Francis H. (Francis Hermann) Bohlen.

Cases on the law of torts (Volume 1) online

. (page 107 of 124)
Font size
QR-code for this ebook

statement does so at his own risk, and is not entitled to recover on
the ground of fraud or deceit.

Appellant relies upon the case of Kice & Co. v. Porter, 21 Ky.
Law 871, 53 S. W. 285. That appellee wanted to buy a house and
went to appellant's office, knowing that he was a real estate agent
and had property for sale, for the purpose of having it shown to
her ; that he had a man in his office named Boswell to take her in
his buggy and show her all the property in his hands for sale; that
she liked best a certain piece of property, and offered $6,500 for it,
but it was then priced at $7,500 on the books. She then intimated
that she w^ould pay $7,000, and suggested to Boswell that she would
see Mr. Kellar, the owner of the house, and see if he would not take
less than $7,000 for it. Boswell told her that this was no use, that
Kellar would not take less than $7,000 ; that they had the matter
in their hands, and it would do no good to see anybody but them.
A day or two after this Kellar came to Kice's office and agreed to
take $6,500 for the property. That night Boswell went to appellee's
home and sold her the proj^erty for $7,000. Appellee brought suit
for $500, charging that appellants had appropriated it to their own
use and had obtained it from appellee by fraud. The facts of t':e
above case are dift'erent from those in the case at the bar. In thi ■,
case no effort or artifice was used by Cronan to prevent inquirv or
investigation by the members of the school board. In the case cited

-50 RIP"^' ''• CRONAN.

the proposed purchaser desired to see ^Ir. Kellar, the owner of the
property, and ascertain whether or not he would take less than
$7,000 for it. Boswell told her this was no use, that Kellar would
not take less than $7,000 for the property, that they had the matter
in their hands, and it would do no good to see anybody but them.
The ruling of the court in the above case was in accordance with
the well-known principle of law that false representations as to the
condition, situation and value of real estate, knowingly made by the
vendor to the purchaser, are not actionable, unless the purchaser
has been fraudulently induced to forbear inquiry as to their truth ;
and in such case the"^ means by which he has been thus induced to
forbear inquiry must be specifically set forth in the declaration.
Parker v. MouUon, 114 Alass. 99, 19 Am. Rep. 315.

Thus it will be seen that the two exceptions to the rule of caveat
emptor are: First, where confidential relations exist between the
two; and, second, where fraud or artifice is used to prevent inquiry
or investigation. In the case at bar there was no confidential rela-
tionship e'xisting. The charge that Cronan was the agent of the
school board was abandoned. The amended petition doe^ not charge
that any fraud or artifice was used to prevent inquiry or investiga-
tion by the members of the board. We therefore conclude that the
rule of caveat emptor applied in the case of the purchase complained
of, as it was not charged that Cronan, in effecting the sale, was the
agent of the school board, or that he employed any artifices to pre-
vent inquiry or investigation by the board.^

(e) Statements of quality open to observation or investigation-

Drew Barantinc x. E. C. of Chicesfer, 13 Hen. IV, pi.' 4; Hanford, "If a
man sells me a blind horse, and warrants it sane in all its members. I shall
not have an action of deceit against him, after that, because I could have
seen it. But if he be sick within his body, I shall have such an action, because
I could not have knowledge of that malady. So is the case here. If he had
bailed the serplers to the plaintiff with such warranty, where they were never
weighed, the plaintiff shall not have an action of deceit, because the plaintiff
could have weighed them." Thirning, C J. "If I buy a horse of you in an-

^ Accord: Merryman v. David, 31 111. 404 (1863) ; Bosley v. Monahan, 137
Iowa 650 (1908), where the agent made false statements as to the price at
which he was authorized to sell; Vernon v. Keys, 12 East 632 (1810), false
statements by one of the several joint purchasers as to the price his associates
would allow him to pay.

Contra: Hokanson v. Oatman.. 165 Mich. 512 (1911), and see Hughes v.
Lockington, 221 111. 571 (1906), where, however, the defendant purporting to
act for the purchaser, conspired with the vendor to put up the price on him.

The agent who sells at a higher price than that demanded by his principal,
must of cour'^e account to him for the entire amount received, Merryman v.
David, 31 111. 404 (1863).


Other place than that where the horse is. through the confidence I have in you,
and you warrant it sane in all its members, when in truth it is blind, I shall
have a good action of deceit against you."

