Hubert v. Joslin

• Court: Michigan Supreme Court
• Writing for the Court: POTTER
• Citation: Hubert v. Joslin, 285 Mich. 337, 280 N.W. 780 (Mich. 1938)
• Decision Date: 30 June 1938
• Docket Number: No. 22.,22.
• Parties: HUBERT et al. v. JOSLIN et al.

285 Mich. 337

280 N.W. 780

HUBERT et al.

v.JOSLIN et al.

No. 22.

Supreme Court of Michigan.

June 30, 1938.

Suit by Peter Hubert and another against Crill Joslin and another to enjoin forfeiture of a land contract for the exchange of property, and for other relief, wherein defendants prayed for affirmative relief based on allegedly false representations made by plaintiffs and for foreclosure of land contract. From a decree for plaintiffs, defendants appeal.

Affirmed.Appeal from Circuit Court, Muskegon County, in Chancery; Joseph F. Sanford, Judge.

Argued before the Entire Bench.

Leland W. Grotewohl and Christian A. Broek, both of Muskegon, for appellants.

Alexis J. Rogoski and Noel P. Fox, both of Muskegon, for appellees.

POTTER, Justice.

May 12, 1932, plaintiffs traded their Chicago property to defendants for a farm with certain personal property thereon located in Ravenna township, Muskegon county. Plaintiffs agreed to pay $2,100 to defendants to boot. This agreement was evidenced by a land contract wherein plaintiffs became purchasers of the Ravenna property. Plaintiff Peter Hubert and defendant Crill Joslin later signed a further agreement in relation to broker's fees and other things, which contract contained a so-called ‘self reliance clause.'

Prior to the execution of the instruments effecting the trade of properties, plaintiffs were interviewed by one Louis Simon, brother of Joseph Simon, and one Cashin, relative to the purchase of the Ravenna farm, at Chicago. Plaintiffs claim these parties made false representations to them as to the value, nature, and productivity of the soil. Plaintiff Peter Hubert visited the farm before purchasing it and was met at Muskegon Heights by Joslin and Joseph Simon who accompanied him to the farm. Cashin accompanied him on this visit. Plaintiff Peter Hubert was undecided as to the trade and upon his return to Chicago complained to Louis Simon and Cashin that the land was sandy but was assured by Louis Simon that the land was clay soil with only a slight top surface sandy. Plaintiff Peter Hubert claims prior to making the deal he was told by Louis Simon the farm was worth $7,000, including the personal property thereon, and was capable of growing substantial crops, and any doubt he entertained after visitng the farm in relation to the nature of the soil and its productivity was dispelled by the representations made by Joseph Simon when he visited the farm and by Louis Simon on his return to Chicago. The trade was made a few months after plaintiff's visit to Ravenna after he had been approached numerous times by Louis Simon to consummate the deal. Plaintiffs moved on the farm in July, 1932. They claim the personal property was not the same either in quantity or quality as when plaintiff Peter Hubert visited the place, that crops were not planted as had been represented, and that all but eight acres was sandy soil instead of clay, and the land was not capable of growing crops as represented to them.

Defendants later offered to rescind the trade but plaintiffs claim the Chicago property had been neglected in the meantime.

Plaintiff Peter Hubert gave his personal note for $100 to defendant Joslin in January, 1933, payable one year thereafter. This was by way of payment on the farm.

In February, 1935, defendants commenced forfeiture proceedings which were stayed by this suit.

Plaintiffs allege fraud and misrepresentation on the part of defendants and the Simon brothers and a conspiracy on their part to defraud them and pray that they receive a credit on the land contract in an amount equal to the difference between the value of the farm and personal property thereon as represented and the actual value thereof, and that they obtain a deed to the farm and recover any amount found to be due them in addition.

Defendants deny all allegations of fraud, that the Simon brothers were their authorized agents, and pray for affirmative relief based upon alleged false and fraudulent representations made by plaintiffs in relation to the value of, and income from, the Chicago property and the amount of a mortgage thereon assumed by defendants and for a foreclosure of the land contract.

After hearing the testimony and considering the depositions introduced, the trial court was satisfied plaintiffs had established by a preponderance of the proof each and every essential element of fraud and misrepresentation necessary to entitle them to relief; that defendants had failed to prove fraud and misrepresentation on the part of plaintiffs or either of them. The trial court was satisfied that both the Simon brothers were acting as agents of defendants and in conjunction with them in effecting a trade of the properties and that they made false and fraudulent representations as to the value of the farm land, the crops planted thereon, and the nature and productivity of the soil; that such false and fraudulent statements were made with knowledge on their part of their falsity because both of them were well acquainted with the farm and it was their intention to induce the plaintiff Peter Hubert to rely upon the same; that he did rely thereon and suffered damages by reason thereof. The trial court also said he was satisfied the Simon brothers had an interest in selling the farm which does not appear outwardly in the case. He found that Leo Langlois, to whom a commission was to be paid, was not guilty of fraud or deceit.

