Court Opinion

ID: 3837493
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:27.05155+00
Date Added: 2024-06-11T07:40:22.678449
License: Public Domain

On July 1, 1933, S.W. Selman and his wife Nona entered into a written contract to purchase for $2,000 a 160-acre ranch in Benton county, Oregon, from H.E. Shirley and his wife. Payments were to be made in the following manner: $500 upon execution of the contract; $200 on or before October 1, 1934, and a like sum of $200 on or before the 1st day of October annually thereafter until the full purchase price was paid. Selman and his wife paid $550 upon execution of the contract, took possession of the premises and have retained the same ever since. $200 was paid on October 1, 1934, but the Selmans failed to *Page 640 
make the annual payment due on October 1, 1935. On October 22, 1935, the Shirleys commenced an action in ejectment.
Soon after the action in ejectment was commenced, the Selmans instituted the instant suit in equity to reform the description of the land purchased and to recover damages for fraud and deceit alleged to have been practiced upon them in the transaction. It is conceded that a mutual mistake was made in the description of the land and this was corrected by the decree of the lower court. Issue was joined on the allegations of fraud and the damages sustained.
Plaintiffs, in their amended complaint, charge that they were induced to buy the 160-acre tract of land on account of the following representations:
(1) "* * * That said premises had growing thereon at least Four Thousand (4000) cords of merchantable fire wood;
(2) "that there was sufficient water in the stream running through said premises to irrigate at least ten acres of land thereon in the driest season of the year; * * * and,
(3) "that there was available, adjacent to the road leading to said premises from the Philomath-Alsea Highway, sufficient gravel to gravel said road and that said gravel could be had for the hauling, that said gravel belonged to Benton County, Oregon."
Plaintiffs allege that the above representations were false and fraudulent in that:
(1) "* * * in truth and in fact there was no merchantable fire wood growing upon said premises;
(2) "that there was not sufficient water to irrigate ten acres or any other amount in excess of One-Eighth of an acre; and * * *, *Page 641 
(3) "that the gravel * * * was privately owned and was not available for graveling said road * * *."
Plaintiffs inspected the premises before entering into the contract of purchase, but assert that they were strangers in Benton county and "had no knowledge or experience in judging timber or timber lands" and that they relied wholly upon the representations made to them. On trial they testified that on account of rain and the muddy ground they were unable to inspect the timber.
The trial court entered findings of fact:
                                  III.
"* * * * plaintiffs herein made their own examination of saidpremises together with defendant C.G. Blakely and had the sameopportunity as defendant C.G. Blakely to examine said premisesand ascertain from such examination the condition thereof and thefacts relative thereto; that defendant C.G. Blakely did not knowingly make any false representation to plaintiffs and was not consciously ignorant or recklessly indifferent to the truth or falsity of any representation made by him to plaintiffs as aforesaid. (Italics ours.)
                                   IV.
"That the defendant H.E. Shirley knowingly and falsely represented to plaintiff that there was at least four thousand cords of wood on said premises; that said representation was false and was made by defendant H.E. Shirley with the intention of inducing plaintiffs to purchase said premises; that the plaintiffs in purchasing said premises relied upon said representation.
                                   V.
"That said premises so purchased by plaintiffs from defendants H.E. Shirley and Ruth Shirley were of the fair market value of $2000.00 at the time said contract was entered into, to-wit, July 1, 1933; that plaintiffs *Page 642 
have suffered no damage, having agreed to pay $2000.00 for said premises. * * * *"
The decree reformed the written contract as alleged in the amended complaint but dismissed the suit against the defendants based on the charge of fraud. From this decree, the plaintiffs appealed.
On original hearing (85 P.2d 384) the court held, with the writer dissenting, that plaintiffs had been defrauded and were entitled to damages "upon the basis of 50 cents per cord for the difference between the represented 4,000 cords and the actual 200 cords," which amounted to $1,900. There was a balance of $1,250, together with interest due, on the purchase price, as $750 had been paid thereon. Therefore, this court's decree enabled plaintiffs to acquire this 160-acre ranch for $100. In reaching this conclusion, the majority of the court held that plaintiffs were entitled to the "benefit of the bargain" rule asserted by defendants. Had the "benefit of the bargain" rule been also applied so as to compensate plaintiffs for the failure of water to irrigate the 10-acre tract and the loss of gravel, we would have the anomalous situation of the vendors being deprived of their property without compensation and being mulcted in damages besides.
