Kelley v. Peeples

• Decision Date: 17 January 1915
• Parties: E. M. KELLEY, Respondent v. L. N. PEEPLES, et al., Appellants
• Court: Kansas Court of Appeals

182 S.W. 809

192 Mo.App. 435

E. M. KELLEY, Respondent v. L. N. PEEPLES, et al., Appellants

Court of Appeals of Missouri, Kansas City

January 17, 1915

Appeal from Livingston Circuit Court.--Hon. Arch B. Davis, Judge.

AFFIRMED.

Judgment affirmed.

J. M Davis & Son and Arthaud & Arthaud for appellants.

Scott J. Miller for respondent.

OPINION

JOHNSON, J.

This is an action to recover damages for fraud and deceit in the sale to plaintiff on January 27, 1906, of three quarter-sections of land in Livingston county. The defendants L. N. Peeples, Lula Peeples and A. L. Anderson were the owners of the record title and the defendants Faltinson, Deardorff and McCaskey were real estate agents in Chillicothe who had the land listed for sale and conducted all the negotiations that culminated in its conveyance to plaintiff by warranty deed executed by the owners of the record title. There is evidence tending to show that the three defendants who conducted the transactions with plaintiff were acting for themselves, having secured an option on the property, but from all the facts and circumstances in evidence, the inference is strong that their actual relationship to the owners of the record title was that of real estate agents or brokers. The cause of action alleged in the petition is grounded upon false and fraudulent representations concerning the acreage of the land made by the brokers, and relied upon by plaintiff, who did not discover their falsity until four years later when he sold the land and the true acreage was disclosed by a survey the purchaser caused to be made. Plaintiff alleged, and adduced evidence tending to show, that he purchased the land which was represented as containing 480 acres--the area of three full quarter-sections--at $ 29.16 2/3 per acre, amounting in all to $ 14,000, while in fact, as the survey disclosed, the total acreage was 426.69, or 53.31 acres less than represented. The defendants allege in their answer that the farm was sold in gross for $ 14,000 and not by the acre; that no representations were made concerning quantity and that, if misled, plaintiff, who personally inspected the land during the negotiations and was furnished an abstract of title which stated the area, was the victim of his own negligence. A trial of the issues raised by the pleadings resulted in a verdict and judgment for plaintiff against all of the defendants for $ 1,200 and following the overruling of their motions for a new trial and in arrest of judgment, defendants appealed.

Plaintiff lived in Iowa and was the owner of a farm of 160 acres in that State which he valued at $ 75 per acre and also of a farm of 160 acres in Kansas valued at $ 2000. In the Fall of 1905 he sent a real estate agent of Clarinda, Iowa, to Livingston county with a view to procuring a suitable exchange of his farms for Missouri land. This agent fell in with defendant brokers who showed him lands they had for sale or exchange, including the tract in question which plaintiff's agent testified they represented as containing 480 acres and priced to him at $ 30 per acre. After receiving his agent's report, plaintiff went to Chillicothe and, accompanied by one of the defendant brokers, visited the tract and made as thorough an investigation as possible under the circumstances. He could not accurately estimate the area and in answer to his inquiries was told the whole tract contained 480 acres and that the price was $ 30 per acre. Negotiations ensued which continued several months and finally culminated in an exchange of properties, but not until defendants reduced the price of their land $ 400, and plaintiff the price of his two farms $ 500. Before the exchange was made defendants sent an abstract of title to plaintiff which disclosed that the three quarter-sections were not full quarters and recited facts from which it inaccurately appeared that their gross area was only 407 acres. Without attempting to examine it, plaintiff handed the abstract to an examiner of titles in Clarinda who advised that it be sent to an examiner in Chillicothe as he did not deem himself competent to pass on titles in Missouri. Plaintiff consented and the abstract was forwarded to an examiner of titles in Chillicothe who, in the letters he subsequently wrote to the Clarinda examiner and to the plaintiff about the title, made no reference to the quantity of the land and he evidently understood that his employment was confined to an examination of the title "to the east 3/4 of section 33, township 57, range 22, Livingston county, as shown by the abstract," and did not include the duty of ascertaining the quantity of land embraced by that description. During the four years plaintiff owned and was in possession of the land before he discovered the fraud, the abstract was in the custody of the holder of a deed of trust and was not inspected by plaintiff.

The condition of the tract was such that nothing short of a survey would have informed plaintiff of its actual, or even approximate, area and in the state of facts presented by the evidence of plaintiff, the defendant brokers were guilty of an actionable fraud in falsely representing the acreage to be so materially in excess of its real quantity. Whether willfully made, with knowledge of the true fact, or recklessly, with pretended knowledge, such representations were a fraud upon and an injury to plaintiff who, obviously, was compelled to rely upon them. Under the doctrine of the decision of the Supreme Court in Judd v. Walker, 215 Mo. 312, 114 S.W. 979, there can be no question of the liability of the defendant brokers to respond in damages to plaintiff, unless it should be held that his own neglect to observe ordinary care and prudence for his own protection was the proximate cause of his loss. Of the subject of the legal effect of negligence of a vendee in such case the court says in Judd v. Walker, supra, l. c. 337: "The word 'negligence' used in that connection, as we understand its meaning in the law of negligence, is an unhappy expression. Fraud is a wilful, malevolent act directed to perpetrating a wrong to the rights of another. That such an act in a vendor should not be actionable because of the mere negligence or inadvertence of the vendee in preventing the fraud, ought to be neither good ethics nor good law."

The very end and aim of fraud is to deceive its victim, to lull him into a false sense of security, to induce him to neglect some precaution which, if taken, would protect him against the contemplated injury and to hold that mere negligence on his part thus induced should give sanctuary to the wrongdoer would be to put a premium on rascality and to say that justice is powerless to...