Court Opinion

ID: 9681731
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:55:33.411522+00
Date Added: 2024-06-11T18:17:35.623755
License: Public Domain

NYE, Chief Justice
(dissenting).
I respectfully dissent. I also withdraw my original Dissenting Opinion and substitute the following Opinion since the majority has changed its reasons and its decision in affirming the trial court’s action which granted an instructed verdict against Stone in favor of Eli Lipner and his Agency.
Since this is an instructed verdict case, we must indulge every inference that may properly be drawn from the evidence against the action of the trial judge in withdrawing the case from the jury and instructing a verdict against Stone. Echols *76v. Wells, 510 S.W.2d 916 (Tex.Sup.1974); Seideneck v. Cal Bayreauther Associates, 451 S.W.2d 752 (Tex.Sup.1970); Bass v. General Motors Corporation, 491 S.W.2d 941 (Tex.Civ.App.—Corpus Christi 1973, writ ref’d n. r. e.); T-L Drilling Company v. Northern Propane Gas Company, 516 S.W.2d 710 (Tex.Civ.App.-Corpus Christi 1974, no writ).
The necessary elements of actionable fraud are: 1) that a material representation was made; 2) that it was false; 3) that when the speaker made it, he knew it was false, or that he made it recklessly without any knowledge of its truth and as a positive assertion; 4) that he made it with the intention that it should be acted upon by the party; 5) that the party' acted in reliance upon it; and 6) that he thereby suffered injury. The majority now holds with respect to the action in fraud asserted against Lipner and the Agency: 1) that although there may be some evidence of fraud, such evidence is not supported by the pleadings; 2) that there was no evidence that Lipner made the representations “recklessly” without any knowledge of its truth and as a positive assertion; and 3) that the element of “reliance” was not raised by the evidence. I still disagree.
First, the majority argues that Stone failed to allege in precise, plain and concise language that Lipner told him that there were no pipeline easements on the 18.639 acres. It is not necessary to allege such precise language in view of Lipner’s failure to object or except to Stone’s Fifth Amended Petition. It has been repeatedly held and is the general rule, so well established that it should need no citation of authority, that the petition will be construed as favorably as possible for the pleader. Gulf, Colorado & Santa Fe Railway Co. v. Bliss, 368 S.W.2d 594 (Tex.Sup.1963). Equally as well established is the rule of law that in absence of special exceptions, the petition will be liberally construed in the pleaders’ favor. Scott v. Gardner, 137 Tex. 628, 156 S.W.2d 513 (1941, opinion adopted); Hanley v. Oil Capital Broadcasting Ass’n, 141 Tex. 243, 171 S.W.2d 864 (1943); Anderson v. McRae, 495 S.W.2d 351 (Tex.Civ.App.—Texarkana 1973, no writ); Luse v. Union City Transfer, 324 S.W.2d 935 (Tex.Civ.App.—Waco 1959, writ dism’d); Foster v. Lessing, 346 S.W.2d 939 (Tex.Civ.App.—Waco, 1961, writ ref’d n. r. e.).
With these rules in mind, we go to the admitted testimony that the majority would throw out and disregard. A “conversation” occurred between Lipner, Weil and Stone. Stone testified at the trial concerning this conversation as follows:
“Q Now, what was the substance of the conversation when you called Mr. Lipner?
Answer by Stone:
I wanted to find out from Mr. Lipner personally if Mr. Wil was conveying the correct information concerning the easements, and Mr. Lipner said that its true, that there was confusion. T found out that there were no easements on the property. There will be no exceptions made.’ ”
Lipner’s attorney objected to that portion of the testimony that Lipner found out that there were no easements on the property because that was not what Stone had pled in his petition and that it was at variance with his trial petition. The objection was overruled. The majority now asserts that the objection should have been sustained because the statement is not supported by the pleadings and if the objection had been sustained excluding the above evidence, there would have been no evidence that Lipner ever represented to Stone that there were no easements on the property.