In the lower court, evidence was received on behalf of the defendant vendors that, at the time the contract was entered into, the land had a market value of $2,000. Since the contract price, or $2,000, was the market value of the land, the defendants contend that no damages are recoverable in an action of this kind. Plaintiffs introduced no evidence concerning the market value of the land. It was their contention that the "out of pocket" rule had no application to the facts and they *Page 643 
relied on the benefit of their bargain in the assessment of damages.
It should be borne in mind that there was no misrepresentation concerning the quantity of land or the boundaries thereof. It is not a case of shortage in acreage as in Lichtenthaler v. Clow,109 Or. 381, 220 P. 567; Purdy v. Underwood, 87 Or. 56,169 P. 536, and Cawston v. Sturgis, 29 Or. 331, 43 P. 656. The issue on this appeal is clearly and definitely defined. What is the proper measure of damages to be applied to the facts in this case? Are plaintiffs entitled to the benefit of their bargain, namely, the difference between the value of 4,000 cords of wood and 200 cords of wood? Or is the proper measure the difference between the contract price of the land and its market value? As stated by Mr. Justice ROSSMAN, speaking for the court on original hearing:
"The sole issue upon which we deem it necessary to express an opinion is whether the plaintiffs are entitled to (1) the benefits of their bargain; or (2) no damages because the market value of the land equals the sum which they agreed to pay."
It seems highly important that this question be determined clearly and definitely so that members of the bar and trial courts may know how to proceed. If there is any one thing that is devoutly to be desired it is certainty of the law. Distinctions based upon immaterial differences in factual situations tend only towards confusion and uncertainty.
What is the proper measure of damages in tort actions wherein fraud has induced the sale or exchange of property? This has long been a controversial question among judges, lawyers, professors, and text writers. As stated in a well-considered article entitled *Page 644 
"The Measure of Damages in Tort for Deceit," 18 Boston U.L. Rev. 681:
"Upon this subject American courts are divided; textwriters present a broken front; a left wing wars with a right; academicians cannot agree; the Law Institute advisers dissent from the reporters; precedent neutralizes precedent; abstract reasoning carries no persuasion; arguments have no other effect than to engender counter-arguments; one practical consideration clashes with another practical consideration; nothing is settled as the just law or general rule."
The majority of the state courts hold that the measure of damages in actions upon sales induced by fraudulent representations is the difference between the actual value at the time of the sale and what would have been worth as represented:George v. Hesse, 100 Tex. 44, 93 S.W. 107, 8 L.R.A. (N.S.) 804, 123 Am. St. Rep. 772, 15 Ann. Cas. 456; 27 R.C.L. 382; 27 C.J. 97; Annotations 108 A.L.R. 1060 and 57 A.L.R. 1142. The English courts (Peek v. Derry, 37 Ch. D. 541); the federal courts (Smith v. Bolles, 132 U.S. 125, 10 S.Ct. 39, 33 L.Ed. 279;Sigafus v. Porter, 179 U.S. 116, 21 S.Ct. 34, 45 L.Ed. 113) and numerous state courts, in cases of sale, limit the recovery to the difference between the price paid and the market value.
No well-considered case holds that a hard and fast rule should be applied in all cases. Objections have been made to both rules. However, the American Law Institute, after a thorough consideration of the subject, reached the conclusion that the better-reasoned cases support the "out of pocket" rule. Hence, we find in the Restatement of the Law on Torts, § 549:
"The measure of damages which the recipient of a fraudulent misrepresentation is entitled to recover from its maker as damages under the rule stated in § 525 *Page 645 
is the pecuniary loss which results from the falsity of the matter represented, including * * *."
