Lewis v. Brookdale Land Co.

• Citation: 28 S.W. 324,124 Mo. 672
• Parties: LEWIS v. BROOKDALE LAND CO.
• Decision Date: 20 November 1894
• Court: United States State Supreme Court of Missouri

28 S.W. 324

124 Mo. 672

LEWIS v. BROOKDALE LAND CO.

Supreme Court of Missouri, Division No. 2.

November 20, 1894.

SALE OF LAND — RESCISSION BY PURCHASER — FALSE REPRESENTATIONS — LOCATION OF MANUFACTORY — LACHES.

1. A manufacturing company contracted for a bonus to build its plant on a land company's land, and to maintain it there for a certain time. To raise the bonus, the land company sold lots, conditioned on the plant being located on certain ground. Held, that the lot purchasers were not parties to the contract requiring the maintenance of the plant for a certain time, so as to authorize them to rescind the purchases in case the plant was abandoned after construction.

2. A land company sold lots on the condition that it would secure the location of a manufacturing plant on certain land; the contract of purchase also providing that the land company should pay the manufacturing company a certain bonus, and should also sell a certain number of lots, from the sales of which the bonus was to be raised. Held that, where the location of the plant was secured, the fact that the requisite number of lots was not sold, or the full amount of bonus paid, was not sufficient ground for the rescission of notes given in completion of the contracts for the sale of the lots, as the latter conditions were merely minor matters conducing to the location of the plant.

3. Nor was the fact that the vendor fraudulently represented that such latter conditions had been complied with ground for the rescission of the notes, as the vendee was not injured by such representations.

4. Where a contract for the sale of lots provides for payment as soon as certain machinery has been received by a manufacturing plant newly established on adjoining ground, false representations by the vendor that such machinery has been received are not ground for rescinding the notes given in payment for the lots, where the vendee, with the means at hand, failed to make an effort to discover the truth of such representation.

5. Delay to sue for the rescission of a contract for the sale of a lot, on the ground of fraud, for 6 months after knowledge of the fraud, and 18 months after the contract has been closed by the execution of the deeds, bars the purchaser's right to such relief.

Appeal from circuit court, Buchanan county; Arch. M. Woodson, Judge.

Action by Fielding H. Lewis against the Brookdale Land Company. There was a judgment for defendant, and plaintiff appeals. Affirmed.

