Court Opinion

ID: 9581883
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:20:04.54282+00
Date Added: 2024-06-11T13:37:18.984868
License: Public Domain

GRIMSON, Justice
(dissenting).
I agree with the first part of the opinion of Chief Justice BURKE, and that the “testimony of the plaintiffs permits a legitimate inference that the defendants represented to the plaintiffs that there were no unpaid special assessments certified or un-certified against the property, and that, therefore, it is sufficient to sustain the verdict. It follows that the motions for directed verdict and for judgment notwithstanding the verdict were properly overruled.” I cannot, however, agree with the holding that the requested instruction should have been given and that for the failure to do ■so a new trial should be granted. To support my position I will briefly review the facts.
The plaintiffs were newcomers to this state. Mr. Halverson was a veterinarian in the employ of the United States Department of Agriculture, and was sent to Man-dan, North Dakota. His work, however, was up along the Canadian boundary and he was home only on weekends. When they first came, they, with their two boys, 5 and 7 years of age, had to live in a tourist camp. Mrs. Halverson found a house built and occupied by the defendants, Mr. and Mrs. Boehm. Mr. Boehm was in the business of building and selling houses. When Mr. Halverson returned home that weekend, he and his'wife visited the Boehm house arid a discussion of the buying of the premises was had. The price asked by the defendant, Mr. Boehm, was $17,500. Mr. Boehm told Mr. Halverson of a mortgage on the premises which plaintiffs were willing to' assume. Plaintiff, Mr. Halverson, asked if there was anything else against the property and was assured there was not. He had had some experience with special assessments in connection with a house he formerly bought at Olympia, Washington. This Boehm property had water and sewer connections and, a double driveway.- Usually such improvements are paid by special assessments payable over a period of years. Mr. Halverson seemed very anxious to find out if there were any such unpaid assessments against-the property. Whether he would buy the property at the price asked, $17,500, might have depended on that. He repeatedly asked Boehm about it. Boehm admits he did not tell Mr. Halverson although he knew there were outstanding, special assessments. The plaintiffs claim that depending on the assurance that there were no unpaid assessments against the property they next day entered into the contract and bought the premises.
At first thought it might seem that plaintiffs should, themselves, have investigated the matter of incumbrances. They were strangers and did not know how to do that. They were in a hurry to find a home- in which to live. They had a right to rely on the assurance of the seller.
This court long ago adopted the principle that “ordinarily, one who buys property has a right implicitly to rely upon representations of the seller; * * *Fargo Gas & Coke Co. v. Fargo Gas & Electric Co., 4 N.D. 219, 59 N.W. 1066, 37 L.R.A. 593; Warne v. Finseth, 50 N.D. 347, 195 N.W. 573; Moon v. Martin State Bank, 59 N.D. 352, 230 N.W. 11. If the representations induce action it is “immaterial that the means of knowledge are open to the complaining party, or easily available to him, and that he may ascertain the truth by proper inquiry or an investigation.” 23
*182Am.Jur., Fraud and Deceit, Sec. 161, p. 970. This is true “even though the fact may be recorded.” * * * “The recording acts are not intended as a protection to those who make false representations.” A.L.I. Restatement of the Law, Torts, Vol. 3, Sec. 540, p. 93.
Shortly after the purchase- plaintiffs found that there were uncertified, special assessments' against the property in the amount of $1085.95. They then commenced this action, not under the warranty deed for the payment of those uncertified special assessments, but for damages' based on the misrepresentations and fraud which they claim led them into the contract. They had a right to do that. 92C.J.S., Vendor and Purchaser, § 543, p. 540. The contract does not shield the wrongdoer. Neither are the false representations that induced the contract merged in it. 37 C.J.S., Fraud, § 63, p. 352; Sellars v. Adams, 190 Ky. 723, 228 S.W. 424.
It is claimed on behalf of the defendants that Mr. Boehm’s representations as to there being no unpaid assessments against the property were true because, they say, that uncertified assessments are not incum-brances as between vendor and vendee under Section 40-2403 NDRC 1943, which reads as follows:
“As between a vendor and vendee, all special assessments upon real property for local improvements, from and after the first day of December after the assessments have been certified and returned to the county auditor, shall be and become a lien upon the real property upon which the same are assessed in the amount certified and returned, and no more.”
