McBee v. Deusenberry

• Decision Date: 19 May 1925
• Docket Number: (No. 5178)
• Citation: 99 W.Va. 176
• Court: West Virginia Supreme Court
• Parties: T. Jud McBee v. S. S. Deusenberry

99 W.Va. 176

T. Jud McBee

v.S. S. Deusenberry

(No. 5178)

Supreme Court of Appeals of West Virginia.

Submitted May 12, 1925.

Decided May 19, 1925.

1. Fraud Misrepresentation Reliance Thereon. One to whom a representation has been made as an inducement to enter into a contract has the right to rely upon it as true quoad the maker, without making inquiry or investigation to determine the truth thereof, (p. 181.)

2. Same False Representation by Vendor of Price Paid for Real Estate When Relied Upon to Injury of Vendee Grounds for Rescission of Contract of Sale. The false representation of a material fact, constituting an inducement to a contract for the purchase of real estate, on which the purchaser had the right to rely, and upon which he did rely, is always ground for a rescission of the contract by a court of equity. Therefore, a false representation by a vendor of the price paid by him for the property, when relied upon by the vendee, who is thereby misled to his injury, is sufficient to warrant a rescission of the contract of sale by a court of equity, upon application therefor by the vendee, (p. 177.)

3. Facts Finding of Circuit Court Conclusive on Appeal. The rule established by the repeated decisions of this Court, both as to law and eqxiity, is that the finding of the circuit court as to facts in issue, unless against the plain preponderance of the evidence, is conclusive on the court of appeals, (p. 182.)

Appeal from Circuit Court, Monongalia County. Suit by T. Jud McBee against S. S. Deusenberry. Decree for plaintiff and defendant appeals.

Affirmed.

Frank Cox, for appellee. Thomas D. Stewart, for appellant. Woods, Judge:

T. Jud McBee instituted his suit in the Circuit Court of Monongalia County praying for the rescission and cancellation of a certain deed for coal lands, on the ground of fraud. From a decree granting the relief prayed for, Deusenberry, the defendant, appeals.

The plaintiff alleged in his bill that S. S. Deusenberry and J. M. Deffenbaugh obtained title to a certain seam of coal in Preston County, by deed bearing date of August 18, 1920; that there had existed for a number of years an intimate and close friendship between Deusenberry and plaintiff, and that said Deusenberry had previously told plaintiff that he was trading in real estate and coal lands, and if he obtained anything that he thought good, he would take plaintiff in on the "ground floor" as he would like to see plaintiff make some money since his return from the war; that Deusenberry approached the plaintiff on August 22, 1920 for the purpose of selling him one-half of his interest, or a one-fourth in the coal above mentioned, and that he represented to the plaintiff that he would sell said one-fourth at exactly what he had paid for it representing that he had paid about $400.00 an acre; that plaintiff had no general knowledge of the coal business and was unacquainted and without knowledge of the coal in question, its character, availability and value; that plaintiff had implicit confidence in defendant's integrity and judgment, and knowing him to be a man, of large experience in buying and selling real estate and coal properties, believed that he would be justified in investing or purchasing said one-fourth interest in said coal and mining rights and privileges; that, relying upon said representations as to price, plaintiff agreed to pay the defendant $6,500.00; that he paid $1,625.00 down, and gave his three several notes in like amounts, payable in one, two and three years, respectively, in payment therefor; that defendant executed a deed to plaintiff for the said one-fourth interest on August 23, 1920; that plaintiff had paid the first of said notes; that he later found that the coal was of less value than he had paid for it; that in fact through defendant's representations he had paid twice the amount the defendant had paid for it; that defendant's statements were false, fraudulent and untrue; that defendant made the representations for the purpose of inducing plaintiff to purchase, and that plaintiff relied on said representations; that the plaintiff did not discover that said representations were false, fraudulent and untrue until shortly before the insti- tution of this suit; that he is willing to return the property if defendant will return the purchase money already paid and deliver up the remaining two unpaid notes; and in the prayer asked that the said deed of August 23, 1920, be cancelled and rescinded and that the purchase money already paid by plaintiff be returned to him, with interest, and that the two unpaid purchase money notes for $1,625.00 each be returned to him, and for general relief.

The defendant filed an answer denying all the allegations in the bill in relation to any and all false and fraudulent transactions, statements and acts, in relation to the transaction, to which answer plaintiff replied generally, and on the issue thereon joined, proof was taken by both plaintiff and defendant.

The bill alleges every essential element necessary to set aside a transaction based on false and fraudulent representation. (1) It alleges that the representation was made; (2) that it was made in relation to a fact existing; (3) that the representation was false; (4) that the representation was material; (5) that the plaintiff relied on such representation and was induced thereby to purchase; and (6) that without such representation the plaintiff would not have purchased. The demurrer was properly overruled. Wilt V. Grim, 87 W. Va. 627; Wamsley v. Currence, 25 W. Va. 543; Crislip v. Cain, 19 W. Va 438; Allen v. Yeater, 17 W. Va. 128; Pomeroy's Eq. Jur., sec, 910.

As tersely stated by the appellant in his brief, the whole case rests on the question of whether or not appellant did make false and fraudulent representations to appellee to induce him to purchase the interest in the coal and mining rights in question, conveyed by the deed of which cancellation is sought.

McBee says that Deusenberry told him that he was selling him the property at $400.00 per acre, which was the price that he had paid for it. It is admitted that the price appellant paid for the property was only $200.00 per acre. Deusenberry denies that he told McBee that he paid $400.00 per acre for it. McBee is corroborated by F. M. Lucas, who overheard a conversation between the plaintiff and defendant at the Elks' Club in Morgantown, which conversation occurred '' in the latter part of the Summer, and I think during the month of August, 1920," according to the witness. Lucas detailed this conversation as follows: "As well as I remember it, Mr. Deusenberry said to Mr. McBee that he had made a good buy; that he was turning the coal in to him at the price he had paid for it, and considered that he made a good buy." The defendant admitted that he made such a statement but stated that it referred to a piece of property adjoining the coal land in question for a right-of-way, and that it was made sometime after the time stated by Lucas. The defendant details the...