"Fairfax— If I buy a thing of a man with a warranty, if the warranty be
of such a thing of which I could have had notice by my five senses at the be-
ginning, if they are not as they are warranted to me, I shall not have an ac-
tion; for example if he sells to me clothes of murry and warrants to me that
they are blue, etc., because I can see for myself when they are sold to me that
they are blue.

Brian — If he who bought them in your case were blind he would have an
action of deceit.

P^airfax— If a man sell to me certain clothes and warrants them to me
that they are of such a length, if they are not of that length I shall have an
action of deceit, for I could not know the length by looking at them, but by
means of some collateral proof, that is to say through measurement, and
then when I have given credence to you that they are of such a length and
you have deceived me, it is reasonable that I should have an action of de-
ceit, etc."

Anon, Y. 5. 11, Edw. J' I. pi. 6.

Brian, J. "If a man sells me a horse and guarantee he has two eyes and
he has not, there will be no action of deceit, because I could have discovered
this myself at the beginning of the transaction."

Fairfax. "If I buy a thing of a man with a warranty, if the warranty be
of something of which I could have notice by my five senses at the beginning,
if it be not such as it is warranted to me, I shall not have an action."


Supreme Court of Errors of Connecticut, 1805. 2 Day. 128.

This was an action on the case. The declaration was substan-
tially as follows: "That on or about the first day of December, 1794,
the defendant applied to the plaintiffs and proposed to sell them
32,162 acres of land lying in the commonwealth of \'irginia, at the
price of twenty-five cents per acre, and to give his deed of the same
to the plaintiffs; and to persuade and induce the plaintiff's to pur-
chase the same, did, on or about the first day of December, affirm
and declare to the plaintiffs, that two-thirds of said tract of land,
with the exception of six hundred acres, was good, arable land,
of an excellent quality ; being one-third level bottom land, one-third
side hill, fine for pasture land, and the other part being good timber
land, the whole of which except the six hundred acres, was worth a
dollar an acre ; and did further affirm and declare that said six hun-
dred-acre tract was wholly bottom land, fit for all agricultural pur-
poses, without any waste or broken land therein, and well worth two
dollars per acre ; and to further persuade and induce the plaintiffs
to purchase the land, did exhibit to the plaintiff's a map of the tract,
therein representing large and beautiful streams running throtigh the
same, thereby the better to convince the plaintift's of the truth of his


assertions as to the quantity and proportion of bottom lands ; and
the plaintiffs further say that the defendant, at divers times and
places, previous to the 20th day of December, 1794, made each and
every of the aforesaid declarations and affirmations ; and further,
that if the plaintiff's would purchase the land from him at the present
value they would thereby make great gains and profits. And the
plaintiffs say that placing full confidence in the declarations and
affirmations of the defendant and believing the same to be true, on or
about the 20th day of December, did, in fact, purchase of the defend-
ant the said land, and did pay to him therefor the sum of $8,040.50."
And the plaintiff's further say that the defendant represented to them
that the deeds given by him to the plaintiff's for the said tract of land
were well executed according to the laws and usages of the common-
wealth of Virginia, and so as to vest the fee of the whole of said land
in the plaintiffs ; and that the plaintiffs took the said land and deeds
in full faith and confidence. "Now the plaintiffs say that all the
declarations, affirmations and representations of the defendant, made
to the plaintiff's as aforesaid, were at the time of the making of the
same, and still are, false and fraudulent ; and the defendant at the
time of the making of the same well knew they were false and
fraudulent, and were made by him with a view to cheat, injure and
defraud the plaintiffs of their property." The declaration then spe-
cifically denies the truth of the various representations of the de-
fendant, and further states that "there is not and never was any
bottom land in the said tract, and that the same is wholly made up of
rocks and inaccessible mountains ; and the plaintiffs further say that
the aforesaid deeds, executed and acknowledged as aforesaid, con-
veyed to the plaintiffs no part of the tract, nor were they executed
according to the laws and usages of the commonwealth of Virginia ;
all of which the defendant, at the time of executing, acknowledging
and delivering the same to the plaintiffs well knew, and of which
the plaintiffs were wholly ignorant. And the plaintiffs say, they have
paid the whole of said sum of $8,040.50, expecting and depending
upon it, that they should, by the deeds of conveyance aforesaid, re-
ceive a valuable property and consideration therefor ; yet they say.
that they have received nothing ; whereby they, in consideration of
the premises, are greatly injured, defrauded, and have sustained
damage," &c.

