Ellison v. Stockton

• Decision Date: 20 January 1919
• Docket Number: No. 32085.,32085.
• Citation: 185 Iowa 979,170 N.W. 435
• Parties: ELLISON v. STOCKTON ET AL.
• Court: Iowa Supreme Court

185 Iowa 979

170 N.W. 435

ELLISON

v.STOCKTON ET AL.

No. 32085.

Supreme Court of Iowa.

Jan. 20, 1919.

Appeal from District Court, Linn County; Milo P. Smith, Judge.

Action to recover damages for false representations in the sale of land. Opinion states the case. Directed verdict for the defendants. Judgment on the verdict. Plaintiff appeals. Reversed.Redmond & Stewart, of Cedar Rapids, for appellant.

E. A. Anderson, of Lisbon, and F. L. Anderson, of Marion, for appellees.

GAYNOR, J.

In September, 1914, defendants were the owners of a certain tract of farm land, and listed the same for sale with Hall & McCall. Hall & McCall were real estate agents whose business it was to negotiate sales for others and to procure purchasers for land owned by others. These facts were known to plaintiff. The defendants had owned this land for about five years before listing it. Some time in September, “Train” McCall, one of these agents, called the plaintiff by phone, stating to him that he had a farm northwest of Cedar Rapids which he wanted to sell the plaintiff if the plaintiff wanted to buy, and asking plaintiff to come in. Two or three days thereafter, the plaintiff came to McCall's home at Lisbon. He came about 8 o'clock in the morning. He then went immediately, in company with these agents and his son, to visit the farm. They left McCall's home about 8:30 and, after stopping some time on the way, reached the farm about half past 10. The land in controversy is described as follows: The south one-half of the northwest quarter, the southwest quarter of the northeast quarter, the north one-half of the southwest quarter, and the northwest quarter of the southeast quarter. The house is situated on the south 80. On reaching the place, plaintiff undertook to examine the land for the purpose of determining whether or not he would purchase it. It is the claim of the plaintiff that he did not make a very thorough examination of it. After such examination had been made as plaintiff cared to make, and it is not claimed that he was prevented from making any further examination of it, on the way back he made an offer of $80 per acre. However, he was told by the agents that the land was listed with them at $85 an acre. He returned by way of defendant's home, but did not stop, though the agents did. Subsequently, on the 21st day of September, the defendants and the plaintiff came together, and a written contract was entered into by which the plaintiff agreed to purchase the entire farm of 240 acres at $80 an acre, to pay $5,000 in cash, and secure the balance by a mortgage upon the premises, the deeds and mortgages to be executed on the 1st of March following, and possession then given to the plaintiff. On the 25th day of February, 1915, the plaintiff, having paid the $5,000 provided for in the contract, executed and delivered to these defendants his note for the unpaid balance of the purchase price, and secured the same by a mortgage upon the premises. Thereupon the defendants executed and delivered to the plaintiff a deed to the land, and on the 1st day of March plaintiff took possession, and continued in possession personally until some time in July, 1916. The record does not affirmatively show, but we take it from the record, that he has been in possession by others since that time. At least it does not appear that he has surrendered possession to the defendants. It appears that when the contract was drawn up, it was supposed that the farm contained 240 acres, but it was subsequently discovered that it was 7 acres short. Some time in January, 1915, a survey was made by the plaintiff and the defendants, and 7 acres agreed upon as the shortage in the acreage of the farm, and $560 or $80 an acre was deducted from the contract price on account thereof, and the note and mortgage were made for $560 less than the contract called for.

