Piper v. Jenkins, 154

Citation113 A.2d 919,207 Md. 308
Decision Date18 May 1955
Docket NumberNo. 154,154
PartiesGeorge A. PIPER and Elleen C. Piper v. Melvin L. JENKINS and Eva C. Jenkins.
CourtCourt of Appeals of Maryland

David E. Betts, Rockville, Thomas R. Brooks, Hyattsville, and Charles W. Prettyman, Rockville, for appellants.

Edward C. Bell, Jr., Hyattsville (Green, Babcock & Bell, Hyattsville, on the brief), for appellees.

Before BRUNE, C. J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.

DELAPLAINE, Judge.

This suit was entered in the Circuit Court for Prince George's County by George A. Piper and wife, of Silver Spring, against Melvin L. Jenkins and wife, of Laurel, to recover damages resulting from fraud alleged to have been committed in the sale of a lot improved by a dwelling in Montgomery County.

Plaintiffs alleged in their declaration: (1) that on October 22, 1947, Piper entered into a contract to purchase from defendants a lot of ground in Montgomery County for the sum of $7,500, and on November 19 1947, plaintiffs made settlement in accordance with the terms of the contract and the title was conveyed to them; (2) that before entering into the contract Jenkins walked over the land with Piper and pointed out to him a garden east of the house on the lot and specifically represented that the east boundary line of the lot ran about one foot east of the garden, thereby representing that the improvements on the lot are entirely within the boundaries of the lot; (3) that in February, 1952, plaintiffs discovered that the improvements are not entirely within the boundaries of the lot, but on the contrary the north line of the house projects upon the adjoining lot for a distance of 3.87 feet on the north side and 8.25 feet on the south side; and (4) that the representation made by Jenkins was a material misrepresentation of fact made with knowledge of its falsity or with reckless disregard for its truth or falsity.

Defendants filed the general issue plea and a plea that the cause of action did not accrue within three years prior to the institution of suit. They also filed a motion for summary judgment on the ground that there was no genuine dispute as to any material fact relating to the issue. Plaintiffs replied that the cause of action did accrue within three years prior to the institution of suit. Defendants demurred to the replication. The Court sustained the demurrer and entered judgment in favor of defendants. Plaintiffs appealed from the judgment.

In the leading English case of Derry v. Peek, L.R. 14 App.Cas. 337, 58 L.J.Ch.N.S. 864, 61 L.T.N.S. 265, 12 Eng.Rul.Cas. 250, Lord Herschell said: 'First, in order to sustain an action of deceit there must be a proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (1) knowingly or (2) without belief in its truth or (3) recklessly, careless whether it be true or false.'

In the United States there is a diversity of opinion as to liability for unintentional misrepresentation. In many States, including New York, Derry v. Peek has not been followed. But in New York and the other States where liability for unintentional misrepresentation has been broadly affirmed, there must be such a relationship that one party has a right to rely for information upon the other, who owes a duty to give it with care. Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275, 23 A.L.R. 1425.

The Maryland Court of Appeals, following the decision in Derry v. Peek, has held that a false statement of fact made by a person honestly with a belief in its truth, and relied upon by the person to whom it is made, does not constitute such fraud as will support an action for deceit. Donnelly v. Baltimore Trust & Guarantee Co., 102 Md. 1, 61 A. 301; Holt v. Kolker, 189 Md. 636, 639, 57 A.2d 287. It has been held, however, that an action will lie for personal injury resulting from reliance upon statements which negligently volunteer an erroneous opinion made with intention that it be acted upon and with knowledge that injury would likely result if acted upon. Virginia Dare Stores v. Schuman, 175 Md. 287, 1 A.2d 897.

We hold that a purchaser of land has a right to rely upon representations made to him by the vendor as to its location when the facts concerning which the representations are made are unknown to the purchaser; and the vendor can be held liable for damages if he makes a false representation as to its boundaries with knowledge of its falsity or with reckless disregard for its truth or falsity, and the purchaser relies upon it. Davis v. Nuzum, 72 Wis. 439, 40 N.W. 497, 1 L.R.A. 774; Hoock v. Bowman, 42 Neb. 80, 60 N.W. 389; Lawson v. Vernon, 38 Wash. 422, 80 P. 559; McFerran v. Taylor and Massie, 3 Cranch 270, 2 L.Ed. 436, 440.

