Appel v. Hupfield

• Decision Date: 01 November 1951
• Docket Number: No. 13,13
• Parties: APPEL et ux. v. HUPFIELD.
• Court: Maryland Court of Appeals

Page 374

198 Md. 374

84 A.2d 94

APPEL et ux. v. HUPFIELD.

No. 13.

Court of Appeals of Maryland.

Nov. 1, 1951.

J. Purdon Wright, Baltimore (William Bruce Oswald, Baltimore, on the brief), for appellants.

Hyman A. Pressman, Baltimore, for appellee.

Before MARBURY, C. J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.

DELAPLAINE, Judge.

This is an action for deceit brought in the Superior Court of Baltimore City by John H. Appel and Myrtle M. Appel, his wife, against Frederick H. Hupfield, a real estate broker, to recover damages alleged to have been caused by fraudulent representations made by defendant to induce the execution of a contract for the purchase of a house on the Alameda in Baltimore.

Plaintiffs were shown the house on June 15, 1949, by Mrs. George V. Kelly, defendant's saleswoman, who told them that they could buy it for $8,500, provided that they paid at least $750 in cash. Plaintiffs could not pay that amount unless they could sell the house where they resided at 1409 North Gay Street. Mrs. Kelly assured them that defendant could sell their house in time for the settlement. On June 16 Mrs. Appel called at defendant's office and told him that she and her husband were considering the purchase of the house on the Alameda, but could not settle for it unless they sold their house on Gay Street. Plaintiffs claim that defendant assured them that he could sell their house for $5,500 in time for the settlement, and in the meantime would obtain a loan of $750 for them by second mortgage on their house so that they could make partial payment on the purchase price of the Alameda house. Plaintiffs allege that upon those assurances they decided to enter into the deal.

On June 17 Mrs. Kelly came to plaintiffs' home with a contract drawn up for the purchase of the Alameda house for $8,500. The contract called for payment of $25 at the signing of the contract, $725 on or before June 23, $2,250 at the time of settlement on or before 120 days from the date of the contract, and the balance of $5,500 to be secured by first mortgage. Plaintiffs expected to obtain the $2,250 from the proceeds of the sale of their house after payment of the two mortgages thereon. Accordingly they signed the contract, paid $25 to defendant, and signed a listing agreement authorizing him to sell their house for $5,500. A week later plaintiffs executed the second mortgage for $750, payable October 23. The actual amount plaintiffs received from the mortgagee, after deduction of mortgage costs, was $710. They paid this sum to defendant.

In August plaintiffs, worried over the possibility that defendant might not be able to sell their house on Gay Street, signed a listing agreement authorizing defendant to resell the Alameda house. They later arranged, however, for the cancellation of the contract of purchase. On October 26 Mrs. Appel requested defendant to return the money which had been deposited as partial payments. When defendant refused to do so, plaintiffs instituted suit. The Court held that, although defendant may have used 'highpressure salesmanship' and 'some artifice,' he was not required to reimburse plaintiffs for the money deposited. From the judgment entered in favor of defendant plaintiffs appealed.

In order to entitle the plaintiff to recover in an action for deceit it must be shown: (1) that a representation made by the defendant was false; (2) that either its falsity was known to the defendant or the misrepresentation was made with such reckless indifference to truth as to impute knowledge to him; (3) that the misrepresentation was made for the purpose of defrauding the plaintiff; (4) that the plaintiff not only relied upon the misrepresentation but had the right to rely upon it with full belief in its truth, and that he would not have done the thing from which damage resulted if it had not been made; and (5) that the plaintiff suffered damage directly resulting from the misrepresentation. Gittings v. Von Dorn, 136 Md. 10, 109 A. 533. We accept the rule that where a vendor makes a positive representation of a fact as true, when he does not know it to be true and does not honestly believe it to be true, and thereby intentionally induces the purchaser to enter into a contract which but for such misrepresentation he would not have entered into, the purchaser can maintain a suit for the damages sustained. Brodsky v. Hull, Md., 77 A.2d 156. But the law is equally clear in Maryland that there can be no recovery in an action for deceit on the ground of negligent misrepresentation. Holt v. Kolker, 189 Md. 636, 57 A.2d 287.

In actions for deceit we recognize a clear distinction between (1) representations of past or existing fact and (2) expressions of opinion as to what will happen in the future. Ordinarily fraud cannot be predicated upon statements which are promissory in their nature, and therefore an action for deceit will not lie for the unfulfillment of promises or the failure of future events to materialize as predicted. Failure to fulfill a promise is merely a breach of contract, which must be enforced, if at all, by an action ex contractu. Boulden v. Stilwell, 100 Md. 543, 552, 60 A. 609. 1 L.R.A., N.S., 258; Knowlton v. Keenan, 146 Mass. 86, 15 N.E. 127; Sachs v. Blewett, 206 Ind. 151, 185 N.E. 856, 188 N.E. 674, 91 A.L.R. 1285; Tucker v. Owen, 4 Cir., 94 F.2d 49.

In this case we are called upon to weigh conflicting evidence. The Court below tried the case without the aid of a jury. When any proceeding at law has been tried upon the facts by the court without a jury, the Court of Appeals may review upon both the law and the evidence, but the judgment of the trial court will not be set aside on the evidence, unless clearly erroneous, and due regard will be given to the opportunity of the trial court to judge of the credibility of the witnesses. General Rules of Practice and Procedure, pt. 3, subd. 3, rule 9.

Of course, plaintiffs cannot complain of the listing of thier house for sale at $5,500, even though they may now claim that it was worth no more than about $4,000. It is common knowledge that owners and agents often place an exaggerated value on property which they are trying to sell. Statements as to value of property made by an owner or agent seeking to dispose of it by sale or exchange are generally regarded as mere commendatory statements, 'dealer's talk,' or 'puffing,' and cannot form the basis of a charge of fraud. In Gordon v. Butler, 105 U.S. 553, 557, 26 L.Ed. 1166, 1169, Justice Field observed: 'The law does not hold one responsible for the extravagant notions he may entertain of the value of property, dependent upon its future successful exploitation, or the result of future enterprises; nor for expressing them to one acquainted with its general character and condition. How could an overestimate in such a case be shown? Other estimates would be equally conjectural. The law does not fasten responsibility upon one for expressions of opinion as to matters in their nature contingent and uncertain. Such opinions will probably be as variant as the individuals who gave them utterance.'

The case at bar gives a good...