Sibley v. Southland Life Ins. Co., 5340.

• Decision Date: 18 February 1931
• Docket Number: No. 5340.,5340.
• Parties: SIBLEY v. SOUTHLAND LIFE INS. CO.
• Court: Texas Supreme Court

36 S.W.2d 145

SIBLEY v. SOUTHLAND LIFE INS. CO.

No. 5340.

Supreme Court of Texas.

February 18, 1931.

Error to Court of Civil Appeals of Eighth Supreme Judicial District.

Suit by the Southland Life Insurance Company against S. W. Sibley and another. To review judgment of the Court of Civil Appeals [11 S.W.(2d) 250], affirming judgment for plaintiff, the named defendant brings error.

Reversed and remanded.

I. M. Williams, of Dallas, for plaintiff in error.

Seay, Seay, Malone & Lipscomb, of Dallas, for defendant in error.

HARVEY, C.

This is an action for deceit founded upon a false representation and a false promise made by the plaintiff in error S. W. Sibley and the Kean Lumber Company to the defendant in error, the Southland Life Insurance Company, in a land transaction. The insurance company recovered judgment for damages against both defendants. Sibley alone appealed, and the judgment was affirmed by the Court of Civil Appeals. 11 S.W.(2d) 250.

In its petition, the insurance company alleges, and the proof shows, that Sibley engaged one J. C. Ellis, a joint broker for all the parties, to negotiate a trade of twenty-two houses and lots in San Jacinto Lawn, an addition to the city of Dallas, for certain lands belonging to the insurance company. Title to the San Jacinto Lawn property was vested in the Kean Lumber Company, a corporation, in which Sibley was heavily interested. The property was incumbered by liens securing various notes, aggregating $96,800, upon some of which Sibley was primarily liable as maker. It was falsely represented by Sibley and the lumber company that each of the twenty-two lots was improved with a brick veneer dwelling house. The construction work on some of these houses was incomplete at the time, but Sibley, as well as the lumber company, promised that all said work would be completed after the trade was effected. This promise was found by the jury to be false. Said representation and promise were communicated by Ellis to the insurance company, and were inducing causes of the latter company making the trade. Pursuant to said representation, Sibley and the lumber company caused twenty-two brick veneer houses to be pointed out to the insurance company, as being the ones offered for trade. Among the ones so pointed out was a brick veneer house on lot No. 6. It was represented that said improved lot was lot No. 7 which was in fact a vacant lot. A written contract was made between the lumber company and the insurance company, and the trade was subsequently concluded by the passage of deeds between the insurance company and the lumber company. In acquiring lot No. 7, the vacant lot, the insurance company relied on the representation that it was improved as stated and the representation that lot 6 was lot No. 7. The difference between the value of lot No. 6 and of lot No. 7 was $1,850. The uncompleted houses on the other lots were not completed by the lumber company or Sibley in accordance with their respective promises, and the insurance company subsequently completed said houses at a cost of $1,866.06. The amount of damages awarded by the trial court's judgment is made up of said sum of $1,866.06 (less admitted credits) and said sum of $1,850.

As has been said, this action is purely one for deceit. The measure of damage applicable to the case is the chief subject of inquiry presented in this appeal. Article 4004 of the statutes, which was originally passed in the year 1919, provides in part as follows:

"Actionable fraud in this State with regard to transactions in real estate or in stock in corporations or joint stock companies shall consist of either a false representation of a past or existing material fact, or false...