Davis v. Cent. Land Co.

• Decision Date: 22 November 1913
• Citation: 143 N.W. 1073,162 Iowa 269
• Parties: DAVIS ET AL. v. CENTRAL LAND CO. ET AL.
• Court: Iowa Supreme Court

162 Iowa 269

143 N.W. 1073

DAVIS ET AL.

v.CENTRAL LAND CO. ET AL.

Supreme Court of Iowa.

Nov. 22, 1913.

Appeal from District Court, Polk County; Lawrence De Graff, Judge.

Action for deceit in the sale of property resulted in a verdict for plaintiff. From an order granting a new trial, the plaintiff appeals. Affirmed.John L. Gillespie, of Des Moines, for appellants.

C. D. Burkheimer, of Seattle, Wash., for appellees.

LADD, J.

The misrepresentation alleged was that the property known as No. 1822 West Tenth street, in Des Moines, purchased by plaintiff, extended back to the alley, whereas it did not, but lacked 35 feet or more of doing so. The property was owned by Fletcher & Van Vliet and defendants were acting as their agent in finding a purchaser. A cash payment of $250 was exacted, and defendants loaned the plaintiffs this amount, which was paid by her on the contract. Upon discovering that the lot did not extend to the alley, plaintiffs notified defendants that she would rescind the contract and requested the return of the note. It had been negotiated, and this action was brought for the amount thereof alleged as damages and the cost of moving household goods in and from the premises.

[1] Had plaintiff elected to rescind, the contract so advising Fletcher & Van Vliet, and brought an action for recovery of the payment made scienter might not have been material. But the action is against defendants as their agents, and fraud on the part of defendants must have been established to warrant the recovery of damages.

[2] One of the grounds of the motion for new trial was that the petition did allege knowledge of the falsity of the representations averred. It recited that plaintiffs informed defendants that they wished to purchase property which abutted an alley, as they expected to keep a horse and buggy, that when the premises were being shown to them, by John G. Trent, one of defendants then asked if the lot extended to the alley, and that he “falsely and fraudulently stated, represented, and warranted that the premises extended from Tenth street back to the alley, running between Tenth and Eleventh streets.” This language is repeated in alleging that plaintiffs relied on the misrepresentations and were induced thereby to enter into a contract of purchase. Again, it was averred that, when moving in, plaintiffs discovered that said statements, representations, and warranties made by said John G. Trent for and in behalf of the defendants relative to said premises were false, fraudulent, and untrue, and were made by the defendants for the purpose of deceiving and defrauding these plaintiffs and for the purpose of inducing them to enter into said contract. The petition was not assailed. and one of the questions to be determined is whether it sufficiently alleged knowledge of the falsity of the representation on the part of defendants.

[3] As the petition was not criticised until after verdict, every legal intendment is to be admitted in its support. The allegations that the representations were false and fraudulent implies that defendants knew them to be false. In Merwin v. Arbuckle, 81 Ill. 501, it was said, in approving an instruction: “As the scienter enters into and is necessary to a fraudulent representation, the instruction virtually informed the jury that the representations must have been made, knowing them to be false: Then when they were informed that they must have been fraudulent, they were, in substance, told that they must have been not only false but plaintiff in error knew it.” Forsyth v. Vehmeyer, 176 Ill. 359, 52 N. E. 55.Bayard v. Malcolm, 2 Johns. (N. Y.) 550, 3 Am. Dec. 450. In Beebe v. Knapp, 28 Mich. 56, the allegation was that defendant falsely and fraudulently represented a note to be good, and, of an objection that knowledge that it was not good, the court, through Christiancy, J., said: “As to the want of a scienter, it is true the declaration does not, in so many words, allege that the defendant at the time ‘well knew that the said note was not good and the maker irresponsible,’ but it does allege that they ‘falsely and fraudulently’ represented the note to be good, and the maker responsible. The term ‘fraudulently,’ in this connection, of itself implies knowledge of the falsehood of the representations, or sufficient knowledge, at least, to render them liable for the consequences of the fraud. See 1 Chitty's Pl. 157; 2 East, 446; 4 Bing. 73; Id. 66. At all events, this is at least an argumentative allegation of defendants' knowledge, and, not being demurred to, is cured by verdict. Kean v. Mitchell, 13 Mich. 207.” 20 Cyc. 100. See, also, Cowin v. Toole, 31 Iowa, 513;Langsdale v. Girton, 51 Ind. 99;Bank of Montreal v. Thayer (C. C.) 7 Fed. 622. There was no such defect in the pleading as to exact the granting of a new trial.