We concede, of course, that if the vendor does not pretend to point out any boundary line specifically but merely expresses an opinion, or estimates the distance from a known point to an unknown point, the purchaser cannot rely upon such a representation as a fact but must ascertain the boundary lines for himself. Arnold v. Campbell, 265 Ky. 485, 97 S.W.2d 32; Gunther v. Ullrich, 82 Wis. 222, 52 N.W. 88; Davis v. Central Land Co., 162 Iowa 269, 143 N.W. 1073, 49 L.R.A.,N.S., 1219; Odell v. Story, 81 Neb. 437, 116 N.W. 269. Likewise, where the means of knowledge are at hand, and the purchaser undertakes to make an examination of the land records, he cannot say that he was deceived and injured by misrepresentations of the vendor. Shappirio v. Goldberg, 192 U.S. 232, 24 S.Ct. 259, 261, 48 L.Ed. 419.

But where the boundaries of land are unmarked and the vendor undertakes to point out the boundaries to the purchaser, he is under an obligation to point them out correctly; and the purchaser has a right to rely upon such a representation, without being required to make an examination of the land records or to employ a surveyor to make a plat of the land, and he can hold the vendor liable for any fraudulent misrepresentation. Gustafson v. Rustemeyer, 70 Conn. 125, 39 A. 104, 39 L.R.A. 644; Rohrof v. Schulte, 154 Ind. 183, 55 N.E. 427; Ballard v. Lyons, 114 Minn. 264, 131 N.W. 320, 38 L.R.A., N.S., 301; McGibbons v. Wilder, 78 Iowa 531, 43 N.W. 520; McGhee v. Bell, 170 Mo. 121, 70 S.W. 493, 59 L.R.A. 761; Lanning v. Sprague, 71 Idaho 38, 227 P.2d 347, 350.

The declaration in this case alleges that Jenkins pointed out to Piper one of the boundary lines of the lot and falsely represented that the improvements are entirely within the boundaries of the lot. The declaration further alleges that the representation was a material misrepresentation made with knowledge of its falsity or with reckless disregard for its truth or falsity. It is therefore beyond question that the declaration states a good cause of action.

We next consider whether the suit was barred by limitations. The Maryland Statute of Limitations requires that all actions on the case for fraud shall be commenced 'within three years from the time the cause of action accrued.' Code 1951, art. 57, sec. 1.

Plaintiffs alleged in their declaration that they entered into the contract to purchase the lot in October, 1947, and made settlement in November, 1947; but that it was not until February, 1952, that they discovered for the first time that the improvements erected on the lot are not entirely within the boundaries of the lot. The suit was instituted on February 18, 1954.

It is universally accepted that where relief is sought in equity on the ground of fraud, and the ignorance of the fraud was produced by affirmative acts of the defendant in concealing the facts from the plaintiff, the Statute of Limitations will not bar relief if the suit is brought within the proper time after discovery of the fraud. The rule has also been held by the weight of authority that in a suit in equity where the party injured by fraud remains in ignorance of it without any fault or want of diligence on his part, the bar of the Statute of Limitations does not begin to run until the fraud is discovered even though there are no efforts on the part of the party committing the fraud to conceal it from the knowledge of the other party. Stearns v. Page, 7 How. 819, 12 L.Ed. 928.

At an early day there appeared a conflict in the decisions as to whether this equitable doctrine is applicable to cases in the courts of common law. The Supreme Judicial Court of Massachusetts held the doctrine to be applicable in actions at law. First Massachusetts Turnpike Corporation v. Field, 3 Mass. 201, 206, 3 Am.Dec. 124. On the contrary, it was held in New York that there is a distinction between the plea of limitations in a court of equity and the plea in a court of law, and that the Statute of Limitations prohibits the bringing of actions after the period limited therein.

In Troup v. Smith's Ex'rs, 20 Johns., N.Y., 33, 45, 46, Chief Justice Spencer, speaking for the Supreme Court of the State of New York, explained the distinction as follows 'The fact, that the plaintiff did not discover the imposition practiced upon him, is entirely distinct from the existence of such fraud and imposition. * * * But it is asserted, that fraud committed under such circumstances as to conceal the knowledge of a fact, and...

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