Gridley v. Ross

• Decision Date: 08 August 1923
• Citation: 217 P. 989,37 Idaho 693
• Parties: CHARLES GRIDLEY, Respondent, v. R. C. ROSS, Appellant
• Court: Idaho Supreme Court

217 P. 989

37 Idaho 693

CHARLES GRIDLEY, Respondent, v. R. C. ROSS, Appellant

Supreme Court of Idaho

August 8, 1923

CONTRACT-FRAUDULENT MISREPRESENTATIONS-ELECTION TO RESCIND-AMENDED COMPLAINT-DAMAGES-LANDS-INSUFFICIENT EXAMINATION-INTEREST PRIOR TO JUDGMENT.

1. When the district court obtained jurisdiction to grant a rescission of a contract at the suit of one who had been defrauded, it obtained jurisdiction to grant whatever relief either equitable or legal, the defrauded party was entitled to recover under the allegations of his complaint.

2. The filing of a complaint in which the rescission of a contract to exchange properties because of misrepresentation is sought does not constitute such an irrevocable election to disaffirm the contract that it is not possible thereafter in the same action to affirm the contract and seek damages.

3. When one, in an action for damages growing out of the fraud of another in an exchange of lands, implicitly relies upon the representations made as to material facts which are false and such false representations were made with the intent to deceive, the defrauded party is entitled to recover such damages as he sustains on account of such fraudulent representations.

4. One who has made false and fraudulent representations with respect to the character, etc., of land will not be relieved from liability therefor because the defrauded party looked over the lands at a time when the ground was covered with snow to such an extent that no proper examination could be made.

5. Interest will not be allowed on a claim for unliquidated damages, prior to judgment, when the amount of such damages is not susceptible of ascertainment by computation or by reference to market values.

APPEAL from the District Court of the Eighth Judicial District, for Kootenai County. Hon. John M. Flynn, Judge.

Action for damages for fraudulent misrepresentations inducing contract for exchange of lands. Judgment for plaintiff. Modified and affirmed.

Modified and affirmed.

E. H Berg and Danson, Williams & Danson, for Appellant.

By commencing action for rescission, respondent irrevocably elected to disaffirm the contract. The amended and supplemental complaint and the entry of judgment on the theory of affirming the contract was inconsistent with the election previously made. (Breshears v. Callender, 23 Idaho 348, 131 P. 15; 20 C. J. 29; Grizzard v. Fite, 137 Tenn. 103, 191 S.W. 969, L. R. A. 1917D, 652; Smeesters v. Schroeders, 123 Wis. 116, 101 N.W. 363; Conrow v. Little, 115 N.Y. 387, 22 N.E. 346, 5 L. R. A. 693; Terry v. Munger, 121 N.Y. 161, 18 Am. St. 803, 24 N.E. 272, 8 L. R. A. 173.)

Under the amended and supplemental complaint, and the theory on which judgment was entered, the relief awarded was for unliquidated damages. Interest has been allowed in the judgment on the damages from March 1, 1919, to the date of judgment, and this was unwarranted. (Barrett v. Northern Pacific Ry. Co., 29 Idaho 139, 157 P. 1016; Storey & Fawcett v. Nampa & Meridian Irr. Dist., 32 Idaho 713, 187 P. 946; Austin v. Brown Bros. Co., 30 Idaho 167, 164 P. 95; Graham v. Brown Bros. Co., 30 Idaho 651, 168 P. 9.)

