Lofgren v. Peterson , 54 Minn. 343 ( 1893 )

Vanderburgh, J.

This action was brought to rescind a sale of lands, on the ground of fraud. It was dismissed at the trial for alleged insufficiency of the complaint. The complaint shows that on the 8th day of March, 1892, the appellants and Carolina Peterson, one of the defendants, owned the parcel of land therein described, alleged to be worth $150,000, and mortgaged for $45,000. On that day the parties hereto entered into a contract with one Thomas Brian, whereby they agreed to convey the land mentioned to him, in consideration of which, and certain covenants in respect thereto, Brian undertook and agreed to convey to them certain lots in the county of Ramsey, viz. lots 4 and 9, on West Crocus Hill, and other lots in the Minnesota Transfer Addition to St. Paul, and to execute his notes to them for $10,000, secured by mortgage on the first-described property. It is alleged that plaintiffs, by virtue of this contract, became entitled to a conveyance of an undivided half of the lands agreed to be conveyed by Brian; that the plaintiffs were entirely ignorant of the location, character, and value of any of that property, and bad never seen tbe same;; that they had been on terms of intimacy and friendship with defendants for many years, and had full faith and confidence in their-integrity and good faith, and that, in reliance thereon, they left to defendant Carl Peterson the whole management, negotiation,, and consummation of the trade with Brian, believing he would deal justly and fairly with them; and that he acted in the-matter in behalf of himself and Carolina Peterson, as well as for the plaintiffs. In the execution of the contract with Brian,, it is shown that they induced the plaintiffs to accept a deed for an undivided half of the Minnesota Transfer lots, and to-allow the Crocus Hill lots to be conveyed to defendants at a valuation of $4,000; the defendants to advance the money for their undivided half of such sum, the same to be applied on the joint indebtedness of the parties. The representations alleged to be-fraudulent, by which plaintiffs claim they were induced to consent to the arrangement and conveyance above mentioned, were that the defendants fraudulently and untruthfully represented to plaintiffs that said two lots last named (Crocus Hill lots) were situated far out in the outskirts and suburbs of the city of St. Paul, and in a bad location, and were not worth more than $4,000, and were-put into said trade (with Brian) at the sum of $4,000, and that such representations were made to enable the defendants to obtain the lots for themselves. That in fact all of the said representations, made by said defendant Carl Peterson as to the value-, location, and character of said lots in West Crocus Hill and in West Crocus Hill B were false, and were known to be false by said defendants at the time the same were made; and said representations made by said Carl Peterson as to the value of said lots in Minnesota Transfer addition to St. Paul greatly appreciated and exaggerated the value of the same, and were false, but that plaintiffs, having implicit confidence in said Carl Peterson, believed the said representations to be true, and relied upon the same, and were thus, deceived and defrauded into allowing said defendants to obtain the title to said lot four (4) in West Crocus Hill, and said lot nine-(9) in West Crocus Hill B. That in fact said lots in West Crocus Hill and West Crocus Hill B, instead of being worth no more than $4,000, were worth the sum of $24,000, and instead of being in, the outskirts and suburbs of said city of St. Paul, and in a bad location, were two of the most beautiful residence lots in the said city of St. Paul, and are centrally located in the same.

(Opinion published 56 N. W. Rep. 44.)

The representations as to the location of the lots, and the price at which they were put in the Brian contract, were representations of fact, and material; and as they are alleged to have been false, to the knowledge of the defendants, and relied on by the plaintiffs, they constitute actionable fraud. It is suggested that it was plaintiffs’ duty to have examined the lots, and inquired into the price thereof, and that it was their own folly to have trusted a party with an adverse interest. But it appears that the defendant Carl Peterson enjoyed the confidence of the plaintiffs, and had been intrusted by them with the management of the negotiations for the exchange of the property. He might be presumed to have informed himself in respect to the material facts, and to have dealt faithfully with the plaintiffs in examining the property and consummating the trade; and we think the plaintiffs might reasonably rely upon his representations in respect thereto in the subsequent transaction between them. The facts were unknown to the plaintiffs, and were known to the defendant, and the representations were in positive terms, and were calculated to mislead them, instead of to put them upon inquiry. Bigelow, Frauds, (Ed. 1888,) 475. The complaint, therefore, stated a cause of action.

Order reversed.