Pratt v. Thompson

• Citation: 133 Wash. 218,233 P. 637
• Decision Date: 03 March 1925
• Docket Number: 18919.
• Parties: PRATT et al. v. THOMPSON et ux.
• Court: United States State Supreme Court of Washington

233 P. 637

133 Wash. 218

PRATT et al. v. THOMPSON et ux.

No. 18919.

Supreme Court of Washington

March 3, 1925

Department 2.

Appeal from Superior Court, Lewis County; Hewen, Judge.

Suit by Nelson S. Pratt and others against Alfred F. Thompson and wife. Judgment for plaintiffs, and defendants appeal. Reversed and modified.

Gus L Thacker, of Chehalis, and Hayden, Langhorne & Metzger, of Tacoma, for appellants.

Hull &amp Murray, of Chehalis, for respondents.

HOLCOMB J.

This is an action for damages upon the ground of fraud in the sale of real estate, and for the abatement of the purchase-money notes and mortgage in the amount of the damage found. Appellants deny the material allegations of the complaint and set up two affirmative defenses--laches and the statute of limitation. The trial judge found damages in favor of respondents in the sum of $2,000 and costs, and gave judgment abating the purchase-money note and mortgage against the appellants in that sum. The undisputed facts may be summarized as follows:

In May 1920, respondents approached appellants themselves and negotiated for the purchase of the tract of land consisting of two 40-acre tracts lying side by side, and a strip 7 rods in depth adjoining the 40-acre tracts on the south containing about 5 acres. The purchase price was $12,000, of which $4,500 was paid at the time of the transfer, and the balance secured by a mortgage on the lands conveyed. The controversy wages over the representations as to the location and quality of a spring, so called, which later proved to be not a spring, but a mere pool in the creek which arose outside of the lands in question and flowed down to, and almost coincident with, the south boundary line of the 5-acre tract for a distance, and then turned into the main tract. It later developed that there was no spring there, but that the pool consisted of water seeping into the bed of this continuously flowing stream, and appellants, who owned the land for six years before selling to respondents, always honestly believed the so-called springs to be springs, and their predecessors had bought the 5-acre tract of land for the purpose of owning the spring or source of water supply. The pool and the stream for some distance above it had a high steep bank on one side and was somewhat hidden by brush, trees, and logs. Evidently both appellants and their predecessors believed the water supply to be springs. It cannot be doubted that appellants represented to respondents when viewing the land that the water supply consisted of a spring or springs. Neither can it be doubted that appellants always believed that the source of the water supply, the so-called springs, was upon the 5-acre tract which had been purchased for the sole purpose of owning this water supply, and controlling it by their predecessors. About February, 1923, Mr. Pratt, one of the respondents, went up above the source of the water supply about 150 feet on adjoining land and made a small dam in the course of the stream. When this was done, it was discovered that the spring went dry, or nearly dry. He also discovered that the pool of water or spring was not located on the 5-acre tract, or on any of the land purchased from appellants. A survey by a competent engineer disclosed that the pool of water was located about 9 feet south of the south line of the 5-acre tract. This being reported to appellants, they did not believe the same, and it was agreed that another survey should be made by another engineer selected by appellants, which was done. This second survey corroborated the first survey, and shortly thereafter this suit was brought for damages for misrepresentation.

The contention of appellants that this is not an action on the ground of fraud, and therefore is barred by the statute of limitations of three years, is untenable. An action for damages for deceit and false representations or for rescission based thereon is an action upon the ground of fraud. Bradford v. Adams, 73 Wash. 17, 131 P. 449; Lyle v. Cunningham, 79 Wash. 420, 140 P. 330; Hanson et al. v. Tompkins, 2 Wash. 508, 27 P. 73; Sears v. Stinson, 3 Wash. 615, 29 P. 205; Lawson v. Vernon, 38 Wash. 422, 80 P. 559, 107 Am. St. Rep. 880; Freeman v. Gloyd, 43 Wash. 607, 86 P. 1051; West v. Carter, 54 Wash. 236, 103 P. 21; Stevens v. Sweitzer, 117 Wash. 420, 201 P. 764; Connell v. McGill, 124 Wash. 350, 214 P. 1; Backham v. Koch, 125 Wash. 451, 216 P. 835.

The fraud or misrepresentation not having been definitely disclosed until February, 1923, and the action brought within a short time and within three years thereafter, it is not barred by the statute of limitations.

It is next contended that even though it be an action for fraud, respondents were charged with the duty of diligence in ascertaining the deceit and fraud. 17 R. C. L. § 105, p. 741, is quoted as follows:

' Duty of Discovery of Fraud.--In proceedings for relief on account of fraud, it must appear that the complainant was in ignorance of the fraud and did not have possession of the means of detecting the fraudulent arrangement. The fact that the complaint was ignorant of the fraud until after the right of recovery was barred is not per se sufficient to entitle him to the benefit of this exception, in the absence of any act or conduct on the part of his adversary calculated to mislead, deceive, or lull inquiry. The presumption is that if a party affected by any fraudulent transaction or management might, with ordinary care or attention, have seasonably detected it, he seasonably had actual knowledge of it. Full possession of the means of detecting fraud is deemed the equivalent of actual knowledge. * * *'

There can be no question but that appellants themselves honestly believed that the source of the water supply was upon their land, which they sold to respondents. The 5-acre tract had been bought for the purpose of acquiring the ownership and control of the water supply. Appellants themselves...