The "comment" in reference to the above clause is so clear-cut and pertinent to the facts in this case that we quote it in full:
"Under the rule stated in this Clause the recipient of a fraudulent misrepresentation is entitled to recover from its maker only the actual loss which because of its falsity he sustains by his action or inaction in reliance upon it. If notwithstanding the falsity of the representation the thing which a vendee acquires is of equal or greater value than the price paid and he has suffered no harm through using it in reliance upon its being as represented, he has suffered no loss and can recover nothing. The fact that he would have made a profit if the representation had been true does not entitle him to recover for his disappointment in not receiving the gain which he was led to expect. Thus where A induces B to purchase a parcel of farm land by falsely representing that it contains valuable mineral deposits, B is not entitled to recover anything if the land as farming land is worth as much as the price paid although had it contained the minerals represented it would have been worth much more. If the fraudulent misrepresentation is so made as to constitute a warranty, the person acting in reliance upon it may of course waive the fraud and bring an action on the warranty, in which case the measure of damages is that appropriate to a warranty, namely, the difference between the value of the article as it is and the value which it would have had had the fact warranted been true."
It is observed that, in the above restatement of the law, no distinction is made between sales and exchanges of property in fraudulent transactions, so far as the measure of damages is concerned. In case of a sale, the party defrauded parts with his money; in exchange of *Page 646 
land, the defrauded party parts with his property. The legal principles involved are the same. The rule in jurisdictions maintaining the "out of pocket" rule is thus stated in 27 C.J., p. 96:
"In such jurisdictions the defrauded purchaser is limited to the difference between the real value of the property purchased and the price paid, or in case of an exchange, the difference between the value of what the injured party was fraudulently induced to part with and the value of what he got."
Among other authorities cited are Ward v. Jenson, 87 Or. 314,170 P. 538; Purdy v. Underwood, supra; Robertson v. Frey,72 Or. 599, 144 P. 128.
The above "comment" of the American Law Institute closely follows the reasoning of the United States court in Smith v.Bolles, supra, which involved a fraudulent sale of stock in a mining company. The court said:
"The measure of damages was not the difference between the contract price and the reasonable market value if the property had been as represented to be, even if the stock had been worth the price paid for it; nor if the stock were worthless, could the plaintiff have recovered the value it would have had if the property had been equal to the representations. What the plaintiff might have gained is not the question, but what he had lost by being deceived into the purchase. The suit was notbrought for breach of contract. The gist of the action was that the plaintiff was fraudulently induced by the defendant to purchase stock upon the faith of certain false and fraudulent representations, and so as to the other persons on whose claims the plaintiff sought to recover. If the jury believed from the evidence that the defendant was guilty of the fraudulent and false representations alleged, and that the purchase of stock had been made in reliance thereon, then the defendant was liable to respond in such damages *Page 647 
as naturally and proximately resulted from the fraud. He was bound to make good the loss sustained, such as the moneys the plaintiff had paid out and interest, and any other outlay legitimately attributable to defendant's fraudulent conduct; but this liability did not include the expected fruits of an unrealized speculation." (Italics ours.)
Sedgwick in his able work on Damages (9th Ed.), § 1027, recognizes that the numerical weight of authority supports the contention of the appellants herein, but it is nevertheless the conclusion of the author that the "out of pocket" rule is based on logic and reason. Thus Sedgwick speaks (Sedgwick on Damages, § 781):
"Instead of finding positive reasons for departing from the logical measure of damages in an action of tort, therefore, the reasons both theoretical and practical seem to support the Smith v. Bolles doctrine. The defrauded vendee has, accordingly, three alternative remedies: first, rescission and recovery of the consideration; second, an action for deceit and recovery for his actual loss, i.e., the difference between the value of what 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."
In Rockefeller v. Merritt, 76 F. 909, 22 C.C.A. 608, 40 U.S. App. 666, 35 L.R.A. 633, that eminent jurist, Judge Sanborn, well stated the rule applicable to the facts in this case:
"The true measure of 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 received under the contract. It is the loss which he has sustained, and not the profits which he might have made by the transaction." *Page 648 
New York for many years consistently adhered to the so-called majority rule but, since 1919, the court has apparently been convinced of the error of its ways and is now, in cases of this character, committed to the "out of pocket" rule. See Reno v.Bull, 226 N.Y. 546, 124 N.E. 144, citing with approval Smith v.Bolles, supra, and Sigafus v. Porter, supra.
