Baxter v. Davis

• Decision Date: 26 January 1934
• Parties: BAXTER et al. v. DAVIS.
• Court: Kentucky Court of Appeals

67 S.W.2d 678

252 Ky. 525

BAXTER et al. v. DAVIS.

Court of Appeals of Kentucky

January 26, 1934

Appeal from Circuit Court, Rockcastle County.

Suit by L. H. Davis against Thelma Baxter and husband. From a judgment in favor of the plaintiff, the defendants appeal.

Judgment affirmed.

C. C Williams, of Mt. Vernon, for appellants.

S.D Lewis and Joel M. Jones, both of Mt. Vernon, and B. J Bethurum, of Somerset, for appellee.

PERRY Justice.

This appeal seeks a reversal of a judgment of the Rockcastle circuit court, awarding to the plaintiff vendor recovery against the defendants upon lien notes, aggregating $3,000 with interest, and directing enforcement of lien and sale of the property for its satisfaction.

In December, 1929, the appellee, L. H. Davis (plaintiff below), filed his petition in equity in the Rockcastle circuit court, wherein he alleged that in June, 1925, he had sold to the defendants, Thelma Baxter and Ed Baxter, her husband, a certain small tract of land situated on the Rockcastle river, in Rockcastle county, Ky. known as the Walnut Grove bathing beach and camp ground, for the agreed price of $5,000, upon which $2,000 was then paid him in cash, and, for the balance, six interest-bearing lien notes were given, each for the principal sum of $500, with precipitating clause and payable annually and consecutively thereafter.

The petition further alleged that he, simultaneously with the execution and delivery to plaintiff of these purchase-money notes, conveyed by proper deed the property to the defendant Thelma Baxter, who at once took over its possession and control. Also it alleged that the defendants had thereafter made two payments of annual interest accruing upon said lien notes, but had failed to pay any of said notes, all long past due, or any part of same. Wherefore, plaintiff prayed judgment against the defendants for the amount of said notes, with interest from July 11, 1927, for enforcement of his vendor's lien upon the property, and that it be sold for the satisfaction of his debt.

Defendants filed answer and counterclaim, admitting their execution and delivery of the notes sued on and their cash payment of $2,000 upon the purchase price of the land, but counterclaimed with the averment that, at the time they purchased the land, they were not acquainted with its nature or character, and that plaintiff had at the time fraudulently represented and guaranteed that it did not overflow, when plaintiff then well knew that the property was subject to and had been repeatedly overflowed; that plaintiff had then further fraudulently represented to them that the property was dry and most suitable for converting into a camp ground (that being the purpose for which he was told they wished to acquire and use it), when plaintiff then knew the representation was false, and that the property was in no wise suitable or fit for such purpose; and that defendants had no knowledge or information whatever, at the time or prior thereto, of the falsity of these representations, but that they relied upon, and were deceived and induced, wholly by plaintiff's representations so made them, to buy the property for a camp ground. Further, they pleaded that the said tract of land was both then represented to them and later described in the deed conveying it to them as containing 7 1/2 acres, whereas, upon its later survey, it was found to contain only a fraction over 5 acres. Further, they averred that they, after purchasing the property and in the course of converting it into a bathing beach and tourist camp, constructed improvements thereon of the value and cost to them of $1,200, which expenditure they would not have made except for their full reliance upon the truth of plaintiff's false and fraudulent representations made them that the land was dry, was not subject to overflow, and was ideally suitable for the purpose of a tourist camp, for which bought.

Therefore, the defendants counterclaimed and prayed that their contract for the purchase of the property, procured by plaintiff through fraudulent misrepresentations, be canceled; that the defendants be adjudged to recover of plaintiff the $2,000 paid him, with interest thereon from June 29, 1925, and the further sum of $1,200, by them expended for improvements erected upon the property; and that plaintiff's petition be dismissed with costs.

Reply and answer was filed to counterclaim, whereby plaintiff denied its averments and alleged that he sold the defendants the tract of land in evidence as a camp site and by boundary only, and that he had gone over the boundaries of the tract with them and had clearly pointed them out to the defendants, by reason of which they thereby learned and fully knew the shape, size, and quantity of land they were to and did receive when they bought the site; that it was sold to them only as a camp site "in boundary by gross," without any representation that it contained a designated number of acres, and the acreage mentioned in the deed was for the purpose of designation only and was so definitely understood by the defendants at the time of their buying the property.

Upon these issues thus formed by the pleadings and proof taken, the cause was submitted for judgment, when the chancellor adjudged that the defendants were not entitled to receive anything under their counterclaim, but that the plaintiff should recover his debt of $3,000 and interest and other relief as prayed.

Complaining of this judgment as erroneous, the defendants have prosecuted this appeal.

As disclosed by the record, the evidence is strongly in conflict as to the facts. The testimony of the plaintiff (appellee) and his witnesses tends to show that, upon the beginning of negotiations between the parties for the sale and purchase of this small river tract, one or two conferences were had between them, when it was arranged for them to meet and together go over this property, so that appellants might make a personal inspection and full examination of it in order to learn its location, size, and fitness for a bathing beach and tourist camp.

It is admitted by the parties that, pursuant to this plan, they met and went over this property, when a full examination was made of it and its boundaries pointed out to appellants as was also (according to plaintiff's testimony) the prior high-water mark of the river, at "high tide," upon this land.

Appellee further states that, some twenty odd years prior to this sale, he bought this small river tract at a cost of $37.50 and constructed a camphouse thereon at a cost of some $25, which he and his friends had for years used as a fishing camp, but that the value of the property as a camp site was later greatly enhanced by the construction of the Dixie highway; that the highway made it generally accessible and served to bring to it many tourists and travelers, which gave the site a new and special value and fitness for use as a tourist camp.

He further testified that only a very small portion of the tract, perhaps an acre or two, next the river, was subject to overflow, leaving an ample amount of level and higher ground, which the river did not overflow, upon which to construct the buildings of the camp; and that the appellants, upon buying the property, had improved it, and for a year or so had profitably run it as a camp site, but that, because of the loose and immoral way in which it was later run by Thelma Baxter or her lessee, a Mrs. Oaks, which gave the camp a bad reputation, the patronage which the camp had at first enjoyed was driven away, and it became a losing business. The plaintiff also testified that no complaint or claim had ever been made by appellants to him that the property was unsatisfactory or that it had been misrepresented by appellee to them in any respect, until nearly five years after their purchase of it, and was only then made by counterclaim, when he, because of appellant's continuing default in the payment of their purchase-money notes, had instituted suit against them thereon for recovery.

On the other hand, the evidence of the appellants and their witnesses in support of their counterclaim is in striking conflict, for the most part as stated, with that given by appellee and his witnesses. While it is admitted both by Thelma Baxter and her husband, Ed Baxter, that they visited and went over the property with the appellee, Mr. Davis, in June, 1925, and then made a full inspection and examination of the property and its boundaries to ascertain its fitness for use as a tourist camp, they further testified that Mr Davis then represented to them that the tract contained 7 1/2 acres, and that only a very insignificant portion of it was ever overflowed; also, that he then stated that he had, both by Mr. Lee and Mr. Woodall, been offered $4,000 for the site, but that he would not take a cent less than $5,000 for it. Further, the appellant Thelma Baxter testified that she was a very illiterate woman, without either schooling or business experience, and that her husband, though a brickmason by trade, was also without business experience outside of his trade, while, on the other hand, the appellee was a shrewd, sagacious, and rich trader, who artfully and effectively made false and fraudulent representations as to the property to them, which they believed and had relied on, and which induced them to buy and improve the property, as...