Shechter v. Brewer, 23135

• Decision Date: 06 March 1961
• Docket Number: No. 23135,23135
• Citation: 344 S.W.2d 784
• Parties: Nathan R. SHECHTER and Ruth Shechter, Respondents, v. Merl L. BREWER et al., Appellants.
• Court: Missouri Court of Appeals

Page 784

344 S.W.2d 784

Nathan R. SHECHTER and Ruth Shechter, Respondents, v. Merl L. BREWER et al., Appellants.

No. 23135.

Kansas City Court of Appeals, Missouri.

March 6, 1961.

Wm. Coleman Branton, James E. Grier, Kansas City, Brewer, Myers & Branton, Kansas City, of counsel, for appellant Merl L. Brewer.

Barnes Griffith, Jack N. Fingersh, Kansas City, Brown & Koralchik, Kansas City, of counsel, for respondents.

CROSS, Judge

In this action plaintiffs, Nathan R. Shechter and Ruth Shechter, sue defendant Merl L. Brewer, a real estate agent, for damages claimed as a result of alleged false representations made in the sale of a house. Defendant Brewer appeals from the judgment entered on a jury verdict for $2,500 in favor of plaintiffs.

The owners of the house, Frank R. McDermand III and Mariel McDermand, were also named as defendants in the petition. Summons was never served upon defendant Mariel McDermand, and the petition was dismissed as to her before the trial. During the trial, and at the conclusion of plaintiffs' evidence, a verdict was directed in favor of defendant Frank R. McDermand III, and he was dismissed from the case as a defendant.

The essential complaint in the petition is that defendant Brewer, in negotiating the sale of a house to plaintiffs, falsely stated, through employees, in response to specific inquiry by plaintiffs, that the foundation was in good condition, had never settled and had never been repaired; that plaintiffs had no knowledge in the premises, relied on the statements and bought the property; that shortly after taking possession, plaintiffs discovered that the foundation had deteriorated and settled and had been repaired before the negotiations, was in the further process of settling and deteriorating at the time of the negotiations and when the statements were made, and, that after the sale, the foundation continued to settle and deteriorat; that the defendant's false statements were material, were known by defendant to be false, were wilfully and recklessly made to induce the sale, and were relied upon by plaintiffs, to their damage. The case was submitted to the jury on evidence and instructions conforming to the issues raised by the petition.

Defendant's first assignment is that the trial court should have directed a verdict in her favor at the close of all the evidence because (1) plaintiffs failed to prove they were damaged, and (2) plaintiffs failed to prove they had a right to rely on defendant's representations.

In determining the sufficiency of the evidence on those issues, we shall assume as true every fact and circumstance in plaintiffs' favor shown in evidence, and give plaintiffs the benefit of all reasonable evidentiary inferences. All evidence and inferences unfavorable to plaintiff will be disregarded.

Treating the immediate questions in inverse order, we first consider whether plaintiffs proved their right to rely on defendant's representations. From a lengthy transcript we extract these facts:

The physical subject of this law suit is a house owned by Mr. and Mrs. McDermand, former defendants. They bought it in 1953 and sold it to plaintiffs in 1957. They testified that they had 'foundation trouble' in that the foundation had undergone sinking and settlement. That process produced cracks in the house, both exterior and interior. The McDermands had the foundation repaired by Young Construction Company. 'They' put down concrete piers. 'These concrete piers were driven down and footings put underneath the foundation and the house placed upon those new piers'. The McDermands listed the house for sale with defendant Brewer in January, 1956. Mr. McDermand told defendant's employee, O'Brien, that the house had been repaired for settlement damages. O'Brien inquired and was told by Mr. McDermand that Young Construction Company had done the work. Both Mr. and Mrs. McDermand told defendant's employee Ben Heller that the house had been repaired for the settlement damage. Heller admitted: 'Mrs. McDermand told me there had been some repairs made in the basement and had a guarantee for the repairs made'.

In December, 1956, plaintiff Nathan R. Shechter, a physician, and Ruth Shechter, his wife, decided to buy a house and contacted the 'Merl Brewer Realty Company'. Defendant's employee Ben Heller was assigned to the Shechters and showed them about twenty-four homes before showing them the McDermand house. Plaintiffs were 'foundation conscious', and were trying to buy a home which had suffered no foundation trouble. When shown a house by Mr. Heller, they always asked first about whether there had been foundation trouble or repair. Prior to the McDermand transaction, Mr. Heller always answered freely and never hesitated to discuss the subject. 'He had no hesitancy in answering whether they were good, bad or indifferent'.

