Hetland v. Bilstad

• Citation: 118 N.W. 422,140 Iowa 411
• Parties: J. M. HETLAND, Appellant, v. T. S. BILSTAD
• Decision Date: 24 November 1908
• Court: Iowa Supreme Court

118 N.W. 422

140 Iowa 411

J. M. HETLAND, Appellant, v. T. S. BILSTAD

Supreme Court of Iowa, Des Moines

November 24, 1908

Appeal from Webster District Court.--HON. W. D. EVANS, Judge.

ACTION on a note for $ 1,500 executed to plaintiff by defendant April 23, 1904, payable December 1, 1905, with interest at the rate of seven percent per annum. The defendant admitted the execution of the note, but alleged by way of counterclaim that it was given in part payment of 1,280 acres of land in Norman County, Minn., and that defendant was induced by fraud to purchase the same to his damage in the sum of $ 19,200. There was a trial by jury, which resulted in a judgment in favor of defendant. The plaintiff appeals.

Affirmed.

H. W Stowe and F. H. Peterson, for appellant.

Chantland Hadley & Graham and Kelleher & O'Connor, for appellee.

LADD C. J. DEEMER, J. (concurring).

OPINION

LADD, C. J.

In April, 1904, the defendant purchased of plaintiff two sections of land in Norman County, Minn., at the price of $ 30 per acre; the first payment being a stock of hardware at Callender, Iowa, subsequently invoiced at $ 4,000. The issues raised by the pleadings and submitted to the jury were whether defendant was induced to make such purchase by the intentional misrepresentation on the part of plaintiff that said land was first class and well adapted for farm purposes and the raising of standard small grain such as is produced in that vicinity, that it was not subject to overflow either from the river or drainage thereon from the surrounding lands, that it had produced a good crop in quality and quantity every year since cultivated, that the water on some portions of the land when looked at by defendant was temporary, being the result of a recent snowstorm, and that the market value of the land was $ 30 per acre. Without reviewing the evidence it is enough to say that, if admissible, it was sufficient to sustain the verdict. Other issues were eliminated by the instructions, and, as nearly if not quite all of the evidence bearing thereon related to the transaction under investigation, no prejudice resulted from its introduction. A wide latitude ordinarily is allowed in such inquiries, to the end that the jury have the fullest information of the entire transaction and be in a situation accurately to determine whether deceit has been practiced or that the charge is unfounded. As many of the sixty-four errors assigned involve the same point, each will not be separately considered.

I. Appellant first contends that there was no evidence of any representation of the market value of the land. The words "market value" are said not to have been used, but the witness did testify that plaintiff stated that "it was cheap at $ 30 per acre," that "the present value of this land is $ 30, easy enough," that "it was worth $ 30 per acre." By "value," in common parlance, is meant "market value," which is no other than the fair value of property as between one who wants to purchase and another who desires to sell. In Jonas v. Noel, 98 Tenn. 440 (39 S.W. 724, 36 L. R. A. 862), it is said that "so difficult a matter, however, is it to separate the ideas of 'value' and 'market value,' that it will be found text-writers and courts have frequently used these terms as interchangeable, and both as being the equivalent of 'actual value,' 'salable value,' and, in proper cases, 'rental value.'" See, also, Chase v. City of Portland, 86 Me. 367 (29 A. 1104); Sanford v. Peck, 63 Conn. 486 (27 A. 1057); Howes v. Axtell, 74 Iowa 400, 37 N.W. 974. The expressions quoted, if made, were to one unfamiliar with the land and prices in the neighborhood, and might well be construed as referring to the value obtainable for such land on fair negotiation between one proposing to buy and another offering to sell, and, if so, were sufficient to sustain a finding that the market value was represented to be $ 30 per acre.

In another connection counsel seek to distinguish between "market value" and "cash market value." In the absence of qualification, sale on the market is presumed to be for cash, and for this reason courts have held the expressions to be equivalent in meaning. Brown v. Calumet River R. Co., 125 Ill. 600 (18 N.E. 283); Manchester Fire Ins. Co. v. Simmons, 12 Tex. Civ. App. 607 (35 S.W. 722).

