Como Orchard Land Co. v. Markham
| Decision Date | 25 February 1918 |
| Docket Number | 3874. |
| Parties | COMO ORCHARD LAND CO. v. MARKHAM et al. |
| Court | Montana Supreme Court |
Appeal from District Court, Ravalli County; R. Lee McCulloch, Judge.
Action by the Como Orchard Land Company against Stuart H. Markham and another. From judgment for plaintiff, defendants appeal. Reversed and remanded.
Walsh Nolan & Scallon, of Helena, for appellants.
O'Hara & Madeen, of Hamilton, for respondent.
This suit was instituted to foreclose a mortgage given to secure an indebtedness of $4,500. The defendants admit the execution of the notes and mortgage and, by way of affirmative defense or counterclaim, allege: That in May, 1909, they purchased from the plaintiff the lands described in the mortgage and that the indebtedness sued upon represents the unpaid balance of the purchase price. That the lands were sold by plaintiff and purchased by defendants for orchard purposes. That plaintiff agreed to plant the lands to orchards and cultivate them for five years. That defendants were residents of Wisconsin, without experience in fruit raising and without any knowledge of the lands except such knowledge as they gained from the information furnished by plaintiff. That, to induce the purchase, plaintiff represented to defendants (b) that the locality where the lands are situated was a long-tried fruit district, fee from serious crop failures damaging frosts, or harmful pests; (d) that fruits of hardy and semihardy varieties prosper in the locality as nowhere else in the United States; (e) that the demand for Montana grown fruits exceeded the supply and that there was a ready home market at remunerative prices; (g) that orchards operated by plaintiff in the vicinity had been successful yielding large profits on the investments; (h) that apple growing has been very profitable in this vicinity, it being understood that these lands would be devoted principally to apple raising; and (k) that plaintiff had available expert knowledge of the business which would be applied to the end that proper selections of trees would be made and conditions injuriously affecting the industry avoided. It is alleged that all of these representations were false; were known to plaintiff to be false when made; that they were intended to be accepted as true and to be acted upon; that they were believed and acted upon by defendants to their damage, and that but for them the lands would not have been purchased; that defendants were lulled into a sense of security by subsequent statements of the same character and did not discover that they had been imposed upon until within six months of the date this action was instituted.
Upon motion of plaintiff, the trial court struck out all the allegations of misrepresentation and, defendants declining to plead further, suffered judgment to be entered against them and appealed.
The motion to strike has the effect of a demurrer, and for the purposes of this appeal all the allegations stricken are deemed to be true. Reduced to its lowest terms, the question presented is: Are these representations, or any of them, of such character as to furnish the basis for relief under the circumstances?
It is elementary that a person injured by the fraudulent acts of another may elect to rescind or may affirm the transaction and sue for damages. 12 R. C. L. p. 405. In order to state a cause of action for rescission, it is necessary for the complaining party to allege that he has restored to the other party everything of value which was received under the contract, or that he has offered to make restitution upon condition that the offending party do likewise, unless it is made to appear that the latter is unable or positively refuses to do so. Rev. Codes, § 5065; 18 Ency. Pl. & Pr. 829. The counterclaim contains none of these necessary allegations and will not justify rescission.
Does it state a cause of action for damages? It does if the representations are material and it can be said that damages flow therefrom in the sequence of cause and effect.
Probably the most familiar example of fraud consists of telling a deliberate and intentional falsehood concerning a material matter. It is sometimes said that the expression of an opinion furnishes no ground for legal relief to one who relies upon it to his injury. Other authorities, however, modify this rule and limit the immunity to cases where the statement amounts to nothing more than an opinion and the parties have equal knowledge of the subject-matter, or equal means of knowledge. Van Horn v. O'Connor, 42 Wash. 513, 85 P. 260; Aitken v. Bjerkvig, 77 Or. 397, 150 P. 278.
In Butte Hardware Co. v. Knox, 28 Mont. 111, 72 P. 301, this court said:
"Mere expressions of opinion or of judgment do not, except in particular cases, which must be shown by the pleadings, constitute actionable fraud or false representations."
And this doctrine was approved in Ott v. Pace, 43 Mont 82, 115 P. 37. But in neither case was any attempt made to amplify the subject or designate the circumstances...
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