Case Name: AMERICAN HARDWOOD LUMBER COMPANY, Respondent, v. DENT, Appellant
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1906-10-30
Citations: 121 Mo. App. 108
Docket Number: 
Parties: AMERICAN HARDWOOD LUMBER COMPANY, Respondent, v. DENT, Appellant.
Judges: All concur.
Reporter: Missouri Appeal Reports
Volume: 121
Pages: 108–114

Head Matter:
AMERICAN HARDWOOD LUMBER COMPANY, Respondent, v. DENT, Appellant.
St. Louis Court of Appeals,
October 30, 1906.
1. PRACTICE: Instructions: Passive Declaration of Law. A declaration of law, whicb authorized a judgment for the defendant, if the facts in support of his special defense were found to be true, was improperly refused, although the court on behalf of the plaintiff gave a declaration' of law to the effect that a finding could not be had for the defendant unless such facts were found to be true. The two declarations are not identical because the court might have determined that other facts had to be found before a judgment could be rendered for the defendant.
2. FRAUDULENT REPRESENTATIONS: Market Value. Representations regarding the market value of a certain kind of lumber made by one acquainted with such values to one ignorant of them,, if false and made with the knowledge by the former that the latter was ignorant, were fraudulent representations and entitled the latter to rescind the contract which he was induced to enter into by means of such misrepresentations.
3. -: Sole Inducement. In order to rescind a contract on the ground that its execution has been induced by fraudulent representations, it is not necessary to show that the false representations were the sole inducement for entering the contract; it is only necessary to show that the false representations were intentionally made, that they were relied upon and deceived the person seeking to rescind, and that they contributed towards inducing him to enter the contract.
Appeal from St. .Louis City Circuit Court. — Hon. Matt. G. Reynolds, Judge.
Reversed and remanded.
R. P. and G. B. Williams and F. M. Owlee for appellant.
(1) Where parties are not dealing at arms-length or on an equal footing; or where one party to the contract being ignorant of the value of a commodity, relies upon the other to inform him, that other, if he speaks at all, must speak the truth; and if he speaks falsely the general rule regarding “dealers’ talk” does not apply. McBeth v. Craddock, 28 Mb. App. 896; Stones v. Richmond, 17 Mo. App. 17; Wannell v. Kem, 57 Ma 478; Cottrill v. Krum, 100 Mo. 397; Cahn v. Reid, 18 Mo-. App. 115; Pickard v. McCormick, 11 Mich. 68; Stoll v. Wellborn (N. J. Chan. 1903), 56 Atl. 894; Smith v. Countryman, 30 N. Y. 655; Peck v. Jenison, 99 Mich. 326; Maxted v. Fowler, 94 Mich. 106; Russell v. Peay, 2 Speers (S. C.) 217; 14 Am. and Eng. Ency. of Law (2 Ed.), p. 125. (2) A representation as to the market price of a commodity is one of fact, and is not mere matter of opinion or “dealers’ talk.” Distinctions between opinions and statements of fact: 20 Cyc., p. 52; Strand v. Griffith, 97 Fed. 854, 38 C. C. A. 444; Manning v. Albee, 11 Allen 520; Com. v. Wood, 142 Mass. 459. (3) In order to avoid a contract for fraud, it is not necessary that the fraudulent representation should have been the sole inducement to the contract, nor to show that the contract would not have been made in the absence of fraud; but it is sufficient ground for the avoidance of a contract to show that the fraud induced, in any degree, to the making of same. Burnham & Co-, v. Ellmore, 66 Mo. App. 620; Saunders v. McClintock, 46 Mo. App. 223; Becroft y. Grist, 52 Mo. App. 589.
Muench, Walther & Muench for respondent.
(1) In order to make out a case of false representations, the following elements must be present: (1) The representation must be made as to a material fact; (2) must be false; (3) must be of such character that the other jjarty had a right to rely upon it; (4) must be accompanied by knowledge that it was false, or what the law regards as equivalent to actual knowledge, and by an intent to deceive; (5) must be relied upon by the other party and deceive him to his damage. 14 Am. and Eng. Ency. of Law (2 Ed.), 23; Nauman y. Oberle, 90 Mo. 666; Anderson v. Pike, 86 Mo. 293; Wade y. Ringo-, 122 Mo. 326; Hodges y. Torrey, 28 Mb. 103; Green y. Worman, 83 Mo. App. 568. (2) Fraudulent representation as to the value of a thing usually amounts only to an expression of opinion and affords no ground for relief. Harrison v. Waldo-n, 89 Mo. App. 164; Ellis v. Andrews, 56 N. Y. 83; 14 Am. and Eng. Ency. of Law (2 Ed.), 124. (3) It is not error to- refuse instructions, the principles of which are included in other instructions given. State v. Gates, 130 Mo. 351; Keim v. Railway, 90 Mo. 314; Best Bros. v. Kempf, 64 Mo. App. 460.

Opinion:
GOODE, J.
