Bell v. Henson , 1934 Tex. App. LEXIS 850 ( 1934 )

R. L. Henson, for a consideration of $1,600 in cash, conveyed to Leo Bell an undivided three-fourths interest in the minerals or oil royalties in 54.2 acres of land in Smith county. He later brought this suit against Bell to cancel said conveyance and for damages, alleging that he had been induced to execute said conveyance as the result of fraud perpetrated on him by the defendant Bell. He alleged in effect that he resided in the state of Kansas and was wholly unfamiliar with oil developments and the value of mineral rights in Smith county where the land in question was situated; that the defendant Bell, who resided in Smith county and was engaged in the business of buying and selling oil royalties, was familiar with oil developments and the value of such mineral rights in that vicinity; that the said Bell visited the plaintiff at his home in Kansas and fraudulently misrepresented the value of said mineral rights; and that as a result the plaintiff was induced to execute said conveyance. The plaintiff alleged that prior to the filing of this suit Bell had conveyed one-fourth of the minerals in said land to good-faith purchasers. He sought to cancel the conveyance so made by him to Bell in so far as it applied to the one-half of said minerals still owned by Bell and to recover damages for the one-fourth of said minerals theretofore conveyed by Bell to good-faith purchasers. In his pleadings he offered to return such part of the consideration received by him as should be found to be equitable and proper. The case was submitted to the jury on the following special issues, which issues were answered by the jury as follows:

"Question No. 1. Do you find from a preponderance of the evidence that the statements and representations made by defendant to plaintiff, at the time the royalty deed was made by plaintiff to defendant, in question, as to the value of the royalty at the time, were made as a fact, and not as mere opinion, to induce plaintiff to make the sale to defendant?" Answer, "Yes."

"Question No. 2. Do you find from the preponderance of the evidence that the statements and representations of the defendant to plaintiff, made at the time of the sale of the royalty by plaintiff to defendant, were, under all the facts and conditions existing at the time, false?" Answer, "Yes."

"Question No. 3. Do you find from a preponderance of the evidence that the plaintiff relied on and was induced by the statements and representations of defendant as to the value of said royalty at the time, to execute and deliver the royalty deed to defendant?" Answer, "Yes."

"Question No. 4. Do you find from a preponderance of the evidence that a reasonable man would have been justified at the time, and under all of the circumstances and situation of the parties at the time, in relying on the statements and representations of the defendant to the plaintiff as to the value of the royalty in question?" Answer, "No."

"Question No. 5. What do you find from the evidence was the fair and reasonable cash value, per acre, of the royalty in question, at the time, and under all of the conditions and circumstances, when the royalty deed was made by plaintiff to defendant? Answer in dollars." Answer, "$80.00 per acre."

The court entered judgment for plaintiff for title and possession of an undivided onehalf interest in the minerals in said land. It was further adjudged that the defendant Bell recover from the plaintiff Henson the sum of $516; it being recited in the judgment that this sum was the difference between the value of the one-fourth of said minerals theretofore disposed of by Bell and the $1,600 paid by Bell to Henson for said original conveyance. Said sum of $516 was declared to be a lien on the mineral rights so recovered by Henson, and said lien was ordered foreclosed and the property sold in satisfaction thereof in the event Henson failed to pay said sum of money into the registry of the court on or before March 23, 1933. The defendant appealed.

The appellant contends that, in view of the jury's answer to special issue No. 4, the court had no right to enter judgment for the plaintiff.

