Harris v. Polk County Inv. Co.
| Decision Date | 11 May 1920 |
| Docket Number | 33220 |
| Citation | 177 N.W. 476,188 Iowa 1259 |
| Parties | MARIAN J. HARRIS, Appellee, v. POLK COUNTY INVESTMENT COMPANY, Appellant |
| Court | Iowa Supreme Court |
Appeal from Polk District Court.--GEORGE A. WILSON, Judge.
ACTION to recover damages based on alleged false representations made in the exchange of lands.
Affirmed.
Brammer Lehmann & Seevers, for appellant.
McHenry & Powers, for appellee.
This action is brought to recover damages for false representations, alleged to have been made by the defendant to the plaintiff in effecting a trade of real estate. The trade is alleged to have taken place on or about the 20th day of May, 1918. At that time, the plaintiff was the owner of certain real estate, and the defendant was the owner of certain other real estate. A trade was effected between them, by which the title to plaintiff's property passed to the defendant, and the title to defendant's property passed to the plaintiff. The terms under which the exchange was made, were agreed upon, and the deal consummated. The plaintiff claims that, to induce her to make the exchange, and to transfer her property to the defendant, the defendant falsely represented that the land which she received in the exchange was tillable land, and that the same never overflowed; that, as a matter of fact, it was not tillable land, and that it overflowed nearly every season; that this representation was made to induce the trade; that it was false; that the defendant knew it was false; that plaintiff did not know it was false, relied upon it as true, and made the exchange; that the property received by her was not worth as much as it would have been if it had been as represented; that, because of its overflowing frequently, its value is less than it would have been, had it been as represented. Plaintiff claims she is damaged by these false representations in the sum of $ 1,500.
It is not necessary, for the purposes of this case, to set out the description of the several tracts of land. It appears that the negotiations for the exchange were started by one Newton, who claimed to represent the defendant, and who claimed to have the right to represent the defendant in bringing about the exchange. Whether he represented the defendant or not, in the view we take of this case, is immaterial. The deal was finally consummated and the exchange made through one Frost. It appears that, before the exchange was made, the plaintiff visited the land, in company with Newton, and we assume that Newton made the statements which plaintiff claims were made by him to induce her to make the contract. We may assume, without deciding, that Newton had no authority to make these representations, and we may assume, without deciding, that they were not binding upon defendant, because of the want of authority in Newton to make them. We may assume, without deciding, that these representations were not within the scope of the authority of Newton to make, and we may assume, without deciding, that, if the defendant knew nothing of these representations, was not a party to the fraud and deceit practiced by Newton, it is not bound by his fraud. Such assumption, it is claimed, is in line with the holding made in Ellison v. Stockton, 185 Iowa 979, 170 N.W. 435, and would follow, though Newton was employed by defendant to find a purchaser. But the record shows that the defendant is a corporation. The answer of the defendant admits that, on the 20th day of May, 1918, a trade was made between the plaintiff and the defendant, and that the defendant in the trade was represented by Frost; that, in this trade, plaintiff's land was transferred to the defendant, and defendant's land transferred to the plaintiff. The evidence shows that, before this trade was consummated, Newton and the plaintiff visited defendant's land, and, while on the land, Newton was asked whether or not the land overflowed, and he informed plaintiff, in positive terms, that it did not. The fact is that it did overflow, and had overflowed frequently during the past. Newton, however, asserted it to be a fact, of his own knowledge, that it did not, in fact, overflow. There was evidence of a creek there, or a run; but it was dry, at the time the plaintiff visited it, and this may have prompted the question. But, however that may be, after this visit, and after Newton had made this assertion touching the character of the land, the record shows that the plaintiff called on Frost. Some controversy arose as to some details in the transaction between her and Frost. Frost told her that Newton had no authority in the matter, except to show the property. He said, "If you make a deal, you will make it with me, as agent of the Polk County Investment Company."
The plaintiff testified that, before the deal was consummated, she talked with Frost. She says:
It is the contention of the defendant that neither Frost nor Newton is shown to have had authority from the company to bind the company by any false representations; that they were merely agents of the company, and that their agency was not of such a character as to include the right to make these false representations, and bind the company; that the defendant was an innocent vendor, practiced no fraud, and cannot be held responsible for the fraud of its agents, unless it is shown that the agents were authorized by the defendant to make the false representations, or that it subsequently ratified the false representations, with knowledge that they were made and with knowledge that plaintiff was relying upon them in making the deal. How it can be claimed that Frost was the mere agent of this company, with no authority to bind the company, in the face of this record, we are not able to see. If the company made false representations, it is bound. If, before the deal was consummated, the company knew that these false representations were made, and that the plaintiff was relying upon them, and re-affirmed and re-asserted the representations as true, it made the representations its own, and it...
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