Whatever may be the rule in other jurisdictions, it has long been settled in this state that, in tort actions for fraud inducing the sale or exchange of real property, the measure of damages is the difference between the value of the property parted with and the actual value of the property received. This court has never endeavored to treat a tort action as being equivalent to a breach of contract. It has adhered to the fundamental principles of tort. The party defrauded is entitled to be made whole — i.e., he is not to be out of pocket. The damages should equal only the loss which the fraud or deceit inflicted upon him. If there has been no loss there can be no recovery, although fraud has been practiced. It is a simple standard, reasonably definite and easily understood. We do not intimate that any hard and fast rule in measuring damages can be applied to every factual situation wherein fraud and deceit are involved. The measure of damages depends somewhat upon the kind and character of the misrepresentation. It can be said, however, with certainty that the "benefit of the bargain" rule, i.e., the difference between the value of the property parted with and the value of the property as represented, has never been applied to a tort action of this character.
Plaintiffs had their opportunity to introduce evidence relative to the market value of the land purchased, but they failed to do so. What they really *Page 649 
sought was damages arising from breach of contract. The fallacy of such contention lies in the fact that the vendors did not contract to sell, nor did the plaintiffs agree to buy, 4,000 cords of wood. Plaintiffs, under the terms of the contract, agreed to buy a 160-acre farm. Applying the "benefit of the bargain" rule to the facts in the instant case leads to absurdity for it amounts to the vendees acquiring the land for practically nothing.
Columbia Riv. Door Co. v. Priest, 128 Or. 359, 274 P. 116, is squarely in point and is adverse to appellants. In that case the plaintiffs brought an action to recover damages on account of fraudulent representations inducing the exchange of lands. The alleged false representations pertained to the quantity of timber upon each of the two tracts of land. The land had less than one-half the amount of timber represented. The court said:
"If defendant's contention be true that plaintiff was not damaged in this exchange of property, even though false representations were made, that, of course, would preclude a recovery by plaintiff."
Now what difference in principle is there between the instant case and the one above mentioned? Can it be that a different rule applies where a sale and not an exchange of property is involved? If so, what is the ground for such distinction?
Southern Oregon Orchard v. Bakke, 106 Or. 20, 210 P. 858, was an action to recover the balance of the purchase price of a tract of land. The defendant filed a counter claim for damages arising out of alleged false representations concerning the quality of the land. The trial court instructed the jury that the measure of damages "would be the difference between what *Page 650 
the defendant paid for the property and its fair market value at the time of entering into the contract." On appeal, this court, speaking through Mr. Justice McBRIDE, held that "this charge clearly states the law". This case involved a sale and not an exchange of property. Chief Justice BURNETT and Justices HARRIS and RAND concurred in the decision.
Salisbury v. Goddard, 79 Or. 593, 156 P. 261, involved fraudulent representations inducing the exchange of a rooming house for land. In speaking of the measure of damages, the court said:
"If, therefore, the plaintiffs received property of equal value of the lot which they conveyed, and the money they paid, they were not injured and sustained no damages." Citing Van de Wielev. Garbade, 60 Or. 585, 120 P. 752; Robertson v. Frey, 72 Or. 599,  144 P. 128.
Ward v. Jenson, supra, was an action for damages involving fraud in the exchange of lands. In the complaint the plaintiff alleged that the defendant had made the following false representations for the purpose of inducing her to exchange property in Portland for certain land in California: (1) That he had invested $10,000 in the California property; (2) that it had cost him $6,000 to level the land so that it could be irrigated, to buy and set out orange trees and to install a water pipe line; (3) that the pumping plant on the premises was of sufficient capacity to supply water for irrigating all the property; (4) that from three to six hours was sufficient time for the irrigation of all the tracts; (5) that he owned the ten-acre tract; (6) that the whole property was of the value of $18,000; (7) that he had a mortgage to secure the loan of $8,000 on the ten-acre tract and that plaintiff could judge of the value of that tract by the fact that there was a mortgage on it to *Page 651 
secure a loan of $8,000; and (8) that the Orange county property contained 15 acres. The trial court instructed the jury as follows:
"The measure of damages in this case is the difference between the value of the land as it would have been if it was as represented, and the actual market value; in other words: the value which Mr. Jenson represented was the true value and its actual value, which you find is the market value."
