Court Opinion

ID: 6689566
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:36:29.759719+00
Date Added: 2024-06-11T16:01:04.265254
License: Public Domain

WHITING P. J., and GATES, J.
('dissenting). We are unable ¡to concur in our colleagues’' views as to the proper measure of compensatory damages for deceit in inducing a purchase or exchange oif property, and wie feel that the importance of 'fehe 'question justifies ia statement of the reaesons for our dissent. Two thoughts naturally suggest themselves: What is the proper measure of damage where there is no statute Controlling-? What is the measure of damlages under section 2312, C. C.?. We will undertake to' .answer these questions in the order named.
We believe little consideration should be accorded a legal proposition, simply because it is a “majority” holding. The weight of judicial authority rests, not upon the number of jurists or text-writers that may unite in declaring the law upon a given subject, but Upon the soundness — -the convincing force — of the reasoning by which, the views of such jurists or writers may be supported. When judicial 'authority is so weighed it will be found that the balance is Oiverwhehning on the side of what our colleagues have termed the “minority” holding. We would commend a consideration of the reasoning found in Smith v. Bolles, 132 U. S. 125, 10 Sup. Ct. 39, 33 L. Ed. 279; Sigafus v. Porter, 179 U. S. 116, 21 Sup. Ct. 34, 45, L. Ed. 113; Rockefeller v. Merritt, 76 Fed. 909, 40 U. S. App. 666, 22 C. C. A. 608, 35 L. R. A. 633; Crater v. Binninger, 33 N. J. Law, 513, 97 Am. Dec. 737; Wallace v. Hallowell, 56 Minn. 501, 58 N. W. 293; Weaver v. Schriver, 79 Md. 530, 30 Atl. 189; Nelson v. Gjestrum, 118 Minn. 284, 136 N. W. 858; Zcbrist v. Estes, 65 Or. 573, 133 Pac. 644; High v. Berret, 148 Pa. 261, 23 Atl. 1004; George v. Hesse, *359100 Tex. 44, 93 S. W. 107, 8 L. R. A. (N. S.) 806, 123 Am. St. Rep. 776, 15 Ann. Cas. 456; Peck v. Deery, 37 Ch. Div. 541-549; and Sedgwick on, Damages (9th, Ed.) §§ 780 and 781.
We are not now1 called upon to 'determine whether, in case of deceit practiced flor the purpose of and resulting In, inducing a purchase or exchange of property, it míay Uolt often1, with sound reason, -be held that there is .an implied warranty that the representations are truie, and1 that, basing bi'si 'claim, of damages, upon the breach of such warranty, the injured ptirlty should not be allowed to recover, for the breach of the contract, the warranty, just what Is allowed under the “majority” rule in an- .action based 001 ¡the tout. Cooley, at page 951 of his wiorlc on Touts, says:
“Where 'one, in selling personal property, makes positive representations of material facts, -upon which the other relies, the vendor is held to the truth of these representations in a suit at law as much as he would have been in; a suit in equity. But this is upoq the ground that they constitute a warranty.”
Neither are we Called upon to discus® the wisdom of allowing damages in accordance with the “majority” rule. What we question is the sound'nies of the argument that the “majority” rule allows compensatory damages and .that only; and that such nude is ndt an exception to the general rule governing damages for fraud ior deceit, under which the injured party is held entitled to “such’ damages as will compensate him, for the loss or injury actually sustained, as will place him, in .the same position that he would have occupied had he not been defrauded.” 12 R. C. L. 451. If those whoi contend for the “majority” rule would frankly confess that Iff is based upon a promise entirely foreign- to- that upon which damages for deceit is ordinarily based' — that it utterly disregards the principles1 that govern -in actions for damages for -all other torts — there would be left büit''4ihe' question of tble wisdom of such a departure. We would announce these propositions, which we contend admit Wf no dispute, and which should be borne in) mind -at all times in the discussion of the questions before us': Etvery tort is a wrong by or through which the innocent party-’® position or condition, a® such position or condition relates to his person or property, is changed for, the worse. The injury suffered is by Virtue of or an account of such change in position or condition. The damages suffered' are *360measured by 'such injury — by the amount or extent in which .the innocent party’s personal or property rights have been changed' from what they were prior ito- the tort, by or on account of such itoint. Tibe “majority” 'decisions are 'based on the theory that -the defrauded party is entitled to tibe benefit of his .contract. Such decisions 'attempt to base such holding upon 'the 'absolutely false premise — that, if .there had been no deceit, (there would have 'been a purchase or exchange of property under which pl'alintiff would have received property answering to' the representations' made. An action fiolr damages for deceit in 'all cases, whether those involving sales or exchanges' of property or whatsoever the nature of fhle case, must 'be basied upon the premise that, if it had not ■been for the deceit, there would have been no purchase or exchange whatsoever. In this 'case our colleagues s'ay that the innocent party is 'entitled toi his bargain, when the very thing that the injured party -’is complaining of, exactly as he would1 in. an action for rescission based on ,thie deceit, is that, owing -to deceit, he never got a contract that gave him such bargain. The gist of the cause of action for deceit is that there has been .a- change in the innocent 'party’s property — in his estate — brought about by the deceit, and that this Change was to plaintiff's loss.