The defendant pleaded a special matter in defense. The plaintiffs
replied, traversing a part of the plea ; and thereupon issue was
joined. A verdict was returned for the plaintiffs. The defendant
moved in arrest of judgment, alleging, that the declaration was in-
sufficient, and the issue immaterial. This motion was overruled by
the court, and the judgment rendered for the plaintiffs.

By the court unanimously, the judgment was reversed.

The questions are, was the declaration insufficient, and the issue
material ?

With respect to the first. — The maxim caveat emptor applies
forcibly in this case. The law redresses those only who use due
diligence to protect themselves ; — such diligence as prudent men


ordinarily use. — Tlic r|uality of land, on which its value depends,
and which is too various for i market standard, the purchaser can
see, if he will hut look. And the course that prudence has established
requires that he should look ; if not with his own eyes, by those of
an agent, or some one in whom he can reasonably place a confidence.
Whatever morality may require, it is too much for commerce to
require, that the vendor should see for the purchaser. It is enough
for him, in point of law, that he does not conceal the knowledge of
secret defects, nor give a warranty, express or implied. Here he
has done neither.

Whether lands be five or five hundred miles from the pur-
chaser's residence, does not vary the requisition of due diligence,
though it may the expense of complying with it. Land is not like a
ship at sea ; it has a known location and can be approached. And
even should it be necessary to purchase land unseen, which can
scarcely happen in a provident course of business, covenants may be
inserted respecting quality, as well as seisin, or title.

As there must be a reversal upon this point, which makes an.
end of the case, it is not necessary to unravel lengthy and intricate
pleadings to get at the other.

Accord: Gordon v. Parmelee, 2 Allen 212 (Mass. 1861), statements of
the quality of land not actionable though when the sale was made the land
was so covered with snow, that its true character was not apparent; in Par-
ker v. Moulton, 114 Mass. 99 (1873), it was held that an allegation that the
plaintiff had no opportunity to inspect the land did not excuse the lack of
examination, there being no allegation that he was fraudulently induced to
forbear inquiry.

Where, however, the property is situate at a great distance or m another
state, it was held in Savage v. Stevens, 126 Mass. 207 (1879), that false state-
ments of its condition were actionable, see accord, Spalding v. Hedges, 2
Barr 240 (Pa. 1846), misstatement of distance of property from the city of
St. Louis; Cornelius v. Molloy, 7 Barr 293 (Pa. St. 1848).


/housc of Lords, 1867. L. R. 2nd English & Irish App. 99.)

This was an appeal against the decision of the Lord Justices
reversing an order of Sir John Stuart, V. C, dismissing the plain-
tiff's appeal for the reason that his subscription to shares in the
defendants' company alleged to have been procured by fraudulent
representations contained in their prospectus.

Lord CiiELMSFORn:—' (After holding that the statements in the
prospectus were fraudulent misrepresentations.) But the appellants
say that even admitting the prospectus to be open to the objection.s
which are made to it, the respondent has no ground of complaint,
because he had an opportunity of ascertaining the truth of the rep-
resentations contained in it, of which he did not choose to avail

^ The concurring opinions of Lords Cranworth and Romilly are omitted.


himself ; that he was told by the prospectus that "the engineer's re-
port, together with maps, plans, and surveys of the line, might be
inspected, and any further information obtained, on application at
the temporary offices of the company ;" and in his letter of applica-
tioa he agreed to be bound by all the conditions and regulations
contained in the memorandum and articles of association of the
company, which, if he had examined, would have given him all the
information necessary to correct the errors and omissions in the

But it appears to me that when once it is established that there
I has been any fraudulent misrepresentation or wilful concealment by
I which a person has been induced to enter into a contract, it is no
\ answer to his claim to be relieved from it to tell him that he might
Ihave known the truth by proper inquiry. He has a right to retort
lupon his objector, "You, at least, who have stated what is untrue, or
Ihave concealed the truth, for the purpose of drawing me into a con-
tract, cannot accuse me of want of caution because I relied implicitly
jupon your fairness and honesty." I quite agree with the opinion of
Lord Lyndhurst, in the case of Small v. Attivood, 6 CI. & F. 395,
that "where representations are made with respect to the nature and

i character of property which is to become the subject of purchase,
affecting the value of that property, and those representations after-
wards turned out to be incorrect and false, to the knowledge of the
party making them, a foundation is laid for maintaining an action
in a court of common law to recover damages for the deceit so
practised ; and in a court of equity a foundation is laid for setting
aside the contract which was founded upon that basis." And in the
case of Dohell v. Stevens, 3 B. & C. 623, to which he refers as an
authority in support of the proposition, which was an action for
deceit in falsely representing the amount of the busmess done in
a public house, the purchaser was held to be entitled to recover
damages, although the books were in the house, and he might have
had access to them if he thought proper.

