Howe v. Martin
| Citation | 102 P. 128,23 Okla. 561,1909 OK 105 |
| Parties | HOWE et al. v. MARTIN et al. |
| Decision Date | 12 May 1909 |
| Court | Supreme Court of Oklahoma |
Syllabus by the Court.
A party is guilty of fraud and deceit where, with intent to induce another to enter into a contract, he makes a positive assertion, which is material, in a manner not warranted by his information, or where he is not shown to have reasonable grounds for believing it true, where the assertion so made is not true, even though believed by the party making it. In such a case the definite assertion as a fact of that which is untrue, concerning that which the party has no knowledge, is tantamount in its effects to the assertion of something which the party knows to be untrue.
A principal is responsible to third persons, not only for the statements and acts of his agent acting within his actual authority, but also for such acts and statements as he may do and make acting within the apparent scope of the authority conferred.
A person induced by false and fraudulent representations to purchase or exchange for property has three remedies. He may first, upon discovery of the fraud, rescind the contract absolutely, and sue in an action at law, and recover the consideration parted with upon the fraudulent contract, and in such a case he must restore, or offer to restore, to the parties sued whatever he has received by virtue of the contract; or, second, he may bring an action in equity to rescind the contract, and in such a case it is sufficient for plaintiff to restore, or make offer in his petition to restore, everything of value which he has received under the contract; or, third, he may affirm the contract, retain that which he has received, and bring an action at law to recover the damages sustained by reason of his reliance upon the fraudulent representations.
An offer to return a deed receive does not divest grantee, or reinvest the grantor with title, nor is it a rescission of the contract by the grantee, nor sufficient to constitute an offer to rescind.
A party who makes an exchange of properties is entitled to make as good a bargain as he can, provided only he deals honestly. He may place his own property at a high price and secure another's at a low one. To the benefit of his bargain is he entitled, and he should not lose this legitimate gain because the other party has been dishonest. The measure of damages, in a case of fraud and deceit on such an exchange should be, and therefore is, the difference in value between the property conveyed to him and the value of that which would have been conveyed had such property been as represented and the actual contract honestly fulfilled.
Error from District Court, Woodward County; J. L. Pancoast, Judge.
Action by J. W. Martin and another against R. F. Howe and another. Judgment for plaintiffs, and defendants bring error. Reversed and remanded, with directions.
Chas R. Alexander and Hoover & Swindall, for plaintiffs in error.
A. M Appelget, for defendants in error.
This action was brought in the district court of Woodward county, and arises out of a controversy between plaintiffs in error, defendants below, and defendants in error, plaintiffs below, over an exchange of lands. The contention of plaintiffs, as shown by the petition and the evidence, is that by and through the fraud and deceit of defendants they were induced to exchange their farm, which was located in Woodward county, Okl., for 80 acres of land in Texas county, Mo. Aside from alleged fraud in the inducement to make the exchange, plaintiffs claim that the defendants agreed to furnish them with a good and sufficient title, evidenced by warranty deed and a clear abstract of the Missouri land, and aver in their petition that the deed delivered did not convey the tract for which plaintiffs traded, and that the same was not such a deed as was contemplated, and that the abstract did not show title in the defendants, and hence no title was conveyed plaintiffs by the deed delivered. In declaring upon this feature of the case plaintiffs, assuming that the papers delivered to them were nullities, pleaded a tender back of the same, and in open court on trial offered them to the defendants. In the prayer to the petition, however, plaintiffs prayed that the deed so made and delivered by the defendants be reformed, so that the same would be a deed of general warranty, and that when so reformed that plaintiff have and recover judgment for the damages suffered upon a breach of the warranties contained. To this defendants answered that, subsequent to the time of the original transfer of the properties, and prior to the commencement of the action, they tendered to plaintiffs a good and sufficient, complete and correct, abstract of the title to the said land in Missouri, showing that the same was clear and free from incumbrances, and that the defendants were the owners thereof in