Court Opinion

ID: 9830593
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:18:35.10479+00
Date Added: 2024-06-11T07:43:24.648769
License: Public Domain

On Motion for Rehearing.
It is strenuously, if not logically, insisted that the opinion in this case is in positive and direct conflict with the opinions in the case of George v. Hesse, the one by this court being found in 94 S. W. 1124, and that by the Supreme Court in 100 Tex. 46, 93 S. W. 107, 8 L. R. A. (N. S.) 804, 123 Am. St. Rep. 772, 15 Ann. Cas. 456. In that case it was proved, as in the other cases cited by the plaintiffs, that the defendants had been guilty of fraudulent and false representations, and that plaintiffs in trading relied on such representations. In this case it was not proved that defendant, as alleged by plaintiffs, made false representations “when the contract was signed,” or “when the deeds were executed,” or “when the bonds were delivered,” and plaintiff W. C. Moore reiterated that he relied alone on the fact that a Baptist church was back of the bonds and that they were first mortgage bonds. In the George-I-Iesse Case, the representations made the land appear more valuable than it really was, but in this case it is not pretended that the bonds were not worth all they were sold for at the time of the trade. It is admitted that at that time they were worth their face value. It is the conten *383tion, however, because the bonds afterwards became worthless, defendant must refund the money that plaintiffs paid for them. There can be no justice in such a proposition.
[7] The uncontroverted testimony showed that defendant requested W. 0. Moore to investigate as to the bonds and gave him the name of a trust company which would give him information. ' Moore was acquainted in Dallas and could, in less than a week’s time, have obtained a full report as to the financial condition of the Baptist College. He was given 30 days in which to make the investigation, but he was satisfied because the Baptist institution had issued the bonds. A court of equity will not set aside a contract or grant other relief on the ground of misrepresentations, “when, after the representation, the party receiving it has given to him a sufficient opportunity of examining into the real facts, when his attention is directed to the sources of information, and he commences, or purports or professes to commence, an investigation. The plainest motives of expediency and of justice require that he should be charged with all knowledge which he might have obtained had he pursued the inquiry to the end with diligence and completeness. He cannot claim that he did not learn the truth, and that he was misled.” Pomeroy, Eq. Jur. § 893. No effort was made by the defendant to conceal the facts from W. C. Moore, but he was invited to investigate and ample time given for the investigation. There was no fiduciary relation existing between the parties. They had never met and did not meet until they executed the exchange of the property. The evidence tends to show that plaintiffs did not rely on the fact that the bonds were secured by a first mortgage for in the statement given by Howard there was no mention of the mortgage, and it would seem that plaintiffs never saw the bonds until they were delivered at the time the exchange was consummated. He had agreed to take the bonds before he ever saw them or knew that they purported to be first mortgage bonds.
We have seen no opinion holding that in order to ascertain the loss the value of the property, about which the representation was made, should be taken 6 months, a year, or 5 years after the exchange was made. It must be the value at the time the trade was made. In order to ascertain the loss the injury should be confined to the time of the trade. If the bonds were worth $1,300 when they were delivered to plaintiffs, as they admit they were, defendant cannot be held to have guaranteed they would never decrease in value.
The rule laid down by this court as to damages is in full harmony with that enunciated by this court in George v. Hesse. In that case the measure of damages was fixed by the difference between the price paid for the land and what it was really worth. In the case of Merrill v. Taylor, 72 Tex. 295, 10 S. W. 532, the same rule was enunciated.
In the case of Smith v. Bolles, 132 U. S. 125, 10 Sup. Ct. 39, 33 L. Ed. 279, relied on very confidently by plaintiffs, the court holds identically as does this court. The Supreme Court said:
“What the plaintiff paid for the stock was properly put in evidence, not as the basis of the application of the rule in relation to the difference between the contract price and the market or actual value, but as establishing the loss he had sustained in that particular. If the stock had a value in fact, that would necessarily be applied in reduction of the damages.”
That is what this court holds and has held, and it is not only founded on common sense, but on the principles of justice. Plaintiffs state that this court must indulge in the presumption that the value agreed on by the parties was the true value, and, such being the case, plaintiffs fail to show that they sustained any damage. If the bonds were worth $1,300 when the trade was made, it is a matter of no moment, so far as this case is concerned, what they may have been worth long afterwards.
Again, in the case of Sigafus v. Porter, 179 U. S. 125, 21 Sup. Ct. 37, 45 L. Ed. 113, the court held:
“Upon the assumption that the property was not worth what the plaintiffs agreed to give for it, they were entitled to have — if the evidence sustained the allegation of false and fraudulent representations upon which they were entitled to rely and upon which they in fact relied — a verdict and judgment representing in damages the difference between the real value of the property at the date of its sale to the plaintiffs and the price paid for it, with interest from that date, and, in addition, such outlays as were legitimately attributable to the defendant’s conduct, but not damages covering ‘the expected fruits of an unrealized speculation.’ If plaintiffs were inveigled by the fraud of the defendant into purchasing this mining property, a judgment of the character just indicated would make them whole on account of the loss they sustained.”
That is the just rule, it is the Texas rule, and we have followed it in this case.
Plaintiffs misapprehend the case of Dargan v. Ellis, 81 Tex. 194, 16 S. W. 789, as they have the other cases on the subject for that case totally fails to sustain their view of this case. That case merely reiterates and applies the doctrine that in the absence of proof as to the value of the property at the time of the exchange, the agreed value will be taken as the true value. So we hold in this case, and under that ruling plaintiffs have failed to make out a case, because they received all they contracted for.
There is no merit, as stated in our former opinion, in the contention that plaintiffs are entitled to nominal damages. Plaintiffs failed to make out a case, and under the rule followed in Texas and federal courts there is no basis for nominal damages. In a Minnesota case, in which the same measure of damages is laid down as the one laid down by this court, the Supreme Court of that state held:
“The plaintiff, under such a rule, would not be permitted to recover nominal damages even *384without proof of loss or injury. * * * Damage is of the essence of the action of deceit; an essential element to the right of action, and not merely a consequence flowing from it.” Alden v. Wright, 47 Minn. 225, 49 N. W. 767.
According to tire old maxim:
“Eraud without damage or damage without fraud, gives no cause of. action.”
The question as to the measure of damages in cases of exchange of properties, when fraud is shown, is fully discussed in the Iowa case of Stoke v. Converse, 153 Iowa, 274, 133 N. W. 709, 38 L. R. A. 465, Ann. Cas. 1913E, 270, and in the notes appended are several cases like the one under consideration in which nominal damages were denied.
We would not have deemed it necessary to have written anything further on the issues involved, had it not been that, in a very long and strenuous motion for rehearing, it is with impassionate emphasis asserted that this court had overruled all cases and precedents in its former opinion, and we deemed it appropriate, if not necessary, to show that this court is not only in accord with the Texas cases, but with those of the United States and other states. The former opinion was written after a full consideration of the subject, and we think the measure of damages followed by. this court is plain enough, and so just that it should appeal to the intelligence of every one.
The motion for rehearing is overruled.