Upon the whole case I think the decree of the Lords Justices
ought to be affirmed, and the appeal dismissed with costs. -^

''Accord: Redgrave v. Hurd, L. R. 20 Ch. Div. 1 (1881), the buyer of a
business whose profits were misstated held entitled to rescission of the pur-
chase and damages, though he actually had in his hand a bundle of papers
showing what had been earned; Dobell v. Stevens. 3 B. & C. 623 (1825),
somewhat similar facts; Crandall v. Parks, 152 Cal. 772 (1908) ; Linington v.
Strong, 107 111. 295 (1883) ; Robinson v. Reinhart, 137 Ind. 674 (1894), though
stated as applicable to property at a distance ; Riley v. Bell. 120 Iowa 618
(1903) ; Scott v. Burnight, 131 Iowa 507 (1906), land situated at a distance:
Eastern Trust, etc., Co. v. Cunningham. 103 Maine 455 (1908) ; Smith V. Mc-
Donald, 139 Mich. 225 (1905), Carpenter, J.— "One who perpetrates a fraud
cannot complain because his victim continues to have confidence which a more
vigilant person could not have;" Smith v. ll'crkhciscr, 152 Mich. 177 (1908),
t'.ie defendant, selling a newspaper, placed the books at the purchaser's dis-
posal to verify his statements as to circulation : the purchaser, wlio appears to
have made a very inaccurate and fragmentary inspection, was allowed to re-
cover; Redding v. Wright, 49 Minn. 322 (1892) ; Osiivld v. McGhcc, 28 Miss.
340 (1854; : Cottrill v. Krum, 100 Mo. 397 (1890) ; Hines v. Royce, \27 Mo.
App. 718 (.1908), and this, though the plaintiff was in the employ of the com-




(15 Car. 2. 1 Levins, 102.)

Case, That whereas the plaintiff and defendant were in treaty
for the sale of a messuage ; the defendant falsely and fraudulently
"a'flfirmed it was let at £42 per annum ; whereto the plaintiff gave
faith, gave him £500 for it, where in truth it was let at £32 per
annum only^ After verdict for the plaintiff, it was moved in arrest
of judgment that the action did not lie ; as for saying that a thing is
of a greater value than it is, without warranty no action lies. Yelv.
20. No more will it for saying that it is demised for more than in
truth it is, for the party might inform himself from the tenant, and a
warranty will not bind a man in a thing that is apparent ; as to war-
rant that a horse has both his eyes, when he is apparently blind of one
of them. But by the court, tho' an action will not lie for saying that
a thing is of greater value than it is (nor by Wyndham, it is perjury
to swear it, because value consists in judgment and estimation,
wherein men many times differ) ; yet to affirm that a thing is demised
for more than it is is a falsity in his own knowledge, and the party
who is deceived may for such deceit have an action, for perhaps the
lease is by parol, or the tenant will not inform the purchaser what
rent he gave. And after it had been twice moved judgment was
given for the plaintiff" in Trinity, 15 Car. 2, by the whole court.^
— /

pany whose stock he bought and remained in its empIo\^ for some time after
the purchase; Mcadc v. Bunn, 32 N. Y. 275 (1865) ; Townscnd v. Fcltlwuscn,
156 N. Y. 618 (1898) ; Griffin v. Lumber Co., 140 X. Car. 514 (1906) ; Fargo
Gas & Coke Co. v. Fargo Gas & Electric Co., 4 N. Dak. 219 (1894), contain-
ing excellent opinion; Pentecost v. Godfrey. 23 Pittsburgh L. J. 177 (Pa.
1876) ; Lake v. M'eber, 6 Pa. Super. Ct. 42 (1897) : Handv v. Waldron, 19 R.
I. 618 (1896) ; MeCleuuan v. Scott, 24 Wis. 81 (1869). In many of the cases
tiie rule is often stated as limited to facts pecuharly within the defendant's
knowledge; see Eastern Trust Co. v. Cunningham, supra.

Aliter. where the falsity of the fact as asserted is obvious to the sense of
him defrauded: Fargo Gas & Coke Co. v. Fargo Gas & Electric Co., 4 X.
Dak. 219. semble: Kaiser v. Nummerdor, 120 Wis. 234 (1904); Long v.
Warren. 68 X. Y. 426 (1877), as to which see Schiimakcr v. Mather, 133 X.
Y. 590 (1892).