II. Even though plaintiff did represent the land to be worth $ 30 per acre, it is insisted that this was mere matter of opinion, and it is to be said that ordinarily the assertion that any property is of a specified value is treated as an opinion. Bosley v. Monahan, 137 Iowa 650, 112 N.W. 1102; Bossingham v. Syck, 118 Iowa 192, 91 N.W. 1047. And a finding of fraud can not be predicated on expressions of opinion only. Vincent v. Berry, 46 Iowa 571; Lucas v. Crippen, 76 Iowa 507. But, as was observed in the case last cited, causes may arise where such representations will be regarded as statements of fact. Parties in negotiating deals have the right to exalt the value or quality of their own property to the highest point credulity will bear, provided their efforts in this line go no further than puffing or praise which the vendor may properly indulge in; but statements of value or of quality may be made with the purpose of having them accepted as of fact, and, if this is done and so relied on, they are to be treated as the parties designed they should be, namely, representations of fact. Mattauch v. Walsh, 136 Iowa 225, 113 N.W. 818. In that case the court said: "The evidence in behalf of plaintiff clearly indicated the intention of Walsh that his assertion of the value of the land should be acted upon as true, and not merely as his estimate, and, if so, and it was knowingly false and induced an exchange by plaintiff to her damage, it was actionable." This is fully sustained by the authorities. Hickey v. Morrell, 102 N.Y. 454 (7 N.E. 321, 55 Am. Rep. 824); Culley v. Jones, 164 Ind. 168 (73 N.E. 94); Murray v. Tolman, 162 Ill. 417 (44 N.E. 748); McKnight v. Thompson, 39 Neb. 752 (58 N.W. 453); People v. Peckens, 153 N.Y. 576 (47 N.E. 883); Horton v. Lee, 106 Wis. 439 (82 N.W. 360); McDonald v. Smith, 139 Mich. 211 (102 N.W. 668); Stack v. Nolte, 29 Wash. 188 (69 P. 753); Mountain v. Day, 91 Minn. 249 (97 N.W. 883); Morgan v. Dinges, 23 Neb. 271 (36 N.W. 544, 8 Am. St. Rep. 121).

The rule is forcibly stated in Murray v. Tolman, supra: "Where the vendee is wholly ignorant of the value of the property, and the vendor knows this, and also knows that the vendee is relying upon his (the vendor's) representations as to the value, and such representation is not a mere expression of opinion, but is made as a statement of fact, which statement the vendor knows to be untrue, such a statement is a representation by which the vendor is bound." In People v. Peckens, 153 N.Y. 576 (47 N.E. 883), the court said: "As a general rule, the mere expression of an opinion, which is understood to be only an opinion, does not render a person expressing it liable for fraud; but where the statements are as to value or quality, and are with an intent to deceive and mislead the one to whom they are made, and he is thus induced to forbear making inquiries which he otherwise would, they may amount to an affirmation of fact rendering him liable therefor. In such a case whether a representation is an expression of an opinion or an affirmation of a fact is a question for the jury. The rule that no one is liable for an expression of an opinion is applicable only when the opinion stands by itself as a distinct thing. If it is given in bad faith, with knowledge of its untruthfulness, to defraud others, the person making it is liable, especially when it is as to a fact affecting quality or value, and is peculiarly within the knowledge of the person making it." As said in Horton v. Lee, supra: "The rule as to representations of value applies strictly only where the parties are dealing at arm's length and on equal terms. It does not apply where the relations between them are of a fiduciary character or of trust and confidence, or the person to whom the representations are made is incompetent to do business, or knows personally nothing about the subject of the sale, and is purposely induced, by the conduct of the vendor, not to inform himself but to act under the advice of such vendor and the influences by him used to that end. While there is some conflict, by the great weight of authority the law is, as laid down by the text-writers and the courts, that if property, offered for sale or exchange, be in a distant locality, and the vendee, to the vendor's knowledge, has no personal information in regard to it, and the latter misrepresents its value or quality for the purpose of inducing a trade and by artifice prevents the former from seeking information elsewhere or by a personal examination of the property, such misrepresentations are not mere expressions of opinion, but misrepresentations in regard to a material fact, satisfying the calls of actionable fraud in that regard." The matter is concisely stated in Cooley on Torts (3d Ed.) vol. 2, page 922: "If the land is at a distance, so that examination is impossible or impracticable, or if any deception or artifice is used to prevent examination or to throw the purchaser off his guard, then false representation as to value may be actionable."

The situation is somewhat like that of an expert who undertakes to impart information on a subject not generally understood. By the authorities generally, those to whom such information is imparted may rely thereon as a statement of fact. A person in giving an opinion on value or quality as one having special knowledge on the subject to another known by him not to be possessed of any knowledge thereof is in a similar situation, and...