Case Name: Baldwin v. Brown
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1924-03-03
Citations: 166 Ark. 1
Docket Number: 
Parties: Baldwin v. Brown.
Judges: The Ohief Justice and Mr. Justice Smith dissent.
Reporter: Arkansas Reports
Volume: 166
Pages: 1–18

Head Matter:
Baldwin v. Brown.
Original opinion delivered March 3, 1924.
1. Appeal and error — conflict between decree and clerk’s certificate. — Where there is a conflict between the recital of the decree appealed from and'.the certificate of the clerk, the former must prevail.
2. Appeal and error — presumption from absence of testimony.— Though the evidence in a chancery case on appeal is so conflicting that the court is unable to determine where the preponderance lies, yet, where a portion of the testimony heard by the chancellor is not in the transcript, it will be presumed that the decree is correct.
3. Appeal and error — admission of incompetent evidence.— Though incompetent evidence was admitted in a chancery case, it will be presumed that the court gave consideration only to competent and revelant evidence.
4. Equity — relief granted. — The statement of facts, and not the prayer for relief, constitutes the cause of action, and the court may grant any relief that the. pleaded facts warrant under a prayer for general relief, or without any prayer at all; but the court will not suffer the plaintiff to take a decree that is' not responsive to the issues nor justified by a full development of the case by the testimony.
5. Cancellation of instrument — removal of incumbrance.— Where plaintiff sued to cancel a deed of land as procured by fraud, and made a party thereto one who in good faith held a mortgage on the land, she was entitled to recover from her grantee the amount required to redeem the land from the mortgage, without first paying the mortgage debt.
6. Appeal and error — limitation—cross-appeal.—Where certain defendants appealed in the lower court from a decree canceling as fraudulent a deed executed by plaintiff, but foreclosing a mortgage executed by one of the defendants to an innocent mort gagee, and plaintiff -prayed a cross-appeal in the lower court from the decree of foreclosure, hut the transcript was not filed in the Supreme Court within 90 days, as required by Crawford & Moses’ Dig., § 2135, the subsequent granting of an appeal to defendants under § 2140, Id., did not operate to perfect plaintiff’s cross-appeal against the mortgagee-defendant who did not appeal.
7. Appeal and error — time por appealing. — While a cross-appeal, under C. & M. Dig., § 2166, may be granted to an appellee against an appellant, or any co-appellee, at any time before the trial of the cause in the Supreme Court, an appeal by an appellee against a party who has not appealed is in effect an original appeal and must be prayed within six months from the rendition of the judgment.
8. Fraud — remedies.—One induced to sell his land by false representations may sue for a rescission of the contract, or for damages sustained, or for rescission and damages where complete relief cannot be given by rescission alone.
9. Equity — decree under general prayer. — In order to entitle the plaintiff to a decree under the general prayer different from that specially prayed, the allegations relied on must not only be such as to afford a ground for the relief sought, but they must have been introduced in the bill for the purpose of showing a claim to relief, and not for the mere purpose of corroborating the plaintiff’s right to the specific relief prayed, otherwise the court would take the defendant by surprise.
10. Cancellation of instruments — relief under general prayer. — Where a vendor, suing to cancel a deed to his vendee for fraud, joined as parties third persons alleged to-have participated in the fraud, but asked only that her deed be canceled and for general relief, she was not- entitled to personal judgment against such third persons.
Appeal from Washington Chancery Court; Ben F. McMahan, Chancellor;
affirmed.