Without loss..there can properly be no cause of action for deceit regardless 'of what representations were made. As said in Alden v. Wright, 47 Minn. 225, 49 N. W. 767:
“The essential' elements which constitute a cause of' action for deceit are well stated in Busterud v. Farrington, 36 Minn. 320, 31 N. W. Rep. 360, and oine is that the parity induced to, act 'has been damaged. He must have acted on the falith of the false representations to* his damage. A party cannot sustain an aation of this character where no harm has odmie to him. Deceit and injury must concur (Doran v. Baton, 40 Minn. 35, 41 N. W. Rep. 244); or, as it has frequently been put by the courts, fraud Without damage, or damage without fraud, will not sustain the action for deceit.”
And it is the amount of loss' that limits, the recovery. As said in Smith v. Bolles, supra:
“Wblat thb'T'l'aintiff -might have gained is not the question, but ‘whiat he had lost by being 'deceived into the purchase.”
And as stated in High v. Benret, supra:
*361“His actual! loss doss not -include 'the extravagant dream-a which /proved illusory [the expectation has-ed upon, tlhie representation], -but -the money ¡he ¡has parted! With without receiving an equivalent therefor.”
Or as stated in Sigafus v. Porter, supra:
“If the plaintiffs were inveigled 'by the fraud; * * * a judgment of the character just indicated would make them whole. * * * More they are not entitled to have at the hand's -of the law in this action.”
Or as stated in Crater v. Binninger, supra:
“The principle of justice, and, as I understand, of law, is, that itihe party injured i-si to be /compensated, at least to the extent that redress is awarded judidiaü'y, for the' actual lo-s-s sustained. The effort is to reach this measure as near as possible, and unless in cases fit for punitive damages, nothing more than this is to be given. But the criterion contended for -is in no sense compensation, but a mere arbitrary amount, bearing, it may be, nip just relation to the quantum of damage.”
We think no better or clearer statement of the reasons supporting the “minority” rule co-uld be made than the following from George v. Hesse, s-upra, a deceision which has been treated as a leading authority by the editors of three series of annotated reports:
“There is a -conflict o-f authority upon the point; h-uit it seems to u-s that the difference -oif -opinion grows out of a confusion as to the nature of the cause of ithie action. This is not a case in Which, the plaintiff sues1 for the breach of a contract, for the contract has been performed by both- parties. But iit is a case in which the plaintiff sues to recover damages- for a fraudulent representation by which be has- been induced to enter into a contract Ito his loss. Clearly, .we think the extent of hi-s loss is the difference between the value1 -of that which -be bias parted with- and. the value of that ■which h!e ihas .received under the -agreement. The contract in this case Was nolt to convey a tract of land with a ‘gusher’ c|n- it, but was' to convey a certain tract of land, which was falsely .represented' to ¡have a ‘gusher’- on it, which false representation- was an inducement Which led to the contract.”