However, Section 3728, C.L.1913, now Section 40-2401 NDRC 1943 .provides for a general lien for special assessments as follows:
“A special assessment, together with all interest and penalties which accrue thereon, shall be and remain a lien upon the property upon which the assessment is levied from the time the assessment list is approved by the governing body until the assessment is paid fully. Such lien shall have precedence over all • other liens except general tax liens and shall not be divested by any judicial sale. * * * ”
There is no specific provision in Section 40-2403 for the release of the vendor from that lien. Even if that were intended the lien is effective as to everybody else. Nor does Section 40-2403 propose to amend Section 40-2401. The case of Murray Bros. v. Buttles, 32 N.D. 565, 156 N.W. 207, is cited. That was a suit brought upon the warranty in a deed for unpaid special assessments. The court held they could not be recovered under the warranty. That is much, different from the situation in the case at bar which is brought for damages caused by false representation. A careful study of the Murray Bros, case fails to disclose any intent of the court to hold that Section 40-2403 amends Section 40-2401. The inference is rather that the court held those sections still in force unchanged. There is no statement in the syllabus nor in the opinion itself that the vendor is excepted from the general lien of special assessments. Section 40-2401, supra. The main determination in that case was that the laws governing special assessments for city improvements applied also to rural improvements.
Section 40-2403 NDRC 1943 is but an addition to Section 40-2401 providing the time when the vendee takes over the payment of the general lien after the purchase of the property but it does not prevent the vendor and vendee from taking the unpaid assessments up for consideration when they agree on the price and make the deal. That is perfectly legal and logical for them to do. That seems to be what Mr. Halverson was trying to do. He wanted to know what incumbrances there wer« against the property. Defendant told him about the mortgage. Plaintiff, Mr. Halverson testified: “I asked him (the defendant, Mr. Boehm) -about insurance and anything against the place, any assessments. He said they were paid * . * * I asked him if there were any liens out or assessments. He said they *183were all paid. * •; * * . I asked Mrs Eoehm definitely as to any assessments against that house and he said they were all paid. He said that (the mortgage) was all there-was, the. house would be free of anything.” Defendant, Mr. .Boehm, testified on cross examination: “Q. You knew, did you not, at the time of the negotiations for the sale, that there were special assessments against the house? - Ans. Yes, I did. * * * Did you mention, to either of the Halversons the unpaid' balance of these special assessments? Ans. I told them — (Question read by reporter), No. * * * ” Mr. Halverson’s questions to the defendant, Mr. Boehm, were not limited to assessments that would become due as between him and the defendant. He wanted -to know about all incumbrances against rthe property. He repeatedly asked specific -questions as to whether there were any assessments against the property. That would include special assessments levied by the City of Mandan against those lots for .the improvement on them. Section 40-2401 NDRC 1943. Certainly such assessments were a lien against the property for -which the owner was liable whether they -were liens against the vendor after the property was sold or not. Common sense -tells us that those assessments were still incumbrances against the’property notwithstanding Section 40-2403 NDRC 1943, and -the Murray Bros. v. Buttles case. Whoever owns the land will -have to pay those assessments just as he has to pay any mortgage .against the land. They were incumbrances against the iand at the time the representations were made by Mr. Boehm whether or not they were liens as between the vendor, Boehm, and the vendee, Halverson.
The requested instruction reads as follows :
“The court instructs you that the special assessments against the' property involved in this action which had not been certified and returned to the County Aiiditor of Morton County, arid did not appear on-'the books and records of the County Auditor of Morton County, May 3, 1953, were not encumbrances against the lands sold by 'defendants to the plaintiffs, and conveyed by the defendants to the plaintiffs by deed dated May 3, 1952.” (Emphasis supplied.)
It will be noted that the court is requested to instruct the jury that all special assessments that had not been certified to the County Auditor “were not incumbrances against the lands sold by defendants to plaintiffs by deed dated May 3, 1952”. Clearly that was an error. Even if the defendants were by Section 40-2403 NDRC 1943, excepted from the general assessments provided by Section 40-2401, such assessments were still a lien against the property effective to all other persons. They are an incumbrance that the owner will have to pay. They were certainly included in the assessments which plaintiff, Halverson, was inquiring about and which he understood defendants represented as all paid.' Not only does the instruction fail to take them into consideration but also definitely excludes them as encumbrances against the property. Such instruction was clearly erroneous. The court committed no error in refusing to give it.
As the Chief Justice says, the evidence was sufficient to sustain the verdict. In my opinion the requested instruction was erroneous under the facts of this case and was correctly denied. I believe, therefore, the judgment of the district court should be affirmed.