Kendrick v. Ryus

• Citation: 123 S.W. 937,225 Mo. 150
• Parties: C. H. KENDRICK, Trustee, v. W. H. RYUS, Appellant
• Decision Date: 04 January 1910
• Court: United States State Supreme Court of Missouri

123 S.W. 937

225 Mo. 150

C. H. KENDRICK, Trustee, v. W. H. RYUS, Appellant

Supreme Court of Missouri, First Division

January 4, 1910

Appeal from Jasper Circuit Court. -- Hon. Hugh Dabbs, Judge.

Affirmed.

McIndoe & Thurman for appellant.

(1) The court erred in permitting Kendrick to testify what the mine would have been worth if as represented, and erred in permitting Lyman to testify what the mine would have been worth if as represented. It was incompetent and the value was purely speculative. The value was fixed at $ 4,000, being the amount paid by plaintiff to appellant. Smith v Bowles, 132 U.S. 125; 2 Greenleaf on Evidence, sec. 256; Carter v. Binnegar, 33 N. J. L. 515; Sigafus v Porter, 179 U. S. P. 117; Rockefeller v Merritt, 40 U. S. App. 666; High v. Barrett, 148 Pa. St. 261. (2) Instruction 3 told the jury that in estimating the damages they should allow the plaintiff the difference between the actual value of the property purchased and what the property would have been worth if as represented by the defendant. Said instruction was wrong as a matter of law and is reversible error. It permitted the recovery of speculative profits. This instruction was based upon the theory of plaintiff's petition. There was no limit on the damages, and it left the jury to guess and speculate on the amount. See authorities above. (3) The measure of damages in all cases is a question of law, and if the court undertakes to instruct the jury on the question, it must do so fully and properly. Kick v. Doerst, 45 Mo.App. 141; Schneuit v. Buggestradt, 8 Mo.App. 47; Matley v. Gregg, 19 Mo.App. 107; Williams v. Iron Co., 30 Mo.App. 662; Friend v. Railroad, 38 Mo.App. 94; Wilburn v. Railroad, 36 Mo. 302. (4) Instruction 3 was improper under the pleadings and the evidence in the case. The mine was sold for $ 4,000, and the instruction cannot be supported on the theory of the Missouri cases. The Missouri cases that apparently support this instruction are upon the doctrine of estoppel and where property had been exchanged at an agreed or fixed price. Caldwell v. Henry, 76 Mo. 254; Shinnebarger v. Sheldon, 41 Mo.App. 157; McBeth v. Craddock, 28 Mo.App. 397; Bank v. Byers, 139 Mo. 627. (5) The court should have sustained demurrer at the close of the plaintiff's evidence and should have given instruction 1 for the defendant at the close of all the evidence, because the plaintiff made an investigation for himself and sought information from others, and the representations which plaintiff alleges defendant made were purely matters of opinion and cannot be the basis for an action in fraud. Brown v. South Joplin Lead & Zinc Co., 194 Mo. 681; Lewis v. Land Co., 124 Mo. 687; Farnsworth v. Duffner, 142 U.S. 33; Farrar v. Churchill, 135 U.S. 639; Anderson v. McPike, 86 Mo. 300; Bigelow on Fraud, secs. 172-490-491; Gordon v. Butler, 105 U.S. 556; Harrison v. Walden, 89 Mo.App. 171; Cornwall v. Real Estate Co., 150 Mo. 383; Wilson v. Jackson, 167 Mo. 153; U.S. Development Co. v. Silva, 125 U.S. 259; Stratton's Independent v. Dines, 126 F. 968.

Thomas & Hackney for respondent.