Plaintiff Peter Hubert has difficulty in understanding and speaking the English language. He lived in Chicago, was unacquainted with farm land in Michigan, and learned little or nothing concerning the farm in question during his visit in March, 1932. Though he saw the land, positive misrepresentations were made to him by Joseph Simon at Muskegon and by Louis Simon in Chicago after his return. The trial court was satisfied plaintiff told the truth; that he believed and relied on the representations as to the character of the land, the same being frozen at the time he examined it; that the farm was fraudulently represented to be of the value of $7,000 and productive, whereas, in truth the farm and personal property thereon was worth in fact $4,400; that there was a balance of $576 owing on plaintiffs' mortgage at the time of the deal instead of $400, and the total incumbrance against the Chicago property, including principal, interest, taxes and insurance, amounted to $751.46. The trial court was satisfied plaintiffs were not guilty of fraud and deceit in relation to the incumbrance upon the Chicago property though defendants may have been misled by reason of plaintiffs' difficulty in explaining the situation. The trial court said:

‘Plaintiff was no match for either of the Simon brothers, let alone both, when it came to making the trade of properties and I am satisfied that he was bewildered and defrauded in the transaction.'

Plaintiffs were not compelled to rescind. They were defrauded in the amount of $2,600; and defendants are entitled to a credit of $351 as against this amount, representing the difference between the amount of the incumbrance as it actually was and as it was understood by plaintiffs. The trial court found that $2,100 of $2,248.54 out of which plaintiffs were defrauded would be applied in payment of the balance owing on the contract, completely paying and satisfying the same; and that defendants should convey the Ravenna property to plaintiffs within ten days after the signing of a decree, and, in default thereof, the filing of a certified copy of the decree in the office of the register of deeds of Muskegon county would operate as a conveyance thereof to plaintiffs; that plaintiffs were to have decree for the balance of $148.54, and costs, not including the costs incurred as the result of the taking of further proof. Decree in conformity with this finding was entered and defendants appeal, assigning 13 reasons or grounds for appeal.

The first four of these reasons relate to disputed questions of fact, whether there was fraud practiced by defendants; whether either Cashin, Joseph Simon or Louis Simon were agents in making the exchange; whether the property exchanged by plaintiffs was of any value. The trial court passed upon these disputed questions of fact. He had an opportunity to see the witnesses and judge the truthfulness of their statements and we are not disposed to criticize his findings upon these questions. Halicki v. Halicki, 244 Mich. 341, 221 N.W. 129;Huber v. Shay, 278 Mich. 414, 270 N.W. 731.

Though plaintiff Peter Hubert went to Ravenna and saw the land in question, it cannot be claimed that in doing so he precluded himself from relief from the subsequent fraudulent statements of defendants. Pinch v. Hotaling, 142 Mich. 521, 106 N.W. 69;Yanelli v. Littlejohn, 172 Mich. 91, 137 N.W. 723;Gugel v. Neitzel, 248 Mich. 312, 226 N.W. 869. Nor was he precluded from complaining of fraud by reason of having signed the contract for the exchange of property which contained a so-called ‘self reliance clause’ subsequent to the completion of the deal. There is ordinarily no reason to insert such a clause in a contract unless the party who insists upon it is prompted to do so by a consciousness he has successfully perpetrated a fraud upon the opposite party. Such a clause is ineffective as a defense against fraud. Peck v. Jenison, 99 Mich. 326, 58 N.W. 312;J. B. Millet Co. v. Andrews, 175 Mich. 350, 141 N.W. 578;J. B. Colt Co. v. Reade, 221 Mich. 92, 190 N.W. 672;Plate v. Detroit Fidelity & Surety Co., 229 Mich. 482, 201 N.W. 457;Fignar v. Schreiber, 255 Mich. 661, 239 N.W. 270;Gloeser v. Moore, 284 Mich. 106, 278 N.W. 781.

It is settled in this State that where money or property is obtained and agents are active in the transaction, the principals are chargeable with the agent's fraud to the same extent as if they had committed the fraud themselves. Busch v. Wilcox, 82 Mich. 336, 47 N.W. 328,21 Am.St.Rep. 563;Bertha v. Regal Motor Car Co., 180 Mich....