Kendrick v. Ryus

• Decision Date: 01 July 1909
• Citation: 123 S.W. 937
• Parties: KENDRICK v. RYUS.
• Court: Missouri Supreme Court

123 S.W. 937

KENDRICK v. RYUS.

Supreme Court of Missouri, Division No. 1.

July 1, 1909.

1. FRAUD (§ 59) — MEASURE OF DAMAGES FOR DECEIT — SALE OF LAND.

The measure of damages for deceit, inducing the purchase of an interest in land, such as a mining lease, is the difference between the actual value of the property when purchased and what it would have been worth if as represented, and not the difference between the price paid and the actual value of the property.

2. FRAUD (§ 59) — SPECULATIVE DAMAGES.

In an action for deceit, inducing the purchase of a mining lease, the evidence tended to show that plaintiff was shown a drift which contained rich ore, out of which plaintiff took some $16,000 worth of ore in a short time, and that defendant told him that the surrounding ore had not been mined, and that the ore had not been taken from two other shafts which could not then be inspected. Held, that damages based on an estimate of what the lease would have been worth if the land contained ore as represented was not speculative.

3. FRAUD (§ 11) — MISREPRESENTATIONS — OPINIONS.

Statements made by defendant to induce the purchase of a lease of mining land that the ground had not been mined, and had been prospected to the ore without removing any of it, were representations of fact, and not of opinion, and afforded a cause of action for deceit.

4. TRIAL (§ 296) — INSTRUCTIONS — CURE OF ERROR.

In an action for deceit, inducing the purchase of a mining lease, the court instructed that "if the jury found that defendant falsely stated to plaintiff that the ore shown to him in the drift extended over the area included in shafts theretofore sunk," "and" that no drifts had been cut except that shown plaintiff, and nothing done except sinking the shafts; that no ore had been taken out, and there was similar ore at a lower level; and if the jury further believe that plaintiff believed and relied on such representations and was induced thereby to purchase the property, and afterwards, relying thereon, took possession and developed it, and such representations were false, etc. — the jury should find for plaintiff. Held that, even if the evidence showed that the statement in the quoted part of the instruction was merely an opinion and not actionable, the jury could not find thereunder for plaintiff, since the use of the conjunctive "and" throughout the remainder of

the instruction required a finding of the facts stated, which the evidence showed were statements of fact, in order to find for plaintiff, so that the quoted part of the instruction was not reversible error.

5. TRIAL (§ 261) — INSTRUCTIONS — REQUESTS — PARTLY ERRONEOUS.

Instructions requesting the withdrawal of both improper and proper evidence were properly refused.

6. FRAUD (§ 65) — INSTRUCTIONS.

Where, in an action for deceit, inducing the purchase of a mining lease, the evidence showed that defendant, though he had previously executed a lease and bill of sale to the land to R. who had deposited $500 thereon, afterwards showed the land to plaintiff, and made certain representations to him, and that plaintiff paid the full price to defendant who repaid to R. the $500 deposited, and the lease and the bill of sale to R. were never delivered, an instruction that if defendant made a bill of sale and executed a lease to R., and deposited it in a bank, and he paid defendant $500 on the price, and, before doing so, defendant made no representations to R., and at plaintiff's request R. secured an extension of time to purchase the property for R. and plaintiff, and plaintiff purchased it pursuant to such agreement, the jury should find for defendant, was properly refused.

Appeal from Circuit Court, Jasper County; Hugh Dabbs, Judge.

Action by C. H. Kendrick, Trustee, against W. H. Ryus. From a judgment for plaintiff, defendant appeals. Affirmed.

McIndoe & Thurman, for appellant. Thomas & Hackney, for respondent.

GRAVES, J.

