Osborn v. Will, 28294.
| Decision Date | 10 April 1931 |
| Docket Number | No. 28294.,28294. |
| Citation | 236 N.W. 197,183 Minn. 205 |
| Parties | OSBORN et ux. v. WILL et al. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Hennepin County; Mathias Baldwin, Judge.
Action by George A. Osborn and wife against Carl H. Will and others. From an order denying their motion for a new trial after defendants' motion for a directed verdict in their favor was granted, plaintiffs appeal.
Order reversed.
Stanley S. Gillam, of Minneapolis, for appellants.
Boutelle, Bowen & Flanagan and James E. O'Brien, all of Minneapolis, for respondents.
Appeal by plaintiffs from an order denying their motion for a new trial.
The action is one to recover damages for fraud, for false oral representations made by defendants to plaintiffs to induce them to purchase two lots and the dwelling house situated thereon in the city of Minneapolis.
Clarke Nicholson and his mother, Antoinette Nicholson (not now a party to the suit), were the fee owners of the property. They had sold it on contract to defendant Carl H. Will, and he and his wife, Helen R. Will, were occupying the premises under the contract. Plaintiffs negotiated with the Wills and Clarke Nicholson for the purchase. On or about August 9, 1924, they entered into the written contract with Carl H. Will and wife for purchase thereof at the price of $14,000. A cash payment of $2,346.38 was made; $5,300 was paid by assuming a mortgage on the premises; $4,353.62 and interest was agreed to be paid to the Nicholsons in monthly payments to pay the balance coming to them under their contract with Will; and $2,000 and interest was agreed to be paid to Mr. Will in monthly payments.
Before signing the contract of purchase, plaintiffs asked defendant Carl H. Will to put in writing his representations as to the basement of the house. He thereupon made and delivered to plaintiffs a writing stating: Plaintiffs moved into the house about September 1, 1924. No water came into the basement during the balance of that year. About December 1, 1924, Mr. Will presented to plaintiffs a written guaranty in the same terms, signed by Clarke Nicholson, but running to both the plaintiffs and himself. He stated that, because he would be out of town so much and Nicholson was right there and handy it would be better for all concerned to have the guaranty signed by Nicholson. Finding this guaranty practically identical with the prior one, plaintiffs received it and returned to Mr. Will the prior guaranty made by him.
1. As already noted, this action is based on the oral representations made, and not upon any guaranty or agreement to repair. The evidence is sufficient to justify the jury in finding that the defendants, in order to induce plaintiffs to purchase the property, made positive oral representations to them that the basement was dry and so waterproofed that no water would enter or stand therein; that these representations were untrue; that water in substantial quantity did seep into and stand in the basement on many occasions in each of the years 1925, 1926, and 1927, and caused damage; that attempted repairs and waterproofings by Nicholson did not remedy the condition. To make out a case of fraud or deceit, the only additional facts necessary for plaintiffs to prove were that they relied upon the oral representations so made, with a reasonable belief in their truth, and were induced thereby to make the contract of purchase. At the close of plaintiffs' evidence, the defendants rested and moved for a directed verdict in their favor, and the court granted the motion. If there was sufficient evidence to go to the jury on the question of plaintiffs' reliance on the oral representations and their being induced thereby to make the contract, then it was error to so direct a verdict.
2. The reasons given by the court for directing the verdict are not here decisive. If, at the close of the evidence, the plaintiffs had not made out a prima facie case, the order directing the verdict was right whether the reasons given by the court were correct or not. On the other hand, a motion for a directed verdict presents only a question of law, and admits, for the purpose of the motion, the credibility of the evidence for the adverse party and every inference which may fairly be drawn from such evidence. If the record discloses evidence, taking the most favorable view of it for the plaintiff, sufficient to sustain a verdict for him, the motion should not be granted. Thompson v. Pioneer-Press Co., 37 Minn. 285, 33 N. W. 856; Bennett v. Syndicate Ins. Co., 39 Minn. 254, 39 N. W. 488; Burud v. G. N. Ry. Co., 62 Minn. 243, 64 N. W. 562; McKenzie v. Banks, 94 Minn. 496, 103 N. W. 497; Lesch v. G. N. Ry. Co., 97 Minn. 503, 106 N. W. 955, 7 L. R. A. (N. S.) 93; Krenz v. Lee, 104 Minn. 455, 116 N. W. 832; Woodworth Elev. Co. v. Theis, 109 Minn. 4, 122 N. W. 310; Ellertson v. Roholt, 109 Minn. 241, 123 N. W. 811; Knudson v. G. N. Ry. Co., 114 Minn. 244, 130 N. W. 994; Arnold v. Dauchy, 115 Minn. 28, 131 N. W. 625; Jensen v. Fischer, 134 Minn. 366, 159 N. W. 827; Olsson v. Midland Ins. Co., 138 Minn. 424, 165 N. W. 474.