Our colleagues have cited both Cooley and Sutherland in, *362support of their views, but an examination of itheir works discloses that neither of them attempts to give hiiis own views as to the correct rule. They both merely set forth wih'at different .courts have held. But it is qjuite .different with the learned author of Sedgwick oo¡ Damages. In the ninth edition of this work, after setting forth the .two rules, he (sections 780 and 781) discusses 'these rules, and to our ¡minds tire reasons he gives for supporting the “minority” rule are absolutely Unanswerable. He isiays:
“If the fraud had been perpetrated by same third person, inducing the vendee to purchase, there can he no ddub't as to the measure of damages; the plaintiff ¡would tiren be entitled only to the difference beltween what he paid 'and 'what lie received. Logically it should make noi 'difference that tire fraud was (perpetrated ¿by the vendor instead of by the third person. And to have a different rule might lead to peculiar results. Thus, suppose a fraud were jointly perpetrated by .the seller and a third' person. It is a strange rule of law which would give a different ¡measure of damages in an action against one joint tort-feasor from that given in an action against the other, yet that wioiuld’ seem to 'be the consequence of the old rule.”
Then, after announcing and discusáng the reason often urged in support of the “majority” rule, “that the misrepresentation gives rise to an action for breach of warranty as well as an .action for deceit, and it is absurd to apply a different rule of compensation according toi the form of action,” he says:
“It is true that the fraudulent -representation also, gives rise to an action >00 the warranty. But the converse is not true; an action of warranty may 'be brought when deceit dbes not lie. Hence it follows that the ¡additional element of fraud creates a wholly 'distinct wrong, with 'a remedy peculiar to itself. The fact that under ¡some circumstances tttsl ¡remedy does not give the vendee sio much as the remedy for another wrong incidentally done is simply a reason for seeking that other remedy. * * * Adherence to logical principles dan by no possibility work a hardship to the vendee; If his damages in an action of deceit, under the Smith v. Bolles rule, are .l'es-s than under the other rute, he 'has simply made a blunder in suing for the fraud. He has the right ¡to sue in assumpsit fdr breach of warranty.”
*363•And in 'Oond-usion be Calls attention to the three actions that are open to the yendee and! to what he can recover under each:
“The defrauded vendee has, accordingly, three alternative remedies; First, rescission and recovery of the consideration,; second, an action fdr 'deceit and recovery for his actual loss, i. e., the 'difference between the value of whalt he parts- with and of what he receives; third, an action for breach of any warranty contained in the contract of purchase, and- recovery of the difference in values between- the property as received and the value as warranted.”
By no juggling of words, by no legal' sophistry, can one advance any plausible reason -why, in an action sounding in tort, a court should grant to the 'injured party, ,as oompenisatory damages, an amount 'that would place him in better shape financially than he would have been in if there had been no deceit, and hence md change ini position as regards property. Sucia expressions as ¡the following, while pertinent in an action based upon a breath of warranty, are absolutely foreign to any question 'presented in an action based upon a tort: “Plaintiff demands that the representan one * * * be made gooid! in damages-;” “If he (purchaser) desires to stand 'by his -agreement;” “The law gives ■her the benefit of the ¡contract;” “The defendant ¡has1 received the consideration .agreed to be paid by the plaintiff, and the laitter wias entitled to have s-uch a tract of land as this was represented to be.” Such expressions disclose that the counts making sarnie have ¡in fact treated the representations complained of, not as a deceit — an inducement which brought about a contract .through which one’s estate was -depleted — 'but as pants of the contract itself, as warranties, just as conceded In the above quotation from Cooley on Torts.