This court, speaking through Mr. Justice HARRIS, said:
"This instruction was erroneous. It is settled in this state that in an action to recover damages for false representations inducing an exchange of property the measure of damages is the difference between the market value of the property parted with by the person defrauded and the market value of the property received by him." Citing numerous authorities in support thereof, among which are Smith v. Boles, supra, and Sigafus v. Porter, supra, by the United States Supreme Court.
In Parks v. Smith, 95 Or. 300, 186 P. 552, 554, it was alleged that fraud induced the exchange of real property. It was charged that:
"In order to persuade and induce these defendants to make said trade and exchange, the said plaintiffs represented and stated to these defendants that the property of said plaintiffs, being the above-described property, was located only five and one-half miles from Mapleton, in Lane County, Oregon, by wagon road, and only three and one-half miles by section line; that all of said land was level and tillable except two acres; that there were on said land no big trees except twenty or thirty dead fir or cedar trees; that the river crossed said land at only one place, and that being directly across one forty; that all of said land was low bench or bottom land; that the public highway skirted the said premises, and that said land was of the reasonable value of $6,000. *Page 652 
"* * * that the said Lane County land is ten miles from Mapleton, that there are not to exceed 50 or 60 acres of said land which is level, that the remainder is rough, hilly, precipitous, some of which is inaccessible by reason of its steep and precipitous nature; that practically the whole of said land is heavily timbered with large dead trees, mostly fallen, a part of which timber is what is described as an `old burn'; that the public highway which is 60 feet in width traversed said land in a zigzag manner; that the river enters and crosses said land at three different points, making thereby much of said land valueless."
Defendants also alleged that the premises were worth not to exceed $1,200.
The court, speaking through Mr. Justice BEAN, held that:
"Defendants cannot recover damages for misrepresentation in effecting an exchange of property, if they received property of equal or greater value." Citing Ward v. Jenson, supra; Salisbury v. Goddard, supra.
Scott v. Wallace, 102 Or. 22, 201 P. 542, involved the sale
of 150.04 acres of land in Lane county. It was charged that plaintiffs fraudulently represented: (1) That there were 90 acres of land under cultivation whereas there were in fact only 65 acres; (2) that there were 70 acres of growing wheat thereon, when the area was only 37.37 acres; (3) that there was no rock on the land except three piles of loose rock on cultivated land, whereas the land under cultivation was full of rock, both loose and in boulders and ledges. It was held that the proper measure of damages was, as stated in Ward v. Jenson, supra. After quoting from the above decision, the court, through Mr. Justice BURNETT, said:
"With these rules of law established, as they are, by a long list of precedents, the question resolves itself *Page 653 
into one of fact, whether or not the defendants have been damaged. The query is, whether their alleged damage, when tested by the standard of Ward v. Jenson, supra, amounts to something or nothing."
Also, to the same effect, see: Hooning v. Henry, 106 Or. 605,213 P. 139; Van de Wiele v. Barbade, supra; Zobrist v. Estes,65 Or. 573, 133 P. 644; Greig v. Interstate Investment Co.,121 Or. 15, 253 P. 877; Howard v. Merrick, 145 Or. 573,27 P.2d 891. That this court has committed itself to the "out of pocket" rule as a proper measure of damages applicable to the facts in the instant case is universally recognized. See McCormick on Damages, § 121; 27 C.J. 96; Annotations 108 A.L.R. 1062 and 57 A.L.R. 1146.
