Court Opinion

ID: 9832734
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:08:44.263278+00
Date Added: 2024-06-11T07:43:51.104400
License: Public Domain

On Motion for Rehearing.
The case of Du Bois v. Rooney, 82 Tex. 173, 17 S. W. 528, was a case similar to the present suit. In that case the plaintiff sought to recover the balance due upon defendant’s contract for the purchase of cattle. The defendant answered, by a plea in recon-vention, that, as a part of the contract relied upon by the plaintiffs, plaintiffs agreed to sell to the defendant 320 acres of land which plaintiffs represented they owned, and that the same had a valuable supply of water which the defendant desired for ranching purposes. In the plea in reconvention, it was alleged that the representations as to the title and quality of the land were false and fraudulently made by the plaintiffs; that plaintiffs owned no title to the land pointed out, and such fraud and deceit practiced by them was the basis of defendant’s cross-action for damages against them. In disposing of that case the Supreme Court said:
“The rules that govern the settlement of the rights of the parties in actions for breach of the covenants of warranty and in equitable actions in which equitable relief is asked will *265not govern and apply in this ease. This case throughout as treated by the pleadings of both plaintiffs and the defendant presents only legal issues and is strictly the assertion of legal rights. The case made by the answer is one of deceit, in which the defendant seeks to hold the plaintiffs liable for the effects of the false representations and the fraud practiced upon him in the sale of land. Grabenheimer v. Blum, 63 Tex. 374, 378 ; 2 Pom. Eq. §§ 872, 897, and note; Brock v. Southwick, 10 Tex. 68; Walling v. Kinnard, 10 Tex. 512; Wheeler v. Boyd, 69 Tex. 298. If we treat the aver-ments of the answer as speaking the truth, it presents a case in which the defendant, by reason of representations made by the plaintiffs about a subject-matter of the contract that was of such importance, was induced to enter into it. The effect of these representations, if true, were certainly calculated to induce the defendant to execute the contract and purchase of the Leoneita survey; and, when he ascertained they were false his right of action arose in damages for the results of plaintiffs’ fraud. Pendarvis v. Gray, 41 Tex. 326; Culbertson v. Blanchard, 79 Tex. 486, and cases there .cited; Wheeler v. Boyd, 69 Tex. 299.”
In 12 R. C. L. p. 408, par. 154, the following is said:
‘When a fraudulent transaction is sought to be enforced in the courts, the defendant may set up the fraud as either a complete or partial defense, as the case may be, or else in mitigation of damages or ground for recoupment.”
And on page 409, par. 155, is the following:
“One who has been induced to enter into a contract by fraud may elect to retain what ho has received under the contract, and bring an action to recover damages for the injury he has sustained from the deceit. Such an action is in the nature of an action on the case, and is denominated an action of deceit.”
[7] Fraud, which induces the execution of a written contract is also a good defense to an action at law for the enforcement of the contract, even though the party defrauded also has the alternative right to equitable relief in a suit for cancellation or rescission of the contract. 9 Oye. pp. 432, 433; 1 Daniel on Negotiable Instruments, par. 193, and numerous decisions there cited. In the present suit the frau'd practiced by the plaintiff and which induced the appellees to purchase the lease was alleged both by way of defense to plaintiff’s suit and as a basis for the plea in reconvention for damages. That was permissible, and no exception was urged to that form of the pleading. Northern Texas Traction Co. v. City of Polytechnic (Tex. Com. App.) 236 S. W. 73.
In Grabenheimer v. Blum, 63 Tex. 369, authorities were cited with approval to the effect that, after one who has been fraudulently induced to execute a contract discovers the fraud and fails to repudiate within a reasonable time and elects to abide by the contract and keeps what he has received under the contract, he thereby loses the benefit of the equitable relief of restoration to his former position, by having restitution of the consideration he has paid, but does not lose his legal remedy of damages for the deceit practiced.
' In the present suit, appellees sought to recover upon their plea in reconvention the $750 paid to plaintiff at the time the lease was executed. The amount so claimed was not specifically .designated as damages which appellees had sustained by reason of the fraud practiced upon them by the plaintiff, but such was clearly the legal import of the plea. Plaintiff addressed no exception to the plea presenting the contention that the amount paid out by them would not be the proper measure of appellees’ damages for the deceit practiced, and no assignment, of error has been presented here embodying that contention. Nor has appellant presented any assignment to the amount of appellees’ recovery as being excessive; and under the circumstances 'Stated, we cannot say as a conclusion of law that the amount of recovery awarded upon the plea in reconvention, as damages for the fraud practiced by the plaintiff, was erroneous simply because it was the same sum which was paid to the appellant by the_ appellees. Furthermore, it was conclusively shown' upon the trial and the point is urged by appellant in briefs filed here that, at the time of the trial, the lease was absolutely worthless. Nor was any proof offered to show the market value of the lease' between the date appellees discovered the fraud and the date of the trial.
According, appellant’s motion for rehearing is overruled. .