On the 18th day of February, 1916, this action was brought to recover damages which the plaintiff claims he has sustained by reason of certain false and fraudulent representations made touching the character of the land purchased. He claims that when visiting the land, for the first time with these agents, he asked one of them while on the farm what kind of soil it was, and the agent replied “black sandy loam.” He asked him if the ground overflowed, and he said, “No; it never overflowed.” His action for deceit is based on the ground that it was not black sandy loam, and it did overflow, and that these representations were made by these agents for the purpose of having him believe that it was black sandy loam, and did not overflow; that he did so believe, and, relying upon these statements, was induced to purchase the land. He further says that the defendants and their agents knew that the representations were not true. He wants damages in the difference between what the land would be worth if it had been as represented and what it was in fact worth. Says that it would have been worth what he agreed to pay had it been as represented.

At the conclusion of the evidence the court directed a verdict for the defendants. Judgment being entered upon the verdict, plaintiff appeals.

It is apparent from this record that these agents had no relationship with the defendants except that which grew out of their agency. The agency was to sell at $85 an acre, or to procure a purchaser who was ready, able, and willing to buy the land on terms satisfactory to the defendants. The agents did not sell the land, but they did find in the plaintiff a purchaser who was ready, able, and willing, and who did buy the land on terms satisfactory to the defendants. There is nothing to show express authority, on the part of these agents, to make any representations touching the character of the land.

As is implied, so far as this record shows, their business was to sell or to secure a purchaser who was ready, able, and willing to buy the land in its then condition, on terms satisfactory to the defendant. They found this plaintiff, took him to the land, showed it to him, informed him that they had it for sale at $85 an acre. Plaintiff proposed to purchase the land, as he says, for $80 an acre if it was as represented by these agents, to wit, to be sandy loan, free from overflow. Subsequently the plaintiff and these defendants met, and the terms were arranged upon which the plaintiff should purchase. Nowhere in the negotiations with the defendants were the defendants informed by any one that any representations had been made to the plaintiff touching the character of the land. They were informed, however, that the plaintiff had been to examine the land. Defendants accepted plaintiff's proposition as he made it to them. It does not appear that these agents had anything to do with the making of the contract on the 21st day of September. The question then is, so far as this proposition is concerned: Are the defendants liable in damages on account of these fraudulent representations made by these agents, it not appearing that they were made with the express authority of these defendants, or that they were ever brought to the knowledge of the defendants before the consummation of the final contract and the surrender of the property to the plaintiff?

We may assume for the purposes of this case, that these agents made the representations substantially as claimed. We may assume that the representations were not true. We may assume that the plaintiff believed they were true, and relied upon them in making the purchase. There is no evidence that the agents knew that their representations, if made, were not true, but we may assume that they did know they were not true. We may assume that plaintiff made his proposition to the agents to purchase at $80 an acre, on the assumption that these representations were made and were true. The question still remains: Are these defendants liable in damages as for deceit in the making of these representations?

[1][2][3] It is not claimed that when plaintiff came to make the contract with the defendants that he said anything to them touching these representations, or asked any questions of them touching the character of the land. It is nowhere shown that he said to these defendants that the condition upon which he was making the purchase was that these representations were true. The record is barren even of suggestion of knowledge on the part of these defendants of the making of these representations. Were the representations so connected with the employment as to be binding upon these defendants? It is undoubtedly true that whatever an agent says or does, within the scope of his authority, binds his principal and is deemed his act. The authority must be either expressed or implied, expressly given or implied from the relationship created and existing. Had these agents the authority from these defendants to represent the land to be other than it was? Their authority was simply to make a sale, or procure a purchaser who was ready, able, and willing to buy. The plaintiff was procured by the agents as one who was ready, able, and willing to buy at a stipulated price. The price was stipulated by the plaintiff himself. He was brought by these agents to the defendants, and with them the contract was made. He gave the defendants no information touching any representations made, nor did he give them any information that he was buying on condition that the representations made were true. The scope of the agents' authority was to sell or to procure a purchaser for the land. Thus far he bound his principal by his acts. He could not bind them by untruthful and unauthorized representations touching the character of the thing which he was authorized to sell. The authority to make these representations was not necessarily included within the terms of the agency. The representations to bind the principal must appear to be representations which the agent by his employment was authorized to make. It is a general rule,...