Plaintiffs rely strongly upon Lichtenthaler v. Clow, supra, but, in our opinion, it does not support their contention that the "benefit of the bargain" rule should be applied to the facts in the instant case. In that case Lichtenthaler purchased certain "lands and premises" for a lump sum of $6,000. The plaintiff therein charged that the defendants falsely and fraudulently represented that there were 20 acres within the area described in the conveyance whereas, in truth and in fact, there were but 14 acres. There were certain buildings and other improvements on the land but it appears from a statement of the facts of the case that such were on that part of the land actually received by plaintiff. The value of the four acres — the deficiency found by the jury — was the sole matter at issue. The trial court gave the following instruction:
"I instruct you if you find that the plaintiff is entitled to recover, the measure of damages would be such proportion of the purchase price, which in this case would be six thousand dollars, as the deficiency bears *Page 654 
to the represented area. In other words, the measure of damages is the amount paid for the deficiency, irrespective of the real value of the tract actually conveyed."
On appeal it was held that the above instruction was erroneous in that it was not the proper measure of damages to be applied to the facts in the case. The court rejected the proportional rule as applied to a case where valuable improvements were on land which had been purchased for a gross price. It approved the rule announced in Hoback v. Kilgores, 26 Gratt. (Va.) 442, 21 Am.Rep. 317, namely, that the vendee was entitled to such portion of the purchase price, less the value of the improvements, as the deficiency bears to the area described in the contract. The court commented on cases dealing with misrepresentations concerning quantity, condition and value of land and stated that they were "divided into two classes: (1) those which measure the damages by ascertaining the difference between the actual value of the property received and its value if it had been as represented to be; and (2) those which measure the damages by ascertaining the difference between the actual value of the property and the amount paid for it." Under the second classification, the court cited numerous authorities from this jurisdiction, leaving no doubt as to the classification in which this state belongs. We also note the following highly significant statement made by Mr. Justice HARRIS in the Lichtenthaler case:
"Compensation is the end which the law strives to attain, and consequently damages must be compensatory and not speculative. Any rule submitted for the measurement of damages is to be commanded only to the extent that it accomplishes the object of the law. The defrauded party is entitled to be made whole, if *Page 655 
that result can be accomplished but he is not entitled to more: Rainier v. Masters, 79 Or. 534, 539 (154 P. 426, 155 P. 1197, L.R.A. 1916E 1175)."
In view of the issues involved in the Lichtenthaler case, we are at a loss to understand how it can reasonably be contended that it supports the "benefit of the bargain" rule. The most that can be said is that, under the particular state of facts, it was necessary for the court, in order to enable the defrauded party to be made whole, to depart from the general rule in the measurement of damages.
The following cases are also relied upon as supporting the "benefit of the bargain" rule: Robertson v. Frey, supra; Purdyv. Underwood, supra; Cawston v. Sturgis, supra.
Robertson v. Frey, supra, does not support the "benefit of the bargain" rule. The instruction of the trial court embodying such rule was not approved on appeal. The judgment was affirmed by virtue of Art. VII, § 3 of the Oregon Constitution, "* * * notwithstanding any error that may have been committed during the trial."
In Purdy v. Underwood, supra, land was purchased at a certain price per acre, but there was a deficiency in the amount of land. Under this factual situation — wholly at variance with the one under consideration in the instant case — the court, in order to make the defrauded party whole, allowed damages for the deficiency in land at the ratable price per acre.
Cawston v. Sturgis, supra, is in the same category as it involved a deficiency in the land purchased.
It must be apparent that a different measure of damages applies when the fraud is based upon misrepresentations concerning the quantity of land purchased *Page 656 
or exchanged. These cases, however, have no application to the facts in the instant case, as no shortage of land is involved herein. Certainly they do not support the "benefit of the bargain" rule.
What has been said thus far is on the assumption that the misrepresentations were made as alleged and that plaintiffs relied thereon, although it is difficult to understand how anyone, after inspection, could have been deceived about logged-off land. It would seem that the black stumps would speak for themselves. It is also difficult to understand why the Selmans continued to make payments after learning, in August, 1933, of the shortage of wood and their alleged consequent damages. In reference to that phase of the case, consider the testimony of Mr. Selman (Trans. 91, 92):
"Q. And when you came up here on the 13th of October and made that payment you only owed a balance of 1450 before you made that payment? A. Yes, sir.
"Q. And you knew at that time you had been damaged eighteen hundred dollars and only owed 1450? A. According to the circumstances we were damaged that much.
"Q. Yes, and you knew it at that time? A. Yes, sir.
