Beltner v. Carlson, 32862

• Decision Date: 13 February 1951
• Docket Number: No. 32862,32862
• Citation: 153 Neb. 797,46 N.W.2d 153
• Parties: BELTNER v. CARLSON.
• Court: Nebraska Supreme Court

Page 153

46 N.W.2d 153

153 Neb. 797

BELTNER v. CARLSON.

No. 32862.

Supreme Court of Nebraska.

Feb. 13, 1951.

Syllabus by the Court

1. One suffers no damage where he is fraudulently induced to do something which he is under legal obligation to do.

2. By merely assigning a lease the lessee only places his assignee in the same relationship with the lessor as was occupied by the lessee and nothing else is implied as against the assignor. If the assignee desires further assurances from the lessee he must exact express provisions for that purpose.

3. As a general rule, a misrepresentation which involves a statement of matters of law is one upon which a party cannot rely, as all parties are bound to know the law.

4. To maintain an action for fraudulent representations it is not only necessary to establish the telling of the untruth, knowing it to be such, or that it was told without knowledge of the facts, but also to prove that the plaintiff had a right to rely upon it, and did so rely, and altered his condition because thereof, and suffered damages thereby.

5. It is a general rule that fraud must relate to a present or preexisting fact, and cannot ordinarily be predicated on unfulfilled promises or statements as to future events.

6. However, if an advantage is obtained by fraudulent promises in the nature of the assertion of facts which there was no intention to perform, that is, when the representation is that of a fact in the future and not a mere promise, and it is relied upon and turns out to be false, the remedies of the injured party are the same as where fraudulent misrepresentations are made in regard to existing facts.

7. One of the essential elements of fraud practiced by means of false representations is that the representation must be concerning a matter material to the contract.

Neighbors & Danielson, Scottsbluff, for appellant.

Mothersead, Wright & Simmons, Scottsbluff, for appellee.

Heard before CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ.

WENKE, Justice.

Fred D. Beltner brought this action in the district court for Scotts Bluff County against Carl H. Carlson. The purpose of the action is to recover damages based on fraud. Judgment was rendered dismissing the action with prejudice. Plaintiff filed a motion for new trial and has appealed from the overruling thereof.

For convenience we shall herein refer to the appellant as Beltner and to the appellee as Carlson.

On November 18, 1943, Beltner owned a ranch in Morrill County, Nebraska. As of that date he entered into an agreement with Carlson whereby he leased these premises to Carlson for the period January 1, 1944, to October 31, 1948. This agreement also contained a provision granting to Carlson the right to purchase the premises at any time during the term of the lease. This option Carlson exercised on June 16, 1948.

The agreement, so far as here material, provided that upon Carlson's exercising the right to purchase Beltner would assign to him the school land leases he then held upon some 440 acres in Section 36, Township 21 North, Range 50 West, of the 6th P.M., in Morrill County, Nebraska, which lands are fully described in the agreement. When, on November 29, 1948, Beltner and Carlson made settlement, pursuant to Carlson's exercise of this option, there were delinquent and unpaid irrigation taxes assessed against these school land leases. The office of county treasurer of Morrill County, as of November 29, 1948, showed these taxes, together with interest and penalties, to be in the total of $13,491.68. In making settlement of the purchase price Beltner allowed Carlson a credit of $6,745.84, or one-half the amount of these delinquent taxes.

On June 7, 1948, Carlson sold the ranch to Clyde A. Linch who will hereafter be referred to as Linch. The terms of their agreement expressly provided that Carlson was not bound to pay these delinquent irrigation assessments.

Carlson admits, or the evidence establishes, that on or about November 29, 1948, he represented to Beltner that as of June 7, 1948, he had entered into a written agreement with Linch whereby he sold the lands and school land leases to Linch and agreed to convey and assign to him the land and school land leases but that Linch refused to perform and disclaimed any obligation to do so until the delinquent irrigation taxes on the school land leases were fully paid; that unless these taxes were paid Carlson would lose the benefit of his bargain with Linch or would be subject to liability for nonpayment thereof; and that Carlson would attempt, by suit, to recover from Beltner any loss sustained by reason of Linch's failure to perform or for any recovery Linch might have against Carlson because of the nonpayment thereof.

