Case Name: Waylon E. CAMPBELL, et ux., Appellants, v. Don L. BOOTH et ux., Appellees
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1975-06-27
Citations: 526 S.W.2d 167
Docket Number: No. 18592
Parties: Waylon E. CAMPBELL, et ux., Appellants, v. Don L. BOOTH et ux., Appellees.
Judges: AKIN, J., dissents.
Reporter: South Western Reporter Second Series
Volume: 526
Pages: 167–179

Head Matter:
Waylon E. CAMPBELL, et ux., Appellants, v. Don L. BOOTH et ux., Appellees.
No. 18592.
Court of Civil Appeals of Texas, Dallas.
June 27, 1975.
Rehearing Denied Aug. 7, 1975.
John M. Gillis, Gillis, Rogers & Taylor, Dallas, for appellants.
Don C. Templin, Haynes & Boone, Dallas, for appellees.

Opinion:
CLAUDE WILLIAMS, Chief Justice.
Waylon E. Campbell and Margaret J. Campbell brought this action against Don L. Booth and Janet B. Booth for damages, both actual and exemplary, alleged to have resulted from affirmative fraudulent concealment in the sale of real estate. The Booths were the owners of a house located in Dallas, Texas, and entered into a contract with the Campbells during the month of August 1973, whereby the Campbells agreed to purchase the house for a stated consideration. In their petition the Camp-bells alleged that prior to the sale, the Booths had failed to disclose to them that the carpet throughout the house had been permeated with canine urine and that the Booths had actively concealed from the Campbells the extensive deleterious effects of said urine; that said facts were material to the transaction; that the Campbells had relied and acted on the presumption that no such fact existed and that they did not become aware of the malodorous nature and condition of the carpet throughout the house until after they obtained possession. They alleged damages caused by replacement of the carpet throughout the house which caused a depreciation of the value of the premises. Trial was to a jury, and at the close of plaintiff's evidence, defendants moved for and were granted an instructed verdict. Judgment was rendered that plaintiffs take nothing. This appeal involves the sole question of the propriéty of the action on the part of the trial court in granting the motion for directed verdict.
Our appellate review of a judgment based upon a directed verdict is governed by well-established rules of law. A directed verdict presents a "no evidence" point. Shubert v. Fidelity & Casualty Co., 467 S.W.2d 662, 663 (Tex.Civ.App.—Houston [1st Dist.] 1971, writ ref'd n. r. e.). We are required to accept as true the evidence in the record supporting appellants' allegations, both of fraud and damages disregarding all evidence to the contrary. All conflicts and inconsistencies must be resolved in favor of appellants, and we must draw all inferences therefrom most favorable to appellants' alleged cause of action. Constant v. Howe, 436 S.W.2d 115 (Tex.1968); Hart v. Van Zandt, 399 S.W.2d 791, 793 (Tex.1965); Adams v. Slattery, 156 Tex. 433, 295 S.W.2d 859, 865 (1956); Triangle Motors v. Richmond, 152 Tex. 354, 258 S.W.2d 60 (1953); Anderson v. Moore, 448 S.W.2d 105 (Tex.1969). If the evidence presented is of such a conclusive character that reasonable minds could not differ as to its effect and only one conclusion may reasonably be drawn from it, only then does the question become one of law, thereby justifying the granting of an instructed verdict. Clevenger v. Liberty Mutual Insurance Co., 396 S.W.2d 174, 177 (Tex.Civ.App.—Dallas 1965, writ ref'd n. r. e.). The appellate court does not pass upon the credibility of witnesses but is obligated to accept as true all evidence which, when liberally construed in favor of the adverse party, tends to support such adverse party's contention and disregards all contradictory evidence favorable to the movant. When so viewed, if the evidence amounts to more than a mere suspicion or speculation that the fact propositions asserted by the opponent to the motion might be true or false, an issue of fact is raised and should be submitted to the jury. Humphreys v. Haragan, 476 S.W.2d 880, 882 (Tex.Civ.App.—Amarillo 1972, no writ); 3 McDonald, Texas Civil Practice § 11.28.2, at 235-36 (1970).
In determining issues of fraud courts allow a wide latitude, and the evidence thereon may embrace all the facts and circumstances which go to make up the transaction, disclose its true character, explain the acts of the parties, or throw light on their objects and intentions. The presence or absence of a certain state of mind may be proved by circumstances. Fraud is deducible from artifice and concealment as well as from affirmative conduct of a character to deceive. Blanton v. Sherman Compress Co., 256 S.W.2d 884 (Tex.Civ.App.—Dallas 1953, no writ); Ten-Cate v. First National Bank, 52 S.W.2d 323, 326 (Tex.Civ.App.—Fort Worth 1932, no writ).