The petition in this case is one in equity, in substance reciting: That defendant is a corporation, and was on the 12th day of December, 1888, the owner of a tract of land called "Brookdale," an addition to the city of St. Joseph. That on that day defendant represented to plaintiff and one Henry W. Westover that it had entered into a contract with the Steel Car Company, a corporation, whereby the said Steel Car Company agreed to establish on land adjoining Brookdale an extensive manufactory of steel railway cars for operation on steam railways, sufficient in capacity for the employment of 500 workmen, and equipped with the best modern machinery, — the buildings to consist of a building 80 feet wide by 800 feet long, with an annex 80 feet wide and 160 feet long, — and to commence the manufacture of cars within six months from December 30, 1888, and to continue to operate the same five years, to a sufficient capacity to give employment to an average of at least 100 employés, upon the condition that defendant should on or before December 30, 1888, secure to it the payment of $50,000. That the defendant further represented that it proposed to raise said sum by the sale of its lots in said addition, which lots and all others therein would be rendered of great value by the construction, operation, and maintenance of said manufactory, and the general business and prosperity of St. Joseph, of which both plaintiff and said Westover were citizens, would be increased thereby. That, by means of said representations, plaintiff and Westover were induced to execute a written agreement of the following tenor: "St. Joseph, Mo., December 13, 1888. We hereby agree to purchase land from the Brookdale Land Company, of St. Joseph, Mo., — lot number eleven (11) in block number nineteen (19), lot number twelve (12) in block number nineteen (19), lot number ____ in block number ____, in Brookdale addition to said city of St. Joseph, — and agree to pay said company therefor the sum of eleven hundred dollars ($1,100.00), one-sixth in cash when the Steel Car Company shall have its buildings inclosed, as per its contract with the said Brookdale Land Company, and one-sixth in cash when the said car company shall receive its machinery at its said buildings, as per said contract, and the balance in one and two years from said last date, with interest at eight per cent. per annum, payable annually, secured by first mortgage on said lots; said Brookdale Land Company to give warranty deed. This agreement to be in force only upon this condition: That said Brookdale Land Company shall sell at least ten thousand front feet of its lots in said Brookdale addition, and donate $50,000 of the proceeds of sales to said the Steel Car Company, and shall secure the location of said car company's works upon the northeast quarter of the northeast quarter of section fifteen (15), township fifty-seven (57), range thirty-five (35), in Buchanan county, Missouri. In witness whereof, we have, on the date aforesaid, hereunto subscribed. Henry W. Westover. Fielding H. Lewis. In presence of J. H. Lewis." That, at the date of said contract, plaintiff and Westover paid defendant one-sixth of the purchase price named in said contract ($183.33), and afterwards, to wit, on the 1st day of July, 1889, defendant falsely represented to plaintiff and Westover that the Steel Car Company had received at its buildings its machinery, sufficient for its manufactory of the capacity aforesaid, and that defendant had already sold 10,000 front feet of its lots in Brookdale addition, and paid the Steel Car Company $50,000. That, relying solely on said representations, plaintiff paid defendant the further sum of $183.33, and he and Westover, with the consent of defendant, divided their interest in said contract, Westover taking lot 11 and the plaintiff taking lot 12, and thereupon defendant conveyed said lot 12 to plaintiff; and plaintiff executed his two notes to defendant, each for $183.33, due, respectively, in one and two years, and secured the same by deed of trust on said lot to W. K. James, trustee. That plaintiff paid said money, took said deed, and executed said notes and deed of trust, relying solely on said representations of defendant, each of which was false, and known to be so by defendant at the time. That defendant knew the Steel Car Company was about to abandon its works, and had no intention of carrying out the contract which defendant represented it had made, and that the Steel Car Company did thereupon abandon its said enterprise. That in purchasing said lots the plaintiff and Westover depended entirely upon the value to be given them by the construction, operation, and maintenance of the factory of the Steel Car Company and upon the fact of the sale of 10,000 feet of the property, as promised, to give them value. That if said contract had been carried out the lots would have been worth the contract price, but that owing to the abandonment of said enterprise the lots are not worth more than $50 each. That plaintiff had tendered to defendant a good and sufficient deed of conveyance of said lot 12, with covenants of warranty against his own acts, and demanded the return of his money and notes, which was refused. The petition concludes: "Wherefore, plaintiff brings said deed so executed by him to said Brookdale Land Company here in court, and tenders the same to said company, and prays that the said Brookdale Land Company be adjudged to pay plaintiff the said sum of one hundred and eighty-three dollars and thirty-three cents ($183.33), with interest thereon at the rate of six per cent. from the time of such payment, and that defendant deliver up said notes to plaintiff, and that the said contract of purchase, notes, and deed of trust be canceled and held for naught, and for all other and proper relief." The answer is a general denial.

After hearing the evidence in the cause the lower court entered the following finding of facts:

"This cause having been submitted to the court upon the pleadings, evidence, and exhibits in the case, all of which having been duly considered by the court, and the plaintiff having requested a special finding of facts and conclusions of law, the court doth now find the facts to be as follows: (1) That on the 4th day of December, 1888, the defendant, the Brookdale Land Company, and the Steel Car Company entered into a written contract wherein it was recited that the said Steel Car Company proposed to establish a plant for the manufacture of railway cars on a certain piece of land therein described. Said contract recited the dimensions of said building, and that the same was to be supplied with the best modern machinery, `sufficient in capacity to employ an average of one hundred employés.' It further recited that land and lot owners in the vicinity of the place where the plant was to be located proposed, by land donations, to assist the enterprise to the extent of $50,000, providing that the citizens of St. Joseph would further aid it by a cash donation of $50,000. It then recited `that the Brookdale Land Company had undertaken to provide said fund of $50,000,' by platting into lots and blocks the land it then owned, and allowing the Steel Car Company, by its agents, to sell to the citizens of St. Joseph ten thousand front feet of said land upon a price therein agreed upon, one-third in cash, balance in two equal payments of one and two years each, secured by deed of trust, and that out of the cash...