In Stone’s Fifth Amended Petition, Stone alleges that the following representations were made to him: 1) “. . .to verify that the matter was straightened out, the plaintiff telephoned Mr. Lipner either on or just prior to March 12, 1971, and asked if everything was squared away. Mr. Lipner replied that it was, and that there would be no exception in the title policy . . .”; 2) “. . . he (Lipner) told Mr. Stone that everything was squared away concerning the pipelines . . .”; 3) “. these representations were made with the *77intention that they be acted upon by the Plaintiff in the manner reasonably contemplated . . . Unquestionably, the pleadings were sufficient to support the question and answer by Stone as can be seen from a reading of the pertinent portion of Stone’s Fifth Amended Petition, to-wit:
“COUNT I
. On March 12, 1971, or within a few days just prior thereto, the Defendant ELI LIPNER called the Plaintiff by telephone and stated that JOE WEIL was in his office and that there was some confusion over pipeline easements, and asked the Plaintiff if he knew of any pipeline or easement on the property. The Plaintiff replied that he did not know of any, but that Mr. LIPNER was the one who was supposed to be able to search the records out. Mr. LIPNER then hung up without divulging the details of the confusion. Later that same day or the next day or two thereafter, JOE WEIL came to see the Plaintiff and told him that everything was straightened out and that Mr. LIPNER was mistaken as to where the pipeline easement was. To verify that the matter was straightened out, the Plaintiff telephoned Mr. LIPNER either on or just prior to March 12, 1971, and asked if everything was squared away. Mr. LIPNER replied that it was, and that there would be no exceptions in the Title Policy." (Emphasis supplied.)
* * * * * *
“. . . Also, the statement made by Mr. LIPNER either on or just prior to March 12,1971, when he told Mr. STONE that everything was squared away concerning the pipelines coupled with the fact that Mr. LIPNER then caused to be issued through LAWYERS TITLE AGENCY OF CORPUS CHRISTI INC., an owner’s Policy of Title Insurance (attached as “Exhibit A”) and a Mortgagee’s Title Policy Binder on Interim Construction Loan, neither of which contained any mention of pipeline easements, plus the further fact that Mr. LIPNER approved for transfer of title the Warranty Deed from ISABEL B. WEIL (GOODSTEIN) which also did not mention any pipeline easements, constituted common law fraud on the part of ELI LIPNER and LAWYERS TITLE AGENCY OF CORPUS CHRISTI, INC., in that such statements and acts on the part of ELI LIPNER and LAWYERS TITLE AGENCY OF CORPUS CHRISTI, INC., constituted representations on their part that the title to the land Plaintiff was buying was not burdened with pipelines or pipeline easements. These representations were made with the intention that they be acted upon by the Plaintiff in the manner reasonably contemplated, (i. e., he would close the transaction, take title to said property and construct an FHA insured mobile home park thereon). Plaintiff rightfully relied upon the truth of said representation which were of material facts. These statements and acts were willfully made and done by each of the three Defendants and they knew, or in the exercise of reasonably care they should have known, the falsity of their statements and acts." (Emphasis supplied.)
Lipner did not in any manner level any special exceptions to the sufficiency of Stone’s pleadings nor to any other aspect of the plaintiff’s pleading on which they went to trial. I disagree with the majority holding that Lipner⅛ objection to the admissibility of the evidence of Lipner’s statement to Stone that “I found out there are no easements on the property”, should have been sustained on the grounds that it was at variance with Stone’s pleadings. This is so for several additional reasons.
First, I believe the evidence admitted by the trial court was responsive to the plaintiff’s allegations of fraud on the part of Lipner. Second, for the variance complained about to be such as to exclude the evidence admitted at trial and our review of the same, it must have been a fatal variance. Certainly not every variance is fatal. A workable criterion is implicit in the factors recognized in dividing variances be*78tween those which are material and those which are not. A variance is immaterial when so insubstantial that it would not mislead, surprise, or otherwise prejudice the opponent. 2 McDonalds, Texas Civil Practice § 5.19 p. 60 (1970). For a variance between the pleadings and proof to be fatal, the variance must be substantial, misleading and a prejudiced departure. Orgain v. Butler, 478 S.W.2d 610 (Tex.Civ.App.— Austin 1972, no writ); Glens Falls Insurance Company v. Vetrano, 347 S.W.2d 769 (Tex.Civ.App.—Houston 1961, no writ). Here, there was no showing that Lipner was misled or surprised by the introduction of such evidence or that such evidence was a prejudicial departure from Stone’s pleading, particularly in view of the fact that evidence of like effect (which will be set out later) was admitted later into evidence without objection together with the fact that Lipner had the opportunity to avoid being misled or surprised by employing the use of special exception in obtaining further particularities prior to trial. This, he failed to do. There being no fatal variance, the trial court did not err in overruling Lipner’s objection and admitting into evidence Stone’s testimony of what Lipner told him.
