Holbrook v. Connor , 60 Me. 578 ( 1872 )

Danforth, J.

The declaration in the writ in this case, after some preliminary allegations, sets out that the plaintiff, ‘ relying „upon the aforesaid representations of the said defendants, that said lands had large deposits of oil in them, and were of great value for the purposes of digging, boring for, and manufacturing oil, and that said Lancey and said Connor had actually paid the sum of $14,000 therefor, was induced to enter into a joint stock company, with other persons, and to subscribe for and buy of said defendants, twenty shares in said alleged oil lands and oil well, and for which he then and there paid the sum of five hundred dollars in money.’ That these representations were false, and were fraudulently made is also alleged. Upon these two allegations the plaintiff’s action r.ests, and if neither of them, or the testimony offered to prove them is sufficient to sustain the suit it must fail.

In regard to the first allegation, ‘that the lands had large de-r posits of oil in them,’ etc., it is contended that the instruction to the jury is erroneous, inasmuch as it was left to them to' find whether the statement was understood as a matter of opinion or the representation of a fact as with the knowledge of the defendants. It is not claimed that the law as given is incorrect, but that it is not applicable to the case as proved. This objection, we think, rests upon a valid basis.

It is true that the language of the beginning of the allegation is the statement of a fact. It is a fact, however, which, unconnected with the other part of the sentence, is of but little consequence. For the lands were sold and purchased for the purpose of making profit in obtaining oil from them.

Assuming, then, that they had large deposits of oil, we have made but little progress in ascertaining their value for the purpose of‘-digging, boring for, and manufacturing oil.’ This would de pend very materially upon the facilities of getting to the lands, the expense of sinking wells, getting the oil to market, and many other things affecting the cost of production and the market price of the oil.

The whole sentence, then, seems to be but the expression of an opinion that the land is valuable for the purposes indicated, containing but one fact out of many upon which a correct judgment must be founded. It is but an opinion of the value or quality of the land. On recurring to the testimony we find that the statement was and must necessarily have been only an opinion, and was taken as such by the plaintiff. It was in proof that up to the time of the trial, the lands had not been tested, and it was entirely unknown to both parties whether the land was valuable as oil land, except so far as might be inferred from the production of wells on neighboring lands, and the single well upon .the land in question.

The plaintiff himself testified that Connor, one of the defendants, ‘ said the fifty acres was good oil land, and pointed to these wells not a great way off in proof of his statement.’

On cross-examination he says, ‘ I understood the two hundred acres had not been tested, and that operations upon it might he unsuccessful. I understood I was making a speculation which might be unsuccessful. ... I expected to suffer loss if we did not find oil, or if oil went down.’ This, corroborated by other testimony and uncontradicted, shows conclusively that the statement was made and understood as a matter of opinion. It may be true that the statements made in relation to the neighboring wells in support of this opinion were false and fraudulent, but that is not the fraud complained of in this action. It is clear that the verdict cannot be sustained under this allegation. Even if sufficient in other respects there is no testimony to show the falsehood of the allegation, so far certainly as it refers to the deposits of oil. On the other hand, the case shows that up to the trial the land had not been tested, and for aught that appears there may be oil enough in it to supply the world for an indefinite period.

The only other allegation on which the plaintiff rests his action, is that which relates to the price paid for the land.

We think that such a statement though false, is not sufficient to sustain an action.

It was early decided that no action would lie against a man for falsely declaring that a third person would have given him so much for his land. Roberts on Frauds, 524, and cases cited.

This was recognized as good law in Cross v. Peters, 1 Maine, 389, and, so far as we are aware, has never since been questioned.

In Medbury v. Watson, 6 Met. 246-260, it Avas held that a false statement by a third person as to what the owner paid, is actionable. But in the same case in the opinion, on p. 259, it is said that ‘ in regard to affirmations and representations respecting real estate, the maxim of caveat ernptor has ever been held' to apply. When, therefore, a vendor of real estate affirms to the vendee that his estate is worth so much, that he gave so much for it, that he has been offered so much for it, or has refused such a sum for it, such assertions, though known by him to be false, and though uttered' with a view to deceive, are not actionable.’

In Hemmer v. Cooper, 8 Allen, 334, in the opinion, it is said, 'The representations of a vendor of real estate to the vendee, as to the price paid for it, are to be regarded in the same light as representations respecting its value. A purchaser ought not to rely upon them; for it is settled that, even when they are false, and uttered with a view to deceive, they furnish no ground of action.’ And that was the only point raised in the case.

In Manning v. Albee, 11 Allen, 622, Gray, J., says, ‘ This court has repeatedly recognized and acted upon the rule of common law, by which the mere statements of the vendor, either of real or personal property, not being in the form of a warranty, as to its value, or the price which he has given, or been offered for it, are assumed to be so commonly made by those holding property for sale, iñ order to enhance its price, that any purchaser who confides in them is considered as too careless of his own interests to be entitled to relief, even if the statements are false and intended to deceive.’

