Opinion ID: 1228967
Heading Depth: 1
Heading Rank: 5

Heading: Fraud as a Matter of Law

Text: The court stated, There isn't one word in this record of any fraud perpetrated by Mr. Adams upon these individuals. In so ruling, it appears to us that the court was unmindful of Idaho case law touching on the doctrine of constructive fraud, and the court was thus applying an incorrect standard as to what constitutes actionable fraud, which may be intentional or constructive. What was said in Turner Agency v. Pemberton, 38 Idaho 235, 221 P. 133 (1923), appears to be applicable here: ... The trial court was evidently of the opinion that the representations alleged must have been made knowingly and wilfully and with intent to deceive in order to be material. It therefore confined itself to finding that respondent did not make such representations knowingly, wilfully and with intent to deceive [in order to be material]... . The idea back of this evidently was that an actual fraudulent intent would have to be proved to make a defense. Generally speaking, this is true. There is, however, a well-established exception in a case where the circumstances impose upon the vendor a special duty to know the truth of his representations, or where the nature of the situation is such that he is presumed to know the facts to which his representation relates. In such cases a misrepresentation is fraudulent even though not made knowingly or wilfully or with actual intent to deceive. 38 Idaho at 239, 221 P. at 135. In short, the general rule is that a vendor may be liable in tort for misrepresentations as to the area of land conveyed, notwithstanding such misrepresentations were made without actual knowledge of their falsity. Annot., Tort Liability for Damages for Misrepresentations as to Area of Real Property Sold or Exchanged, 54 A.L.R.2d 660, 680 (1957). The reason, of course, is that the parties to a real estate transaction do not deal on equal terms. An owner is presumed to know the boundaries of his own land, the quantity of his acreage, and the amount of water available. If he does not know the correct information, he must find out or refrain from making representations to unsuspecting strangers. Even honesty in making a mistake is no defense as it is incumbent upon the vendor to know the facts. Fowler v. Uezzell, 94 Idaho 951, 500 P.2d 852 (1972); Lanning v. Sprague, 71 Idaho 138, 143, 227 P.2d 347 (1956). The trial court's belief that only the A.S.C. made a representation and that Adams was not making any representation in merely showing the A.S.C. document is not an absolute proposition of law. The act of representing may take many forms: While false representations generally consist of verbal or written statements, a misrepresentation in words is not essential... . [A] misrepresentation need not be express, but may be implied or inferred from circumstances which are in fact equivalent to positive representation, or from acts or conduct, such as the exhibiting of fraudulent or misleading documents, or maps or plats... . (Emphasis supplied.) 37 Am.Jur.2d Fraud § 42 (1968). Even silence, in circumstances where a prospective purchaser might be led to harmful conclusions, is a form of representation. Brooks v. Jensen, 75 Idaho 201, 215-216, 270 P.2d 425 (1954). Finally, we observe that respondents, in their effort to sustain the judgment, challenge appellants' right to rely on the A.S.C. figures in light of their opportunity to check the figures themselves at the tax assessor's office, or by a survey of the land. The trial court did not address this particular element of fraud in its bench remarks. Such argument, however, has never found favor with this Court: False statements found ... to have been made and relied on cannot be avoided by the appellants by the contention that the respondents could have, by independent investigation, ascertained the truth. The appellants having stated what was untrue cannot now complain because respondents believed what they were told. Lack of caution on the part of respondents because they so believed, and the contention that respondents could have made an independent investigation and determined the true facts, is no defense to the action. Weitzel v. Jukich, 73 Idaho 301, 305, 251 P.2d 542, 544 (1953). And see, Lanning v. Sprague, supra . The judgment is reversed and the cause is remanded for a new trial. Costs are awarded to the appellants. McFADDEN, C.J., and DONALDSON and BAKES, JJ., concur. SHEPARD, J., dissents without opinion.