We think the fallacy of the “majority” view can well be demonstrated -by a few 'illustrations. If A., through duress; perchance through the use of a gun, induces, B. to pay him $5,000, and to take in exchange for such money a deed for a farm- worth' $4,000, and B. 'afterwards sees fit to keep the land -and seek damages for the tort, it is perfectly clear that B.’s estate has been depleted $1,000, and the.limit of bis recovery, so fair as lit rests upon (the land transaction, is $1,000, that which , will malee him *364whole. Wioiuild1 B.’s estate have actually suffered! any greater depletion) — would: it have taken any greater amount to make whole B.’s financial toss, the “detriment proximiately caused1” by the tort - — if A., ini addition: to his more persuasive inducements, had falsely held out to B. that the farm possessed certain qualities which, if possessed by it, would have ¡marie lift wioirth $6,000? Or if A. had uisierii the more refined' and less dangerous method1, and through deceit alone had: led B. to pay his $5,000. for ‘the $4,000 fartm, .would1 the ‘‘’detriment proxknately caused” by the tort— the depletion df hii.s estate — 'have 'been any greater than, if B. had' .paid over the money through felar? Again, would it make any difference in the actual financial losis suffered by"B. — the “detriment praxfamtely caused” ¡by the tort — the actual depletion of his. estate — df B. gave the deed induced1 thereto, by representations' which, if true, would1 show the land to have been worth $10,000 instead of $6,000? Suppose the land' were actually worth $4,000, 'but A. makes, false rapresentaitiotns asi to four qualities! tine possession of which wtowld' enhance the value of land, each of 'which would enhance its Value $500, or $2,000 in all; and suppose B. relies on only one of these representations, and yet, being of poor judgment, purchases' the land, when he would not if this particular representation had not been made. Under the “majority” rule one cannot 'base recovery on representations not believedA-sueih representations Could not be treated' as warranties ■and suit be biased upon their breach — so that, except under the 'iminolrity’’ rUile, B. could not recover the amount ¡he actually suffered: from the deceit — the amount in which his. estate was actually 'depleted! through A.’s wrong. B.’® actual loss, is just as great, and A.’s tort is as morally wrong, whether B. is led to 'part with his money for the $4,000 farm through his belief in tine one representation as though he believed in them all. Suppose that B. baid), mi option oto C.’s $6,000 farm, under which option B. had the right to purchase it for $5,000, and A., through ¡deceit, leads B. to’ forfeit such! .option, thus depleting B.’s. estate to the value of such option, $1,000; should it make a-ny difference in the amount which, as Compensation, B. should recover against iA., whether A. made one or fifty false statements concerning C.’s farm, or whether, if such statements were in fact true, C.’s farm would be worth $5,000 or only $2,000? Certainly not. To our *365minds, Sit is no more illogical' to allow1 a recovery of $4,000 as compensa,toiry damages for the tort in case A. hadi represented G.’s farm, to he worth only $2,000 than! it would) be to allow B. (bo recover of A. $4,000 where A. induced) B. toi pay $5,000 for a $4,000 farm by making representations which, if’ true, would Show the farm, to he worth $8,000.
Our colleagues suggest that the “minority” rule encourages, and even often rewards, the wrongdoer. That might he good ground for holding that, in a proper case, punitive damages should' be 'alkwled. But the “majority” rule often prevents the innocent parity from recovering his actual loss, such) rule limiting damhges to) those allowed for'breach of warranty. Take the illustration above, where there were four false representations: The “minority” rule would give the injured party the actual datoia'ge suffered, '$1,000, and thus replete his estate, and this regardless of whether he was wronged' — his estate 'depleted— through hfe believing in .one or in four of the representations; while under the “majority’’ rule, his recovery would depend on hiolw many of the representations he believed. Thus the damage allowed) under the “majority” rule might be more, less, or the same as tíre actual1 ios's suffered.
As suggested by the court in Nelson v. Gjestrum, supra:
“Hioiwi easy, is it not, for the one with the most elastic conscience to establish misrepresentations and secure large amounts-on sharply conceived' bargains. If bargains can be recovered for in actions for deceit, may we not look for persons- going around seeking opportunities' to be duped, so .that they may recover for 'advantageous1 bargains? Suppose the defendant herein had been in a situation where he was virtually forced to sell at any price 'the property be believed to; be worth $12,000, and which he actually represented to plaintiff of that value, thereby inducing her to buy; should plaintiff ethically or morally he entitled, if dissatisfied1, to retain ibhe property she got and recover $4,500 besides, or would it he more consonant with proper ideas of right and1 fair dealing to give her back the farm, -or, if sire prefers to lce'eip the house and lot, to give her whalt'ever -the farm was worth above what she received;”
As a -matter of fact the “minority” view does not encourage sharp practice on the part of either grantor or grantee. The fact *366that an action based on .the breach' of. warranty cam' be brought sufficiently 'discourages wrongdoing, where 'damages, for breach of warranty 'would exceed .those for tort; and, in cases, where the damages for It'ort would be the greater, the fact that such action may be resorted' to 'discourages' fraudulent warranties..