[4] II. Another ground of motion for new trial was that the evidence was insufficient to warrant a finding that defendants had knowledge that the lot did not extend to the alley. Mrs. Davis testified that: “After we had looked through the house, we were standing in the kitchen when Mr. Davis asked Mr. Trent if the lot ran back to the alley, and he informed him that it did. Mr. Davis said the reason he wanted to know, in his business, he had goods to deliver, and he expected to have some kind of vehicle, a horse or a car.” And Mr. Trent then said: “Well, you have plenty of room. There is a barn on the rear of the next lot to the south. This lot and the lot to the south on which there was a barn at the rear close to the alley were apparently the same length.” The witness then described the ground between the house and the alley, and proceeded: “John Trent pointed to the alley, which was at the rear end of the lot. The alley pointed out by him had been used and teams had driven up and down that alley, and the result of driving along the alley could be seen. * * * Mr. Davis, Mrs. Darnell, and myself heard Mr. Trent make these statements about the lot running clear back to that alley, which alley was back of the other barn on the lot to the south.” Mr. Davis testified: “I asked John Trent, in regard to this lot, whether it ran back to the alley or not, and I told him the reason why I wanted to know that, that we expected later to remove our factory from Oskaloosa to Des Moines, and that I would have to have a place where I could have a barn so I could have some way of delivering my truck, my cigars, and he said there would be plenty of room there, and he pointed to the barn on the south. He said: ‘You have got lots of room. There is a man there right on the lot next to you has got a barn. I do not see what there would be to hinder you from building a barn there.’ I said, ‘Well that looks all right because I would want to have a place where I could have a barn.’ * * * If I remember right, I think we walked out to the alley or barn.” Mrs. Darnell swore that: “John Trent showed us where the end of the lot went to the alley. It was perfectly smooth clear back to the alley. I could see nothing but smooth ground. John Trent told them they could have plenty of room to build a barn, that the folks down on the other lot had a barn on their lot, and that Davis could build a barn on their lot, too.” On the other hand, Trent testified that he told plaintiffs in showing the lot that he “thought the lot went to the alley, but would have to find out from Van Vliet”; that he “did think the lot went to the alley”; that he did not know where the boundaries were; that Davis talked about building a barn; that he next met them at defendants' office, when Mr. Van Vliet was called; that they then inquired about the size of the lot; and that he told them they would have to find out of Van Vliet.” The latter testified that he told “the Davises that the lot was smaller than a full lot and would not be as big a lot as they would expect in smaller towns; that he read the description to them and told them there was an easement over the right of way back of the house which would give them access to the alley.”

[5] From this testimony, the jury might have found that Trent had no knowledge whatever as to the boundaries of the premises, that, to induce plaintiffs to buy the same, he represented that the property extended to the alley, and the precise question is whether therefrom the jury might have found that his representations were fraudulent.

The size of the lot was a matter of definite knowledge and readily ascertainable as distinguished from mere matter of opinion, and judgment which might vary and the assertion that it extended to the alley, if made, carried with it the implied assurance that Trent knew this to be a fact. If the Davises are to be believed, he was asked if the lot extended back to the alley and the reason for wanting to know explained, and Trent in answering must have intended to have given them to understand that he knew the boundary and that it was as he stated. He was showing the lot for the purpose of selling it to them and, in doing so, they quite naturally would assume that he knew its location. The jury then might have found that Trent did not know whether the premises extended to the alley or not, and yet asserted as of his own knowledge that they abutted thereon, and, if so, and plaintiffs were induced thereby to enter into the contract of purchase to their damage, a verdict must have been returned for the plaintiff. True it is that in Boddy v. Henry, 113 Iowa, 462, 85 N. W. 771, 53 L. R. A. 769, it was said that: “The rule uniformly recognized by this court is that the plaintiff must show by competent testimony that the representations were false and fraudulent, within the knowledge of the party making them. It is not enough that...