Judd v. Walker

• Court: Missouri Court of Appeals
• Writing for the Court: Nortoni
• Citation: Judd v. Walker, 89 S.W. 558, 114 Mo. App. 128 (Mo. App. 1905)
• Decision Date: 30 September 1905
• Parties: JUDD v. WALKER et al.

89 S.W. 558

114 Mo. App. 128.

JUDD v. WALKER et al.

St. Louis Court of Appeals. Missouri.

September 30, 1905.

1. FRAUD—FALSE REPRESENTATIONS—MATTER OF FACT OR OPINION.

False statements and representations made by the vendor, positively as of his own knowledge, as to the number of acres in a tract of land which is being negotiated for sale by the acre, are not regarded as mere expressions of opinion, but rather as statements of fact, of which fraud may be predicated.

2. VENDOR AND PURCHASER—FRAUD OF VENDOR—CAVEAT EMPTOR—APPLICATION OF RULE.

The rule of caveat emptor only requires the purchaser to exercise such care and attention as is usually exercised by ordinarily prudent men in like business affairs, and only applies to defects which are open and patent to the senses of one exercising such care. It is without application to a deficiency in the represented acreage of a tract of land which is not open and patent to the observation of the purchaser and within the range of his senses while viewing the land.

3. FRAUD—FALSE REPRESENTATIONS—DUTY TO INVESTIGATE.

Where the vendor makes a positive representation as to the number of acres in a tract of land, the purchaser is not required, in the exercise of ordinary business prudence, to survey and measure the land, and is not precluded from recovering damages for fraudulent representations as to the quantity of acres in the tract by reason of not having caused measurements to be made in advance of his purchase.

4. VENDOR AND PURCHASER—FALSE REPRESENTATIONS BY VENDOR—CAVEAT EMPTOR.

Where a vendor makes false statements of fact, the falsity of which is not palpable to the purchaser, the latter may rely implicitly on such statements, and the vendor cannot defend an action for the fraud by invoking the rule of caveat emptor and urging the negligence of the purchaser in trusting him.

5. PRINCIPAL AND AGENT—FALSE REPRESENTATIONS OF AGENT—LIABILITY OF PRINCIPAL.

It is within the scope of the authority of a real estate agent to represent the acreage of a tract of land placed in his hands for sale, and the principal is liable for false and fraudulent representations made by the agent in such respect.

6. SAME—RATIFICATION BY PRINCIPAL.

A real estate agent fraudulently misrepresented to a purchaser the acreage of a tract of land sold by the acre, and induced the vendor to permit an overstatement of the acreage of the land to be inserted in the deed, giving him an obligation to protect him in case the fraud was discovered. The vendor also accepted compensation for more land than he owned, and the agent retained for himself the price paid for a number of acres which were supposed to be, but which were not, conveyed. Held, that the vendor, by knowingly accepting a benefit from the false and fraudulent representations of the agent, ratified and adopted the same, and was jointly liable with the agent therefor, though he was originally no party thereto.

7. FRAUD—ACTION—PARTIES.

Plaintiff and his agent were engaged in the business of buying and selling real estate. Plaintiff furnished the money and took title to the land purchased by the agent; but the agent, after reselling the land, shared in the profits and losses of the transaction. Held, that the agent was not a necessary party to a suit by plaintiff to recover damages for fraud and deceit in the sale of land to plaintiff through the agent.

Appeal from Louisiana Court of Common Pleas; David H. Eby, Judge.

Action by Curtis J. Judd against Alten M. Walker and others. From a judgment for defendants, plaintiff appeals. Reversed, and certified to the Supreme Court.

