McCaw v. O'Malley
| Decision Date | 09 April 1923 |
| Parties | H. R. McCAW, Appellant, v. WM. F. O'MALLEY |
| Court | Missouri Supreme Court |
Appeal from Phelps Circuit Court. -- Hon. L. B. Woodside, Judge.
Reversed and remanded (with directions).
Lorts & Breuer and Frank H. Farris for appellant.
(1) A seller is liable to an action of deceit if he fraudulently represents the quality of the thing sold to be other than it is, if the buyer has not equal means with the seller of knowing, or if the seller did so in such a manner as to induce the buyer not to make inquiry or investigation, which he would otherwise have done, for his own security. 1 Story's Equity (11 Ed.) pp. 212, 213. The court will not rescind the contract without the clearest proof of the fraudulent misrepresentations, and that they were made under such circumstances as show that the contract was founded upon them. 1 Story's Equity (11 Ed.) p. 213. Courts of equity do not sit for the purpose of relieving parties who refuse to exercise a reasonable diligence of discretion. 1 Story's Equity (11 Ed.) p. 214. (2) The mere puffing or commendation such as gross exaggeration or departure from truth, while reprehensible in morals, are not treated as frauds which will avoid contracts. In such cases, the other party is bound to exercise his own judgment if the matter is equally open to the observation, examination and skill of both. 1 Story's Equity (11 Ed.) pp. 214, 215. (3) The claim of respondent that appellant was guilty of fraud by statements made as to the quality of the land, as to its being bottom land, and the number of acres of such land upon the farm in question is not fraud. The rule is that misrepresentations as to the quality of ground, to work a rescission of a contract, must be a statement thereof, which is material, not the mere expression of opinion, and the purchaser must rely upon the statement and be deceived, and it must be about things which the purchaser cannot discover by ordinary observation, unless the seller, by artifice, prevented the purchaser from discovering the true facts by means of an inspection. 39 Cyc. 1268; 27 R C. L. 371; Clinkenbeard v. Weatherman, 157 Mo. l. c 112; Judd v. Walker, 215 Mo. 326. (4) Respondent also complains that appellant made statements which were untrue as to the value of the land, and for that reason, the contract should be rescinded. If his contention were sustained by the evidence, it would not be sufficient to cancel his contract. A statement as to the value of the property is generally a matter of opinion, and it is assumed that it is so understood by both parties to the transaction. 39 Cyc. 1270, 1271; 27 R. C. L. 377; Stonemets v. Head, 248 Mo. 267; Parker v. Moulton, 14 Mass. 99, 19 Am. Rep. 315. O'Malley in looking over and investigating the character and value of the farm by personal visit and examination before purchase, thereby informing himself as to the value and lay of the farm, did not rely on representations of others, but acted on his own independent judgment, and therefore, he cannot have relief because his bargain proves unsatisfactory to him. Younger v. Hoge, 211 Mo. 444; Curran v. Smith, 148 F. 945; Kline v. Kennedy, 150 S.W. 998; Sohan v. Gibson, 80 S.W. 1173. In dealing with matters of ordinary life, traders must look out for themselves, and a party may exalt the value of his own property to the highest point his prospective purchaser's credulity will bear, without being guilty of deceit rendering him liable before the law. Cornwall v. McFarland R. E. Co., 150 Mo. 377; Anderson v. McPike, 86 Mo. 293; Black v. Epstein, 93 Mo.App. 459; Chase v. Rusk, 90 Mo.App. 25; Harrison v. Waldon, 89 Mo.App. 164. (5) A charge of fraud cannot be based on a representation by the vendor as to what he paid for the land, or what he had been offered for it, or what the land had sold for, to prior owners. 27 R. C. L. 378; Holbrook v. Connor, 60 Me. 578; Bostick v. Lewis, 2 Am. Dec. 80; Cottrell v. Krum, 18 A. S. R. 557. (6) There was no confidential relationship existing between witness King and the respondent. This claim based upon respondent's unsupported statement, and upon no other reason than mere acquaintanceship, and under no claim of employment by respondent of King, nor an agreement between them that King was to act for him; or even that respondent sought advice and counsel from King. All of the statements testified to by respondent as to the declarations of King upon this issue are positively denied by King, and there is no reason apparent from this record why such relation should exist, or did exist, or why respondent should be believed as against the witness King. 8 Cyc. 564. (7) Retention of the property by the purchaser without objections is an admission on his part that the contract has been performed. He cannot accept the property under the contract, retain it after full opportunity for examination as to its