We have examined the record in the light of these rules. Mr. and Mrs. Booth, the owners of the property in question, placed the property in the hands of a real estate broker to negotiate a sale. Mr. and Mrs. Campbell, on one or more occasions, inspected the house. During these inspection tours, made in company with the real estate agent, the Campbells did not observe anything out of the ordinary nor did they smell any offensive odors. The Campbells made an offer to purchase the house, and a contract for such sale was signed on August 31, 1973. A few days after the signing of the contract, Mr. and Mrs. Campbell and Mr. Campbell's mother again toured the house and did not detect any offensive odors. The sale was consummated about September 25, 1973, and the Booths vacated the premises about October 1, 1973. At the time the Booths left the house, it was locked, and there is no evidence that anyone entered the premises until about one week later on October 7, 1973, when the Camp-bells returned to take possession. On that date, when the Campbells opened the house, they immediately detected the offensive odor for the first time. This odor was determined to have been caused by canine urine which permeated most of the carpets in the house. During the next two or three weeks, the Campbells employed a rug cleaning company, using the system known as "steamatic," to attempt to clean and treat the carpets. During that same time they also had an experienced employee of the American Rug and Carpet Company and a Mr. Carr, the owner of a carpet supply and cleaning company, to inspect the premises generally. Thereafter, the carpets were taken up and removed. Samples of the damaged carpet were made and introduced into evidence. After replacing the damaged carpet with new carpet, the Campbells moved into the house. Mr. Campbell testified that he would not have entered into the contract for the purchase of the house had he been aware of the condition of the rugs which was discovered following the sale.
Mr. Campbell said that neither he nor his wife had any reason to suspect that there was anything wrong with the carpet prior to the closing of the contract of sale. When he and his wife entered the house, about two weeks later, they were confronted with the smell which they described as "horrible." He said: "It just smelled horrible. It wasn't just a little smell like the house had been closed up a week and without substantial ventilation, it just smelled horrible." At the time the Campbells inspected the house, prior to the purchase of same, they knew that the Booths had several dogs, two Dobermans, and a smaller dog as well as several cats. At that time they did not know that the dogs were allowed in the house but did see the cats in a closet. Mr. Campbell said that on one of his inspection trips through the house that he noticed at least one candle which was burning and that his wife and the agent who was showing the house also saw it. Concerning deodorizers, Mr. Campbell testified that he observed "airwick around all over the place," which he described as "little pull-up deals" and which would act as a deodorizer. He said that at least two of these were left in the hotise, one in the kitchen and one in the bathroom and that they had been pulled up but they did not get rid of the odor altogether. He said that: "I would have to say over a period of time they do not, but if you put enough in there apparently you do. The thing that gave a lot of odor was a small jar that we discovered afterwards also, in the kitchen, just a little bitty jar about like this with a powerful deodorizer." In this connection he testified, in detail:
Q. And you said you found a deodorizer that seemed to work on these smells?
A. Uh, huh.
Q. Did they give you permanent relief? Did it remove them or cover them up?
A. It covered them up.
Q. Was it effective in covering them up?
A. It appeared to be very effective. .
Q. Did you try it after you found it out there?
A. I sure did.
Q. And how long would it give you relief in a room after you applied it?
A. I would say several hours.
Q. It lasts for several hours and when it would diminish or evaporate or whatever it does, would the smell be noticeably less or—
A. Back to the same.
Mr. Campbell further testified that after the rugs were replaced he had occasion to examine the bottom of the old carpets, and there he found stains on almost every area in every room. These stains appeared to him to be animal urine, and they had a very stringent odor.
