Case Title: Ham v. Hart

Citation: 273 P.2d 748, 58 N.M. 550

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1954-08-09T00:00:00Z

Document:
273 P.2d 748 (1954) 58 N.M. 550 HAM v. HART. No. 5758. Supreme Court of New Mexico. August 9, 1954. Howard F. Houk, Santa Fe, for appellant. Charles B. Barker, Santa Fe, for appellee. LUJAN, Justice. During the summer of 1949 the defendant (appellee) had a water well drilled on the premises referred to in the complaint. She used water therefrom by means of a pump operated by electric current until November of that year when the electricity was turned off and never used again for approximately four years, or, until it was sold to plaintiff in 1953. A log was furnished defendant by the well driller in 1949 which indicated that it was 150 feet deep and would produce two gallons of water per minute at that time. The plaintiff (appellant) instituted this action to recover damages alleged to have been sustained by reason of false and fraudulent representations made by the defendant to the plaintiff. The principal allegations in the complaint are in the following words: The cause was tried to the court, who, at the conclusion of the entire case, on motion of defendant, dismissed plaintiff's complaint and he appeals. The parties will be referred to as they appeared in the district court. According to the record, there is abundant testimony to show that the defendant on three different occasions represented to plaintiff that the well in question had ample water capable to producing not less than two gallons of water per minute, when in fact it only produced one-half gallon per minute at the time the property was delivered to plaintiff; and that he relied upon said representations. It is insisted that the trial court committed error in making the following finding of fact and conclusion of law: Whether the defendant acted honestly and in good faith is immaterial. The culpability which stamps statements as a fraud is in the assertion of that to be true which is not true, although believed to be true, when made to be relied upon and which are relied upon to the injury of the party misled. Becker v. McKinnie, 106 Kan. 426, 186 P. 496; Aldrich v. Scribner, 154 Mich. 23, 117 N.W. 581, 18 L.R.A.,N.S., 379; Rosenberg v. Cyrowski, 227 Mich. 508, 198 N.W. 905; Romine v. Thayer, 74 Ind. App. 536, 128 N.E. 456; Joyce v. McCord, 123 Ark. 492, 185 S.W. 775; Laney-Payne Farm Loan Co. v. Greenhaw, 177 Ark. 589, 9 S.W.2d 19, 73 A.L.R. 1117. In 1 Story, Equity Jurisprudence, 14th Edition, sec. 272, Justice Story uses this language: The statements as to the number of gallons the well would produce were material as a positive assertion of fact, affording a decisive consideration on plaintiff's willingness to contract. He relied upon their truth and accuracy. We held in Jones v. Friedman, 57 N.M. 361, 258 P.2d 1113, that irrespective of the good faith with which a misrepresentation of material fact is made, if it is justifiably relied on by one seeking rescission of the contract, such rescission should be allowed, and we reaffirm that holding. And in Bennett v. Finley, 54 N.M. 139, 215 P.2d 1013, 1015, we said: For other cases holding to the same effect, see Wilson v. Robinson, 21 N.M. 422, 155 P. 732, Ann.Cas. 1918C, 49; Bell v. Kyle, 27 N.M. 9, 192 P. 512; and Thrams v. Block, 43 N.M. 117, 86 P.2d 938. *750 The Jones and Bennett cases, as well as those holding to the same effect, were in equity, but we can see no difference in the principle involved in an action at law for damages and a suit in equity for rescission. Trust Company of Norfolk v. Fletcher, 152 Va. 868, 148 S.E. 785, 73 A.L.R. 1111. It is true that the weight of authority in actions at law for fraudulent misrepresentations require proof of knowledge. However, a strong minority follow the equity view that good faith is immaterial and we believe this view the better one and here adopt it. Other errors are assigned and argued, but no additional question need be decided in view of the disposition we must make of the question just discussed. For the reasons stated the judgment will be reversed and the cause remanded for further proceedings in conformity herewith. It is so ordered. McGHEE, C.J., and SADLER, COMPTON and SEYMOUR, JJ., concur.