As late as Cooper v. Lovering, 106 Mass. on p. 79, Ames, J., in the opinion, says, ‘ It has been repeatedly decided that representations of a vendor, as to the value or cost of the property to be sold, or as to offers for it made by others, even though false, are not representations upon Avhich a purchaser ought to rely, and are not sufficient to furnish any ground of action.’

In Mooney v. Miller, 102 Mass. 220, the same doctrine is recognized.

The same doctrine has been held in our own State, so far as the question has been discussed.

In Long v. Woodman, 58 Maine, 52, Hemmer v. Cooper is recognized as good law, and the principle is still more fully discussed in Martin v. Jordan, 60 Maine, ante.

In a late English work of good authority, representations by the vendor, as to price paid by him for land, are regarded in the same light as representations respecting its value, or the offers which have been made for it. It is there said, ‘ a purchaser is not justified in placing confidence on them.’ Kerr on Fraud and Mistake, 88.

This view seems to have been considered as well-settled law by all the authorities bearing upon the question, so far as we have been able to ascertain, with the exception of Sanford v. Handy, 23 Wend. 260, and Van Epps v. Harrison, 5 Hill. 63. In the latter of these cases Bronson, J., says: ‘ In Sanford v. Handy, it was intimated that a vendor would be liable for misrepresentations as to cost, but the point was not decided.’ He then states his own convictions as decidedly the other way. And after giving his reasons for his own views with much force, he closes by saying, ‘ the majority of the court think otherwise.’

This case, decided by a bare majority, with the reasons given all against the decision, is the only case directly in point, in conflict with the authorities before cited.

The other cases cited in the argument for the plaintiff are decided upon different principles, and are not in conflict with those relied upon in defense. Some of them were decided on the ground that a confidential relation existed between the vendor and vendee. This was the case in Bagshaw v. Seymour, 98 Eng. Com. Law, 373, and Clark v. Dixon, 95 Eng. Com. Law, 452, where the defendants acted in behalf of, and as agents for the plaintiffs. In Bradley v. Poole, 98 Mass. 169, and many of the cases cited, the representations were as to the condition of the company and the amount actually paid in, facts upon which the value of the shares sold, materially depended. Other cases rest upon statements of the amount paid for bonds in the market, or rents actually paid for lands under lease, showing the actual market value of the property sold. All these cases are widely distinguishable from the one. at bar. What a person may have paid for land is. one thing, its actual market value another, and often a very different thing. The purchaser of land for a company, though not especially appointed as agent therefor, would not be permitted to deceive, or even make a profit out of those for whom he assumed to act, and,' who subsequently adopt or ratify what he has clone. In the case at bar, the defendants, in making the purchase of the land, were not the agents of the association, nor did they assume to act for or in their behalf. The purchase was made before the company was formed, and, so far as appears, before its organization xvas contemplated. The contract of the parties does not refer to the original purchase. So far as the land is referred to it provides simply for a sale, which is completed by a deed subsequently given. True it was.sold for the purpose of forming a joint stock company, of which' the defendants were to be members; still it was but a sale, and the parties to this case stand to each other in the relation of grantor and grantee and no other, and in the writ are so declared to be. Viewing the authorities then, as bearing upon the admitted facts of this case, they would seem to be nearly all one way, very clearly showing, that a false representation, by the vendor, of the price paid for land, will not lay the foundation for an action. And if we add to these the long list of cases in which it has uniformly been held, that misrepresentations as to value and quality, and even of offers made by third persons, though fraudulent, are not actionable, it would seem that the law upon the question we are now considering must be free from doubt. If we examine the question upon principle the result must be the same. The statement of the vendor, that he paid a certain price for his land, if true, can be no more than an indication of his opinion of its value, and when we consider the various motives which may, and often do actuate men in making their purchases, and especially when it is done for the purposes of speculation, it is but the slightest proof of such an opinion. It is certainly of no more value than the offer of a third person, and this is considered of so little worth, that it is not legal testimony in a case where the market price is in issue.

It is, however, claimed that the price paid is a definite fact, the truth or falsity of which is susceptible of satisfactory proof, while assertions of quality and value are necessarily matters of opinion which are too uncertain for judicial cognizance. This may be true, and the same may be said of offers made as well as many other representations not actionable. But it should also be remembered, that a misrepresentation, to be the foundation of an action, must relate, not only to an existing fact, but to a material one ; one which will enable the purchaser more intelligently to form his own opinion of the value of the property. Now, as we have already seen, the price paid, if correctly stated, is but an uncertain indication of the vendor’s opinion. It gives no light whatever as to any inherent fixed quality, or description which goes to make up the value, and, in this respect, is not distinguishable from an offer made, except that it is even more unreliable, as an indication of value. The instructions of the presiding justice not being in conformity with these views, and being inapplicable to the case as presented by the testimony, the exceptions must be sustained, and it is unnecessary to consider the various other points raised.

Exceptions sustained.

Cutting, Walton, Barrows, and Virgin, JJ., concurred.