Rabenau v. Harrell

• Decision Date: 02 June 1919
• Citation: 213 S.W. 92,278 Mo. 247
• Parties: WILLIAM J. RABENAU et ux. v. R. Y. HARRELL, JACKSON-VREELAND LAND COMPANY et al., Appellants
• Court: Missouri Supreme Court

213 S.W. 92

278 Mo. 247

WILLIAM J. RABENAU et ux. v. R. Y. HARRELL, JACKSON-VREELAND LAND COMPANY et al., Appellants

Supreme Court of Missouri, Second Division

June 2, 1919

Appeal from Christian Circuit Court. -- Hon. John T. Moore, Judge.

Affirmed.

C. O French and G. Purd Hays for appellants.

(1) There is no proof that the alleged representations were not true. (2) The alleged representations did not amount to fraud. Loan & Investment Co. v. Trust Co., 175 Mo.App. 646; Younger v. Hodge, 211 Mo. 444; Anderson v. McPike, 86 Mo. 293; Cahn v Reid, 18 Mo.App. 115; Funding & Foundry Co. v Heskett, 125 Mo.App. 536; Cornwall v. McFarland Real Estate Co., 150 Mo. 377; Lee v. McClelland, 120 Cal. 147; Investment Co. v. Shafer, 91 Neb. 798; Morrison v. Koch, 32 Wis. 254; Wade v. Ringo, 122 Mo. 322. (3) The rule of caveat emptor applies. 39 Cyc. 1279; Myers v. Summerville, 85 Mo.App. 187; Lewis v. Brookdale Land Co., 124 Mo. 672; Cahn v. Reid, 18 Mo.App. 121; Dunn v. White, Admr., 63 Mo. 181; Clark v. Edgar, 12 Mo.App. 345; Langdon v. Green, 49 Mo. 368; Morse v. Rathburn, 49 Mo. 91; Anderson v. McPike, 86 Mo. 300; Shappirio v. Goldberg, 192 U.S. 232; Slaughters, Admr. v. Gerson, 13 Wall. (80 U.S.) 379; Southern Surety Development Co. v. Silva, 125 U.S. 247; Farnsworth v. Duffner, 142 U.S. 43; 2 Pomeroy's Equity Jurisprudence, sec. 892; Churchill v. Farrar, 135 U.S. 609; Investment Co. v. Shafer, 91 Nebr. 798; Judd v. Walker, 215 Mo. 312. (4) A party seeking to rescind a contract for fraud must act promptly. 39 Cyc. 1294; Lewis v. Brookdale Land Co., 124 Mo. 687-8; Taylor v. Short, 107 Mo. 384; Key v. Jennings, 66 Mo. 370; Hart v. Handlin, 43 Mo. 175; Cahn v. Reid, 18 Mo.App. 123; Estes v. Reynolds, 75 Mo. 563. (5) A party seeking rescission must return the consideration received by him. Bailey v. Gilman Bank, 99 Mo.App. 571; Lockwood v. Hannibal Ry. Co., 65 Mo. 233; Melton v. Smith, 65 Mo. 324; Woods v. Straup, 63 Mo. 437; Cahn v. Reid, 18 Mo.App. 125; Hancock v. Blackwell, 139 Mo. 453; Jarrett v. Morton, 44 Mo. 275; Och v. Ry. Co., 130 Mo. 48; North v. Stevenson, 71 Mo.App. 432; (6) Plaintiff Grace Rabenau was not a competent witness. (a) Because she was the wife of the real party in interest. Layson v. Cooper, 174 Mo. 211; Roberts v. Bartlett, 190 Mo. 704; O'Bryan v. Allen, 95 Mo. 73. (b) The evidence offered to qualify said plaintiff as a witness was incompetent. Crumb v. Wright, 97 Mo. 13; Turner v. Williams, 67 Mo. 617; Houck v. Patty, 100 Mo.App. 302. (7) Defendants acted in good faith. Funding & Foundry Co. v. Heskett, 125 Mo.App. 531; Wannell v. Kem, 57 Mo. 478; McBeth v. Craddock, 28 Mo.App. 386. (8) Plaintiffs are estopped by the terms of the contract. Peterson v. Landahl, 86 Minn. 32; Anderson v. McPike, 86 Mo. 300; Cahn v. Reid, 18 Mo.App. 127; Myers v. Summerville, 85 Mo.App. 187; Lewis v. Brookdale Land Co., 124 Mo. 672; Wade v. Ringo, 122 Mo. 322.

Roscoe Patterson for respondents.

