Sutton v. Greiner

Decision Date26 September 1916
Docket Number30631
Citation159 N.W. 268,177 Iowa 532
PartiesR. G. SUTTON, Appellant, v. JOSEPH GREINER, Appellee
CourtIowa Supreme Court

Appeal from Clarke District Court.--THOMAS L. MAXWELL, Judge.

ACTION at law to recover damages caused by defendant's failure to perform a written contract for exchange of land owned by defendant in Manitoba for other property owned by plaintiff in Colorado. There was a verdict and judgment for the defendant, and plaintiff appeals.


O. M Slaymaker, for appellant.

Temple & Temple, for appellee.




The parties executed a written contract, whereby plaintiff undertook to sell to defendant a certain house and lot in the town of Palisades, Colorado, and in payment therefor, defendant agreed to convey to plaintiff 400 acres of land in Manitoba, and, further, to pay him the sum of $ 1,000 in money. The conveyances were to be delivered within 30 days. Defendant having refused to carry out the agreement, plaintiff brought this action for damages. The defendant admits making the contract, but avers that it was obtained from him by fraud and deceit, and that, having discovered the wrong which had been perpetrated upon him, he at once, and within the period of 30 days, rescinded the contract and so notified the plaintiff. According to the testimony of defendant, the land owned by him in Manitoba was worth $ 14,000, subject to a lien of $ 5,200. He was formerly a resident of Iowa, and, being desirous of returning to this state, he sought an opportunity to exchange the land for Iowa property. To that end, he requested one Pringle, a real estate agent, to secure him a customer. Soon thereafter, Pringle informed defendant that he had found a prospective customer, and requested a meeting of the parties at Osceola. Defendant accordingly went to Osceola, where he met Pringle, who introduced him to plaintiff, and, later in the same day, the contract in suit was executed. Defendant claims that plaintiff and Pringle, conspiring together to swindle him, induced him to drink freely of intoxicating liquor, furnished by them, whereby he was unable to exercise judgment and care to protect his own interests, and by this means and by false representations and deceit procured the contract. He says that plaintiff, not having any Iowa property such as he desired to obtain, proposed to exchange the Colorado property for the land. Defendant had never seen the house or lot and knew nothing of its quality or value, except as it was revealed by a photograph which plaintiff exhibited. Plaintiff had himself visited the property, and told defendant, as the latter swears, that it had a market value of $ 10,000. In alleged reliance upon this representation, defendant entered into the contract. His land was estimated at $ 14,000, and his equity therein at $ 8,800. After some negotiation as to the difference of $ 1,200 between these estimates, it was agreed, as shown in the contract, that defendant should make a deferred payment of $ 1,000 and assign to plaintiff the unpaid rent on the land, some of which was under lease. Defendant further says that, very soon after the contract was executed, he made investigation, and found that the Colorado property was worth not to exceed $ 2,500, whereupon he repudiated and rescinded the agreement. The jury sustained the defense so pleaded and found against the plaintiff. In argument to this court, appellant relies upon the following propositions:

I. The insufficiency of the evidence to sustain the defense. It is said that the representations as to the value of the Colorado property were mere expressions of opinion, on which defendant had no right to rely, and do not amount to fraud. Counsel concedes, however, that statements of value "may become representations of fact on which the purchaser may rely," but insists that the rule cannot properly be applied in this case. Giving to the testimony, as we must, the most favorable interpretation it will fairly bear in support of the verdict, the trial court was clearly right in submitting this issue to the jury. Defendant had never seen the property, and had no notice or knowledge whatever of its character or value except as he was informed by the plaintiff, who had visited and inspected it. Under such circumstances, a false statement of market value of property, upon which it is intended that the purchaser shall rely and be thereby induced to make the purchase, becomes a material representation, and, if believed and acted upon, it justifies the party thus overreached in rescinding the agreement. The doctrine that proof of mere "trade talk" or "puffing," such as is common to the seller or trader of property, is not sufficient to sustain a charge of fraud, has no application to false representations of material facts which are, in their nature, calculated to deceive, and are made with intent to deceive. Harris v. Rosenberger (C. C. A.), 149 F. 449, 13 L.R.A. (N.S.) 762, 766. The rule on which appellant here relies, which, under ordinary circumstances, renders representations or statements of value nonactionable, applies only where the parties stand on equal footing and have equal means of knowledge and there is no relation of trust or confidence between them. Mattauch v. Walsh, 136 Iowa 225, 113 N.W. 818; Hanson v. Kline, 136 Iowa 101, 113 N.W. 504; Hetland v. Bilstad, 140 Iowa 411, 415, 118 N.W. 422; Murray v. Tolman, 162 Ill. 417, 44 N.E. 748; Schumaker v. Mather, 133 N.Y. 590, 30 N.E. 755; Huffstetter v. Buzett, 32 Ind. 293; Grim v. Byrd, 73 Va. 293, 32 Gratt. 293; Kenner v. Harding, 85 Ill. 264, 270. Quite in point with the case before us is our own case of Scott v. Burnight, 131 Iowa 507, 107 N.W. 422. See also Fulton v. Fisher, 151 Iowa 429, 131 N.W. 662; Nowlin v. Snow, 40 Mich. 699; Van Vliet v. Crowell, 171 Iowa 64, 149 N.W. 861. Indeed, the rule, as we have stated it, is too well settled in this and most jurisdictions to call for further discussion. In this case, the defendant, as we have seen, did not know the property, which was in a distant state. Plaintiff did know it, and knew its value; or, even if he did not know its value, his positive statement thereof was one on which defendant was entitled to rely as a material representation. The testimony on behalf of defendant was such that, if credited by the jurors, they were justified in finding that plaintiff did represent the property as having a market value of $ 10,000; that the statement was false and was made as an inducement to defendant to make the exchange; and that defendant, in reliance thereon, entered into the contract. Upon this issue, the jury has found for the defendant, and its verdict cannot be interfered with unless we find some other assignment of error to be well grounded.

Counsel says that the transaction was an ordinary trade or exchange in which both parties placed an exaggerated value on their property, and that, when real values are compared, there was no undue advantage obtained by plaintiff. Assuming, but without holding, that this proposition, if correct, would work an effective avoidance of the defense to plaintiff's claim for damages, we have only to say that the record does not so show. At least, the fact is not so clearly shown that we may assume its truth as a matter of law. Somewhat singularly, all the evidence offered on the trial as to the market value of the Colorado property and of the Manitoba property, so far as given by disinterested witnesses, was introduced by the plaintiff. The defendant appears to have been content to rest his case, in this respect, upon plaintiff's own showing, and in this we think he was justified. The evidence so offered by plaintiff was such that the jury could have found the Colorado property to have been worth but $ 2,500, and the land which he was to have obtained in exchange therefor to have been worth $ 14,000, subject to an incumbrance of $ 5,200--a disproportion so radical and startling as to suggest the thought that no man in his senses, unless in some manner deceived or misled, would have consented to such terms. If it be said that this computation involves an acceptance of the highest estimate upon defendant's property and the lowest upon the property of plaintiff, we must still say it was within the jury's province so to find. But even if the jury, for the purpose of comparison, should have averaged the several estimates upon both pieces of property, defendant's equity in his land was $ 6,950, while the equity he was to receive in the Colorado property (counting the $ 1,000 "boot money" as a charge thereon) was but $ 3,000. From any view of the facts disclosed by the record, a case was presented calling for the careful scrutiny of the court and jury. If the advantage thus obtained by plaintiff was legitimately acquired, he was, of course, entitled to a verdict notwithstanding the magnificent proportions of his profit, but such results are so unusual, where a deal is openhanded and fair on both sides, that the court should not unduly narrow or restrict the jury in getting at all the essential facts. Fraud will not be presumed, but, once fairly established, the law will not permit the party practicing it to reap any advantage therefrom. The plaintiff, as a witness, denies the truth of most of the story told by the defendant, and in this he is, to a...

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  • Sutton v. Greiner
    • United States
    • United States State Supreme Court of Iowa
    • 26 September 1916

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