(1) The defendant's demurrer to the evidence was properly overruled. The testimony was ample to sustain the allegations in the petition to the effect that defendant had sold plaintiff a cut out mine, honeycombed with drifts at various levels from each of the shafts, and that all of the ore had been taken out by the defendant except a small bunch which defendant had left uncut to show a purchaser, and that this bunch of ore was surrounded by drifts. The defendant, with this knowledge, and knowing plaintiff's ignorance of the true condition of the ground, fraudulently represented to plaintiff that no drifts had been cut and that no ore had been taken out except such as was on the dump piles, and that the ground was virgin ground. When the plaintiff suggested the propriety of getting a mining expert to examine the ground the defendant dissuaded him from doing so, and induced him to take the property on the faith of the false representations made by the defendant. It's a clear case of positive and intentional fraud. (2) Instruction number three, given for plaintiff, correctly stated the law as to the measure of damages. In an action for damages for fraud and deceit the measure of damages is the difference in the actual value of the thing sold and what it would have been worth had it been as represented. This is the rule in Missouri, established by an unbroken line of decisions. Langdon v. Green, 49 Mo. 363; Caldwell v. Henry, 76 Mo. 254; Bank v. Byers, 139 Mo. 659; Brownlee v. Hewitt, 1 Mo.App. 360; Shultz v. Christman, 6 Mo.App. 338; Anslyn v. Frank, 8 Mo.App. 242; McBeth v. Craddock, 28 Mo.App. 380; Patton v. Penquite, 32 Mo.App. 595; Shinnabarger v. Shelton, 41 Mo.App. 147; Hitchcock v. Baughan, 36 Mo.App. 216. This rule is adopted by the best text-writers on this subject. 4 Sutherland on Damages (3 Ed.), sec. 1171, pp. 3400-3410; 3 Sedgwick on Damages (8 Ed.), sec. 1027; 2 Sedgwick on Damages (8 Ed.), sec. 777; 1 Bigelow on Fraud (1888 Ed.), pp. 627-8; 14 Am. & Eng. Ency. Law (2 Ed.), p. 182; Kerr on Fraud and Mistake (2 Ed.), p. 410. This rule has long been established and is supported by decisions in the courts of last resort of a great majority of the states of the Union. Foster v. Kennedy, 38 Ala. 359; May v. Dyer, 57 Ark. 441; Ahrens v. Adler, 33 Cal. 608; Herfort v. Cramer, 7 Colo. 483; Gustafson v. Rustemeyer, 70 Conn. 125; Williams v. McFadden, 23 Fla. 143; Gaulden v. Shehee, 24 Ga. 438; Estes v. Odom, 91 Ga. 600; McCrary v. Pritchard, 119 Ga. 876; Drew v. Beall, 62 Ill. 164; Antle v. Sexton, 137 Ill. 410; Sangster v. Prather, 34 Ind. 504; Nysewander v. Lowman 124 Ind. 584; Moberly v. Alexander, 19 Iowa 162; White v. Smith, 54 Iowa 233; Speed v. Hollingsworth, 54 Kans. 436; Drake v. Holbrook, 66 S.W. 512; Wright v. Roach, 57 Me. 600; Morse v. Hutchins, 102 Mass. 439; Nash v. Title Ins. & T. Co., 163 Mass. 574; Page v. Wells, 37 Mich. 415; Jackson v. Armstrong, 50 Mich. 65; Totten v. Burhaus, 91 Mich. 496; Estell v. Myers, 54 Miss. 174, 56 Miss. 800; Woolman v. Wistbaugh, 22 Neb. 490; Lunn v. Shermer, 93 N.C. 164; Noyes v. Blodgett, 58 N.H. 502; Crosland v. Hall, 33 N.J.Eq. 111; Van Epps v. Harrison, 5 Hill, 63; Krumm v. Beach, 96 N.Y. 398; Ettlinger v. Weil, 184 N.Y. 179; Fargo Gas & Coke Co. v. Fargo Gas & Elec. Co., 4 N.D. 219; Linerode v. Rosmussen, 63 Ohio St. 545; Lukens v. Aiken, 174 Pa. St. 152; Beasley v. Swinton, 46 S.C. 426; Hogg v. Cardwell, 4 Sneed (Tenn.), 151; Hecht v. Metzler, 14 Utah 408; Shanks v. Whitney, 66 Vt. 405; Krause v. Busaker, 105 Wis. 350. The contrary rule, laid down by the Supreme Court of the United States in Smith v. Bowles, 132 U.S. 125, limiting the recovery to the difference between the actual value and the price paid, has met with favor in but very few jurisdictions and is opposed by the text-writers. 4 Sutherland on Damages (3 Ed.), p. 3410; 2 Sedgwick on Damages (8 Ed.), sec. 781.

OPINION

GRAVES, J.

This is an action for fraud and deceit in the sale of a lease on certain mining lots in Jasper county, Missouri. 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 $ 1000 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 cut 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...