Robertson v. Frey

• Decision Date: 20 October 1914
• Citation: 144 P. 128,72 Or. 599
• Parties: ROBERTSON v. FREY.
• Court: Oregon Supreme Court

144 P. 128

72 Or. 599

ROBERTSON v. FREY.

Supreme Court of Oregon

October 20, 1914

Department 2.

Appeal from Circuit Court, Marion County; Percy R. Kelly, Judge.

Action by J. C. Robertson against L. B. Frey. From a judgment for plaintiff, defendant appeals. Affirmed.

This is an action of damages for fraud and deceit. The cause was tried to the court and jury and a verdict rendered in favor of the plaintiff. From a judgment rendered thereon, the defendant appeals.

It is alleged in the complaint (paragraph I), in substance, that in April, 1912, the plaintiff and the defendant entered into an agreement whereby the former agreed to sell and convey to the latter certain described real property in the city of Salem Or., together with the improvements and buildings thereon and a small stock of groceries, general merchandise, and fixtures, at the agreed price of $3,700; that the defendant agreed to purchase the same and pay therefor in the following manner, namely: $1,200 in cash, and a deed of conveyance to the plaintiff of 40 acres of land in Monona county, Iowa, at the price of $2,500; that the defendant, in order to induce the plaintiff to enter into such agreement, represented that the land in Monona county contained 40 acres and was worth at least $2,500. It is then alleged that the said representations were, and the defendant knew them to be false, and that they were made for the purpose of inducing the plaintiff to enter into the agreement, and for the purpose of misleading and deceiving him; that the plaintiff relied upon such false representations; that the plaintiff performed his part of the agreement, and the defendant paid the sum of $1,200 and delivered to the plaintiff a deed of the land in Iowa which purported to convey 80 acres instead of 40; that the plaintiff called the attention of the defendant to this discrepancy and the latter explained that there were more than 40 acres in the tract, but that part of the land was not claimed by the defendant and was in question concerning a right of way, but that the defendant had a good title to at least 40 acres; that the plaintiff had never seen the land and was compelled to and did rely upon the representations made by the defendant concerning the property and the value thereof, and was deceived thereby; that the land in Iowa is utterly worthless, for the reason that it is located on the bank of the Missouri river and is being washed away gradually; that during the year 1911 the river washed away six acres of the tract and that now there are not more than 25 acres left; that by reason of its location, its gradual destruction by the river, and the want of a right of way or road for ingress and egress, the land is not worth $2,500, or any other sum.

It is also further alleged that at one time prior to the commencement of this action the plaintiff demanded from the defendant a rescission of the agreement, but that the defendant refused to rescind the same or to restore to the plaintiff any part of the property conveyed to the defendant that the plaintiff and wife duly executed a quitclaim deed conveying to the defendant the land in Monona county, Iowa and offered to deliver the same to him, requesting the repayment of $2,500, which the defendant refused; that the plaintiff deposited the deed with the clerk of the court for it to be delivered upon the repayment of said sum of $2,500. The defendant answered and admitted all of paragraph I of the complaint, except the following: He denied that he represented the tract of land in Monona county, Iowa, to contain 40 acres, or any number of acres, or that he represented it to be worth at least $2,500, or any other sum, or that the plaintiff relied thereon. The defendant denied the remainder of the complaint, except that he represented to the plaintiff that his father paid $2,500 for the land, denying that such representation was false. There was some conflict in the evidence upon the issue as to what representations were made by the defendant.

George G. Bingham and Harold D. Roberts, both of Salem (Rollin K. Page, of Salem, on the brief), for appellant. Carson & Brown, of Salem, for respondent.

BEAN, J. (after stating the facts as above).

That this is not an action of damages for fraud and deceit, but is in the nature of a suit to rescind a contract, is the alleged error upon which the defendant more particularly relies. This we understand is on account of the allegation in the complaint, to the effect that the plaintiff demanded a rescission, offered a deed to the defendant of the Iowa land, and requested a repayment of $2,500. If this paragraph of the complaint should be treated as surplusage, there would remain sufficient for an action of damages for fraud and deceit.

In an action for deceit it is necessary to allege that the representations were false; that the defendant knew them to be false; that they were made with the intent to defraud; and that the plaintiff relying thereon was induced to enter into the contract. Rolfes v. Russel, 5 Or. 400; Dunning v. Cresson, 6 Or. 241.

Misrepresentations of material matters recklessly made as of one's own knowledge, without in fact knowing whether they are true or not, render the maker liable to one who relies and acts thereon to his injury. Cawston v. Sturgis, 29 Or. 331, 43 P. 656. The court's instructions upon this point were to this effect, and they are approved.

If land contracted for is at a distance, or if the statement of the value is based upon and connected with specific representations as to location, condition, and the like, or the conditions are such that the purchaser cannot make an examination, a false statement as to the value of the property contracted for will constitute fraud. 39 Cyc. p. 1271; Montgomery v. McLaury, 143 Cal. 83, 76 P. 964; Lamb v. Levy, 77 Wash. 511, 137 P. 1024.

The plaintiff offered in evidence the quitclaim deed referred to, which was admitted over the objection and exception of the defendant's counsel. The action for damages is predicated upon an affirmance of the contract, and not upon a rescission. Scott v. Walton, 32 Or. 460, 52 P. 180; Van de Wiele v. Garbade, 60 Or. 585, 120 P. 752. We think this evidence was irrelevant, but that its admission did not amount to a reversible error.

It is urged that the trial court erred in instructing the jury that:

"The measure of damage in this case is the difference between the value of the land as it would have been if it was as represented and its actual market value. The purpose of making the award of damages in this

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