Wendell v. Ozark Orchard Co.

• Citation: 200 S.W. 747
• Decision Date: 20 December 1917
• Docket Number: No. 2118.,2118.
• Parties: WENDELL v. OZARK ORCHARD CO. et al.
• Court: Court of Appeal of Missouri (US)

200 S.W. 747

WENDELL v. OZARK ORCHARD CO. et al.

No. 2118.

Springfield Court of Appeals. Missouri.

December 20, 1917.

Rehearing Denied February 20, 1918.

Appeal from Circuit Court, Newton County; Charles L. Henson, Judge.

Action by J. F. Wendell against the Ozark Orchard Company and others. From judgment for plaintiff, defendants appeal. Affirmed.

Justin D. Bowersock, of Kansas City, and Charles L. Dort, of Falls City, Neb., for appellants. A. R. Dunn, of Neosho, and W. L. Butts, of Joplin, for respondent.

STURGIS, P. J.

The defendant corporation, having its home office at Kansas City, Mo., owned a large body of land in McDonald county near Goodman, Mo., a considerable portion of which was planted in orchards. The defendant subdivided this land into smaller tracts and placed them on the market, advertising same liberally in the Kansas City papers. The plaintiff owned a couple of houses and lots in Kansas City, and, being attracted by the advertisement of defendant's lands, visited the office of defendant's sales agent in Kansas City and opened up negotiations for the exchange or trade of his Kansas City property for some of defendant's land at Goodman. The defendant, having first investigated the value of the plaintiff's Kansas City property, informed plaintiff that it would be willing to take plaintiff's property as part purchase price. Plaintiff thereupon went to Goodman. and in a general way was shown defendant's land by defendant's agent there. Negotiations were then resumed at Kansas City, with the result that plaintiff purchased 40 acres of land from defendant at the price of $3,650. Defendant accepted plaintiff's Kansas City property in part payment at $3,150, leaving a balance of $500 due defendant. Defendant then loaned plaintiff $300, and took his note for $800, secured by deed of trust on the land sold to plaintiff.

The present suit is bottomed on alleged fraud and misrepresentations of the defendant as to the land sold. The petition alleges that plaintiff was deceived and induced to buy such land at a price much above its reasonable value relying on defendant's representations thereto, that plaintiff has already paid more than full value, and asks that plaintiff's note and deed of trust on said land held by defendant be canceled and declared void. The trial court granted the relief prayed for, decreeing the note and deed of trust void and canceled, and enjoined any foreclosure of such deed of trust. The defendants appeal from this judgment.

It will be noted that the petition has for its sole object the recovery of damages equal to, and asks for the cancellation of, the mortgage held by defendant on plaintiff's land purchased from defendant, and the sufficiency of the petition is challenged as not stating a cause of action. The defendant contends, and rightly so, that when a purchaser has been defrauded he may pursue one of two remedies. He may sue for a rescission of the contract, in which case it is necessary to rescind the entire contract and tender back the consideration received. North v. Stevenson, 71 Mo. App. 427; Jarrett v. Morton, 44 Mo. 275; Estes v. Reynolds, 75 Mo. 563; Bell v. Campbell, 123 Mo. 1, 19, 25 S. W. 359, 45 Am. St. Rep. 505. As a corollary to this the courts hold that a rescission will not be decreed unless the parties can be substantially placed in statu quo. Robinson v. Siple, 129 Mo. 208, 222, 31 S. W. 788; Melton v. Smith, 65 Mo. 315; Johnson v. Railroad, 227 Mo. 423, 451, 127 S. W. 63. The other remedy allowed is to stand on the contract, retain the purchased property, and sue in damages for the fraud. Robinson v. Siple, 129 Mo. 208, 31 S. W. 788; Jarrett v. Morton, 44 Mo. 275; Parker v. Marquis, 64 Mo. 38.

The defendant is mistaken in assuming that plaintiff chose the remedy of suing for a rescission. He has, on the contrary, elected to stand on the contract of sale, and this is a suit for damages for the fraud. The amount of charges which he alleges and which the court awarded him equals the amount of the deed of trust on the land held by defendant. Not only is the plaintiff entitled to a judgment for the damages resulting from the defendant's fraud, but, where the plaintiff owes the defendant an equal or greater amount secured by mortgage on the land, then the court, as one of equity, will decree that the one debt will cancel the other in whole or pro tanto, and will thus cancel the mortgage and free plaintiff's land. Therefore the suit, while primarily one for damages, because of being founded on fraud and requiring equitable relief in the cancellation of the mortgage, becomes a suit in equity. The plaintiff in such case might claim an amount of damages in excess of the secured debt he owes defendant, and in such case, if the evidence so warrants, he would be entitled to a cancellation of the mortgage and a general judgment for the excess against the defendant. These principles are clearly recognized in McGhee v. Bell, 170 Mo. 121, 133, 70 S. W. 493, 59 L. R. A. 761; Stonemets v. Head, 248 Mo. 243, 250, 154 S. W. 108. The petitions and the relief asked and given in the cases just mentioned are much the same as in this case. In the last-mentioned case the court awarded damages in an amount sufficient to cancel, and did cancel, a deed of trust in defendant's favor on plaintiff's land, and gave a general judgment in plaintiff's favor for $2,400 in addition. The petition therefore states a good cause of action, and the court gave the proper relief, provided the evidence is sufficient to support the same.

Giving attention to this latter proposition, we find the case difficult to decide. The plaintiff was a carpenter by trade, and had lived in the city all his life. He knew nothing about farming and less about orchards and fruit raising and the claimed adaptation of this land to this industry. The peach orchard thereon is what defendant claims gave the land enhanced value. This is apparent not only from the evidence in the case as to the value of the land as fruit land, but from the fact that plaintiff bought 40 acres, of which 20 acres was timber land, 7 acres in cultivation, and 13 acres of peach orchard. The price of the timber land was $50 per acre, of the cultivated land $100 per acre, and of the peach orchard $150 per acre. The evidence was quite convincing that this was an exorbitant price for this land, a price out of all proportion to its fair value, at least when disassociated with its peculiar value as fruit land. Plaintiff's evidence places the market value of such land at $25 to $35 per acre. There is no evidence contradictory to this except as to the alleged increased value as fruit land.

The defendant's manager and selling agent at Kansas City denied having represented to plaintiff that this land was of the value at which it was sold, but only that such was defendant's price, and that defendant had and made only one price to everybody, to wit, $50 per acre for timber lands, $100 per acre for cultivated lands, and $150 per acre for land in peach orchard. Defendant justifies these prices only on the basis of the land being superior fruit land and the value of the orchard thereon....