Berrendo Irrigated Farms Co. v. Jacobs

• Decision Date: 23 August 1917
• Docket Number: No. 2029.,2029.
• Citation: 23 N.M. 290,168 P. 483
• Parties: BERRENDO IRRIGATED FARMS CO.v.JACOBS et al.
• Court: New Mexico Supreme Court

23 N.M. 290

168 P. 483

BERRENDO IRRIGATED FARMS CO.

v.JACOBS et al.

No. 2029.

Supreme Court of New Mexico.

Aug. 23, 1917.Rehearing Denied Nov. 12, 1917.

Syllabus by the Court.

Where a party is induced to enter into a written contract by false and fraudulent representations made to him by the other party to the contract, such party perpetrating the fraud cannot seal the mouth of the other party as to such fraud, by inserting in the contract a clause which reads, “No promise, stipulation or representation not herein contained has been made by the company to the purchaser,” and the fraud may be shown whether the action is for rescission or for damages.

Where a party is induced to purchase lands by reason of false and fraudulent representations made to him, and such representations were made in prospectuses letters, and orally, it is not proper for the court to permit such parts of the prospectuses to go to the jury, which have no relation whatever to the false representations upon which the party relied, and which induced him to enter into the contract.

Where representations are proven, but there is no evidence offered tending to show that such representations were false, the court should, upon motion, withdraw the same from the jury.

Where a party contracts to purchase certain real estate, and the seller represents that arrangements have been made with a company furnishing electricity at a given rate to pump water for the irrigation of such land, and the buyer is fully informed as to the arrangement made in that regard, and is given certain shares of stock in a water users' association, and such association has the legal right to compel performance of such contract, but voluntarily abandons the same, and the buyer makes no effort to enforce his rights under such contract, he is in no position to claim damages from the seller by reason of such default.

If the person to whom the false statements are made did not rely on them but investigates for himself, and acts and relies on his own knowledge, no fraud exists, if the falsity of such representations was or could be discovered thereby, and if no artifice was resorted to to prevent him from discovering the truth.

Where the claim for damages is based upon various alleged misrepresentations, some of which affect only a portion of the land purchased, and others affecting the value of the land in certain respects, it is not proper for the court to charge the jury that if it found that any one of the alleged false representations were made, that defendant (cross-complainant) would be entitled to the same relief as if all had been made and relied on as charged.

Appeal from District Court, Chaves County; McClure, Judge.

Action by the Berrendo Irrigated Farms Company against George Jacobs and Elizabeth Jacobs, with counterclaim by defendants. Judgment for defendants for $500 on their counterclaim, after a remittitur of $499 had been filed, and plaintiff appeals. Reversed and cause remanded.

Where some of misrepresentations to purchaser affected only part of land and others affected its value in certain respects, charge that if any one misrepresentation was made purchaser might recover as if all were made and relied upon, as charged, was error.

Reid & Hervey, of Roswell, for appellant.

L. O. Fullen and W. A. Dunn, both of Roswell, for appellees.

ROBERTS, J.

This action was instituted in the lower court by the Berrendo Irrigated Farms Company against the appellees to recover on a written contract for the purchase price of a certain tract of land sold by appellant to appellees. Appellant claimed of appellees the sum of $1,950, with interest thereon at 8 per cent. from February 21, 1914. Appellees in their answer admitted that they executed the contract sued on and that the sum claimed was due from them to the appellant, but, in order to defeat the appellant's recovery of this amount, they alleged that they had been damaged in the sum of $4,276.80, by reason of the fraudulent representations of the appellant which induced them to enter into the contract. These alleged representations, as stated in the complaint, were that said land was good and first-class orchard land, suitable for peach trees and especially adapted to the growing of apples; that the soil was deep and fertile; that said tract contained 20 acres, and could all be easily irrigated and planted to apples; that the plaintiff could and would transfer with the land a good and sufficient water right, adequate for the complete irrigation thereof; that the water for such purpose could and would be supplied from wells, from which it would be necessary to pump, but that appellant had completed arrangements with the Roswell Gas & Electric Company to furnish electric power for pumping purposes, whereby sufficient water for the irrigation of said premises would be supplied and delivered thereon without cost for the year 1913 and thereafter for a term of 10 years, at a charge of $1.25 per acre-foot; that two acre-feet of water would be sufficient for the irrigation of any and all crops that might be growing on said land.