(1) The representations that the defendant had arranged with the Valley Reservoir & Canal Company for the irrigation of the land in question within ninety days and that the irrigation facilities of said company were ample and adequate to irrigate said lands continuously as needed, is the representation of a material existing fact and where relied upon, as in this case, may be made the basis for rescinding the contract and cancelling the deeds procured through such misrepresentation. Cottrill v. Krum 100 Mo. 397; Clinkenbeard v. Weatherman, 157 Mo. 105; Herman v. Hall, 140 Mo. 270; McGee v. Bell, 170 Mo. 135; Pomeroy v. Benton, 57 Mo. 542; Williamson v. Harrison, 167 Mo.App. 347; Judd v. Walker, 215 Mo. 323; Stonemets v. Head, 248 Mo. 243; Burger v. Boardman, 254 Mo. 238; Laird v. Keithley, 201 S.W. 1142. Even where opinions are given upon matters capable of approximation to the truth and false statements are contained therein for the purpose of deception, and injury follows from reliance thereon, the party has been held liable. Brown v. South Joplin Lead & Zinc Min. Co., 194 Mo. 703; Stonemets v. Head, 248 Mo. 263; Wakefield v. Moore, 186 S.W. 1150. Even a promise of something to be done in the future with no intention to perform it, but with a fraudulent design to obtain a contract by giving the promise and then breaking it, is a ground of rescission. Laswell v. Handle Company, 147 Mo.App. 542; Bank of North America v. Crandall, 87 Mo. 208; Stonemets v. Head, 248 Mo. 263; Howard v. Scott, 225 Mo. 711. (2) The rule of caveat emptor has no application to the case at bar. Judd v. Walker, 215 Mo. 328; Stonemets v. Head, 248 Mo. 262. (3) Respondents acted immediately upon discovering the fraud. 3 Elliott on Contracts, sec. 2431, p. 589; 39 Cyc. 1427-1428; Cantwell v. Crawley, 188 Mo. 57; Hudson v. Cahoon, 193 Mo. 562; Maun Merc. Co. v. Levin, 189 Mo.App. 244. (4) The offer made by respondents in their bill to reconvey the Texas land received in the transaction is a sufficient tender to entitle them to rescission of the contract and cancellation of the deeds given by them. Smith, Law of Fraud, sec. 133, p. 152; 3 Elliott on Contracts, sec. 2436; Hancock v. Blackwell, 139 Mo. 453; Clinkenbeard v. Weatherman, 157 Mo. 105; Enterprise Soap Works v. Sayers, 55 Mo.App. 15. (5) The respondent Grace Rabenau was a competent witness, she being a party in interest. Steffen v. Bauer, 70 Mo. 404; O'Bryan v. Allen, 95 Mo. 704; Layson v. Cooper, 174 Mo. 223.

BOND, C. J. Blair, P. J., and Graves, J., concur; Woodson, J., absent.

OPINION

BOND, C. J.

Plaintiffs, husband and wife, sue to set aside their deed for their farm in Missouri, given in part payment of certain Texas land conveyed to them by the corporate defendant and to recover damages for alleged fraud and deceit, on the part of said defendants in procuring said deed.

The husband, a doctor and farmer living in Webster County, Missouri, was induced to become one of a party of excursionists who were making a trip to Texas to see the lands which the defendant corporation was endeavoring to sell to Missouri and Illinois farmers. These excursions were run at regular intervals, were personally conducted and were made up of persons who were provided, for a stipulated sum, with transportation and provision during such trips. Upon arrival of these parties in Texas, they were met with automobiles in charge of the defendant Jackson-Vreeland Land Company, which took them to see certain "show farms." While visualizing these, the prospective purchasers were told that they represented the average yield of such lands, if adequately irrigated. A prospectus was furnished them, which, among other things, stated as to irrigation, the following:

"The Valley Reservoir & Canal Company was organized for the purpose of furnishing water to our lands. They have installed at the river one of the most modern and complete pumping plants to be found in the valley. To this plant they are continually adding new pumps of the most modern type. . . .

"The natural conditions for irrigation are most ideal, as the land slopes back from the river, the altitude at the city of Edinburgh being but three feet higher than the Rio Grand River at low water stages, the surface of the ground lying so level and perfect that very little or no leveling or grading is necessary to irrigate our different tracts. . . .

"The most expert critics on irrigation, after examining our system, have pronounced it as nearly perfect as human ingenuity can devise.

"Each main canal is of sufficient width and depth, and these with the sub-laterals penetrate every portion of the lands we offer for sale."

While on his way home, on February 21, 1914, Rabenau entered into a contract to exchange his Missouri land for a tract of Texas land. This contract was afterwards abandoned, and on June 3, 1914, plaintiff and his wife entered into a final contract of exchange and executed a deed to their Webster County farm and also a deed to a certain town lot at Fordland, Missouri, subject to a deed of trust thereon.

Plaintiff W. J. Rabenau testified that defendant's agents represented that the Texas land would produce from five to seven crops of alfalfa a year, and cabbages and onions in such quantities as to bring from two hundred and fifty to five hundred dollars an acre. He specifically testified that it was also represented to him by defendant's agents that "they had the best system [for supplying water] in the valley; that they had more water than we could ever use, and the best pumping system in the valley;" that relying on these representations he purchased about seventy-two acres of land, in payment for which he and his wife deeded a town lot to a third party and conveyed their farm, as stated before; that upon his faith in the truth of these representations he became a sales-agent for defendant and sought to aid it in selling its lands to others; that during that time he spent more than five hundred dollars clearing thirty-two acres of the land he had purchased for himself and wife; that discovering later, through statements of Mr. Rutledge, a purchaser, and of defendant's agent Mr. Baker, that the representations made to him as to the water supply and the productivity of the Texas land were false, within three days thereafter he brought the present action.

At the close of the evidence the court found the issues for the plaintiffs and decreed that the deed executed by plaintiffs for their Webster County farm should be cancelled and set aside, and that plaintiffs also recover, as the value of the lot which they had conveyed to a third person, the sum of $ 875 and costs, and that plaintiffs should deposit with the clerk of the court a deed of reconveyance in due form to defendant of the Texas land conveyed to them. Defendants duly appealed.

I. The...