This is an action for fraud and deceit in the sale of a lease on certain mining lots in Jasper county, Mo. Plaintiff sues as trustee for himself and other parties interested with him in the deal. Defendant had acquired a previous lease on the premises, and afterward had acquired the fee interest in the land, so that at the time he was in position to make a lease to plaintiff. Defendant had been mining upon a portion of the lots in question, and had agreed to give one Roby a lease on the same for the price and sum of $4,000. With the lease, was to go certain mining machinery. Roby was to put up and did put up $500, and was given time to pay the remainder, which time was later extended. Defendant contends that he had no dealings with plaintiff, but that he sold the lease to Roby who in turn sold to plaintiff. The evidence is conflicting upon this point; Roby claiming that he put up the $500 as the price of an option on the lease, and that defendant understood that he (Roby) was going to get some other party or parties to take it. The final outcome was that defendant did execute a lease and bill of sale direct to C. H. Kendrick, trustee, and Kendrick paid him $4,000 by check, and directed Ryus to pay back to Roby the $500 put up by him, which was done by a check from Ryus. Plaintiff charges that defendant falsely and fraudulently represented to him that the lots in question had not been previously mined; that in several of the shafts thereon he had struck good ore in developing them, but had not taken it out; that he (plaintiff) could take out $1,000 per week for three years. Plaintiff went down into one shaft, the only one at the time which could be entered, and found therein very rich ore. He then avers that he asked defendant if the vein had been out or worked other than he then saw it, and was informed that it had not been; that, as a matter of fact, the defendant had caused the drift to be closed up so as to keep plaintiff from seeing that the drift where this pocket of rich ore was had cut into another drift; that defendant had caused the bottom of the drift to be covered with mineral to deceive him; that upon taking possession he afterward discovered that all these, as well as many other, representations made by defendant were untrue; that he discovered that there was but a small pocket of rich ore, which was surrounded with drifts theretofore made, of all of which defendant had knowledge. The charges of false representations in the petition are so numerous that it would be a useless task to reiterate all of them. Suffice it to say that defendant by proper answer raised issue therewith, and the proof thereon is conflicting; plaintiff's proof tending to show not only that the alleged representations were made, but also the falsity thereof, and defendant's evidence tending to show that the representations were not made. There is evidence in the record upon which a verdict might have been found either way, but in our judgment the weight of the evidence seems to have been with the plaintiff. Plaintiff averred and proved that he expended $5,000 on the lease before he discovered the fraud and deceit, and says that he netted from ore taken out about $1,000. He also charges that had the property been as represented it would have been of the value of $16,000, and prays for judgment in the sum of $19,000. Defendant by answer denied all things in the petition averred. He also pleads that there was no privity of contract between him and plaintiff, but avers that he traded with Roby, and that Roby traded with plaintiff. And he then pleads that both Roby and plaintiff had knowledge of all the facts and conditions pertaining to the property before said lease was made. Verdict and judgment was for the plaintiff in the sum of $7,000, from which defendant has appealed. Alleged errors will be noted in their order.

1. Of prime importance is the challenge which defendant makes to the instruction on the measure of damages. For the plaintiff, the court instructed thus: "If the jury find the issues for the plaintiff, then, in assessing plaintiff's damages, they should allow him the difference, if any, between the actual value of the property purchased by him from the defendant at the time of the purchase and what the said property would have been worth if it had been as represented by the defendant, the damages on such account not to exceed the sum of $15,000, together with such further sum, if any, as you may find from the evidence that the plaintiff necessarily expended in sinking shafts and drifting on said mining lots up to the time plaintiff discovered the falsity of said representations, if you find they were false, deducting from the amount of such expense the moneys received by the plaintiff from ore sales, less royalties paid, the damages on that account not to exceed the sum of $4,000; and the aggregate damages on the above accounts not to exceed the sum of $19,000." Defendant contends that this instruction erroneously states the measure of plaintiff's damages. He contends that in actions for fraud and deceit the measure of damages is the difference between the price paid and the actual value of the property received. It should be noted that the defendant was selling a 10 years' lease, which is an interest in lands. By this lease the plaintiff, in addition to the contract price of $4,000 for the lease, was to pay defendant a fixed royalty on the ore taken out from the premises. The $4,000 was therefore the purchase price of the lease, as distinguished from the moneys to be paid and the things to be done under the lease, after its purchase and execution. This action is not to rescind the contract, but an action ex delicto for damages sustained by reason of fraud and deceit used at the time the contract was made. Plaintiff was a stranger in the community and had at the time no knowledge of mining. Defendant was an experienced miner in Jasper county.

The cases are not all harmonious upon the question of the measure of damages in a case of fraud...