Byers v. Federal Land Co.

• Decision Date: 01 December 1924
• Docket Number: No. 6581.,6581.
• Citation: 3 F.2d 9
• Parties: BYERS v. FEDERAL LAND CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

3 F.2d 9 (1924)

BYERS v. FEDERAL LAND CO. et al.^*

No. 6581.

Circuit Court of Appeals, Eighth Circuit.

December 1, 1924.

J. W. James, of Hastings, Neb. (James & Danly and J. E. Willits, all of Hastings, Neb., and Walton & Watts, of Cheyenne, Wyo., on the brief), for appellant.

Ray E. Lee, of Cheyenne, Wyo., for appellees.

Before STONE, Circuit Judge, and MUNGER and MILLER, District Judges.

MUNGER, District Judge.

This suit was brought for the cancellation of a contract for the purchase of land. The parties will be designated as in the trial court. The defendant the Federal Land Company was a corporation organized under the laws of Wyoming and doing business at Cheyenne, Wyo. The other defendant, J. R. Carpenter, was its president. The plaintiff entered into a written contract on January 23, 1920, to purchase from the Federal Land Company 320 acres of land in Wyoming, for which he was to pay $2,800 in cash and a balance of $8,400, with interest, in 50 semiannual installments. In the contract the Federal Land Company agreed "to convey or cause to be conveyed" to the plaintiff the land mentioned when the plaintiff should have made these payments. The plaintiff was given the privilege, if he was not in default, of paying any amount on the contract at any interest-paying date.

This suit was begun September 15, 1922. The plaintiff's bill alleged the making of this contract, and prayed for its cancellation, and for recovery of the amounts he had paid under it. The grounds for his relief, shortly stated, were that the Federal Land Company had induced the plaintiff to sign this contract by fraudulently representing to him, contrary to the facts: (1) That the Federal Land Company was the actual owner of the land; (2) that it was in the actual possession thereof; and (3) that it was of the value of $35 per acre. The answers denied the making of these alleged representations. At the trial there was evidence that the real estate brokers acting as agents for the Federal Land Company had stated to the plaintiff, at the time of the preliminary negotiations leading up to the making of this contract, that the land was worth $35 an acre. The proofs were that the land was then worth about $15 per acre. The plaintiff lived at Hastings, Neb., several hundred miles from this land, which was situated about eight miles from Cheyenne, Wyo. The brokers, who made this statement as to value, also lived at Hastings and were engaged in the business of dealing in real estate. There was no relationship of special trust or confidence between them and the plaintiff, or between the vendor and the plaintiff. They also represented to the plaintiff that the Federal Land Company was the owner of this land. Before the contract was executed, the other defendant, Carpenter, who was the president of the Federal Land Company, came to Hastings, and he there executed the contract of sale on behalf of the Federal Land Company at the same time that the plaintiff signed it.

The written contract for the sale of the land contained no statement as to the possession of the land after its execution, except as implied in the covenant to convey the land when final payment had been made. There was no evidence of any direct statement to the plaintiff that the Federal Land Company was in possession of this land, but the plaintiff testified that the possession of the land was to be given at once upon the execution of the contract, and as a part of the same transaction there was a lease executed by the plaintiff to the defendant Carpenter of this land and of some adjoining land for a period of five years beginning on the March 1st following, at an annual cash rental of $1,000 per year, payable annually, with an agreement therein that Carpenter should cause to be broken 160 acres of the sod on the land agreed to be conveyed in 1920, and a like amount in 1921, for which he was to be paid from the rental.

The plaintiff had not seen this land prior to the contract and relied on the statements made by the agents and Carpenter. He saw the land in March, 1920. He paid the installment of the purchase price in September, 1920, when it was due, and paid the taxes due upon the land in the January following; but it was not shown that he knew the facts as to possession or value at these times. These facts and others were brought out in the testimony, and at the close of the plaintiff's evidence, the court sustained a motion by the defendants to dismiss the plaintiff's bill on the ground that no actionable misrepresentations had been proved, and the plaintiff has appealed.

It was undisputed in the evidence that the plaintiff had acted upon a representation on the part of the defendant Federal Land Company that this land was owned by it, but in fact the land was owned by another company. This company, however, had entered into a written contract with the Federal Land Company, prior to the date of the plaintiff's contract, to sell this land to the Federal Land Company, and it appeared that the land company which had agreed to sell the land to the Federal Land Company wrote several letters to the plaintiff, many months before this suit was brought, stating that a deed would be delivered to plaintiff at any time when he had complied with his contract. The plaintiff did not answer these letters. It was one of the essentials of the plaintiff's case to prove not only a misrepresentation, but a material misrepresentation. The plaintiff did not undertake to prove the inability of the Federal Land Company to comply with its contract to "convey or cause to be conveyed" this land. What evidence was given tended to indicate its ability and willingness to have the title conveyed to the plaintiff upon his compliance with his contract. The representation as to ownership was not a material misrepresentation to the plaintiff under these circumstances.

The representation as to the value of the land, as already stated, was made by the real estate brokers who lived in the same city as the plaintiff, in Hastings, Neb. He testifies that they told him the land was worth $35 an acre, was cheap at $35. He testified at one time that he relied on the representation as to ownership and possession and at another time...