Smith v. Jordan

CRAMER, Justice.

This is an action under Art. 4004, R.C.S. 1925, for damages, actual and exemplary, by Fred Jordan against E. J. Smith and M. L. Long, growing out of the sale of real estate to Jordan by E. J. Smith, through Long as real estate agent. Trial was to the court without a jury and resulted in judgment for Jordan against Smith and Long, jointly and severally, for actual damages in the sum of $500 and against E. J. Smith, individually, for exemplary damages in the sum of $250. Smith and Long have perfected their appeal from such judgment.

An examination of the evidence, which sustains the court’s judgment, reveals that Long testified that he pointed out the lines of the property sold; that it was his duty as a real estate man to find out where the property lines were and to show the lines to his purchaser. Jordan knew nothing about the property lines except what Long told him, and Long told him the fence was on the line.

Appellants assign five points of error: (1) Statements by agent Long were not false representations, but merely expressions of opinion; (2) which Jordan did not rely on; (3) that Smith made no representations and there is no evidence that Smith had any knowledge of the statements made by Long; (4) the presumption of falsity and fraud is overcome by testimony showing they were made in good faith; and (5) Smith and Long were prevented from correcting the error by Jordan’s refusal to accept title by limitation to the unconveyed strip of land.

Jordan testified about the sale as follows :

“Q. Now, after you got the deed to the property, what did you do, Mr. Jordan? A. Well, on the day that the deed was given to me, Mr. Smith wanted me to pay him for the butane that was in the tank out there, and I said, ‘How do I know 'how much to pay you?’ and he said, ‘We will go out and read the meter and see how much is in there,’ and we went out and read the meter and I asked him which of those fences was the line. He was the seller, and I wanted the truth about it.

“Q. What did he tell you? A. He said, ‘For your information, this stake right here by the butane is you'rs.’ Part of the butane tank would be off of my property. The 'butane tank sits across the property line. ⅜ ⅜ ⅝

“Q. Now, what other conversation did you have with Mr. Smith at that time? A. I said, ‘Here you have sold me a house that is not on the property.’ He said, T figured you were fifteen feet better off than what you thought you were.’ I asked him how he figured that. He said, ‘That can be bought.’ I said, ‘You didn’t sell it to me, though.’

“Q. What did you do then ? A. I asked him what he was going to do about it, that I wasn’t satisfied with the deal and I wanted it straightened up. * * *

“Q. Did they come out the next day? A. Yes, sir.

“Q. Who was present at that time? A. Mr. and Mrs. Smith and my wife and I.

“Q. What transpired then ? A. Well, I contended that I had been wronged and wanted the thing righted. Mr. Smith said, ‘I had a horse and I couldn’t ride. Now you ride it.’ He said, T don’t aim to do anything.’

“Q. Did you offer to give the property back to them? A. I offered to lose two hundred dollars if they would take the property back.

“Q. He refused to do it? A. He wouldn’t do it, no. He said he wouldn’t do it because he didn’t want it; that was the reason he got rid of it, because he didn’t want it.

“Q. What next happened? A. I lost my temper.”

A survey thereafter made shows that a part of the house, part of the butane.tank, and the side fence were outside the lot conveyed. Art. 4004, R.C.S. 1925, provides in part:

■ “Actionable fraud in this State with regard to transactions in real estate * * * shall consist of either a false representation of a past or existing material fact, * * * but for which promise said party would not have entered into said contract. * * * All persons guilty of 'such fraud shall be liable to the person defrauded for all actual damages suffered, the rule of damages being the difference between the value of the property as represented or as it would have been worth had the promise been fulfilled, and the actual value of the property in the condition it is delivered at the time of the contract. All persons making the false representations or promises and all persons deriving the benefit of said fraud, shall be jointly and severally liable in actual damages, and in addition thereto, all persons wilfully making such false representations or promises or knowingly taking the advantage of said fraud shall be liable in exemplary damages to the person defrauded in su'ch amount as shall be assessed by the jury, not to exceed double the amount of the actual damages suffered.”

Title by limitation is not a marketable title. Myrick v. Leddy, Tex.Civ.App., 37 S.W.2d 308. Jordan, therefore, was under no obligation to accept title by limitation, assuming it could be obtained; but could elect to sue for his damages. A representation in a real estate sale, as to improvements or other objects of value being located on the premises, is one of fact, and, if false, is actionable. Flusche v. Uselton, Tex.Civ.App., 201 S.W.2d 58 (Syl. 7); Schonrock v. Taylor, Tex.Civ.App., 212 S.W.2d 260 (Syl. 1 and 4) (error ref.).

The rule or measure of damages in fraud cases involving real estate is set out in the statute quoted above, passed in 1919, and superseded the former rule. Reed et al. v. Hester et al., Tex.Com.App., 44 S.W.2d 1107 ('holding's in opinion by-Justice Sharp, then a Commissioner, approved by the Supreme Court). As applied to this case, the rule would be the difference between the value of the property as represented and the actual value of the property at the time of the contract with the title in the condition in which it was delivered.

However, there is no assignment attacking the amount o-f damages, either actual or exemplary, and it is presumed that the trial court applied the correct rule.

“The rule is that, where a land owner has been fully apprised of the fact ■that the sale of his land was procured by the fraud of the broker, and with full knowledge of such fact he declines to rescind, but affirms the sale and retains the fruits of the deal, he ratifies all that has been done by the broker and is responsible 'for all fraudulent conduct, to the same extent as though he had committed such fraud in person.” Donigan v. Polacek, Tex.Civ.App., 85 S.W.2d 771, 772:

Under the evidence, Smith ratified Long’s representations by refusing to rescind the 'sale when Jordan advised him they were made, and is liable with Long for the damage sustained by Jordan.

Since the trial court’s findings are sustained by substantial evidence, they are binding on us. The judgment is therefore affirmed.