The majority holds that Stone’s pleadings are insufficient to support a judgment (even if there is evidence) against Lipner or the Agency for misrepresentation of a material fact which induced Stone to close the transaction. The majority based its decision on the technicality that the statement by Lipner that “everything was squared away”, coupled with his acts constituted representations that “the title to the land was not burdened with pipelines or pipeline easements” is not an allegation of fact but a mere conclusion by the pleader and as such cannot be considered. Even if this was true, which it is not, a legal conclusion pleaded is permissible, if the pleader’s adversary is not misled by it. White v. Bond, 355 S.W.2d 225 (Tex.Civ.App.-Amarillo 1962, rev’d on other grounds, 362 S.W.2d 295 (1962); Texas Employers’ Insurance Association v. Price, 336 S.W.2d 304 (Tex.Civ.App.-Eastland, 1960, no writ); Rule 45, T.R.C.P. This is particularly true in the absence of special exceptions to the pleading. Texas Employers’ Insurance Association v. Price, supra; Greenfeld v. San Jacinto Insurance Company, 319 S.W.2d 134 (Tex.Civ.App.-Houston 1958, no writ); Blackstock v. Gribble, 312 S.W.2d 289 (Tex.Civ.App.-Eastland 1958, writ ref’d n. r. e.). There is certainly not one thing in this record to indicate that Lipner or the Agency was misled by the pleadings of Stone. Neither Lipner nor the Agency contend in their briefs that they were misled.
Next the majority asserts that a special allegation in a pleading controls over a general allegation and it can, therefore, be inferred that the meaning of the term “squared away” is limited by the specific allegation “there will be no exceptions in the Title Policy”, to which it was coupled citing Monsanto Company v. Milam, 494 S.W.2d 534 (Tex.Sup.1973) and Richardson v. First National Life Insurance Company, 419 S.W.2d 836 (Tex.Sup.1967). These cases are not in point. The allegations in Stone’s pleading that Lipner replied that everything was squared away cannot be considered a general allegation. Unquestionably, it is an allegation of a specific fact (a statement) making up one of the elements of fraud. There is nothing general about such allegation.
The allegation that Lipner made the fraudulent statement i. e. “ . . . everything was squared away concerning the pipelines . . . ” and the introduction of such same evidence showing the same, together with the context in which said statement was made is some evidence of a material representation and I would hold that it was properly admitted into evidence by the trial court.
Even if it can be held that a fatal variance exists precluding the admissibility of the above evidence (which it cannot), other evidence of like character was later introduced without objection, therefore, implying consent to try issues outside the pleadings. Mr. Stone’s testimony, later introduced without objection, is set out as follows:
*79“Q And it was correct, he (Lipner) said that everything was squared away?
A He (Lipner) said that he and Joe Weil had resolved the confusion. That he knew now where the easements were. They were not in the property that I purchased. Words to that effect.”
The majority attempts to discard the above evidence asserting that Stone, by adding the phrase “words to that effect”, qualified this particular testimony as being no more than his interpretation of the meaning of Lipner’s statement to him. This reasoning has no merit.
This Court sets out the applicable law and we should remain conscious of it throughout, this being that in an instructed verdict case, we must indulge every inference that may properly be drawn from the evidence against the action of the trial judge in withdrawing the case from the jury and instructing a verdict in favor of Lipner and his Agency and against Stone. The majority in viewing the above evidence seems to be indulging inferences against Stone instead of against Lipner, which is, under these circumstances improper. Applying the proper rules of appellate review, and after reviewing all of the evidence, I would hold that there is some evidence of probative value that Lipner made a material representation to Stone that was false.
It being established that there was some evidence of a material representation by Lipner to Stone, which was unquestionably false, we next look to see whether there was any evidence that Lipner knew said statements or representations were false when he made them, or whether there is any evidence that he made them recklessly without any knowledge of their truth and as a positive assertion. The majority erroneously holds that there was no evidence that Lipner knowingly made a false statement to Stone, or that Lipner made any representation “recklessly” without any knowledge of its truth and as a positive assertion. Assuming for a moment there was no evidence that Lipner had actual knowledge of the falsity of his statements to Stone, there was ample evidence that Lipner’s representations were made recklessly without any knowledge of their truth and as a positive assertion.
It is the Texas rule that when a party makes a positive representation that a fact is known to him, the same being a material fact about which accurate knowledge could be ascertained, and if such representations are false, it amounts to a positive and active fraud for which he is liable in damages. Harris v. Shear, 177 S.W. 136 (Tex.Civ.App.—Austin 1915, no writ) and cases cited therein.