W. N. Ivie and J. V. Walker, for appellants.
1. The alleged false and fraudulent representations, both under the allegations of the complaint and under the proof, .all relate only to the value of the seven gold bonds of the Southwest Oil and Live Stock Association given as a consideration for the purchase of lands. There is no allegation or proof of confidential relationship between Baldwin and appellee, nor of any superior knowledge on his part as to the market value of the bonds. Representations that relate merely to the value of property, even if untrue, do not give the person to whom made a cause of action for damages against the party making them, nor a cross-action by way of recoupment or set-off. Smith on Law of Fraud, § 30; 76 Me. 223; 46 Minn. 463. Not only did Baldwin give appellee, as she herself admits, the opportunity to investigate the value of the bonds, but advised her to make such investigation. 3 Wyo. 356; 163 111. 17; Smith, Law of Fraud, § 34; 82 S. W. 433; 99 Ark. 438, 442; 11 Ark. 58; 19 Ark. 522; 46 Ark. 337; 47 Ark. 148; 95 Ark. 375.
2. There was no justification in the pleadings, even as finally amended, nor in the proof, for a personal judgment against Hurst, F; L. Bradley and Josephine Bradley. Josephine Bradley was a bona fide purchaser for a valuable consideration. 132 Ark. 158; 145 Ark. 121.
J. W. Grabiel, for appellee.
1. It is seldom that fraud can be proved by direct evidence, because of the difficulty arising from its nature, and circumstances enter largely into the proof. 130 la. 513, 114 A. ,S. R. 443; 4 Wall. 463. But the allegations of fraud in this case were proved as completely as could be, short of a full and complete confession.
2. To render one liable for damages in an action for deceit, it is not necessary that he shall have derived any benefits from the deception, or have colluded with the person who was so benefited, nor that he should have any interest in the contemplated transaction, or the subject-matter thereof, or in making the representation, or expected any benefit. 12 R. C. L. 394, par. 143.
3. The liability 'of each of the defendants, Bradley, Hurst and Baldwin, is clearly established. Even if Baldwin had made no misrepresentations, he would be liable, because he is bound by what the others said. 21 Yt. 129, 52 Am. Dec. 46; 12 R. C. L. 403, §§ 150,151; Id. 402; Id. 429, § 176. Hurst, when Mrs. Brown was insisting that he disclose all the information he had relative to the bonds and the company that issued them, was bound to do so, and he could not avoid responsibility by stating only those things that were favorable to the matter in hand; Any concealment of facts which he knew would cause her to distrust his opinion or advice rendered him liable for fraudulent misrepresentations. 12 B. C. L. 310; 229 Mo. 27. While an express stipulation or warning may purge silence of its fraudulent import, yet there must be neither active concealment nor representations calculated to throw the other party off his guard. 9 Conn. 107. The rule that one may not rely upon representations of value or cost, but rather must .exercise his own judgment, does not apply where the parties do not stand on an equal footing, especially where there is a relation of confidence or trust between them, or where one is fraudulently prevented from making inquiries. 12 B. C. L. 381, § 132; Id. 283, § 47. For rule as to whether statements relative to the value of property are mere expressions of opinion, or are material representations, see 99 Ark. 438; 162 111. 417. The fact that Baldwin told Mr. and Mrs. Brown that they should investigate, which occurred after they suggested a time to investigate, does not remove the taint of fraud from his dealing with them. It is significant that he told them what they should do, where they should investigate, and directed their inquiries to the parties who were working with him. And the fact that these parties made reference to the source of their information does not remove the taint. 12 B. C. L. 441, § 186; 2 Pomeroy, Eq. Jur., 4th ed., 1856, §§ 895, 896.

Opinion:
McCulloch, C. J.