quality, and afterwards be heard to urge as a defense that the quality is inferior to that represented by the seller: 3 Elliott on Contracts, sec. 2110; Reed v. Randall, 29 N.Y. 538; Steam Heating Co. v. Gas Fixture Co., 60 Mo.App. 153; Famechon v. Devore, 170 S.W. 699; Long v. International Vend. Co., 139 S.W. 819; Cahn v. Reid & Bungardt, 18 Mo.App. 115, 123; Taylor v. Short, 107 Mo. 384, 393; Hart v. Handlin, 43 Mo. 171; Robinson v. Siple, 129 Mo. 208, 222; Athoff v. Transit Co., 204 Mo. 166; Carson v. Smith, 133 Mo. 614; Och v. Railroad, 130 Mo. 27; Estes v. Reynolds, 75 Mo. 565. And it was his duty upon the discovery of the fraud, first to restore what he had received before asking relief in equity. He cannot both eat his apple and keep it. Miller v. Crigler, 83 Mo.App. 401; Parker v. Marquis, 64 Mo. 38; Melton v. Smith, 65 Mo. 315; Robinson v. Siple, 129 Mo. 208. (8) The contract being one for the sale of lands is clearly within the statute of frauds, and being a contract complete on its face, the court should not have permitted defendant to contradict its plain terms by proof of a parole agreement made either prior or subsequent to its execution. Reigart v. Coal & Coke Co., 217 Mo. 166; Ringer v. Holtzclaw, 112 Mo. 523; Boyd v. Paul, 125 Mo. 9; Standard Fireproofing Co. v. St. Louis Fireproofing Co., 177 Mo. 571; Wilson's Assignee v. Beam, 14 S.W. 362. (9) Respondent pleaded and was permitted to offer proof upon a subsequent parole agreement which varied the terms of the written contract. This was clearly error because there was no new, different or other consideration claimed to have passed to appellant in support of such subsequent agreement, and being without consideration was invalid. Macfarland v. Heim, 127 Mo. 327; 13 C. J. 592; Mt. Vernon Car Mfg. Co. v. Milling Co., 227 S.W. 74. (10) Respondent admitted the execution of the contract with appellant. The proof beyond dispute is that he did not comply with it. He was to give a bankable note and not a solvent one. "A good and bankable note, being such a note as first party will be able to negotiate to the bank for its face value without recourse on said first party." "A bankable note is one receivable as cash by a bank, and a note that banks will not buy is not bankable, regardless of the bank's reasons for refusing to buy, or the high character of the paper." 1 Words and Phrases (2 Ser.) 398; Pasha v. Bohart, 122 P. 284; 76 Ann. Cas. 1913 C, 1250. "Solvency" is generally understood to mean that a person is able to pay his debts as they mature. The term is used too, in a sense importing that one's property is adequate to satisfy his obligations when sold under execution. Vandeventer v. Goss, 116 Mo.App. 316.
J. J. Crites, W. D. Jones and W. L. Hiett for respondent.
(1) The owner of property is bound by the representations of his agent as to extent and value and the price paid for the same. Laird v. Keithley, 201 S.W. 1143; Garretzen v. Duenckel, 50 Mo. 104; Chase v. Rusk, 90 App. 28. (2) False representations of the value of land when relied upon by the purchaser, are statements of fact and not expressions of opinion. The purchaser has a right to rely on the same and they are actionable. Vodicka v. Sette, 223 S.W. 578; Stonemets v. Head, 248 Mo. 263; Laird v. Keithley, 201 S.W. 1142; Judd v. Walters, 215 Mo. 323; Cottrill v. Crum, 100 Mo. 403; Davis v. Foreman, 229 Mo. 27; Licher v. Keeney, 98 Mo.App. 394; Thaler v. Niedermeyer, 185 Mo.App. 274; Addis v. Swafford, 180 S.W. 548; Shinnabarger v. Shelton, 41 Mo.App. 158; Ruddy v. Gumby, 180 S.W. 1043; Luchow v. Brewing Co., 183 S.W. 1125. (3) In a purchase of land, the purchaser is not concluded by a visit to the land, but may rely on the statement of the seller as to the market value of the same. The inspection of the property by respondent did not reveal to him the market value of the same. Vodicka v. Sette, 223 S.W. 582; Laird v. Keithley, 201 S.W. 1138; Judd v. Walker, 215 Mo. 312, 323; Stonemets v. Head, 248 Mo. 243, 258; Rabeneau v. Harrell, 213 S.W. 93. (4) The confidential relations existing between respondent and King gave respondent a right to rely on King's representations. 20 Cyc. 60, 70; 16 Cyc. 176; Stones v. Richmond, 21 Mo.App. 17. (5) The property was tendered to appellant after the discovery of his fraud, by the petition of respondent. Rabeneau v. Harrell, 213 S.W. 93; Burgen v. Boardman, 254 Mo. 257; Davis v. Foreman, 229 Mo. 46; Hays v. Wyant, 202 S.W. 586. Evidence of the fraud before the execution of the contract was properly admitted.
REEVES, C. Railey and Davis, CC., concur.
Action on contract for sale of real estate.
Plaintiff sued for damages for an alleged breach of said contract, and defendant answered by invoking equity for a rescission, on the grounds of plaintiff's alleged failure to perform and for fraud in its procurement. Defendant prevailed...
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