There is an ol'd saying that, “It fe a poor rule that won’t work both ways.” Suppose the grantee, by 'deceit consisting in repres'enlbing to the grantor that grantor’s! land] is olf poor quality, induces the grantor to sell land for $5,000 which is actually wiorth $6,000, but which if as represented by .the grantee is. only worth $4,000. Tine “minority” rule would give the grantor damages in $1,000, Ihiis .actual loss. Knight v. Leighton, 110 Minn. 254, 124 N. W. 1090; Mountain v. Day, 91 Minn. 249, 97 N. W. 883. To be consistent, those courts, upholding the “majority” rule should, ini such la case, allow $2,000 damages, and' yet to do so would hardier upon the ridiculous.
It is clear that tine only premise upon which the “majority” rule could be biased and give support to. the claim that it is nio|t an exception to the ordinary rule governing' measure of damages for deceit — the rule that allows compensation — is: “If there had been no deceit there would have been a purchase or exchange of property under which plaintiff would have received property .answering to the representations' mlade,” or, as1 suggested by one of our colleagues, “If the representations had been true, the sale or exchange would have been made just as it was made.” If it were permissible, in air action for damages based on a tort inducing a sale or exchange, to> start from such premise, the* “'majority” rule would1 be no exception., Bult the premise upon which an action to recover damagesi for deceit inducing a sale, as evidenced by the necessary allegations- of a complaint, is: If there had been no deceit, there would! have been no sale or exchange. It is only where deceit prevents a sale that an action to recover damages is .properly based on the premise that, if tiñere had been no deceit, the sale iwoold have been made.
One of our colleagues has suggested that “under tile ‘minority’ ruile the falsie representation© have no- relevancy to the measure of damages,” and that “thie false 'reipresenbatioosi a© to quality and value are thus entirely eliminated! as the proximate cause of 'the d'am)ag.e, and bear no relation to the .compensation for -the *367wiióing.” Such statements are partly correct. We concede, in fiacit claim, that under the “minority” rute — (which is identical wiith the general rule governing measure of damages for tort — ■ there Us no relation between the tort and the amount of compensatory damages recoverable; but rwe dispute the assertion that the “minority” rule entirely eliminates' the tort itself — in the case hefioire ms, the false representations. It would seem that our •colleague is of the opinion, and it is clear that the “majority” rule is founded upon the assumption, that compensatory damages should be measured by the tort itself — iby the false representations; that the greater, the more numerous, ithie representations, in other words, the moire heinous the tort, 'the greater should be the recovery, and this regardless of the results that flow from the representations. Nothing could more clearly reveal the fundamental unsoundness of the “majority” rule, and prove that it is in fact .an1 exception to the rule governing the measure of damages far every other tort. Such rule places cause before effect when the whole law fixing the measure of (damages for tort is based upon the proposition that compensatory .damages should be, and ■in the case of every- other tort known to the law are, measured by -the result or effect of the tort rather /than.' by the tort itself. It is because of this very fundamental error — this very fact that tíre “majority” rule has, -as to this one -peculiar tort, disregarded the rule governing (damages for every other known tort — that the “majority” rule -stands upon a basis both unsound and exceptional. Attempt ta apply to- any Other tort the rule 'that there is a -direct relation between the amount lolf compensatory damages •that should be recovered .and the number, the moral gravity, or the enormity of tth-e torts committed1, add! see to what result one would .arrive. It is (true that there must be a tort, else there is no wrong upon which to base recovery; but unless the tort, as a cause, produces an effect detrimental to the innocent person, there can be no recoverable damages; and whenever compenis'atory damages 'are recoverable 'they should alwlays be measured by the effect produced by (the tort, and! not by the Itort itself. We cannot logically measure damages by ithie cause in the case of -one tolrt, and by ithie effect in the case of some other itort, but, if we da, we sbctoM ialti least concede that we are usling two rules for such measurements. If we are to measure 'damages by the tort, it *368must Ibe .because libe tort itself is a<n actionable wrong, regardless of the effect or result flowing therefrom. If, through the negligence of the carrier, the train, runs off the track, should' the right and extent of recovery be the Same to ial'l who were on the train —to him who escaped without any physical or nervous injury, to 'him who isi slightly injured .and to' him whose body is so badly injured as to leave' him a - cripple for life? If the confidence man addresses the multitude, and, through the same 'deceit, leads some to invest their thousands, others their hundreds., while others are too wary and are not caught, should toe amount recoverable by each be the same? It is clear that logically there should be one rule applicable alike to all cases, no •matter what toe mature of the tort may be, and that one rale is that compensatory damages folr every kind of tort must be such amount as will compensate the .injured party; in the one class of torts, for toe injury to his person; /in the other class of torts., for the injury to his property — toe 'depletion of his estate.
