Court Opinion

ID: 8756976
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:50:52.95386+00
Date Added: 2024-06-11T17:01:18.592780
License: Public Domain

SHELBY, Circuit Judge
(dissenting). This is an action for damages for deceit in the sale of real estate. The declaration shows that the plaintiffs purchased of the defendant a certain ranch for the lump sum of $20,000. It is averred that the defendant, to make such sale, represented that the ranch contained 43 sections, and that the plaintiffs subsequently ascertained that it only contained 32 sections — that there was a shortage of 11 sections. It is averred, in effect, that the 11 sections found not to be included in the ranch were worth not less than $7,000. The declaration contains no statement of the value of the 32 sections of land which were really included in the ranch, and embraced in the contract of purchase. The defendant demurred to the declaration as showing no cause of action, and the trial court sustained the demurrer. The plaintiffs declined to amend the petition, and it was dismissed.
A declaration in a suit for damages shows no cause of action unless it states facts which, if true, show that the plaintiff has been *26damaged. It is averred that the plaintiffs have paid to the defendant the agreed price of $20,000, and have possession of the ranch. There is no offer to rescind the sale. The suit, in effect, ratifies and confirms the sale, and seeks damages- for the deceit as to the quantity of the land. On proof of the deceit, the plaintiffs would be entitled to recover, on proper allegations, the amount of their loss. If the land which they received was worth $20,000, it seems clear that they have lost nothing. If it was worth more than $20,000, they have profited to the amount of the excess by the purchase. In Sigafus v. Porter, 179 U. S. 116, at page 123, 21 Sup. Ct. 34, at page 37, 45 L. Ed. 113, which was an action for deceit in the sale of real estate, the Supreme Court has laid down the rule for the measure of damages in such cases:
“The true measure of the damages suffered by one who is fraudulently induced to make a contract of sale, purchase, or exchange of property is-the difference between the actual value of that which he parts with and the actual value of that which he receives under the contract.”
The question in such case is, how much worse off are the plaintiffs than if they had not bought the land ? If they had not bought the land, they would have in their pockets $20,000. It is clear that, to ascertain their loss, we must deduct from that amount the real value of the land they received. There is no other way in which to ascertain the loss which the plaintiffs have sustained by acting on the alleged representation of the defendant. That is the distinct rule established by the Supreme Court of the United States, by the English Court of Appeal, and by many state courts of last resort. Sigafus v. Porter, supra, and cases there cited; Smith v. Bolles, 132 U. S. 125, 10 Sup. Ct. 39, 33 L. Ed. 279; Peek v. Derry, 37 Ch. Div. 541, 591, 594.
Wilson v. New U. S. Cattle Ranch Company, 73 Fed. 994, 20 C. C. A. 241, decided by the Circuit Court of Appeals of the Eighth Circuit, was a suit involving the failure of the vendor to convey to the vendee the quantity of land which he had agreed to convey. In stating the proper rule of damages on that branch of the case,, the court said:
“Upon an action for damages for the deceit and fraud which induced the purchase, the measure of damages is what the vendee has lost. It is the difference between that which he had before and that which he had after the contract of purchase was made.”
Smith v. Bolles, supra, is cited as sustaining this rule. The same rule is also applied, in cases involving purchases of real estate in Atwater v. Whiteman (C. C.) 41 Fed. 427; Glaspell v. Northern Pac. R. Co. (C. C.) 43 Fed. 900; and Greenwood v. Pierce, 58 Tex. 130.
0The declaration in this case contains no averment of fact that will enable the court to apply this rule. Every averment of fact which it contains may be true, and the plaintiffs, instead of being damaged, may have profited more than $10,000 by the purchase, for the land they hold under the purchase may be worth $30,000 instead of $20,000. Unless it is averred that the land which they received is *27worth less than $20,000, there is certainly no averment of damage.
For these reasons, I think the Circuit Court ruled correctly in sustaining the demurrer, and that the judgment of the Circuit Court should be affirmed.