Heller showed plaintiffs the McDermand house first to Mrs. Shechter in March, 1957. She saw only two conditions which prompted inquiry--a long crack in the basement floor that had obviously been filled in, about two inches wide, and a thin hairline wall crack upstairs, about fourteen inches long. The foundation walls were clean, smooth and white, with no cracks that could be observed. She saw no cracks in the floor other than the one long one. Pursuant to Mrs. Shechter's question, Heller told her the crack in the basement floor was 'due to the expansion under certain weather conditions, that concrete will crack and buckle and this was a result of that'. She asked him if the crack indicated any foundation trouble. He answered that it did not. Mrs. Shechter asked Heller if the foundation had ever been repaired. Heller answered that the foundation was in sound repair and had not been repaired. When Mrs. Shechter asked Heller what caused the crack upstairs, he said it was just an ordinary plaster crack that had nothing to do with any foundation trouble. Later Dr. and Mrs. Shechter returned together with Mr. Heller for another inspection of the house. Dr. Shechter saw the long crack in the basement floor that had been filled, but saw no other cracks in the basement floor, basement walls, or in the walls upstairs. The first question Dr. Shechter asked was whether the foundation had been fixed. Heller emphatically stated that the foundation had not been repaired and that the crack in the floor was due to expansion of the concrete, that you get it in any home that has concrete in it. He said the foundation had never been fixed by putting pillars under the house, but just by fixing the crack in the floor. Dr. and Mrs. Shechter proposed to call in Joe Hoffman, a home builder, to inspect the house for them, but Heller became angry and told them that if they did so he would not sell them the house. They testified they relied upon the statements made by Heller and considered them as statements of fact, as representations of fact, and not as advice and comment, and purchased the house on May 31, 1957.

On behalf of defendant, Ben Heller testified: 'Dr. and Mrs. Shechter as has been testified were very conscious of the condition of the foundations, building and construction due to the drought conditions in the Kansas City area and asked me on many occasions the condition of the various homes at which we looked' * * * 'Mrs. McDermand told me there had been some repair made in the basement and had a guarantee for the repairs made'. He told the Shechters the foundation was in good shape because the basement walls 'were in obvious good condition'.

The foregoing evidence justifies a jury finding that the foundation had suffered extensive damage from settling and that it had undergone major repairs. The jury was privileged to believe that defendant and her two agents, O'Brien and Heller, had full knowledge of those facts. The jury could further find that Heller deliberately and falsely told plaintiffs there had been no settlement damage and no foundation repairs when he knew the truth to be otherwise. Those conclusion, if so reached by the jury, amount of a finding that defendant's agent committed intentional fraud on plaintiffs to procure the sale.

In arguing this point, defendant asserts no absence of fraud, but insists that plaintiffs should have been more diligent in its presence. She says that plaintiffs were not entitled to rely upon 'those representations' of her agent, and argues that even if material fraudulent misrepresentations were made by him, plaintiffs had no business believing them, 'for the law will not allow respondents to ignore what they plainly saw and knew when they made their inspection'.

Defendant takes this position under the general rule that a person to whom false representations have been made is not entitled to rely on them if he could have discovered the truth by exercising ordinary care and prudence, particularly when the means or knowledge are at hand and equally available to both parties, as stated in Hanson v. Acceptance Finance Co., Mo.App., 270 S.W.2d 143, and other Missouri cases. We recognize that broad rule of generality, but cannot accept it without giving effect to other rules and to interpretations which qualify and temper its application.

The tendency of modern decisions is not to extend, but to restrict the rule requiring diligence, and similar rules, such as caveat emptor, and the rule granting immunity for dealers talk; to condemn the falsehood of the fraud feasor rather than the credulity of his victim. It is so declared by Missouri courts. See Monsanto Chemical Works v. American Zine, Lead & Smelting Co., Mo.Sup., 253 S.W. 1006; Aven et al. v. Ellis, 334 Mo. 449, 66 S.W.2d 828; Cantley v. Plattner, 228 Mo.App. 411, 67 S.W.2d 125; 37 C.J.S. Fraud Sec. 30 p. 274. Since the very purpose of fraud is to cheat its victim by making him neglect the care essential to prevent injury, to deny relief because the victim was negligent would encourage the evil. A tort-feasor will not be heard to say that he is a person...