Plaintiff sues for the breach of a contract in which defendant agreed to manufacture, sell and deliver to plaintiff, at Newton, Mississippi, prior to January 1, 1903, five hundred thousand feet of hardwood lumber of various kinds and grades. The contract was written and was dated August 21, 1902. Defendant admitted the execution of the contract and its nonperformance, alleging that it was voidable because- obtained from defendant by fraud. The allegations in support of this defense are that defendant had no knowledge of the value of the kinds of 'lumber set out in the contract and, during the negotiations between himself and plaintiff, so advised the latter; that plaintiff stated to defendant that the prices for the different kinds of lumber agreed, to be furnished were the market prices then ruling and on such knowledge and information the contract was closed; that the prices stipulated, in consequence of plaintiff's false representations and defendant's reliance thereon, were much below the market prices at the time, as plaintiff well knew and by reasonj thereof the contract never became operative. It was further alleged that at the time of and prior to making the contract, defendant was engaged in the manufacture and sale of softwood lumber and plaintiff was a dealer in hardwood lumber, that plaintiff came to Mississippi and induced defendant to enter into the contract in question, defendant informing plaintiff that he had no knowledge of the value and prices of hardwood lumber and the cost of manufacturing the same, and that defendant relied on the statements of plaintiff as to prices and values of the lumber.
The contract was arranged by defendant and plaintiff's agent George H. Cottrill. A perusal of the evidencé has convinced us that the testimony of the defendant and some other testimony for him, tended to support the allegations of the answer that defendant was ignorant of the prices of hardwood lumber, so stated to Oottrill and relied on the representations .made by Cottrill regarding the prices of it and that those prices were considerably below the real prices; that Cottrill undertook to give defendant the market prices as the basis for the contract and defendant accepted his statements as true. The testimony for the plaintiff was quite to the contrary and goes to show that defendant did not rely on Cottrill's statements and, further, that the latter stated the true market prices for the different grades of lumber then current. Defendant never entered on tbe performance of the contract, but early in September repudiated it by letter. No question is raised about tbe rescission not being prompt. Tbe letter assigned as reasons for defendant's refusal to perform, that tbe agreed prices were too low and that plaintiff would not advance enough money on lumber cut and piled by defendant, to enable bim to perform tbe contract. Though defendant's letters and statements elicited from bim on crossexaniination, materially weakened bis defense, we cannot say tbe judgment was so obviously for tbe right party that errors committed at tbe trial ought to be disregarded. In view of the contradictory testimony, tbe decision of tbe appeal must turn on tbe declarations of law given by tbe court, tbe cause having been tried without a jury. Exceptions were saved to tbe rulings on tbe declarations requested, and the court having entered judgment in plaintiff's favor, tbe defendant appealed.
The court declared there could be no judgment for defendant unless it was found that Cottrill represented the prices stated in tbe contract were the true market prices; that said prices were substantially less than tbe market prices; that defendant bad no knowledge as to the actual market prices; and so advised plaintiff's agent, or plaintiff's agent knew from other sources that defendant in making tbe contract relied on Cottrill's representations. But tbe court refused to declare, at defendant's request, that if all said facts were found, and also that the agent knew tbe prices be gave were not tbe market prices and by reason of bis representations that they were, defendant was misled and deceived to his damage, then defendant bad tbe right to avoid the contract, and if be did so, tbe verdict should be in bis favor. That tbe requested declaration correctly stated tbe law and tbe existence of the facts it mentioned entitled defendant to rescind the contract, is not denied. [Anstee v. Ober, 26 Mo. App. 665, 669; 14 Am. and Eng. Ency. Law (2 Ed.), p. 91.] But the declaration given at plaintiff's request is said to have enunciated the same principles and, therefore, the one requested by defendant would have been superfluous. We cannot accept this proposition. The first declaration stated that no judgment could be given for defendant unless certain facts were found, but did not state that judgment should be given for him if those facts were found. Now the declaration requested by defendant asserted the proposition that if such facts, and, in addition, a guilty scienter on the part of the agent, were found, defendant was entitled to judgment. That declaration was refused and hence we cannot say the court disposed of the case on the theory that a finding of the facts it recited would warrant a judgment in defendant's favor. The natural conclusion from the refusal would be that the court thought it was necessary for him to establish, not only the hypothesized facts, but some other fact, before he would be entitled to judgment.
It may be doubted if a statement of what the market value of an article is, is ever a mere estimate of value by the speaker. Certainly the alleged statements of Cottrill on that subject in the present case are not to be treated as mere expressions of opinion, as plaintiff contended, but as assertions of fact, if they were made when he knew defendant was wholly ignorant of the market value of hardwood lumber and was relying on Cottrill's expert knowledge for enlightenment. Under those circumstances the parties were not dealing on equal terms, but one was putting confidence in the other's honesty and knowledge. [Cahn v. Reid, 18 Mo. App. 115; Stone v. Richmond, 21 Mo. App. 17.] According to Dent he' informed Cottrill that he knew nothing of the value of hardwood lumber and was compelled to rely on the latter's statements in fixing the market prices, the agreement being that the lumber was to be furnished by defendant at those prices.
Neither was it essential to a rescission of the contract by defendant, that fraudulent misstatements by plaintiff's agent should have been the sole inducement for entering into the contract. It is necessary that false representations should have been made by plaintiff's agent, and in vieAV of what the answer avers, intentionally made, and that defendant should have relied on them and-have been deceived by them so far that the deception'contributed toward inducing him to enter into the contract. [Benjamin, Sales (6 Ed.), p. 377; Cahn v. Reid, 18 Mo. App. 115, 131, et seq.; Becraft v. Grist, 52 Mo. App. 589; Burnham v. Ellmore, 66 Mo. App. 617, 621.]
The judgment is reversed and the cause remanded.
All concur.