Henderson v. Henshall

• Decision Date: 30 January 1893
• Docket Number: 69.
• Citation: 54 F. 320
• Parties: HENDERSON et al. v. HENSHALL.
• Court: U.S. Court of Appeals — Ninth Circuit

54 F. 320

HENDERSON et al. v. HENSHALL.

No. 69.

United States Court of Appeals, Ninth Circuit.

January 30, 1893

Dorn &amp Dorn, for plaintiff in error Charles Henderson.

W. G Witter, (S. C. Denson, of counsel,) for plaintiff in error W D. Holcom.

Norman H. Hurd, for defendant in error.

Before McKENNA, Circuit Judge, and MORROW, District Judge.

MORROW District Judge.

This was an action at law commenced in the circuit court by Mary Alice Henshall, a citizen of the kingdom of Great Britain against Charles Henderson, W. D. Holcom, and John Purcell, citizens of the state of California, to recover the sum of $30,000 for damages alleged to have been sustained by plaintiff in the exchange of certain lands in California. It is charged that false representations were made by the defendants Henderson and Holcom as to the value, character, and quality of certain lands in Shasta county, whereby they induced the plaintiff to exchange her lands in Tulare county for the lands in Shasta county, to her damage in the amount stated. The defendants demurred to the complaint, and the demurrers were sustained. An amended complaint was filed, to which demurrers were interposed, alleging, among other things, that the complaint did not state facts sufficient to constitute a cause of action. The demurrers were overruled, and the defendants thereupon answered. Thereafter, upon the written suggestion of the death of the plaintiff, it was ordered by the court that John Henshall, special administrator of the estate of Mary Alice Henshall, deceased, be substituted as plaintiff. There was a jury trial, and a verdict and judgment against the defendants Henderson and Holcom for $6,000, and the defendants sued out this writ of error.

It appears from the bill of exceptions that when the case was called for trial, and before the jury had been impaneled and sworn, the defendants moved the court to dismiss the action, on the ground that it had abated by the death of the original plaintiff; that the cause of action did not survive her death; and that John Henshall, as special administrator, could not maintain the action. The motion was denied, and defendants excepted. It further appears that during the trial of the case, and after all the evidence had been introduced on behalf of the plaintiff, and he had rested, and before the defendants had introduced any evidence on their part, the defendants moved the court to instruct the jury to render a verdict in favor of the defendants, upon the ground that the amended complaint did not state facts sufficient to constitute a cause of action. The motion was granted as to the defendant Purcell, but denied as to the other defendants, who duly excepted.

The case presents two questions for determination: (1) Whether the complaint states facts sufficient to constitute a cause of action. (2) Did the action abate by the death of the plaintiff?