The appellee, Mrs. Almyra O. Brown, was, on February 9, 1921, the owner of a farm in Washington County, containing 285 acres, which is the subject-matter of this controversy, and on that day she conveyed it to Thomas E. Baldwin, the sum of $7,000 being recited in the deed as the consideration for the conveyance. This consideration was in fact paid by the delivery to Mrs. Brown by Baldwin of seven so-called gold bonds of the 'Southwestern Oil & Livestock Association, of Fort Worth, Texas, an unincorporated concern doing business as a common-law trust. The b'onds were- each of the denomination of $1,000, bearing interest at eight per centum per annum, payable annually. Baldwin conveyed the land to Josephine Bradley, wife of F. L. Bradley, by deed dated February 12, 1921, but which was not filed for record until February 28, 1921; and on the last-mentioned date Mrs. Bradley mortgaged the land to Mrs. Lucy Wilson to secure a loan of money in the sum of $1,200. This mortgage was filed on the same date. On that date (February 28, 1921) Mrs. Brown instituted this action in the chancery court of Washington County against Baldwin to-cancel the conveyance on account of alleged misrepresentations concerning the value -of the -bonds which were delivered as the consideration for the conveyance. S. K. Leskey was joined as defendant in the suit, on an allegation that he claimed a lien on the land, but it does not appear that Leskey was ever served with process, and he has passed out of the -suit. Appellee filed a lis pendens under the statute -on the day that the suit was instituted. At that time appellant was not apprised of the conveyance from Baldwin to Mrs. Bradley, nor of the mortgage executed by Mrs. Bradley to Mrs. Wilson. Subsequently appellee amended her complaint and joined as defendants Mrs. Bradley. and Mrs. Wilson, alleging that neither of them were innocent purchasers for value, and also bringing in, as parties defendant, F. L. Bradley and George A. Hurst, alleging that they participated in the fraudulent misrepresentations by aiding Baldwin in inducing appellee to convey her land for the consideration named. Mrs. Wilson filed an answer, denying that she had knowledge of the fraud alleged to have been perpetrated on appellee, and she asked that appellants, Baldwin, Bradley and Hurst, be made parties, and that, if the court canceled her mortgage, she have judgment over against appellants for the amount of her debt.
The cause was heard by the court upon the pleadings and exhibits and the depositions -of numerous witnesses, whose names were set forth in the decree, and the court found in favor of appellee upon the charge of fraudulent misrepresentations, and canceled her deed to Baldwin and the deed from Baldwin to Mrs. Bradley, but found that Mrs. Wilson was an innocent mortgagee, and the decree vested title to the land in appellee, subject to Mrs. Wilson's lien as mortgagee. The court also rendered a decree in favor of appellee for the recovery from Baldwin, Bradley and Hurst of the amount of Mrs. Wilson's mortgage debt, with interest.
Baldwin, Bradley, Mrs. Bradley and Hurst prayed .an appeal, which was granted by the chancery court, and appellee also prayed an appeal from the decree in favor of Mrs. Wilson. This decree was rendered on November 23, 1922, and none of the appeals were perfected within ninety days, as required by statute, but on May 7,1923, Baldwin, Bradley, Hurst and Mrs. Bradley filed an authenticated copy of the record with this court and prayed an appeal, which was granted by the clerk of this court. Appellee obtained a cross-appeal on November 11, 1923.
There is a conflict in every phase of the testimony, and w.e are unable to determine where the preponderance lies, for the reason that the deposition of one of the witnesses, J. C. Barthell by name, is omitted from the'transcript. The record entry of the decree recites the name of this witness as one of the deponents in the trial of the case, but his deposition is not in the record. The clerk certifies that the record is complete, but,' there being a conflict between the recital of the decree and the certificate of the clerk, the former must prevail. Weaver-Dowdy Co. v. Brewer, 129 Ark. 193; Massey v. Kissire, 119 Ark. 222. The absence from the transcript of part of the testimony in the case raises the presumption that the decree was correct. It is therefore unnecessary, to discuss the testimony in further detail.
.It is insisted by appellant that some of the testimony of the witnesses was incompetent, but we must indulge the presumption that the court only gave consideration to such testimony as was competent and relevant. Niagara Fire Ins. Co. v. Boon, 76 Ark. 153.
It is .also contended that the personal decree in favor of appellee for recovery of the amount of Mrs. Wilson's mortgage debt is erroneous on its face, for the reasons, (1) that appellee's complaint contained no prayer for such relief, and (2) that appellee had no right of action for such recovery until she was compelled to pay the debt.