"Q. And had known it for quite a while before? A. Yes, sir.
"Q. In other words the damage amounted to 350 more than what you owed Mr. Shirley at that time? A. Yes, sir.
"Q. Then why did you pay him two hundred dollars and interest on it? A. We paid Mr. Shirley two hundred dollars because he agreed to do what was right.
"Q. Did you have him express himself as to what he thought was right? A. He did not. We didn't ask him what. We thought that he would be reasonable. *Page 657 
"Q. You though at that time naturally expected him to make this eighteen hundred dollars good, didn't you, for the thirty-six hundred cords? A. We expected him to make a reasonable settlement on the place. We didn't expect him to give us eighteen hundred dollars outright.
"Q. You expected him to make the place though worth as much as to you as it would have been worth if it had been as represented? In other words, make good the representation? A. We expected him to make good the misrepresentation.
"Q. And that could only have been done by paying you eighteen hundred dollars for this shortage of wood? A. Well, we couldn't hardly expect him to give us eighteen hundred dollars.
"Q. Why? A. Well, it wouldn't have been fair in the first place.
"Q. Wouldn't have been fair? A. I hardly think it would.
"Q. You are asking two thousand dollars now, aren't you, as damages? A. We are.
"Q. Do you think that's fair then if eighteen hundred dollars wouldn't have been fair at that time? The four thousand cords is two thousand dollars, isn't it? A. We were not dealt with square to begin with."
On September 16, 1934, Mrs. Selman wrote from California to Mr. Shirley concerning an arrangement to settle on a cash basis for the amount due on the purchase price. The letter was entirely friendly and made no reference to any alleged false representations, although at such time the Selmans were fully aware of conditions on the farm which they had purchased. Concerning this letter, the record (Trans. 69) thus speaks:
"Q. Why didn't you tell him in that letter you had been damaged two thousand dollars and two thousand dollars was all you were paying for the place and therefore he owed you your money back, all that you had paid him? * * * A. I just got through telling you. Because I wanted to tell him to his face. *Page 658 
"Q. How? A. I wanted to tell him to his face the damage we had been done and not in a letter.
"Q. That's the only explanation you care to make of that? A. That's all I know how to make. I don't know just how else you would put it."
The equities of the case are not entirely with the plaintiffs. They have been in possession of 160 acres of land since August, 1933, and it has been their home, however humble it may be. They have paid $750, together with interest, on the purchase price. This farm or hill ranch had, according to Shirley, a rental value of $150 per year. It is utterly unreasonable to state that it is worth only $100. Yet that is what this court must say if we adhere to the decision on original hearing. Can it be that the testimony of all witnesses on market value is to be ignored? Mr. Dollarhide, a disinterested and fair witness, testified without contradiction that he offered Shirley $2,000 in cash for the ranch, but learned that it had just been sold to the plaintiffs. Dollarhide thereupon went out to see Mrs. Selman, "to see if she would sell it", but she would not do so. Dollarhide and three other witnesses testified that the market value of the 160-acre ranch was $2,000. Otherwise stated, that it was worth $12.50 per acre.
This farm is not all logged-off land. 40 acres are assessed as tillable land. It is a typical hill ranch, valuable mostly for pasturage purposes. Blakely, a witness friendly to plaintiffs, said that, at the time of inspecting the ranch, nothing was said about wood or timber. The plaintiffs, according to this witness, wanted a place off the main highway and out of traffic.
However, let it be understood that this opinion is bottomed on the legal proposition that the "benefit *Page 659 
of the bargain" rule does not apply to the facts in this case. We have adverted to these features of the case only to refute the idea of a gross miscarriage of justice in the event the decree of the lower court is sustained.
In the light of all that has been said by this court relative to the proper measure of damages to be applied in actions of this kind, the trial court, no doubt, felt secure in denying plaintiffs any relief, for the simple reason that they had sustained no loss. In other words, under the uncontradicted evidence, the land which they purchased had a market value equal to the price which they agreed to pay for it.
The decree of the lower court should, therefore, be affirmed.
LUSK and BAILEY, JJ., concur in this dissenting opinion. *Page 660