Nelson v. Gjestrum
| Decision Date | 21 June 1912 |
| Citation | 118 Minn. 284,136 N.W. 858 |
| Parties | NELSON v. GJESTRUM. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Blue Earth County; A. R. Pfau, Judge.
Action by Lena Nelson against Martin L. Gjestrum. From an order denying a new trial, plaintiff appeals. Reversed, and new trial granted.
Reynolds v. Franklin, 44 Minn. 30, 46 N. W. 139,20 Am. St. Rep. 540, and Stickney v. Jordan, 47 Minn. 262, 49 N. W. 980, adhered to as to the measure of damages in actions of deceit.
Even if, under the pleadings and evidence in this case, a ruling excluding testimony of impeachment of a witness on the ground that such testimony related to an immaterial matter might be sustained, when, however, after such ruling, the court instructs the jury that the issue to which such impeachment was directed is material, it is held that the action of the trial court becomes prejudicial.
Where the court, before the final argument to the jury, indicates to counsel that his request to instruct the jury would be given to the effect that, if plaintiff was entitled to recover in the action, the measure of damages was the difference between the value of the property she received in the trade and what defendant falsely represented it to be worth, but instead thereof an instruction was given that the measure of damages was the difference between what she gave and what she received, it is held that the party whose counsel was thus misled may claim accident and surprise, resulting in an unfair trial.
No error appears from the conduct of the court when counsel were guilty of improper language during the trial. H. L. & J. W. Schmitt, of Mankato, for appellant.
S. B. Wilson, of Mankato, for respondent.
On December 22, 1910, a contract was made between John J. Nelson, husband of plaintiff, whereby said Nelson agreed to exchange a farm of 211 acres in Nicollet county for a house and lot in Minneapolis owned by defendant. Nelson examined the house and lot before he entered into the contract. It is conceded that he acted for plaintiff in the transaction. A day or two thereafter, and pursuant to the contract, plaintiff conveyed her farm to defendant's wife, and defendant conveyed the house and lot to plaintiff. The allegations of the complaint are that the defendant, with intent to deceive and defraud plaintiff, and inducing her to trade her farm, fraudulently represented that the defendant's house and lot were actually of the market value of $12,000, that it was rented for $83 per month to a bona fide tenant, that he had been offered $100 per month rent, and that he had been offered $7,500 in cash for the lot alone. It is further alleged that the lease was not bona fide, but that defendant had conspired with the tenant to deceive plaintiff into making the trade, and no rent whatever was to be paid; that the rental value was no more than $50, and the premises were of no greater value than $7,500. The defendant answered, denying any false representations, and attempted to set up a counterclaim in regard to misrepresentations of the value, size, and productiveness of the farm exchanged for the house and lot. The trial resulted in a verdict for defendant. Plaintiff appeals from the order denying a new trial.
[1] The assignments of error raise the question of the proper rule of damages in actions of this character. The court in substance instructed the jury that, if plaintiff was entitled to recover, the amount of her damages would be the difference in the market value between the farm she parted with and the house and lot she received. Plaintiff contends that she was entitled to the benefit of her bargain, or, in other words, the recovery, if she established the deceit, should be the difference in the actual market value of the house and lot and what she would have got had the representations been true. Her counsel earnestly insists that the rule of damages adopted by this court in actions of deceit is illogical and wrong, and not in accord with that of many other states, or with the late decisions in the states where the earlier decisions were of the same trend as our rule. And further it is said that this court, by the decisions in Fleckten v. Spicer, 63 Minn. 454, 65 N. W. 926,Brown v. Doyle, 69 Minn. 543, 72 N. W. 814,Scheerschmidt v. Smith, 74 Minn 224, 77 N. W. 34,Howe v. Coates, 90 Minn. 508, 97 N. W. 129, and Stearns v. Kennedy, 94 Minn. 439, 103 N. W. 212, has receded from the rule first established by the decision of Reynolds v. Franklin, 44 Minn. 30, 46 N. W. 139,20 Am. St. Rep. 540. The first three cases cited are all upon covenants or warranties in contracts. In the case of Howe v. Coates, the court, in the language relied on by plaintiff, was referring to a claim for damages which the alleged fraudulent representations could not have caused; and, instead of repudiating the rule of damages established in actions of deceit, as announced in Reynolds v. Franklin, supra, the case of Stickney v. Jordan, 47 Minn. 262, 49 N. W. 980, following it, is cited as the law. In the Stearns Case, supra, there was misrepresentation of the acreage of land conveyed; but the damages asked for this deficiency were less proportionately than the consideration paid therefor. The measure of damages in actions for false and fraudulent representations, inducing a person to make a sale or exchange of property, where such actions are not based on the covenants or warranties in the contract itself, is not the loss of the bargain, but the loss sustained by parting with something of greater value than the value of that obtained in the transaction. It may appear illogical to say that, where one has, without deceit, made a contract for the sale of property, he may, if for some misfortune his title fails, be held to the good bargain made by the other party; but, had he induced such other party to enter the contract by the use of deceit, he is only liable to return what he got in the deal.
As applied to the practical everyday transactions of men, the rule may, however, have its advantages, although justly open to criticism when compared with that which obtains where an action can be predicated upon the breach of an agreement or covenant in a contract. We may suggest that the present case is an illustration of what may be done. The written contract is absolutely silent as to any representations except as to the acreage of the farm, nothing at all as to representations of value or the character of either tenant or the lease, or the house and lot. How, easy, is it not, for the one with the most elastic conscience to establish misrepresentations, and secure large amounts on sharply conceived bargains. If bargains can be recovered for in actions for deceit, may we not look for persons going around seeking opportunities to be duped, so that they may recover for...
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