But let us ask if there could be applied, in all .cases, of damages resulting from deceit, the rule that such damages should depend upon and be measured by 1 the deceit •practiced. On the other hand, can. we not, in every case, apply toe “minority” rule, and, ini every case where damages are 'sought for deceit, measure toe same by the result — toe change in the estate of toe 'injured person? Besides the illustrations we have already given, let us suggest the following: A. falsely represents to B. that B. is 21 years of age, .and thereby induces- B. -to be a candidate for .am office the salary of which is $2,000 per year. B. expends $500 li'm being elected, amid- then is held disqualified beclausle of minority. B. sues A. for 'damages. What can B. recover? 'Gam B. say to A., If the representations had been true, I wbuldl have had toe office, and you are l-iable to me for $4,000, the amount of two years’ «'alary — or $12,000 if it were a siix-yelar office — or can B. recover but for the money -he parted with and tone he spent ini Canvas's? Gould B. s'ay to A., You must make your representations, .good? ■
We repeat that every .aotiiotai seeking -compensatory dlamages f/or injuries alleged -to have resulted from a tort — tío/ matter what the nature oif toe tort may be — i.sl logically -based on this one premise: Prior to the ■ tort the innocent party occupied a certain *369position oír wiae in a .certain condition in relation to some personal or property right; by such tout such/ position or condition '.was changed) to his .detriment. ' And we insist 'that, based upon such premise, -the following /rale as to measure of .damages logically fblfows: The injured parity is entitled /to recover that amount which will recompense him in money for the loss or injury which he has suffered to his person or property through such Change of position or condition; suich loss suffered, and therefore the amount to be recovered, should not depend in any manner whatsoever upon the nature of the tort or torts that brought about the .change of position or condition.; neither should it depend upon, nor be measured by, the number of such torts, o.r the ixuoral atrooiousness thereof; but it should be measured solely by the nature and extent of the change of position or condition brought about by tire tort or torts. Whenever any person, through any line of logical reasoning, can demonstrate that, if a man pays $500 for a $300 horse, being led to do so because of ten lies told him, he really suffers in dollars and cents ten times as much damage, through the depletion of his estate, as he would have suffered if he had -paid the $500 for the $300 horse and been induced to do so through the influence of one lie, or through duress, then such person has laid the basis for a claim that the “majority” rule )is not in fact an exception to. tire recognized rule governing measure of damages for every other known tort.
It is clear /that -the courts which have adopted the “majority” rule, have engrafted upon ¡the law prescribing the usual measure of dameges for torts an exception allowing such damages to be measured by the cause — the tort — and not by the effect — the change wrought upon the person or estate of the property of the injured party. This undoubtedly came about through the fact that the courts, adopting the “majority” rule, believed: to hold otherwise encouraged wrongdoing. Morse v. Hutchins, 102 Mass. 439. And; yet, in actual practice, it is often found that such rule gives: to the injured party less than the “minority” rule, and in the great mlajority of cases gives either more or less than actual' compensation. "But whatever we might'think of'the advisability of providing one rule for a part of the cases that are based upon deceit, and another rule for all others based on torts including a large proportion of 'those based on deceit, we are not *370ait liberty to carry .out our judgments, as our lawmakers,- by section 2312, C. C., have prescribed the rule that must govern us and have- enacted no exception- thereto. lit ¡is well to note the several provisions of -our Ocidie applicable to the case before us. Section 1292, C. C., reads:
“One who willfully 'deceives another, wii't-h intent to induce him to 'alter this position to his injury or risk, is liable for any damage which he thereby suffers.”
Section 1297, C. C., provides:
“* *.* The extent of liability in such cases is- defined by the title on compensatory relief.”
