Gulf Electric Co. v. Fried , 218 Ala. 684 ( 1928 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The fifth count of the complaint, in substance, avers that T. A. Yeend and Yeend Bros. Realty Company, Inc., acting by and through its president, T. A. Yeend, were the duly-authorized agents of the defendant to rent the property in question, and that said agents, while acting within the line and scope of their employment as agents of the defendant, and in and about the business of the defendant, asserted to plaintiff's agent as a truth, and as an inducement to the plaintiff to rent the premises, that there was an elevator in said premises that made the second and third floors of the building accessible for plaintiff's use; that the plaintiff relied on said representation, and without inspecting the property executed the lease, and in fact there was no elevator in said building, as represented by said agents.

The appellee's contention is that the demurrers to this count were properly sustained; that, for plaintiff to maintain an action for deceit, he must aver and prove, not only that the representation was false, and made as an inducement to making the contract, but that it was expressly authorized by the defendant, or made with his knowledge and consent, and, if it relates to an obvious fact open to ordinary observation, though not true, the doctrine of caveat emptor applies, and denied to the plaintiff the right to rely on the representation.

The rule that holds the principal liable for his agent's fraud, tort, or negligence, though committed without the principal's participation or consent, if it is done in the course of his employment, and is not a willful departure from it, is one of general acceptation and sustained by the great weight of authority, and, as to third persons affected by the agent's acts or words, it is sufficient if he acts within the apparent scope of his authority. Johnson v. Barber, 5 Gilm. (Ill.) 425, 50 Am. Dec. 416, and note; Griswold v. Gebbie,126 Pa. 353, 17 A. 673, 12 Am. St. Rep. 878; Jarvis v. Manhattan Beach Co., 148 N.Y. 652, 43 N.E. 68, 31 L.R.A. 776, 51 Am. St. Rep. 727; Ball v. Farley, Spear Co., 81 Ala. 288,1 So. 253; Haskell v. Starbird, 152 Mass. 117, 142 N.E. 695, 23 Am. St. Rep. 809; Lothrop v. Adams, 133 Mass. 471, 43 Am. Rep. 528; Busch v. Wilcox, 82 Mich. 336, 47 N.W. 328, 21 Am. St. Rep. 563; Du Souchet v. Dutcher, 113 Ind. 249, 15 N.E. 459; Nichols v. Wadsworth, 40 Minn. 547, 42 N.W. 541; 21 R. C. L. 905, § 82.

And " 'it is as much a fraud at law to affirm as true what is untrue, though not known to be so, as to assert what is known to be untrue. The law imposes the duty of ascertaining the truth of the statement before making it, and demands in case of omission that the representation shall be made good.' * * * The principle is, that one, in negotiating a trade, shall not recklessly, or even innocently, assert as fact that which is untrue, if such asserted fact be to any extent an inducement to the other party to enter into the contract." Ball v. Farley, Spear Co., supra; Munroe v. Pritchett, 16 Ala. 785, 50 Am. Dec. 203; Jordan v. Pickett, 78 Ala. 331; Harton v. Belcher,195 Ala. 186, 70 So. 141; Byars v. Sanders, 215 Ala. 561,112 So. 127; Cartwright v. Braly, ante, p. 49, 117 So. 477.

Such fraud, if it results in damage to the party deceived thereby, will support an action for deceit, whether the transaction in which it is committed relates to personal or real property. Sledge v. Scott, 56 Ala. 202; Munroe v. Pritchett, 16 Ala. 785, 50 Am. Dec. 203; Harton v. Belcher, Byars v. Sanders, supra; Haskell v. Starbird, 152 Mass. 117,142 N.E. 695, 23 Am. St. Rep. 809.

The doctrine of caveat emptor is not applicable where the party injured is induced by the fraud of the other party to act without inspection of the property, the subject of the transaction. 35 Cyc. 68, Par. II; Stewart v. Wyoming Ranch Co., 128 U.S. 383, 9 S.Ct. 101,32 L.Ed. 439; Matthews v. Bliss, 22 Pick. (Mass.) 48; Burnett v. Hensley, 118 Iowa, 575, 92 N.W. 678; Raeside v. Hamm,87 Iowa, 720, 54 N.W. 1079. McCoy v. Prince, 11 Ala. App. 388,66 So. 950, cited by appellee holding that misrepresentations made by mistake and innocently where the misrepresentation was as to a fact, would authorize a rescission, but would not support an action for deceit was in effect disapproved in Cartwright v. Braly, supra.

After due consideration, the opinion prevails that count 5 was not subject to the stated grounds of demurrer, and that error to reverse was committed in sustaining the demurrer.

We are further of opinion that the other counts of the complaint were subject to some of the grounds of the demurrer, and therefore the demurrers to these counts were sustained without error.

Reversed and remanded.

ANDERSON, C. J., and SAYRE, GARDNER, BOULDIN, and BROWN, JJ., concur.

FOSTER, J., not sitting.