The evidence did not warrant a judgment in favor of respondent. The preliminary contract between the parties contemplated that respondent should investigate for himself before a trade should be made, and he did make such investigation without interference from appellant and nothing was concealed. Under such conditions respondent cannot claim that he relied upon the representations of appellant and disregarded his own investigation. (12 R. C. L. 357, sec. 111; 361, sec. 114; 424, sec. 172; 27 R. C. L. 359, sec. 59; Farrar v. Churchill, 135 U.S. 609, 10 S.Ct. 771, 34 L.Ed. 246; Slaughter v. Gerson, 80 U.S. 379, 20 L.Ed. 627; Southern Development Co. v. Silva, 125 U.S. 247, 8 S.Ct. 881, 31 L.Ed. 678; Shappirio v. Goldberg, 192 U.S. 232, 24 S.Ct. 259, 48 L.Ed. 419; Van Horn v. O'Connor, 42 Wash. 513, 85 P. 260; Conta v. Corigat, 74 Wash. 28, 132 P. 746; Wilson v. Mills, 91 Wash. 71, 157 P. 467; Forester v. Jastad, 97 Wash. 633, 167 P. 55; Citizens' State Bank v. Moebeck, 143 Minn. 291, 173 N.W. 853; Asher v. Jensen, 43 N.D. 355, 175 N.W. 365; Sohan v. Gibson, 118 Ky. 403, 80 S.W. 1173; Merritt v. Dufur, 99 Iowa 211, 68 N.W. 553; Hirschman v. Hodges, 59 Fla. 517, 51 So. 550; Aitken v. Bjerkvig, 77 Ore. 397, 150 P. 278; Watson v. Molden, 10 Idaho 570, 79 P. 503; Kemmerer v. Pollard, 15 Idaho 34, 96 P. 206; Johnson v. Holderman, 30 Idaho 691, 167 P. 1030.)

Ezra R. Whitla and E. T. Knudson, for Respondent.

Where equity assumes jurisdiction it will retain the same and grant damages where the specific relief prayed for cannot be given.

"An action for fraud and an action for rescission can be based upon the same identical facts, and whatever is proper awarded." (Hetrick v. Gerlinger Motor Car Co., 84 Ore. 133, 164 P. 379; Bancroft v. Woodward, 183 Cal. 99, 190 P. 445.)

"There is nothing inconsistent in his asking for rescission first and damages if he cannot have it." (Glover v. Radford, 120 Mich. 542, 79 N.W. 803; Batholomew v. Walsh, 163 Wis. 208, 157 N.W. 575; International Realty & Securities Corp. v. Vanderpoel, 127 Minn. 89, 148 N.W. 895; Marshall v. Gilman, 52 Minn. 88, 53 N.W. 811; Freeman v. Fehr, 132 Minn. 384, 157 N.W. 587; Gunderson v. Halvorson, 140 Minn. 292, 168 N.W. 8.)

"The wrongdoer cannot shield himself from liability by asking the law to condemn the credulity of his victim." (Watson v. Molden, 10 Idaho 570, 79 P. 503; Speed v. Hollingsworth, 54 Kan. 436, 38 P. 496; Pennington v. Roberge, 122 Minn. 295, 142 N.W. 710; City of Tacoma v. Tacoma L. & W. Co., 17 Wash. 458, 50 P. 55; Baughman v. Gould, 45 Mich. 481, 8 N.W. 73.)

Where the land sold was irregular so that one could not readily discover the shortage in acreage, an action of fraud would lie. (Conta v. Corgiat, 74 Wash. 28, 132 P. 746; Glasgow v. Brecht, 117 Wash. 245, 200 P. 1089.)

The ground being covered with snow, the vendee had the absolute right to rely upon the vendor's statements as to condition of the land. (Knapp v. Schemmel & Armstrong (Iowa), 124 N.W. 309; Risch v. Von Lillienthal, 34 Wis. 250; Schmeisser v. Albinson, 119 Minn. 428, 138 N.W. 775.)

"The owner of property, when he sells, is presumed to know whether the representation which he makes about it is true or false; and the positive statement thus made of a material fact, if false, is a fraud in law." (Smith v. Richards, 13 Pet. (U.S.) 26, 10 L.Ed. 42; Equitable Trust Co. v. Milligan (Ind. App.), 64 N.E. 673; Lynch v. Mercantile Trust Co., 18 F. 486, 5 McCrary, 623; Richelberger v. Mills Land & Water Co., 9 Cal.App. 628, 100 P. 117; Baird v. Gibberd, 32 Idaho 796, 189 P. 56.)