The complaint alleges, among other things, that the tract of land owned by plaintiff in Tulare county contained 440 acres; that it was her separate property, and was all agricultural or farming land of the best quality, of the value of $75 per acre. The complaint charges that the defendants conspired with each other to defraud the plaintiff, and deprive her of said land; that the defendant Henderson, in pursuance of the conspiracy, and with intent to defraud the plaintiff, falsely stated to John Henshall, plaintiff's husband that he (Henderson) was about to become the owner of a ranch or tract of land in Shasta county, Cal., containing about 560 acres, of the value of $32 per acre; that there was a mortgage on the land for the sum of $3,000; that there was a fence around 80 acres of the land; that 160 acres had been planted in grain, and 240 acres had been cleared; that Henderson proposed to exchange the tract of land in Shasta county for plaintiff's tract of land in Tulare county, whereupon Henshall suggested that it would be better for him to visit the land in Shasta county, and inform himself as to the quality and condition of the land, but Henderson represented that it was not necessary for Henshall to do so; that he could rely upon his (Henderson's) representations. The complaint further charges that Henderson represented to Henshall that his real-estate business was extending and becoming so large that he could not conduct it alone, and he proposed to form a partnership, and take Henshall in as one of the partners; that he (Henderson) was a church member and a Christian. It is charged also that Henderson referred Henshall to the defendant Holcom, representing that the latter was a wealthy banker and resident of Yolo county, above suspicion, and entirely disinterested, and that he knew all about the Shasta county land; that Henderson thereupon introduced Henshall to Holcom; that the latter repeated to Henshall all the statements previously made by Henderson; that Henshall, relying upon and believing that all of said representations were true, gave to Henderson a writing purporting to agree to an exchange of the land in Tulare county, subject to a mortgage for $7,000, for the land in Shasta county, subject to a mortgage of $3,000. It is alleged in the complaint that Henshall did not have the legal authority to bind the plaintiff, but he acted upon the belief that plaintiff would acquiesce in his suggestions in regard to her property. It is further alleged that, after delivering the agreement for the exchange of plaintiff's land in Tulare county for the lands mentioned in Shasta county, Henshall wrote to Henderson that the transaction had better be left in abeyance until he could better inform himself as to the condition and value of the land in Shasta county, whereupon Henderson, in pursuance of the conspiracy, and with the intention of intimidating and defrauding plaintiff, went to her, and falsely stated that he had already sold the land in Tulare county to the defendant Purcell, who was in great haste to go into possession, and, unless the trade was carried out, the purchaser would 'law him' and he in turn would 'law her;' and, further, that he was in possession of papers signed by her husband, which he would at once record in Tulare county; that, for the purpose of deceiving and defrauding plaintiff, Henderson repeated to her all the representations made to her husband as to the character, value, and quality of the land in Shasta county, and stated that the whole of the land could be cultivated; that it was not necessary to make any examination of the land, but that it was necessary to close up the transaction at once. It was alleged that plaintiff believed these representations, and was induced by them and by threats and through fear to sign an agreement concurring in the previous agreement made by her husband for the conveyance of her lands in Tulare county to Henderson, and thereafter, in pursuance of further representations made to herself and husband as to the character, quality, and value of the land in Shasta county, and being urged by Henderson to close up the matter at once, to avoid trouble she executed a deed conveying to Henderson her land in Tulare county, and took from him a deed for the land in Shasta county, but without an opportunity to examine into its value and character.

There are other allegations in the complaint relating to the detail of this transaction, but enough has been stated to disclose the basis of the charge of misrepresentation and fraud contained in the closing paragraphs of the complaint as follows:

'As a matter of fact, the said land in Shasta county was at all said times the property of the defendant Holcom, and he conveyed it to the defendant Henderson on the thirteenth (13) day of September, 1890, for the purpose of carrying out said conspiracy. No mortgage for three thousand dollars, (3,000) or any sum except seven hundred dollars, ($700,) was on said land before said exchange. The true value of said land in Shasta county was at all the times aforesaid, and is now, five dollars ($5) per acre. No part of said land was ever cleared, cultivated, or sown in grain, except about four (4) acres thereof, and no part of said land was ever fenced. The whole of said land, with said exceptions, is wild, uncleared land, and a large part thereof is rocky, and unfit for cultivation. The defendants well knew that all of the said representations made by them, and by each of them, were untrue. In further pursuance of said conspiracy, and for the purpose of preventing the plaintiff from rescinding said transaction, the defendant Henderson did, immediately after obtaining the said conveyance of said land from this plaintiff, convey the said land to a sister of said defendant John Purcell, who had represented, as hereinbefore alleged, that he was in great haste, and was very anxious to purchase said land; and the said land now remains in the possession of said sister of the defendant Purcell, and said Purcell has never become the owner thereof, nor has he ever moved upon the same, or lived there.'

It is contended on behalf of the plaintiffs in error that the facts stated in the complaint are not sufficient in law to support the judgment; that the representations as to the land in Shasta county were made with respect to the matters equally within the power of both parties to ascertain; that the doctrine of caveat emptor applies in such a case, and to such representations; and that, where a buyer could by reasonable or ordinary diligence have discovered the truth, the law provides no remedy for damages sustained under such circumstances. It is undoubtedly the law that a party to a contract is required to exercise reasonable care and caution to prevent being defrauded. He must not close his eyes to matters directly before him, and, when he fin...