Mr. E. H. Durham, president of American Rug & Carpet Company and an expert in cleaning and repairing rugs, examined the samples of carpet which had been taken from the premises. He said that based upon his examination the rugs were definitely stained with urine either from a cat or a dog and that the stains could not be effectively cleaned in place nor could they be effectively removed, cleaned and replaced because one could not kill the odor by cleaning. He testified that this odor could not be removed but it could be concealed to a degree by deodorizing it. He said that the deodorant would only be temporary and that the smell would return after a time. When asked about the deodorizer that the Campbells found on the premises, Mr. Durham said that this would possibly kill the odor for a length of time but that it would reappear. The deodorizer smell itself would disappear completely. He said that the deodorizer would completely neutralize a great deal of the smell but it would not ever completely remove the smell if one actually got down and put his nose on the carpet itself. Concerning scented candles, he testified they would kill odors in the air. When asked to explain the "stea-matic" process of cleaning rugs, he stated that this process could not have caused the dog or cat urine smell and stains on the back of the carpets. He further testified that when carpet is wet because of the steamatic process, a urine smell could be intensified, but once it dries up again, the smell would no longer be aggravated. He concluded, therefore, that the steamatic process would not cause an animal urine smell nor permanently aggravate such a smell.
Mr. Howard Carr, another carpet expert, personally examined the damaged carpet while in place at the residence. He testified that the backs of the carpets in question were all faded and coming apart. He said they were rotten and deteriorated and that such was caused by pet urine. He testified that he could tell the difference between a urine smell and the effect of steamatic cleaning process and that he definitely knew that the smell of the rugs in question was caused by urine. He said that: "Just to look at it from the surface it didn't appear to show wear. It showed normal wear and until you smell it, you don't recognize the damage." He said when he initially went to the house and inspected the carpet he found that: "The odor about knocked you over." He pulled the corner of the carpet up in each room to observe it and found no salvageable piece of carpet in the house. He said that in every room there was enough carpet damaged by the urine so as to make it unusable. However, there were no visible stains on the top of the carpeting, and he explained this fact by stating that these were all synthetic carpets and do not show stains on the surface. He said that at the time he inspected the carpets in the dining room and den, those rugs were still wet; that he could pick them up and twist the carpets and the urine would run out. He estimated that these wet spots were about a month old. When asked if the wetness could possibly have been caused by the steamatic cleaning a week or two prior to his visit, he replied: "If it had been steam cleaned a week or so prior it would have been wet evenly all over, and I am assuming that the people would know what they are doing and not leave it soaking wet around the wall." He positively stated that the wetness he observed in the carpeting was urine and not water and that the urine was not diluted.
Don Booth testified that he and his wife lived in the house for two years before selling it to the Campbells. During this time they had two cats and three dogs; one of the dogs was an Afghan which weighed approximately fifty pounds and the other two were Dobermans, weighing about eighty pounds apiece. For six to eighteen months of his occupation of the house, Booth testified that the two Dobermans were allowed in the house in the evenings; that the Afghan was subsequently traded for a smaller dog but during the time they owned the Afghan he was also allowed in the house at night. The cats stayed inside at all times. When asked to examine the carpet samples that were removed from his house, he admitted that they smelled offensive and that the odor was fairly strong. With regard to candles, Mr. Booth stated that there were some in the den and there was one in the breakfast room. The candle in the breakfast room had a vanilla scent. He testified:
Q. Did you burn those all the time at the time that you were showing the house to the Campbells and the folks that were looking during that period of time?
A. The candles? I can't say when the first time was, but when Mr. Campbell and Mrs. Campbell came back that afternoon I think they were probably on. It was the usual practice.
He also testified, concerning deodorizers:
Q. Did you have a deodorizer in your house at the time you were showing it for sale to the Campbells?
A. Yes, sir, there were deodorizers.
Q. Were they placed there on your own initiative or on the suggestion of your realtors?
A. They were on our initiative.
Q. Approximately how many deodorizers did you have throughout the house?
A. Well, there was — I know my wife had one of these solid deodorizers, I don't know the brand name, in the kitchen and there was the customary one kept in each bathroom.
He was asked: "Do you recall when I asked you how many scented candles would you all light when the realtor came by with the prospective customer and you answered there were, I think, three in the den?" He answered, "Well, there were some candles over on a bookshelf that were lighted occasionally, yes, sir."
Appellees contend that the case is governed by the rule that fraud, because of silence as to a material fact, can only exist where the defrauded party did not have an equal opportunity to discover the true facts. That rule, however, does not apply to cases where, as here, the fraud resulted from affirmative acts of concealment.
Appellees also argue the implementation of the rule that while inferences may be utilized in cases of fraud, they cannot be made the basis of recovery when it is demonstrated that it is equally possible to infer a favorable motive as an unfavorable one. They contend that under this record, one may infer motives which are favorable to them. While we recognize the rule we cannot agree with appellees as to its relevancy here. When viewed in the light most favorable to appellants, this record does not contain evidence that renders it equally possible to infer a favorable motive to appellees as an unfavorable one. To the contrary the evidence is sufficient to lead only to the conclusion that appellees utilized the scented candles and other deodorizers for the purpose of masking odors caused by animal urine so that a favorable atmosphere would thereby be created when potential purchasers of the house were present.
