Brown v. South Joplin Lead & Zinc Mining Co.

• Decision Date: 30 November 1910
• Citation: 231 Mo. 166,132 S.W. 693
• Court: Missouri Supreme Court
• Parties: BROWN et al. v. SOUTH JOPLIN LEAD & ZINC MINING CO.

132 S.W. 693

231 Mo. 166

BROWN et al. v. SOUTH JOPLIN LEAD & ZINC MINING CO.

Supreme Court of Missouri, Division No. 1.

November 30, 1910.

1. APPEAL AND ERROR (§ 1011) — REVIEW— TRIAL BY COURT—FINDINGS OF FACT—CONCLUSIVENESS.

In an action at law, findings of fact made by the trial court on conflicting evidence are conclusive on appeal.

2. FRAUD (§ 32)—RIGHTS—ELECTION OF REMEDY.

In a case of fraud and deceit in a contract, the party injured has two remedies; he may rescind the contract, or he may fully perform it and sue for the damages resulting, provided he adheres to the original contract, standing at all times at arm's length towards the opposite party.

3. FRAUD (§ 35)—ACTIONS—WAIVER.

Where a party, entitled to recover for fraud and deceit in a contract, makes a new contract with the same person, having knowledge at that time of such fraud and deceit, he waives his right of action.

4. FRAUD (§ 31)—ACTIONS—CONDITION PRECEDENT.

An action for fraud and deceit, in a contract contemplates that the party injured adheres to the contract with its burdens and benefits.

5. FRAUD (§ 60)—ACTIONS —DAMAGES.

In an action for fraud and deceit in a contract, the injured party may recover damages for the benefits of the bargain.

6. FRAUD (§ 35)—ACTIONS—WAIVER BY NEW AGREEMENT—PRESUMPTION.

Where a party with knowledge of the fraud and deceit practiced in the original contract enters into a new one, he waives his right of action, even though he expended money before discovering the fraud, for it is presumed that the new agreement took that into consideration and wiped out all old scores.

Appeal from Circuit Court, Jasper County; Howard Gray, Judge.

Action by C. J. Brown and another against the South Joplin Lead & Zinc Mining Company. From a judgment for defendant, plaintiffs appeal. Affirmed.

J. W. McAntire, for appellants. Spencer, Grayston & Spencer and Meredith & Harwood, for respondent.

GRAVES, J.

This is the second appearance of this cause in this court. When first here it appears that the plaintiffs had obtained a verdict for something over $14,000, which verdict the trial court set aside for reasons assigned, and the plaintiffs appealed. Brown v. Lead & Zinc Mining Co., 194 Mo. 681, 92 S. W. 699. Upon that appeal, Fox, J., by opinion eliminated much of plaintiff's case. The action is one for fraud and deceit in the execution of a certain mining lease, the pleadings being fully analyzed in the former opinion. When the case was remanded by this court the defendant amended its answer, and pleaded that after the execution of the lease pleaded and after plaintiff knew of the facts, they entered into a new and subsequent contract, by which the original lease was ratified and modified, and that by so entering into the new agreement plaintiffs waived and lost all their rights to sue for and recover any damages by reason of the alleged fraud and deceit. The trial court found that such subsequent contract had been made, and that by reason thereof plaintiffs were precluded from recovering. In this regard the case is different from that of the former appeal, otherwise, it remains very largely the same. For a fuller statement the former opinion (194 Mo. 681, 92 S. W. 699) should be read with this. We shall take the question of this subsequent contract and its effect first, and then, if necessary, discuss other questions.

1. The case was tried before the court, and upon motion of the defendant certain findings of fact were made. This was done by the defendant presenting a number of findings of fact and asking the court to give or refuse the same as is done with instructions. Instructions were also presented for the action of the court. The court among other findings of fact, gave and made the following two, which are important upon the issue now under discussion:

"The court sitting as a jury finds the following facts: That the only ground of recovery on which plaintiffs offered any evidence was the alleged false and fraudulent representations made by Henry B. Pain as to the new shaft on lot 9 being on solid ground, and as to the proximity and direction of the old drifts in reference to said new shaft."

"The court sitting as a jury finds the following facts: That on February 18, 1901, plaintiffs entered into a new contract in writing with defendant company for a valid consideration, reducing the amount of the royalty and making other changes in the lease, and at that time plaintiffs had knowledge of the falsity of the alleged misrepresentations made by Pain on which this action is based."

"The court sitting as a jury finds the following facts: That in sinking the new shaft the plaintiff struck at a depth of about one hundred and forty-six feet a small prospect drift leading into a large drift, referred to in the plaintiff's petition, and the plaintiffs had the prospect drift cleaned out, and had knowledge of facts showing the falsity of Pain's misrepresentations, upon which this action is based, and up to that time the plaintiffs had expended the sum of $3,476."

These findings become important because the evidence upon which they were made is not before us, although the plaintiff seems to have excepted to the findings. The abstract simply says what the evidence tends to show upon both sides. This is an action at law, and we are bound by these findings. Snuffer v. Karr, 197 Mo., loc. cit. 188, 94 S. W. 983, and cases therein cited.

The finding of facts, to which we must bow, is to the effect that there was a new agreement made after the plaintiffs were fully possessed of the facts. This new agreement was to the advantage of the plaintiffs as the record runs. Under such circumstances the trial court did not err in holding that plaintiffs had waived their action for fraud and deceit under the original contract. In cases of fraud and deceit the party has two remedies: First, he may rescind the contract; or secondly, he may fully perform the contract, and sue for damages resulting from the fraud and deceit. Nor does it appear that there can be a waiver of damages for the fraud and deceit, so long as the party adheres to the original contract. He is not compelled to abandon his original contract upon the discovery of fraud, but may go on in the fulfillment thereof and rely upon his action for fraud and deceit. Such would seem to be the doctrine of the cases relied upon by the plaintiffs, of which the following are samples: Morman v. Harrington, 118 Mich. 623, 77 N. W. 242; Haven v. Neal, 43 Minn. 315, 45 N. W. 612; Sell v. Logging Co., 88 Wis. 581, 60...