purchase money. The general rule in those cases is that the purchaser may rescind the contract by conveying or offering to convey back all the title he has received, in which case he may recover what has been paid, and refuse to pay what is unpaid; or, if he chooses to affirm the contract, he can recover but nominal damages for the breach of the covenant of seizin, unless actually evicted; and the reason is given in Small v. Reeves (14 Ind. 164, approved in 17 Ind. 98), that he has suffered as yet no actual damage, and that his possession may ripen into title. But in case of the fraudulent concealment of, or' fraudulent misrepresentations as to some specific material fact affecting the value of the property sold — the purchaser trusting to the repre [393] sentations of the seller — he is not bound, upon discovery of tbe fraud, to repudiate tbe contract and give back tbe possession. He may do so, or be may stand by bis purchase and sue for damages ; or if tbe purchase money is not paid, be may reduce it by tbe amount of tbe damages to which be is entitled. He may rescind tbe contract, even though both parties were mistaken in relation to facts that induced the purchase. (McFerran v. Taylor, 3 Cranch, 281; Miles v. Stevens, 3 Barr, Penn. St., 21.) But, in general, if a party would hold on to the property purchased, and look to his vendor for damages for deceit, there being no warranty, be must satisfy the jury that the deception was intentional. The tort is the foundation of bis claim — not the contract, nor tbe innocent mistake of both parties. But the question of deception — of knowledge — is one for the jury to decide, and not for the court. If there was evidence tending to show that the situation of tbe property was misrepresented, and that tbe defendant, in bis purchase, acted upon those misrepresentations, and not upon bis own judgment, tbe question of knowledge of intention on tbe part of the seller becomes a material one, and must be left to tbe jury; and if tbe court took the cause from tbe jury because in its opinion such knowledge was not proved, it committed an ' error. Tbe reason for its action does not clearly appear in tbe record, but it seems to have been based upon tbe assumption of some fact in the province of tbe jury to decide. Tbe judgment is therefore reversed and tbe cause remanded. The other judges concur.