The plaintiff in answer to the defendant's counterclaim admitted that it represented to the defendant that the land described in the complaint was good orchard land suitable for peach trees and adapted to the growing of apples; that the soil was fertile, and that the tract contained 20 acres, and that the plaintiff could and would transfer with said lands a good and sufficient water right thereto adapted for the complete irrigation thereof; that the water for such purposes could and would be supplied from wells from which it would be necessary to pump, and that two acre-feet of water would be sufficient for the irrigation of ordinary annual crops. The plaintiff denied all other matters and things set forth by the defendants, and especially denied that the plaintiff had represented that it had completed arrangements with the Roswell Gas & Electric Company to furnish electric power for pumping purposes whereby sufficient water for the irrigation of said premises would be supplied and delivered without cost for the year 1913 and thereafter for a period of ten years, at $1.25 per acre-foot, or that two acre-feet of water would be sufficient to irrigate any and all crops that might be planted and grown on each acre of the land.

The plaintiff in its answer by way of new matter alleged that in May, 1913, on account of the complaint of the defendant George Jacobs that the tract did not contain full 20 acres, and that the arroyo and sloping land bordering on one edge of the tract made some of the land hard to irrigate, and that part of the land was likely to overflow during the wet seasons, it paid the defendant the sum of $300, in full settlement of his claim. This the defendants denied in their reply and set out that the $300 was paid only in consideration of the shortage of land.

The contract sued on in this case contained the following paragraph:

“No promise, stipulation or representation not herein contained has been made by the company to the purchaser.”

In support of their allegations of fraud, the appellees offered in evidence a quantity of printed literature put out by the appellant for the purpose of advertising this land. The representations contained in the literature had to do with climate, with the water supply and sources of water from the artesian wells, and contained statements as to the products that could be grown upon the land, and stated that 40 acres of this land planted in fruit trees would be worth $40,000 in six years. Among other statements, the prospectus said the land rivaled the land in the famous Valley of the Nile in fertility and productiveness. These prospectuses were permitted by the court to go to the jury over appellant's objection. After the appellees rested their case, appellant moved to strike out certain portions of the printed literature on the ground that appellees had offered no evidence to show the falsity of the representations therein contained. This motion was overruled by the court. The case was submitted to the jury under instructions from the court, which returned a verdict in favor of appellees on their counterclaim and awarded appellees damages to the amount of $500, over and above the amount claimed by appellant and for which it had sued. Appellant filed a motion for a new trial and the court ordered appellees to file a remittitur in the sum of $499. This was done and judgment was rendered on the verdict in the sum of $1 and costs in favor of appellees. Other facts will be later stated in the discussion of the various points.

[1] The first proposition urged by the appellant as ground for reversal is that appellees had the right to affirm or disaffirm the contract, and that by electing to sue for damages they affirmed the contract, hence it was not competent for them to introduce evidence to contradict, change, or add to the terms plainly incorporated in and made a part of the written contract. That by reason of the clause contained in the contract as follows:

“No promise, stipulation or representation not herein contained has been made by the company to the purchaser”

-it was not competent for the appellees to offer in evidence any representation alleged to have been made by the agents of appellant not contained in the written contract. It is proper here to state that the false representations upon which appellee relied were representations made to them by the agents of appellant by oral and written communications and by prospectuses issued by the company, and their right to recover was not based upon fraudulent representations alleged to have been contained in the written contract.

We cannot agree with appellant's contention. Where one party to the contract has perpetrated a fraud upon the other, by means of which the latter was induced to enter into the contract, he cannot be precluded from seeking redress by a provision...