American Rio Grande Land & Irr. Co. v. Bellman , 1925 Tex. App. LEXIS 407 ( 1925 )

SMITH, J.

On December 15, 1917, the American Rio Grande Land & Irrigation Company (hereinafter designated American Company) entered into a contract with the W. E. Stewart Land Company (hereinafter designated Land Company) for the sale to and purchase by the latter of about 30,000 acres of land in Hidalgo county; including 45.15 acres involved in this suit and known, as farm tract 276, block 131, being a part of tbe west tract subdivision. Subsequently, on October 25, 1919, George Bellman entered into a contract with tbe Land Company for tbe purchase of farm tract 276, and on tbe same day tbe tract was conveyed to him by general warranty deed from tbe W. E. Stewart Farm Mortgage Company (hereinafter designated Mortgage Company), to which tbe tract had been conveyed in the meantime. The consideration paid by Bellman was $16,-254, of which amount $14,144 was in cash, and the remaining $3,050 was paid by Bellman, assuming to pay five certain promissory notes payable to the American Company and secured by a lien on the land involved. Bellman went into possession early in 1921, improved and cultivated the premises, and was still in possession of and using the same at the time of the trial of this cause late in June, 1924.

In September, 1921, Bellman, joined by his wife, brought this suit for the purpo'se of rescinding the sale and purchase upon the ground that he had been induced to purchase the land through false and fraudulent representations made by the agents of the Stewart Companies in pursuance of a conspiracy between those companies and the American Company to bring persons into Hidalgo county and sell them lands in said county by means of such deceit. The suit when originally brought, in 1921, was for rescission onl't, but after entering into the trial, and after the pleading of the parties had been read to the jury, Bellman, obtaining leave for the purpose, filed a trial amendment, and, as an alternative of rescission, prayed for damages sustained by him on account of the deceit alleged to have been practiced upon him byjhe Stewart Companies. These damages were fixed by Bellman at $11,039, being the alleged difference between the actual and the represented values of the land at the time of the purchase. The suit was brought against the American Company, the Land Company, the Mortgage Company, the W. E. Stewart Investment Company, and John M. and R. A. Rowland, who were acquitted in the trial without objection from the other parties.

The cause was tried by jury, who in response to special issues found that the conspiracy existed as and for the purposes alleged; that the alleged false representations of material facts were made to Bellman, who relied thereon and purchased the land on account thereof; and that the difference between the reasonable market value of the land at the time of purchase and its reasonable market, had it been as represented by the sellers, was $6,500 per acre (or, as stated by appellants and not questioned by appel-lees, $293,495 on the 45.15 acres in controversy). Because of its obvious . absurdity, the trial court disregarded this finding as to damages, treating it as immaterial, rendered judgment grinding the sale, and awarding recovery to appellees of the ámount they had paid for the land, with interest, and canceling the notes assumed by them. The American Company and the Stewart Companies have appealed, as the judgment was rendered jointly against all of them.

We will first consider the finding of the jury, in effect, that the difference between the actual and the represented value of the land was $293,475. The tract involved embraced 45.15 acres. The consideration Bellman paid for it was $16,254, or $360 an acre. Appellees alleged in their petition that the actual market value of the land was only $100 an acre, and that they were damaged in the sum of $11,039. It seems the lowest estimate in evidence of the actual value was $50 an acre, and the highest estimate of the value, if the representations had been true, was $1,000 an ’acre. Notwithstanding these allegations and that evidence, however, the jury found the difference in the actual and the represented values to be $6,-500 an acre, or an aggregate damage of $293,-475. The trial court concluded that this finding was not “influenced by prejudice or passion,” but that it was “arrived at through ignorance or mistake on the part of the jurors by using erroneous methods to arrive at the same.” Naturally, appellants find no solace in this distinction, which, however accurate it may be, does not render the finding less offensive to justice and fairness. It is just as deadly as it would have been if corruptly arrived at, which, of course, no one contends it was, and, however arrived at it is so obviously preposterous as to make it a farce and a travesty, to be instantly rejected for any and every purpose. The trial court promptly and properly set it aside and disregarded it, and appellees, in the exercise of good taste and candor, do not offer it for any purpose, arguing that it is immaterial. Appellants contend that the finding is of such extreme nature and purport as to dis-. credit the remaining findings of the jury, and we are disposed to sustain the contention. It would indeed be difficult to reconcile its presence among rational findings emanating át the same time from a common source and affecting the rights of identical parties, even if the remaining findings were supported by evidence which would ordinarily suffice as a basis for a jury verdict. We have very carefully reviewed the evidence in the case, however, and have reached the conclusion that it does not warrant the finding of a conspiracy between appellants to defraud • appellees, while the testimony upon the issues of waiver and of actionable fraud is so unsatisfactory as to raise a serious doubt of its sufficiency to warrant the action of the court or jury in resolving those issues in favor of appellees. While conspiracy may be proven by circumstantial evidence, it must nevertheless be clearly established in order to support an action for r§jfCission or for damages; and the same degree of proof is essential to show actionable fraud. The unsatisfactory state of the record with reference to these issues, especially when viewed in the shadow of the absurd finding on the issue of damages, envelops the whole verdict in such doubt as to require that it be set aside.