It would appear that in Massachusetts recovery is only allowed where the
defendant's false statement is intended to induce and does induce the plaintiff
to refrain from investigation: Parker v. Moulton. 114 Mass. 99 (1873) : see
also Strand v. Griffith. 97 Fed. 854 (C. C. A. 1899). The Washington cases
deny recovery to one who has the power by investigation to disprove the
false statements relied upon: Pigott v. Graham. 48 Wash. 348 (1908"), unless
the facts can only be ascertained by inquiry from the defendant: Breese v.
Hunt, 67 Wash. 398 (1912), or where the investigation would be unduly oner-
ous or difficult, or the plaintiff would be unable to appreciate the effect of the
facts discovered therebv. Daniel v. Glidden. 38 Wash. 556 (1905).

In Schiiabacker w' Riddle. 99 Til. 343 (1881), it was held that where the
plaintiff bought goods from the defendant at a price represented to be that
stated in an invoice, it was a question for the iury whether he had exercised
sufficient diligence to guard himself against deception in not asking to see
the invoice, which was in the possession of one of the defendants.

\4ccord: Risney v. Selby. 1 Salk. 211 ("1704). "the value of the rent is
matter that lies in the private knowledge of the landlord and tenant": Dobell


Supreme Court of Missouri, 1908. 215 Missouri 312.

Lamm, J- Judd, the plaintiff, resides in Brookline, Mass., but
is in business at Dwight, 111. Bourland resides at Pontiac, 111. The
defendants, Walker and Naxera, reside in Buffalo township, Pike
county, Mo. Naxera owned two tracts of land in Pike county, 111.
Walker was Naxera's agent to sell them. Bourland was Judd's
agent to buy them. So acting, at a certain time Bourland purchased
from Walker said tracts of Illinois land. Judd and Bourland were
strangers in that vicinity, and unfamiliar with the lands. Walker
and Naxera were familiar with the lands, and Walker made false
representations as to the acreage. After the deed passed from
Naxera to Judd, it was ascertained there was a serious discrepancy
in the amount of land conveyed by the deed, whereby Judd paid
over $i,ooo for land he did not get, and which Naxera did not own,
and knew he did not own. Thereupon Judd sued Naxera and
Walker for damages in the Louisiana Court of Common Pleas,
grounding his action on fraud and deceit. No question is made on
the pleadings, and the facts seem to be of such sort that the law
should throw no mere captious obstacle or dry technicality in the
road of recovery — to the contrary, should put its benediction on the
effort, if it can be done without overturning settled principles. The
laws of hospitality seem to require that strangers should be taken
in a good sense, but courts should be astute to not permit such a
"taking in" as appears here. At a trial in that court with the aid
of a jury, at the close of the plaintiff's evidence, he was cast by a
peremptory instruction. Thereat he appealed to the St. Louis Court
of Appeals. That court speaking through Nortoni, J., handed down
an unanimous opinion reversing and remanding the case (Judd v.
Walker, 114 Mo. App. 128, 89 S. W. 558), but certified it here,
being of mind that its opinion was in conflict with Mires v. Summcr-
ville, 85 Mo. App. 183, decided by the Kansas City Court of Appeals.

7. Stevens, 3 B. & C. 623 (1825), vendor of a public house misstated his re-
ceipts from the sale of spirits and malt liquors and the rent received from
certain rooms.

So in Braley v. Powers, 92 Maine 203 (1898), it was held that though
statements of value were not actionable, statements of facts, peculiarly within
the vendor's knowledge and directly affecting values, such as the cost of man-
ufacturing an article, the patent for which was the subject of the sale, if
fraudulent, were actionable. So it is actionable to falsely assert that the par
value of the stock has been paid in, CooUdge v. Goddard, 77 Maine 578
(1885) : and a misstatement, by one selling a share of a contract for purchase
of land, of the amount paid to the owner upon it, was held actionable in
Hoxie V. Small, 86 Maine 23 (1893) : Ellis v. Andreivs. 56 N. Y. 83 (1874) :
McAleer v. Horsev. 35 Md. 439 (1871). p. 457. defendant not only asserted
that he had paid S25.000 for his share in a mining claim but also stated that
he had paid in $10,000 as working capital, compare Davis v. Reynolds, 107
Maine 61 (1910). where defendant's misrepresentations of the price paid
were held not actionable, with Adams v. Burton, 107 Maine 223 (1910),