It is generally not essential to support an action in fraud that the one making the false representation knew that it was false at the time it was made. Jumonville Pipe and Machinery Co. v. Haslam Lumber Co., 129 S.W.2d 386 (Tex.Civ.App.—Beaumont 1939, no writ); Missouri, K & T Ry. Co. of Texas v. Maples, 162 S.W. 426 (Tex.Civ.App.—Dallas 1914, writ ref’d). If one states material facts as of his own knowledge, by which another is induced to act to his detriment, it is no defense to reply that, although the representations were false, the person making them believe them to be true. Gibbens v. Bourland, 145 S.W. 274 (Tex.Civ.App.—San Antonio 1912, no writ); 37 C.J.S. Fraud § 21(a), (b), (c), pp. 255-258; 25 Tex.Jur.2d Fraud and Deceit § 17; 37 Am.Jur.2d Fraud and Deceit §§ 203, 204.
The evidence reflects that on November 12, 1970, the chief examining attorney for the Agency prepared a written title opinion which showed that the easements in question were encumbrances to the title on the subject tract. Lipner states that he never consulted with the examining attorney, nor did he review the title opinion prior to making the questioned statements to Stone on March 12, 1971. The evidence shows that at all times pertinent to this lawsuit, there were certain records in the Agency’s office commonly referred to as “take-off” cards which if Lipner had read would have shown the existence of the particular pipeline easements. Lipner stated that he did not look at the cards prior to the time he made the representations to Stone.
*80One must then question: what basis did Lipner have in making those representations? Lipner testified that he relied upon facts which were given to him by his friend (Weil) and that such reliance (as it now proves out) was a mistake in his judgment. If it was true that Lipner relied upon what Weil had told him and disregarded the title opinion prepared by his chief title examiner and disregarded the take-off cards located and easily available in his office, Lipner did in fact “recklessly represent” a positive fact without knowledge of its truth.
Concerning the issue of recklessness, our Texas Legislature has in enacting Article 9.34 Tex.Ins.Code Ann., set out several requirements which must be met before a policy or contract of title insurance can be written. Article 9.34 provides in pertinent part as follows:
“Determination of Insurability
No policy or contract of title insurance shall be written unless and until the title insurance company (a) has caused a search of title to be made from the title evidence prepared from an abstract plant . , and (b) has caused to be made a determination of insurability of title in accordance with sound title underwriting practices . . . ”
Surely, the Legislature of Texas in enacting the above legislation did not intend that a president of a title company should rely on what his friends tell him over what he could have determined from his own title opinion or take-off cards which were readily available to him. I believe that such action by Lipner in relying entirely upon Weil and not the title opinion or take-off cards is evidence raising a fact issue as to whether Lipner’s statements to Stone were recklessly made without making any inquiry as to their truth.
There is still a further inference of fraud raised by the evidence. The Agency’s chief title examiner found the defect in the title and set it out in his title opinion to the title agency. Lipner was the Agency so to speak.1 Lipner called Stone and told him that “he was confused as to where the pipelines were.” This confusion can reasonably be inferred from all of the evidence available to Lipner. If Lipner had actual knowledge of the title examiner’s opinion or had seen the “take-off” cards, this knowledge would account for Lipner’s confusion. Where else would Lipner have had knowledge that the easements were on the subject property causing him to be confused. His cards and what the title examiner pointed out stated that there were pipelines over the subject property. Lipner’s friend (Weil) said there were no pipelines over the subject property. Since Lipner knew (from the above inference) where the pipelines were, but chose to represent to Stone that either: 1) he had no such knowledge, or 2) that he was going to rely on what his friend Weil had told him, the fraudulent representation was perpetrated in either event. It was to Lipner’s and the Agency’s advantage that the real estate deal close. It was after these facts were available to Lipner that Lipner called Stone and said “It is true that there was confusion. I found out that there were no easements on the property. There will be no exceptions made.” The actual knowledge by Lipner, or the reckless disregard of the truth by Lipner, coupled by Stone’s reliance to his damage, completed the fraud.
The fourth element necessary, for an action in fraud, that the statement was made with 'the intention that it should be acted upon by the other party is not usually at issue, since it can be inferred from the reckless nature of the statement made. However, there is ample evidence raising such issue. Lipner told Stone that the pipeline easements were not on the property, when Lipner told Stone this, he knew, or a reasonable person would have known, that Stone would rely on those statements. The *81majority insists that there was no evidence that Stone relied on any statements made by Lipner at the time of closing. This is not so. The evidence clearly shows that after the contract for the sale of property had been signed by all parties, the question was raised concerning the pipeline easements. Stone sought and received assurance from Lipner that there were no easements on the land just prior to the closing of the transaction.