Let us look now at the case from another standpoint. As stated, the court properly set aside the finding upon the issue of damages. So, as it was left standing by the trial court, the verdict of the jury is that there was a conspiracy to defraud; that the sellers falsely represented the quality of the land in material matters, and thereby deceived appellees into purchasing the land at the stipulated price. There is no finding however, that appellees were injured as a result of the facts found, nor can the finding of the jury upon the issue of damages serve to supply this omission. That finding, having been properly set aside, comes to naught, and may not be considered for any purpose.

It is the law in this state as elsewhere that rescission of a contract will not be enforced because of deceit in procuring the contract', unless it is shown that the complaining party has been injured by the fraud practiced upon him. In other words, it is not sufficient for the party seeking to rescind merely to show fraud, and the resulting agreement, but he must go further and show that the deceit practiced upon him has resulted in actual injury and damage to him. Russell v. Transp. Co., 113 Tex. 441, 251 S. W. 1034, 258 S. W. 462. The court, however, set aside the finding of the jury upon the measure, and concluded that, as appellees had brought the suit “for a rescission and in the alternative for damages,” and as the “cause is not to be considered in its entirety but can be separated as between rescission and damages,” and the jury’s finding on damages “being immaterial in the court’s opinion on the question of rescission, I believe that the motion of plaintiffs for a judgment of. rescission should be granted.” In pursuance of this conclusion, the court entered judgment for rescission. We think this was error.

Again, the court appears to have submitted the ease solely upon the theory of damages, laying down therefor the measure jjrovided by statute for that character of action. Article 3973b, Vernon’s Ann. Civ. St. Supp. The court did not submit the alternative theory of rescission, nor did appellees object to this method of submission, or request that the case be put to the jury on the latter theory. Whether appellees under the law were required to elect their remedy before submission of the cause need not now be decided; for, undoubtedly, when they acquiesced in the submission of the case for damages, and in the exclusion of the case for rescission, they thereby elected to stand upon the former and abandon the latter. And, having set aside a finding of the jury upon an essential issue in the case submitted, it was beyond the power of the court to apply the remaining findings to another? case, not submitted, and render judgment upon ’ the substituted remedy.

Summarizing, we hold, first, that the verdict of the jury in the respects mentioned is not supported by the evidence; second, that, the cause having been submitted to the jury solely on the theory of damages, the remedy of rescission was thereby excluded; third, the remedy of damages and the remedy of rescission are repugnant each to the other, and, while they may be set up in one pleading one in the alternative of the other, the pleader must seasonably elect between them, standing upon one and abandoning the other, and the court may not after verdict re-elect for him; and, fourth, the judgment of rescission was erroneous because not supported by a finding that appellees had been injured on account of the deceit of appellants. For these reasons the judgment must be reversed.

Appellees cite and urge the recent case of American Rio Grande Land & Irrigation Co. v. Barker, 268 S. W. 506, decided by this court, as being analogous to this case. But the controlling and fundamental facts in that case are quite different from those disclosed by the record in the case at bar, particularly with reference to the issues of conspiracy and deceit. In that ease it was shown, for instance, that the American Company, which owned the land, actively participated with the Stewart Companies in inveigling Barker into making the contract of purchase, accepted and appropriated a substantial portion of the consideration paid by Barker for the land, and then withheld the title from him. There are other distinguishing characteristics in the cases, which are essentially fact cases, so that the decision of one can have but little, if any, influence upon the decision of the other.

The judgment in favor of John M. Rowland and R. A. Rowland will be affirmed. In all other respects, the judgment will be reversed and the cause remanded for another trial.

Affirmed in part, and in part reversed and remanded.