3. It was not necessary to prove that the representations were known by defendants to be untrue or made in bad faith. Defendants were owners and occupants of the property, and plaintiffs would have a right to rely on their representations. Bullitt v. Farrar, 42 Minn. 8, 43 N. W. 566, 6 L. R. A. 149, 18 Am. St. Rep. 485; Miller v. Bricker, 117 Minn. 394, 136 N. W. 14; Wann v. Northwestern Trust Co., 120 Minn. 493, 139 N. W. 1061; Jacobson v. C., M. & St. P. Ry. Co., 132 Minn. 181, 156 N. W. 251, L. R. A. 1916D, 144, Ann. Cas. 1918A, 355; Schlechter v. Felton, 134 Minn. 143, 158 N. W. 813, L. R. A. 1917A, 556; Shane v. Jacobson, 136 Minn. 386, 162 N. W. 472; Helvetia Copper Co. v. Hart-Parr Co., 137 Minn. 321, 163 N. W. 665; Perkins v. Orfield, 145 Minn. 68, 176 N. W. 157; Ristvedt v. Watters, 146 Minn. 146, 178 N. W. 166; Tischer v. Bardin, 155 Minn. 361, 194 N. W. 3; Saupe v. St. Paul Trust Co., 170 Minn. 366, 212 N. W. 892.
4. It is urged that there is not sufficient evidence to justify the jury in finding that plaintiffs believed and relied upon the representations made, and, in that connection, it is urged that the evidence conclusively shows that plaintiffs relied wholly upon the guaranty. Both plaintiffs testified that they believed and relied upon the oral representations. The only evidence tending to the contrary is a statement brought out on cross-examination of the plaintiff Grace Osborn that she did not think she would have gone on with the contract if defendant Will had refused to give the written guaranty; that, if he had refused, they would have felt suspicious and have been afraid. She did not otherwise testify to any reliance on the guaranty, and plaintiff George Osborn did not give any such testimony. There is the additional fact that, after receiving the Clarke Nicholson guaranty in December, 1924, the plaintiffs, during 1925, 1926, and 1927, called upon him to make good under the guaranty agreement. This evidence went no further than to make it a question of fact for the jury whether plaintiffs relied upon the oral representations made. Even if the jury found that plaintiffs relied in part upon the guaranty and in part upon oral representations, recovery could be had. Meland v. Youngberg, 124 Minn. 446, 145 N. W. 167, Ann. Cas. 1915B, 775; Kraus v. National Bank of Commerce, 140 Minn. 108, 167 N. W. 353; Old Colony Life Ins. Co. v. Moeglein, 165 Minn. 117, 205 N. W. 885.
5. The fact that one who has been defrauded has a remedy on the contract or on a guaranty or warranty is not any impediment or defense to an action for the fraud or deceit. Hedin v. Mpls. Medical & S. Inst., 62 Minn. 146, 64 N. W. 158, 35 L. R. A. 417, 54 Am. St. Rep. 628; 27 C. J. 17, § 127, citing Graham v. Shay, 61 Or. 133, 121 P. 413; Ives v. Carter, 24 Conn. 392, and other cases. See also Williams v. Wilson, 101 Ill. App. 541; Antle & Bro. v. Sexton, 137 Ill. 410, 27 N. E. 691; Hitchcock v. Gothenburg, W. P. & I. Co., 4 Neb. (Unof.) 620, 95 N. W. 638.
6. Where there is a warranty or guaranty covering the same matter as the oral fraudulent representations and the defrauded party relied solely on the warranty or guaranty, there can be, of course, no recovery for the fraud. But these are ordinarily questions of fact for the jury. So, in McNaughton v. Conkling, 9 Wis. 316, it was held error for the trial court to refuse to submit to the jury the question of whether plaintiff relied solely on the guaranty; and in Holdom v. Ayer, 110 Ill. 448, a verdict based on the finding by the jury that plaintiff relied solely on a guaranty and not on the representations was sustained. See, also, 26 C. J. 1165, § 76½, and cases cited in note 47.
The case of Elphick v. Hoffman, 49 Conn. 331, is not in conflict with the rules stated. The court there said: "If the alleged false representations did not induce the respondent to make the purchase, then it is a case of fraud without damage." In that case respondent sued both for fraud and breach of warranty. The court held that he could not recover on both grounds. The trial court also had found in that case that there was no fraud, and that finding disposed of the case.
It is argued that plaintiffs had made an independent investigation and relied thereon. The evidence is not sufficient to show, as a matter of law, that they relied upon such investigation.
7. It is claimed that plaintiffs were granted favors in the way of an extension of time of payment. Plaintiffs did, in 1927, refuse to make further payments, and stated they would get out of the premises. Nicholson said he would get them out of there by fall, and that they need...
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