This is an action at law on an allegation of fraud and deceit for the sale of lands. The evidence was to the effect that the plaintiff, Curtis J. Judd, treasurer of the Keeley Company of Dwight, Ill., is a man of means and invests surplus money in lands. One Bourland, a banker at Pontiac, Ill., and Mr. Judd have an arrangement whereby Bourland looks around for lands out of which money can be made by buying and reselling, and upon locating such lands Mr. Judd furnishes the money and the land is purchased in the name of Judd as a speculation. The business is all done by Bourland, subject to Judd's approval. On the occasion in question, Bourland as agent of Judd, came to Louisiana, Mo., in search of lands and met the defendant Walker, a real estate agent at that place, who drove him across the Mississippi river into Pike county, Ill., and upon the lands of the defendant Naxara, which he then had for sale as agent for Naxara. The land was irregular in shape, being bounded on one side by the Sny, and running to a dull point on the north end. Walker, Naxara's agent, informed Bourland, Judd's agent, that the two pieces of land which were adjacent, and owned by Naxara, contained 178 acres; one piece containing 80 acres and the other 98 acres, and offered the tract at $40 per acre. Bourland looked at the land, and they then drove on and viewed other properties. Returning to Louisiana, both Bourland and one Sims, a friend of Bourland, who was accompanying him on the trip, informed Walker that Bourland was acting for Judd, and that he would wire Judd for consent to buy the Naxara lands, which he did, and received Judd's permission by wire which was communicated to Walker. On the following day Bourland drove to and upon the lands in order to locate a certain slough thereon, and that evening paid Walker $200 earnest money, and entered into a contract in writing, whereby he agreed to purchase said lands as soon as Walker could procure satisfactory abstracts, conveyances, etc. At the time of executing this contract, Walker said he was not sure of the number of acres in excess of 90 in the irregular shaped tract adjacent to the Sny, and therefore they had better put in the contract the round number of 90 acres and he would ascertain definitely thereafter. A month later Walker drew up a deed which was executed by his principal, Naxara, and acknowledged before Walker as a notary public, which deed purported to convey to Judd the two tracts of land mentioned, 178 acres, for which a draft payable to Walker, covering the balance due at $40 per acre was delivered to the bank in payment therefor, and the deed was thereupon delivered to Judd. It was shown by the evidence of both Walker and Naxara, as well as otherwise, that each of them knew there was not 178 acres of the land; that Naxara claimed to own 160 acres only, and that he refused to execute the deed for 178 acres at Walker's request, and advised with friends about it before signing the same, and finally consented to do so upon the agent Walker giving him a written obligation to hold him harmless in event the shortage of acres was discovered and he would be called upon to make good; that Naxara received pay for 160 acres of the land at $40 per acre, less Walker's commission, a total of $640, and that Walker appropriated to his own use, with Naxara's consent and approval, $40 per acre for the remaining 18 acres besides his commission. Some time thereafter, Judd caused the land to be surveyed, whereby it was ascertained that it contained 153 24/100 acres only, instead of 178 acres, there being a shortage of 24 76/100 acres. One witness also testified that between the time of the negotiation for the land and the making of the deed, Walker told him in his (Walker's) office that Bourland was going to take the land, and that he was getting paid for a number of acres, something like 27 acres, more than there was in the tract. Upon this state of facts, this suit for fraud and deceit was instituted to recover this shortage at $40 per acre.

The salient points clearly established by the evidence are that Walker was the agent for Naxara for the sale of these lands; that Bourland was the agent of Judd to buy, and so informed Walker during the negotiations; that Bourland viewed the lands twice before the purchase; that Walker made positive and direct representations to Bourland, in the presence of Sims, that the irregular tract contained 98 acres, and the whole tract contained 178 acres; that such representations were then false, and were known by Walker to be false when made; that Bourland believed and relied upon such representations, trusting thereto, and made the purchase, and caused Judd to pay for the land upon the faith thereof; that the purchase was not made in a lump, but at an agreed price of $40 per acre; that the land was of such an irregular shape as would render it impossible for one to form an accurate judgment as to the number of acres contained therein; that the defendant Naxara did not meet the purchaser nor his agent, and personally made no representations, but that both he and Walker knew, however, that there was not 178 acres in the tract, and that he only claimed 160 acres; that Naxara had knowledge of the transaction before its consummation and assisted his agent, Walker, to consummate the fraud by executing a deed for 178 acres of land, taking an obligation from Walker to protect himself, together with compensation for 160 acres, or 6 76/100 acres more than he owned, permitting Walker to appropriate $40 per acre for the land, which Naxara did not claim to own. Bourland had no interest in the land. His arrangement with Judd is to the effect that he looks up and purchases the lands for which Judd furnishes the money. Bourland then finds a buyer and sells the land, and they divide the profits and losses occasioned by such sales. The land mentioned herein, together with other adjoining lands purchased at the same time from other parties, were all sold by Judd prior to the filing of this suit, at a profit sufficient to reimburse him for his entire expenditure in that behalf, and therefore there was no loss such as would or did occasion a contribution from Bourland to Judd on account of the shortage of acres in the Naxara tract.

Separate answers by each defendant consisted of a general denial and a plea that...