“Q All right. Now just prior to the closing of this transaction on March the 12th of 1971, did you have any conversations with Mr. Lipner or Mr. Weil about pipelines in this 18.639 acres of land?
A . Mr. Lipner called me and asked me if I knew of any pipeline easements on the property that I was purchasing, and my words were to the effect that, ‘My Lord, Eli, (Lipner) I don’t know of anything out there. That’s your job. You’re supposed to be the one that’s being paid to search the title,’and he hung up. Shortly thereafter Joe Weil came up to the office and told me that Eli was confused and that he had it all straightened out. That there wasn’t any easements there. There wouldn’t be any exceptions in the policy. I called Eli Lipner to confirm that, and he did. That was the reason why I entered into the contract. . . . ” (Emphasis supplied.)
There was other evidence that Stone relied on Lipner just before closing:
“Q Now, at the time of closing this particular transaction, did you in any way rely on these statements (by Lipner) that you have just described?
A (answer by Stone) I relied on Mr. Lipner and Mr. Weil one hundred percent. If there would have been any doubt, any question in the mind of Charles C. Stone, Jr., that he was purchasing a piece of property that was encumbered with easements, I would not have entered into the contract.”
Lipner must have recognized that his statements were likely to induce actions, because they did. Lipner did not attempt to stop Stone from closing the deal several days later.
Generally speaking, whether Stone would have acted in the absence of the representations is the test of whether or not he relied thereon. But here, the evidence is clear that Stone did rely on Lipner. It is not even necessary that there be a statement by Stone as to his reliance where Stone’s acts show the same. Either way, Stone relied.
The majority would have us infer that Stone was talking about closing the original contract instead of closing the real estate deal. One only has to read the statement of facts to see that all of the conversations were made after the contract had been executed and that Stone and Lipner were talking about closing the transaction. This is just a play on words.
The evidence shows that within a day or two after Lipner made these representations (the above statement) to Stone, the closing occurred. It is virtually undisputed and only logical, that had Stone known that the easements were on the land in question, the closing would not have taken place. The evidence clearly shows that Stone acted in reliance upon Lipner’s statements. The jury should have had a chance to have answered this question! 37 C.J.S. Fraud § 22a, b, § 26.
The last element, that being that Stone suffered damage or injury due to such reliance is sufficiently supported by the evidence. It is undisputed that Stone suffered considerable damage because of the existing easements and pipelines on the subject tract of land, among which were: 1) the park had to be redesigned and he lost the income from such necessary redesign; 2) there was a reduction in the number of spaces which in turn caused a reduction in the F.H.A. commitment; and 3) the de*82crease in value of the 7-acre tract due to the easements thereon.
Honoring the inferences which must be indulged against the instructed verdict, I would hold that the record shows that all the elements of fraud in the action against Lipner and the Agency were raised by both the pleadings and evidence and that a remand of the cause of action against Lipner should be submitted to the jury for their final determination.
Since all three judges agree that there is evidence of fraud in Stone’s cause of action against Weil and that such should be reversed and remanded for trial, I believe that Stone’s cause of action based on fraud against Lipner and the Agency should also be reversed and remanded for trial for still another additional reason. The evidence is clear and in fact is readily admitted that Eli Lipner and Joe Weil were friends. They enjoyed a close relationship throughout the entire transaction concerning Stone. If Weil is to be re-tried for fraud, the circumstantial evidence is overwhelming that Lip-ner should be a co-defendant along with Weil in such new trial. Lipner and Weil worked together and they each had the most to gain in inducing Stone to go ahead and buy the encumbered property.
I concur only in the result reached concerning Lawyers Title Insurance Corporation and Joe B. Weil. I would reverse that part of the judgment which decrees that Stone take nothing against Eli Lipner and Lawyers Title Insurance Agency of Corpus Christi, Inc. and remand the same to the trial court for a new trial with Joe B. Weil.

. Eli Lipner was president and principal stockholder of the Lawyers Title Agency of Corpus Christi, a Texas Corporation. Wilson was the chief title examiner and an employee of Lawyers Title Agency of Corpus Christi. Lipner had a contract with Lawyers Title Insurance Corporation to undersign the insurance policies for Lawyers Title Insurance Corporation as an exclusive agent for Nueces County.