With regard to the issue of damages, Tex.Bus. & Comm.Code Ann. § 27.01(b) (Tex. UCC 1968) provides that the measure of actual damages in a suit for fraud in a real estate transaction is "the difference between the value of the real estate . as represented or promised, and its actual value in the condition in which it is delivered at the time of the contract."
Appellants pled the statutory measure of damages in their trial amendment. The record contains sufficient evidence of probative force to present an issue on the question of damages.
The record is undisputed that the value of the house in question, as revealed by the contract between the parties, was $69,900. While this agreed price is not necessarily synonymous with "the value as represented," as required by § 27.01, it is some probative evidence thereof. As to the value of the property in the condition in which it was delivered, the record is replete with evidence concerning the cost of replacement of the carpeting which was damaged. There is positive testimony concerning the value of the 292 yards of carpeting which was replaced, one-fourth of that amount being dark green shag, valued at the time and place of the conveyance at $7.95 or $8.00 per yard installed; one-half of light green shag valued at $8.00 or $8.95 a yard installed; one-fourth of a lighter pale pastel carpet, valued at $10.00 to $12.00 a yard installed. Testimony of carpet cleaning and deodorizing experts reveals that none of the carpet was salvageable and that the replaced carpet had a value of 0 dollars. There is also evidence that the carpeting, had it been in the condition that it was represented that it would be, would have depreciated in value by four-twelfths or four-fifteenths, considering its age and lifespan. When this evidence is considered in its entirety, we conclude that the jury could have computed "the value of the real estate as received" by deducting the value of the carpet from the contract price of the house. The figure thus arrived at would, at least, be some evidence of the value of the property in the condition in which it was received by the appellants. It must be emphasized that we are not here dealing with the question of factual sufficiency of the evidence to support a verdict of the jury, but we are viewing the record in the light of an instructed verdict, and in doing so we must determine whether some evidence of probative force exists justifying the submission of the issue to the jury.
We believe that the rationale of the Supreme Court in Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127, 128 (1950) is peculiarly applicable in this case. While the question in that case was damage to personal property, the logic applied to the solution of the problems is the same as here. In Pasadena, the Supreme Court stated that evidence of the reasonable cost of repairing the damaged property to the identical condition it was in prior to the injury constitutes prima facie evidence of damages. The burden of proceeding then shifts to the defendant to allege and prove that the value of the property has been enhanced beyond the value before the injury by the repairs. This rule is based upon the sound and practical theory that in a tort action the measure of damages should reasonably and fairly compensate for the injury that results directly and proximately from the wrongful act. Such rationale applies with equal force to an action based upon fraud.
The cases of Frey v. Martin, 469 S.W.2d 316 (Tex.Civ.App.—Dallas 1971, writ ref'd n. r. e.) and Thrasher v. Walsh, 228 S.W. 961 (Tex.Civ.App.—San Antonio 1921, writ dism'd) relied upon by appellees, while involving the question of damages, are easily distinguishable from the instant case. Both cases involved exchange of real estate, and each was submitted to the court or the jury. Neither case involved the question of propriety of an instructed verdict. In Frey, there was an exchange of property rather than a sale, as in this instance. In that case the fraud alleged was that one of the pieces of property exchanged, an apartment complex, did not contain the number of units represented. The court in that case concluded that the value per unit of the apartments was not a proper measure of damages in the case of fraud involving an exchange of real property. In Thrasher, the common law measure of damage was applied, that is the difference in the amount paid for the property and the true value thereof. The court held that since the facts alleged did not indicate what the respective values of the properties were, there was no basis upon which to compute the correct measure of damages. It is quite apparent that neither of these cases are similar to the one here and that in neither instance was there evidence of probative force on the issue of damages. As pointed out above, the testimony presented by appellants is sufficient to enable the jury to have some basis for answering the issues which should have been submitted to them on the question of damages.
When this record is viewed in its entirety, within the rules announced above, we conclude that there is more than a mere suspicion or surmise concerning the elements of fraudulent concealment and also of damages resulting therefrom. The trial court should have submitted these issues to the jury.
The judgment of the trial court is reversed and remanded.
AKIN, J., dissents.