fee simple, and announced that they would in open court tender an abstract of title showing the same. On the trial of the cause the defendants tendered plaintiffs a correct abstract, showing title in them to the Missouri land, and also a deed of general warranty to the land. Defendants refused to accept the tender made by plaintiffs, and plaintiffs refused to accept the tender made in court of the corrected abstract and deed by defendants. The court found, and so instructed the jury, that the plaintiffs had not shown that the defendants were not the legal owners of the land in Missouri, and did not have the legal title thereto, and from the entire record we are satisfied this conclusion is correct. The prayer contained in plaintiffs' petition for a reformation by the court of the deed received for the Missouri land was fully met by defendants' acquiescence and tender of the corrected abstract and warranty deed above mentioned. All that the court could have accomplished by a judgment decreeing the reformation of this deed the defendants effected in their voluntary execution and tender of the same. So it seems to us the question as to the title of the Missouri land is no longer involved. If it had been the only matter at issue in the case, a tender at the time it was made would have the effect of burdening defendants with the costs; but, as it was not, plaintiffs under their petition ought to have accepted it, and proceeded with the trial for damages prayed on account of the fraud and deceit. The offer on the part of plaintiffs to return the deed and abstract to the defendants did not reinvest defendants with title, nor was it a rescission of the contract on the part of plaintiffs, nor in itself constitute an offer to rescind. 18 Encyclopædia of Pleading & Practice, p. 838; Ahrens v. Adler, 33 Cal. 608; Jeffers v. Forbes, 28 Kan. 174. While the land was misdescribed in the deed, still as between the parties there can be no doubt grantee secured an equitable and enforceable title to the same. Fitch v. Gosser, 54 Mo. 267; Johnson v. Robinson, 20 Minn. 189 (Gil. 169).
There is nothing in the record to induce us to believe that the defendants did not have title to the Missouri land, and in good faith intended to, and believed they were conveying, such title to the plaintiffs. But the complications which arose by virtue of the defect in the deed and the abstract created the woeful spring from which flowed practically all of the uncertainties and errors in the procedure which followed. This being now out of the way, and plaintiffs, as we assume, being possessed of title to the Missouri land, there is left for our consideration but two propositions: First, whether or not the evidence introduced, viewing it in the light of the verdict, and giving to it the same weight and credit given it by the jury, was sufficient to sustain an action for fraud and deceit; and, second, whether or not the instruction on the measure of damages in such a case was correct. We will consider these in the order suggested.
The case of plaintiffs rests almost entirely upon the evidence of J. W. Martin. The evidence shows that, at the time of the exchange of properties, he was about 72 years of age residing on a farm in Woodward county, Okl.; that he was slightly acquainted with J. W. Carter, who lived in that vicinity, who approached him with a proposition to trade his farm in Woodward county for a tract of land of 80 acres, owned by the defendants, in Texas county, Mo. Martin signified a willingness to make the exchange. Carter was acting as the agent for the Howes, and admitted that he had no personal knowledge of the character or grade of the Missouri land, and so informed Martin. He, however, as Martin testifies, described the land as being a nice smooth piece, and having a good-hewed log house on it, and a good stable and corncrib, and a good log chicken house, and between 30 and 35 acres fenced with a good 8-rail stake and rider fence, a good orchard of 6 acres, and two good springs on it. He showed plaintiff a piece of paper that had all of the improvements marked down that he asserted were on the land and told him that "Howe went down there a year ago this fall, and had a car load of apples picked off of the place, and had them shipped to Gage"; that he had bought them himself out of the car at Gage. It appears from the evidence that neither Martin, Carter, nor Howe had seen the land, but it does not appear, according to Martin's testimony, that he knew that Howe had not seen it. He testified that, from the way Carter spoke, he supposed that Howe had seen it, and that he supposed Howe had described it to him (Carter) although he (Carter) did not tell Martin this. The plat purporting to contain markings showing the location of the improvements on the land, taken in conjunction with this testimony of Martin's, was evidently an important...
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