Plaintiff had a right to rely on the statement of Ross as to the acreage. (Porter v. Beattie, 88 Wis. 22, 59 N.W. 499; Quarg v. Scher, 136 Cal. 406, 69 P. 96; Speed v. Hollingsworth, supra; Cawston v. Sturgis, 29 Ore. 331, 43 P. 656; Taylor v. Lytle, 26 Idaho 97, 141 P. 92; Ledbetter v. Davis, 121 Ind. 119, 22 N.E. 744; McGibbons v. Wilder, 78 Iowa 531, 43 N.W. 520; Hoock v. Bowman, 42 Neb. 80, 47 Am. St. 691, 60 N.W. 389; Judd v. Walker, 114 Mo.App. 128, 89 S.W. 558; Best v. Offield, 59 Wash. 466, 110 P. 17, 30 L. R. A., N. S., 55; Stearns v. Kennedy, 94 Minn. 439, 103 N.W. 212.)

Even going upon the ground does not preclude right of vendee to rely upon the representations of vendor. (Rudolph v. Wright, 124 Minn. 24, 144 N.W. 430; Pennington v. Roberge, supra; Glasgow v. Brecht, supra.)

Where it is necessary in order to secure full compensation for damages the courts quite generally allow interest. (17 C. J. 880; Fell v. Union P. Ry. Co., 32 Utah 101, 13 Ann. Cas. 1137, 88 P. 1003, 28 L. R. A., N. S., 1; Cook v. Perry, 43 Mich. 623, 5 N.W. 1054; Briggs v. Brushaber, 43 Mich. 360, 5 N.W. 338; Snow v. Nowlin, 43 Mich. 383, 5 N.W. 443.)

"Interest where the plaintiff has been defrauded of his property is necessary in order to make the damages compensate the plaintiff for the loss incurred." (Moore v. Fryman, 154 Iowa 534, 134 N.W. 534; Steele v. Kellogg, 163 Mich. 132, 128 N.W. 403; Shaw v. Gilbert, 111 Wis. 165, 86 N.W. 188; 12 R. C. L., p. 458; Wintz v. Morrison, 17 Tex. 372, 67 Am. Dec. 658.)

The proper measure of damages is the difference between the actual value of the property and its value as represented. (Boddy v. Henry, 113 Iowa 462, 85 N.W. 771, 53 L. R. A. 769; Stoke v. Converse, 153 Iowa 274, Ann. Cas. 1913E, 270, 133 N.W. 709, 38 L. R. A., N. S., 465; Whiting v. Price, 172 Mass. 240, 70 Am. St. 262, 51 N.E. 1084; Smith v. Werkheiser, 152 Mich. 177, 125 Am. St. 406, 115 N.W. 964, 15 L. R. A., N. S., 1092; Chapman v. Bible, 171 Mich. 663, 137 N.W. 533, 43 L. R. A., N. S., 373; Robertson v. Halton, 156 N.C. 215, 72 S.E. 316, 37 L. R. A., N. S., 298; Fargo Gas & Coal Co. v. Fargo Gas & Electric Co., 4 N.D. 219, 59 N.W. 1066, 37 L. R. A. 593; Howe v. Martin, 23 Okla. 561, 138 Am. St. 840, 102 P. 128; Gunther v. Ullrich, 82 Wis. 220, 52 N.W. 88.)

WM. E. LEE, J. McCarthy and William A. Lee, JJ., concur. Dunn, J., was not present at the hearing and took no part in the decision.

OPINION

WM. E. LEE, J.

--This is an appeal from the judgment of the district court of the eighth judicial district, for Kootenai county, in favor of respondent Charles Gridley and against appellant R. C. Ross for the sum of $ 3,145.08 and costs.

On and prior to March 1, 1919, appellant and another were the owners of a ranch in Powell county, Montana, consisting of more than a thousand acres, together with certain horses, cattle, farm machinery, hay, grain and other things comprising a farming outfit and necessary to farming operations. At the same time Charles Gridley, an elderly man of Coeur d'Alene, was the...