Section 2286, C. C., reads:
“Every person who suffers detriment from the unlawful act •dr omission of another may recover from tire- person in fault a compensation- therefor in money, which isi calie-d- damages.”
Section 2287, C. C., reads:
“Detriment -is -a loss or harm -suffered in person or property.”
Section 2312, C. C., reads:
“Foir the breach of an obligation not arising from- contract, the measure olf damages, except where otherwise expressly provided by thlis Code, is the amount which will compensate for all the detriment pro-ximately caused thereby, whether it -could have been anticipated or not.”
One of ouir colleagues has very truly stated that section 2312, C. C., “inlay be paraphrased, without changing its meaning in the least, to say, ‘The measure of 'damages iis the amount which will make good tel the innocent party whatever loss was proximately caused! to him by the deceit.’ ” It will be found that but few of the “majority” states have a statute like our section 2312. We sire'dot at liberty to give this section such a construction' as will permit uis to place ¡an injured party in a better position financially —to -increase his- estate -over what it would have been if there’had been no ’deceit.
Tlhe question before us has never ¡been passed upon by this court. It was mat before the court in McCabe v. Desnoyers, 20 S. D. 581, 108 N. W. 341. Respondents have cited Lunscheon v. Wocknitz, 21 S. D. 285, 111 N. W. 632. We (hardly understand why, as the opinion shows that the jury allowed dam*371ages in acaontHamGe with the “minority” rule, and in sustaining tibe verdict this court -said:
“Under tibe facts and circumstances of the case, it is "well settled that a purchaser of real estate ¡baa a oi'ghlt to rely upon the representations of tihie vendor touching tibe quality of the property, ¡anid may either rescind! tibe transaction or recover compensatory damages.”
Our colleagues have quoted frota the decisions of the court of our sister state, which state has -our section 2312. We cannot ¡agree that the reasoning' oif the ¡court as revealed in those decisions is sound. As early as 1890 the federal -court speaking of this section, said in Glaspell v. N. P. R. Co. (C. C.) 43 Fed. 900:
“Upon this statute, and the 'cases of Smith v. Bolles and Atwater v. Whiteman [(C. C.) 41 Fed. 427], supra, I am of tilie ¡opinion that the court, upon the trial of this- -action, should have instructed the jury tfaait if they found for the plaintiff upon the other issues, that as to the measure of damages they should find the cash Value of the 1‘and in the condition if actually was -at the time of the ¡sale, and 'deduct such value from the sum of money invested) 'by the plaintiff in the land, and that difference, iwiitih interest added, in th-e discretion of the jury, would he the proper -amount which the plaintiff ¡was entitled to recover.”
Since the action- now before us was brought, the Circuit Court of Appeals, in Nupen v. Pearce, 235 Fed. 497, 149 C. C. A. 43, on appeal firomi the District Court of the United- States for the District o-f North Dakota, disregarding that rule generally recognized by tire- federal! courts under which such counts follow the aonstructiloo putt upon a state statute by the courts of such state, held in accord with the “minority” rule, saying:
“And notwithstanding the construction placed by the Supreme Court of North Dakota upon its statute fixing the measure of damages for (deceit and’ misrepresentation -in- the sale of personal property, we do not feel at liberty to depart from the rule so-approved by the Supreme -Court of the United States.”
In closing we would suggest that, if the lawmaking power of this state desired to establish, for deceit inducing the purchase or exchange of land, a -rule of damages other than compensatory, iit could, as it did in case of warranty of quality of personal -prop*372erty (section 2305, C. C.), have enacted! -a statute expressly providing' therefor, and declaring itibe damage to be the difference between thie value of the piropelrty if it had been as represented and its actual value. Knowing that 'there were courts which, at colmaron, laiw, did' allow damages, in accordance with such rule, which rule was an exception, to the ordinary rule governing measure of damage for torts, it. would seem that, by 'omitting to recognize such exception, such lawmaking power had clearly 'disclosed an intention that in (this state the siamie rule was to govern in all actions for damages based upon deceit, even those where deceit induces a sale or exchange of property, as governs in every other action for damages based upon' tort. It is not for this court to usurp the power of the Eegfelatare, even though we might believe the “majority” rule toi be the wiser.