It is true that the complaint contained no specific prayer for such relief, but it contained a prayer for general relief, in addition to the specific prayer for cancellation of all the deeds, including the mortgage to Mrs. Wilson.
The rule established by decisions of this court is that the statement of facts, and not the prayer for relief, constitutes the cause of action, and that the court may grant any relief that the pleaded facts warrant under a prayer for general relief, or without any prayer at all. Kelly's Heirs v. McGuire, 15 Ark. 555; Chaffee v. Oliver, 39 Ark. 531; Sannoner v. Jacobson & Co., 47 Ark. 31; Ashley v. Little Rock, 56 Ark. 391; Waterman v. Irby, 76 Ark. 551. An exception to this rule is that "the court will not suffer the defendant to be taken by surprise and permit the plaintiff to take a decree that is not responsive to the issues and which is not justified by a full development of the case by the testimony." Mason v. Gates, 90 Ark. 241. This case falls within the rule and not within the exception. Appellants were made parties at the request of Mrs. Wilson to answer for alleged fraud in inducing her to accept a mortgage on the land. They were also made parties by appellee, and the question of their conduct in obtaining the deed from appellee and in obtaining the loan from Mrs. Wilson were issues directly raised by the pleadings. For that reason there could have been no surprise in granting relief on the general prayer. In fact, a personal decree for recovery of the amount of the incumbrance wrongfully placed on the land was the only available relief against appellant Hurst, for he was not an actual party to the conveyance and was not a proper party to this litigation for any other purpose.
. The right of action was not prematurely sustained, even though appellee had not paid the mortgage debt, for the recovery of this amount was a part of appellee's damage in having her land wrongfully incumbered by the mortgage to Mrs. Wilson. She could not obtain a cancellation of the mortgage for the reason that Mrs. Wilson was an innocent party, but she was entitled to the only available reparation, which was to allow her to recover the amount necessary to redeem from the mortgage — otherwise she is without relief.
Appellee 'did not perfect her original appeal from the decree in favor of Mrs. Wilson within ninety days after the rendition of the decree, as required by statute (Crawford & Moses' Digest, § 2135); in fact, she did not perfect the original appeal at all. If the transcript had been filed by any of the appellants within the prescribed time, this would have been sufficient to perfect all of the appeals which had been granted by the court below, but no transcript was filed by any of the appellants within the prescribed time. The present appellants — Baldwin, Bradley, Hurst and Mrs. Bradley— abandoned their original appeal, and, within six months, took a new appeal as provided by statute, Crawford & Moses' Digest, § 2140. The granting of this appeal to the appellants did not have the effect of perfecting the original appeal granted to the appellee by the lower court. The statute (Crawford & Moses' Digest, § 2166) provides that a cross-appeal may be granted to an appellee against an appellant 'or any co-appellee at any time before the trial of the cause in the Supreme Court. Appellee was not entitled to a cross-appeal against Mrs. Wilson, for the reason that the latter was not an appellant in the case, nor a co-appellee. The controversy between appellee and Mrs. Wilson 'Concerning the foreclosure of the latter's mortgage was distinct from the controversy between appellee and the appellants, therefore appellee was not entitled to a cross-appeal. Shapard v. Nixon, 122 Ark. 530; Meyers v. Linebarger, 144 Ark. 389. It has been the practice here, in instances where a cross-appeal was improperly granted within the period of six months allowed by statute for obtaining original appeals, to treat the cross-appeal as an original appeal, but, in the present instance, the cross-appeal was not granted until after the expiration of six months from the date of the rendition of the judgment. Therefore it was too late to operate as an original appeal.
Opinion delivered April 21, 1924.
It follows from what we have said that the cross-appeal of appellee must be dismissed and that the decree of the chancery court against appellants must be affirmed. It is so ordered.