Court Opinion

ID: 7944939
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:19:14.409232+00
Date Added: 2024-06-11T16:33:52.714027
License: Public Domain

Montgomery, J.
(dissenting). Plaintiffs brought this action on the case against the defendant to recover damages claimed to have been sustained by reason of false and fraudulent representations made by the defendant to the plaintiffs-^relating to a farm in Lapeer county, which representations are alleged to have induced a trade by plaintiffs of an equity in a house and lot in Detroit for the farm. It is claimed that the particular representations were made by a firm of real estate agents, who, it is alleged, represented the defendant. This is a matter of dispute. The representations were made on an unsigned slip of paper, and described the property as follows:
“Forty acres; 6-room frame house; small barn with *33wagon shed, also shed attached to barn; room enough for five horses; 175 fruit trees in good, bearing condition; fences fair; rents at $100.”
It is claimed that these representations were not true in fact, and that there were less than 100 fruit trees on the property, which, it would seem, was the principal ground of complaint made by the plaintiffs. The case has been once before the court. On the former trial a recovery. was had by the plaintiffs, and the judgment was reversed upon error, in an instruction given by the trial judge. On the second trial, a verdict was directed for the defendant. It is claimed by the plaintiffs that the testimony on the present trial is not materially different from that given upon the first trial. It is enough to say, if such was the case, that the question of whether there was a case for the jury was not determined upon the former hearing, and is now for our consideration.
The plaintiffs were entitled to go to the jury upon the question of fact if the representations which were made by the defendant were made as statements of fact within the knowledge of the defendant. The plaintiff’s testimony as to the representations made by Barnard & McCloud, the real estate agents, is as follows:
“Barnard told about this property, and finally he pulled out some papers from a pigeonhole in his desk, and made a memorandum from them as to how many trees there were and the condition of the barn; * * * that everything he had stated to me was true. It was the same statement that had been made to Mr. Scribner, that they had made inquiry from Ferguson, besides getting the statement from the gentleman he had bought from, and that the banker had stated it was true; that the property was all right.”
There was other property also traded, called the “ Avon property,” and plaintiff testified that when defendant and himself were going out to see this Avon property, they discussed the trade, and he •proceeds:
“ I told him I really ought to see the Lapeer property *34before I traded, but I figured that if the representations that Barnard had made — that it is 40 acres of land, that there is a six-room house, and if there is 175 bearing apple trees — that certainly the property should pay 6 per cent, on $1,600. Scribner replied that he figured it just that way when he made the trade.”
He further testified that he knew they had just traded for the property. He knew that they had telephoned a Mr. Ferguson of Almont, who held a mortgage on the property. He also testified that he himself conferred with a Mr. Hanna, who had once owned the property, in the absence of defendant, with a view of getting all the information he could. He also testified that defendant, Scribner, had told him that the representation in the memorandum made by Barnard was faulty in one respect —that the farm was not rented for $100 — but that Ferguson had told him it was rented for $60, and plaintiff testified that, after receiving the memorandum that Barnard gave him, he had a talk with Scribner, and found that he had never seen the farm, and that he had had these same representations from Ferguson. The testimony on behalf of the defendant shows that the information imparted to plaintiff was precisely that which had been given him by Ferguson, and there is nothing in the case to indicate that there was any intent to mislead the plaintiff.
The case presents the question of whether, in- the absence of a warranty, one who sells property stating that he has no personal knowledge of its condition, but who gives the source of his information upon the subject, and imparts the information as it was imparted to him, is liable, in' an action on the case for deceit, if the information turns out to be incorrect. Plaintiff relies chiefly upon Holcomb v. Noble, 69 Mich. 396, and Busch v. Wilcox, 82 Mich. 336. In each of these cases the representation consisted of an estimate of timber made by an agent of the seller, and it is possible that the rulings may be sustained upon the ground that the principal adopted the agent’s estimate as his own. If so, the cases can be *35distinguished from the case under consideration. However this may be, the latest enunciation of this court was made in Krause v. Cook, 144 Mich. 365. In that case the question was distinctly presented. Cook was charged with fraud in the selling of stock. He made certain representations as to the character of the property, and these representations proved to be false. It was held that the court should have given the following instruction:
“If a person received information from others, and believes it, repeats it, explaining that he has no personal knowledge, he is not guilty of fraud. Therefore, if you find that the defendant received information from others and repeated that information to plaintiff, and explained to plaintiff the sources of his information, he is not guilty of any fraud, if he acted honestly and in good faith.”
I am not able to distinguish that case from the present. It is suggested that in the Krause Case the defendant was an agent who at most only received 10 per cent, of the damages caused by the false representations. This attempt to distinguish appears to be based upon the assumption that the recovery in an action for fraud is in some sense based upon what the defendant received. There is no such rule of law that I am acquainted with. The present case well illustrates the difficulty of applying such a rule. There is very little doubt upon the record in this cáse that the farm, even in the condition, in which it proved to be, was adequate compensation for the equity in the Detroit property which the defendant received. But this, if there was actionable fraud, would not affect the plaintiff’s right to recover the difference between the farm as represented and what it actually proved to be. True, if upon the ground of mutual mistake it was sought to rescind a contract because facts, which both parties assumed upon information derived from the same source to be true, proved to be false, a very different question . would be presented. But in an action for fraud the recovery is not based upon what the defendant receives. It is based upon the fact that the plaintiff has been induced *36to enter into a contract, and through false representations of the defendant has found himself in possession of something different from what he expected.' The illustration of information afforded by one friend to another as to the value of mining or other property, accompanied by a statement of the source of information, is not an apt illustration of anything analogous to the facts in Krause v. Cook. In such case there is no contract between the parties. But in Krause v. Cook there was a contract. The defendant was a party to that contract in the sense that he not only made the sale of the stock as agent, but received a consideration passing to him; and, as pointed out in the opinion of Mr. Justice Hooker, the rule in Holcomb v. Noble, so far as “it is a sound rule, was in Angell v. Loomis, 97 Mich. 5, applied to an action against an agent.
It is suggested that the rule of liability for a representation such as that involved in this case accomplishes justice where the contract is made by the defendant, and the whole consideration passes to him. This is certainly a shadowy distinction, existing only in degree at best, and if an attempt were made to make such a distinction, it would involve in every case an investigation as to whether the consideration passing to the defendant was the equivalent of the damages which the law gives for such a wrong. This is neither an action to rescind nor is it an action to recover the consideration paid. It is an action for a tort, and that tort is committed as well by one who receives only a portion of the consideration as by one who receives it all. If such a distinction were attempted, one partner could not be made liable in an action of tort for a representation, which afterwards proved to be false, made under the circumstances of this case, whereas one who received the whole consideration might. / ,
I find it impossible to distinguish the case of Krause v. Cook. See, also, Hunt v. Blanton, 89 Ind. 38, cited in defendant’s brief; also 20 Cyc. p. 17.
It is also alleged that the court erred in excluding testi*37mony to contradict evidence given by the witness for the defendant on the former trial of the case, who had since died. A complete answer to this objection is that the defendant offered to waive the objections he had previously made to the testimony and permit plaintiff to put in the proof, but he declined to do so.
We think no error was committed in withdrawing the case from the jury, and judgment should be affirmed.
Blair, and Ostrander, JJ., concurred with Montgomery, J.