Gibson v. Mendenhall

• Decision Date: 14 November 1950
• Docket Number: No. 33552,33552
• Citation: 224 P.2d 251,203 Okla. 558
• Parties: GIBSON v. MENDENHALL et al.
• Court: Oklahoma Supreme Court

Page 251

224 P.2d 251

203 Okla. 558

GIBSON v. MENDENHALL et al.

No. 33552.

Supreme Court of Oklahoma.

Nov. 14, 1950.

Syllabus by the Court.

1. A purchaser of real property cannot predicate fraud upon statements by the vendors which, either by reason of form or subject matter, are mere expressions of opinion. The purchaser is not justified in relying upon the accuracy of such statements, and if he does and such opinions are wrong, no cause of action based upon fraud arises therefrom.

2. It is not error for the trial court to sustain a demurrer where the petition, taken as a whole, and giving full import and consideration to all inferences that may be legally drawn therefrom, fails to state facts sufficient to constitute a cause of action.

A. L. Commons, Miami, for plaintiff in error.

L. A. Wetzel, Miami, for defendants in error.

CORN, Justice.

This is an appeal from the trial court's judgment sustaining a general demurrer to plaintiff's petition, in an action brought to rescind a contract, and recover money judgment from defendants, because of alleged fraud and misrepresentation in sale of property. Plaintiff elected to stand upon his petition and judgment was entered dismissing the action.

The appeal to this court is by transcript. The only question presented is whether the third amended petition stated a cause of action. Because of its length we do not set forth the entire petition, but the following sufficiently states the material allegations relied upon by plaintiff.

Plaintiff alleged that on April 12, 1946, he entered into a written contract from purchase from defendants of a building and all the equipment, and stock used in the operation of a beer parlor, located in Commerce, Oklahoma; that he was induced to do this by reason of material representations, orally made by defendants, upon which he relied; that such representations were false, known by defendants to be false when made, and were made with the intention of inducing plaintiff to rely thereon; that plaintiff was unfamiliar with conditions in the locality, and relied wholly upon the truthfulness of the representations and thereby was deceived to his detriment, which resulted directly from defendants' deception.

The misrepresentations relied upon allegedly were false in the following particulars. Defendants owned the property sold, and held a license to dispense beer at such location. In negotiating a sale of the property to plaintiff, the defendants allegedly advised plaintiff they were personal friends of representatives of the Tax Commission and the county court, and that there would be no trouble connected with his securing the license required for operation of the business in his own name, and that all plaintiff would have to do would be to make application. Plaintiff alleged that as a matter of fact, during the period of negotiations, defendants knew that it was extremely difficult to secure a beer license in the county and particularly in the town of Commerce, and they likewise knew plaintiff was unfamiliar with existing conditions; that there was great bias and prejudice in the minds of both city officials and the better citizens against beer parlors; that defendants had been advised of and knew of such conditions, and had knowledge that their own, or any other effort to secure a beer license would be protested, and had been so advised by city officials; that during the period of negotiations a city ordinance was in the process of being enacted which purported to outlaw all beer parlors; having knowledge of such matters defendants knowingly concealed same from plaintiff and falsely and fraudulently represented to plaintiff he need only make application for license, thereby inducing plaintiff to purchase the property and part with his money. Plaintiff also alleged that, as further inducement, defendants falsely represented plaintiff would make $90.00 per week from the sale of beer, knowing same to be untrue, and that he was induced to rely upon such false statements.

Further, that after execution of the written agreement plaintiff learned of the true conditions in the county and determined that his application for a license would be defeated; that everything which defendants did was part of a scheme or conspiracy to defraud him of his money, and that he relied upon defendants' false representations. Plaintiff then asked for rescission of the contract and recovery of the money paid thereunder, under that portion of the agreement which provided that the $500.00 earnest money and $2700.00 paid upon execution of the contract should be forfeited as liquidated damages in the event of his failure to complete the contract.

Plaintiff's second cause of action sought judgment for $5000.00 exemplary damages for defendant's alleged wanton and malicious representations.

The elements of actionable fraud have been pronounced so often by this court as scarcely to require citation of authority. These elements are material, false representations, made with knowledge of their falsity, or recklessly made without knowledge of their truth and as a positive assertion, with intention they be acted upon by another, and reliance thereon by another party to his injury. McAtec v. Garred, 185 Okl. 314, 91 P.2d 1095; Tyler v. Hartford Acc. and Indemnity Co., 195 Okl. 523, 149 P.2d 722; 23 Am.Jur., Fraud and Deceit, § 20.

At the beginning it is apparent plaintiff's contention that defendants induced him to enter into the contract by their representation that he could realize a profit of $90.00 per week is untenable. At most such representation was an expression of opinion, dependent upon the contingency necessarily recognized by all parties, that plaintiff would be able to secure a license. In such instances such statements do not...