Vanarsdol v. Farlow

Weaver., J.

1. ITraud: fraudulent representations : evidence in re value of property. — Prior to November 29, 1918, the defendant, Farlow, was the owner of 569 acres of unimproved land in Saskatchewan, Dominion of Canada. On the day named, he entered into a written contract to convey the property to one Beebe for the named consideration of $5,000. Soon thereafter, Beebe, alleging that he had been deceived by Farlow’s false and fraudulent representations, began legal proceedings to rescind the agreement. Later, Farlow and Beebe compromised their differences upon payment by Farlow of damages in the sum of $1,000. There is ground also for the inference (though there is no direct testimony to that effect) that, as a part of the compromise, Farlow undertook to assist Beebe in making a sale of the property to some other person. Very shortly thereafter, Beebe, with the help of Farlow, sold and assigned the contract for the Canada land to the plaintiff, Vanarsdol. In consideration of the assignment, plaintiff assumed the payment of the unpaid installments of the contract price, and made to Farlow his promissory note for $2,250, and conveyed to. Beebe his equity in 80 acres of Iowa land. Plaintiff alleges that he was induced to enter into this deal by the assurance of Vanarsdol that he had personally examined the Canada land, and that it was for the most part choice wheat»land, and worth $30 per acre in trade, or $25 per acre in cash. Plaintiff now claims that the representations were false; that the land was practically worthless for agricultural purposes, and for the most part covered with rocks and stone; and that much of the remainder was wet and subject to overflow. For damages thus resulting, plaintiff demands recovery in tiie sum of $10,000.. Defendant admits the sale of the land by contract to Beebe and the assignment by Beebe to defendant, but denies all of plaintiff’s allegations of fraud and misrepresentation. There was a trial to a jury, and verdict returned for plaintiff for $9,104; and from the judgment entered upon this verdict, defendant, appeals.

I. Without attempting to state or discuss the details of the evidence in the ease, it is sufficient for the purposes of this appeal to say that in our judgment the showing made is sufficient to sustain the finding of fraud and misrepresentation; and that, if this were the only question presented by the record, we should have no hesitation in affirming the judgment. There is, however, another feature of the case not so easily disposed of.

II. As will be observed from the statement already made, the transaction between the parties involved the conveyance by plaintiff to Beebe of 80 acres of Iowa land. Of the value of this land or the value of plaintiff’s equity therein, there is no direct evidence, though plaintiff in his testimony says that the ‘ ‘ agreed consideration” for the deed was $10,000. On the trial, the defendant sought and offered to show the value of the Iowa land, and to show that such value was not in excess of the incumbrances thereon; or, in other words, that the value of the equity which plaintiff conveyed to Beebe in exchange for the Canada land contract was merely nominal. Upon plaintiff’s objection, all evidence of this nature was excluded, the court holding that, as the action was not for the rescission of the deal, but for recovery of damages, because the Canada land was not what it was represented to be, therefore the value of the Iowa land exchanged for it was entirely immaterial. In submitting the issues to the jury, the court restated its prior holding, and charged, in substance:

“That the value of the Iowa land was not open to inquiry; and that, if plaintiff was found entitled to recover, the verdict should be for such sum as damages as would compensate him if the land he had bargained for had been as represented, # * * that is, the difference between the market value of the Canada land as it was in fact, and its reasonable market value at such time, had it been as represented. ’ ’

ana adequate exception. The correctness of this ruling is the one material question presented by this appeal. It is said at the outset by the appellee that defendant’s objections to the charge of the court were not made within the time allowed by law, and cannot, therefore, be assigned as error upon the appeal, ^ appears, however, that defendant preserved an exception to the exclusion of this evidence at the time the ruling was made, and thereafter assigned such ruling' as a ground for his motion for new trial. This, we think, is sufficient to entitle him to a hearing on the question in this court.

That the offered evidence was admissible is, under our decisions, a well settled proposition. See, for example, Likes v. Baer, 10 Iowa 89; High v. Kisiner, 44 Iowa 79; Vaupel v. Mulhall, 141 Iowa 365; Stoke v. Converse, 153 Iowa 274; Hess v. McCardell, 182 Iowa 1121; Workman v. Bales, 190 Iowa 1061; Skeels v. Porter, 165 Iowa 255; and other precedents cited in both the Stoke and the McCardell case. These authorities are all to the effect that, where the plaintiff’s action is for damages because of alleged fraud by which he was deceived and misled in an exchange of property, and the allegations of fraud are denied, the value of the property given by him in the exchange may be shown by the defendant for its bearing upon the issue whether the misrepresentations were in fact made and relied upon, though not as affecting the measure of damages, which is the difference between the fair market value of tlxe property received by the plaintiff axxd its fair market value as it would have beexx at that time, had it been in all respects as it was represented to be. That the evidence was admissible under the rule of our cited eases canxxot be doubted. Counsel for appellee, while xxot denying such admissibility, seeks to avoid the error'by insistiixg that appellant did not sufficieixtly disclose to the court the purpose for which the testimony was offered, axxd did not show what the witxxess would testify to, if allowed to axxswer. The poixxt is xxot well made. Couixsel did state to the court their purpose to show by the offered witxiess that the Iowa land was hilly and rough, and not worth the amount of the incumbrance against it. To this the plaintiff objected, as beixxg both incompetent and immaterial, and the court so ruled. The questions to tbe witness and counsel’s offer to tlie court were such as to clearly indicate the nature of the evidence, and no further or more explicit offer was required.

The error in the ruling was clearly prejudicial, and a new trial must be ordered. The. judgment below is reversed, and cause remanded. — Reversed.

Stevens, C. J., Preston and De Graff, JJ., concur.