Carlson admits these representations were false and, at the time, known by him to be such. This is self-evident from the terms of Carlson's agreement with Linch. Beltner claims he believed these representations and relied thereon and pursuant to such belief and reliance acted thereon by allowing Carlson a credit of $6,745.84 on the balance due on the purchase price.

The first question presented is, was Beltner legally obligated to pay these delinquent irrigation taxes under the terms of his agreement with Carlson wherein he agreed to assign to Carlson the school land leases? If he was legally obligated to pay them he could not have been defrauded for it has often been stated: 'One suffers no damage where he is fraudulently induced to do something which he is under legal obligation to do * * *.' 23 Am.Jur., Fraud and Deceit, § 177, p. 996. See, also, 37 C.J.S., Fraud, § 41, p. 292; Kuper v. Snethen, 96 Neb. 34, 146 N.W. 991; Musconetcong Iron Works v. Delaware, L. & W. R. R. Co., 78 N.J.L. 717, 76 A. 971, 20 Ann.Cas. 178; Record v. Rochester Trust Co., 89 N.H. 1, 192 A. 177, 110 A.L.R. 1218; Field v. National City Bank, 343 Mo. 419, 121 S.W.2d 769; Plews v. Burrage, D.C., 19 F.2d 412.

Section 76-201, R.R.S. 1943, provides: 'The term 'real estate,' as used in sections 76-201 to 76-281, shall be construed as coextensive in meaning with 'lands, tenements and hereditaments,' and as embracing all chattels real, except leases for a term not exceeding one year.'

We said in Fawn Lake Ranch Co. v. Cumbow, 102 Neb. 288, 167 N.W. 75, 78: 'Defendant insists that his lease is a chattel real, and that such instruments or the rights given thereby are personal property, and hence do not constitute a lease of the land or a sale of any part of it. A number of decisions are cited in support of this proposition. In a number of states chattels real are personal property, but in this state the statute has settled the law in that respect. Rev.St. 1913, § 6187 (now section 76-201, R.R.S. 1943). Under section 6187 in the chapter of the statute relating to real property, the term 'real estate' is construed 'as coextensive in meaning with lands, tenements and hereditaments and as embracing all chattels real, except leases for a term not exceeding one year.' * * * Whatever view may be taken in some states with reference to the nature and character of such an instrument * * * the legislative definition prevails, and the property must be considered as real estate.'

Consequently the agreement to assign and the subsequent assignment of these school land leases did not subject Beltner to any implied warranties created by statute in the sale or contract to sell personal property. Nor would the authorities cited from other jurisdictions here apply wherein, on the assignment of a lease, warranties are implied that the title is perfect and free from liens and encumbrances on the theory that a lease is personal property.

After a careful study of the authorities we think the following statement taken from 19 A.L.R. 608 correctly reflects our view: 'The authorities on the question whether implied covenants of title or possession result from the assignment of a lease are conflicting. The sounder doctrine would seem to be that no such covenants are implied in the assignment of a lease.'

As stated in Miles v. United Oil Co., 192 Ky. 542, 234, S.W. 209, 213, 19 A.L.R. 602: 'By merely transferring his lease the lessee only places his assignee in the same relationship toward the lessor as was occupied by the lessee, and all warranties and covenants by the lessor (by implication of law or otherwise) are transferred to the assignee by the assignment. Nothing else is implied as against the assignor and if the assignee desires further assurance from the lessee, his assignor, he should exact express covenants for that purpose.'

'The assignment transferring the leasehold from Adams to Howard and thence through mesne assignments to the corporation, was no more than a quitclaim.' Arnett v. Stephens, 199...