Where it is sought to recover damages or to rescind a contract by reason of an alleged fraudulent representation, the false representation relied on must have been of such a nature and made under such circumstances that the injured party had a right to rely upon it. 20 Tex.Jur. 54; 26 C.J. 1141; 12 R.C.L. 359; Scott v. McWilliams (Tex.Civ.App.) 60 S.W.2d 491, par. 5. Whether or not the complaining party had a right to rely on the alleged false representation ordinarily involves a question of fact to be determined by the Jury. 20 Tex.Jur. 176; 26 C.J. 1144; 27 C.J. 76; 12 R.C.L. 449; J. M. Radford Grocery Co. v. Halper (Tex.Civ.App.) 274 S.W. 1023 par. 2. This is particularly true with reference to a representation as to the value of an article being bought or sold. 20 Tex.Jur. 72; 12 R.C.L. 381; 26 C.J. 1155. In the case at bar the court, by special issue No. 4, undertook to submit to the jury plaintiff's right to rely on the representations complained of. The jury found against the plaintiff on that issue. Notwithstanding such finding, the court entered judgment for the plaintiff. There was no attempt by plaintiff to comply with the provisions of Revised Statutes, art. 2211, as amended in 1931 (Acts 1931, c. 77, § 1 (Vernon's Ann.Civ.St. art. 2211), authorizing the entry of judgment non obstante veredicto. It is a well-settled rule in this state that, in the absence of a compliance With the provisions of the above statute, the trial court cannot disregard the findings of the jury on a material issue and enter judgment contrary thereto. 25 Tex.Jur. 497; Houston T. C. Ry. Co. v. Strycharski, 92 Tex. 1, 37 S.W. 415; Henne Meyer v. Moultrie, 97 Tex. 216, 77 S.W. 607; Heimer v. Yates (Tex.Com.App.) 210 S.W. 680; Fitch v. Lomox (Tex.Com.App.) 16 S.W.2d 530,66 A.L.R. 758. Moreover there was evidence to support the issue, and it would have been improper for the court to have disregarded the jury's answer thereto even if there had been an attempt to comply with the provisions of the above-cited statute.

We do not wish to be understood as holding that special issue No. 4 as submitted by the court was in proper form. Ordinarily the test for determining liability on this issue is not whether or not a reasonable man would have been justified in relying on the alleged false representations, but whether or not said representations were of such a nature and made under such circumstances that the complaining party had a right to rely thereon. 20 Tex.Jur. 54; 26 C.J. 1142; 12 R.C.L. 359; Kaiser v. Nummerdor, 120 Wis. 234, 97 N.W. 932, 934; Christensen v. Jauron (Iowa) 174 N.W. 499; Ingalls v. Miller, 121 Ind. 188, 22 N.E. 995; Oneal v. Weisman, 39 Tex. Civ. App. 592, 88 S.W. 290, par. 2; Jackson v. Stockbridge, 29 Tex. 394, 399, 94 Am.Dec. 290. However, notwithstanding the fact that the issue as submitted was improper in form, it was not so utterly defective as to be entirely immaterial and thereby authorize the court to ignore the same and to enter judgment contrary thereto. Harrell v. St. Louis S.W. R. Co. (Tex.Com.App.) 222 S.W. 221; North v. Atlas Brick Co. (Tex.Com.App.) 13 S.W.2d 59, par. 3. This requires a reversal of the judgment of the trial court.

In view of another trial, we suggest that there were no pleadings authorizing the foreclosure of a lien in favor of Bell on the mineral rights recovered by Henson. In the event Henson is allowed to rescind the contract and to recover a part of the minerals so conveyed by him to Bell, it naturally follows that Bell should be compensated for the difference between the consideration paid by him to Henson and the value of the mineral interest retained by him, but the judgment should require Henson to pay said amount to Bell, or into the registry of the court for him, on or before a fixed date, as a condition precedent to the right to enforce the judgment recovered by Henson, instead of awarding Bell a lien on said mineral rights and forcing him to resort to legal process in order to collect same. Fitzhugh v. Franco-Texas Land Co., 81 Tex. 306,16 S.W. 1078; Southern Oil Co. v. Wilson, 22 Tex. Civ. App. 534,56 S.W. 429.

On account of the above errors, the judgment of the trial court is reversed and the cause remanded for a new trial.