Loma Vista Development Co. v. Johnson

This suit was brought by Thomas W. Johnson and wife, Dorothy, against appellant, Loma Vista Development Company, a corporation. Appellees had purchased a new dwelling house from appellant at the agreed price of $4,500. Appellees claimed that they were induced to pay that price for the house by reason of false representations as to its value and qualities made by one Roy E. Jones, alleged to be an agent of appellant thereunto duly authorized; that the house was in fact defective in construction and by reason of such defects its actual and reasonable value was only about $2,500, whereby appellees were actually damaged at least $2,000, for which they prayed judgment. On a jury trial appellees recovered judgment against appellant for $1,500 actual damages. Appellees prayed for exemplary damages, but that claim was eliminated from the case.

Appellant verbally listed the property generally with W. P. McNeeley Company, a local real estate concern, and particularly and directly with Roy E. Jones, McNeeley's sole salesman, to whom appellant gave the exclusive agency for a limited period during which he procured the sale to appellees at the listed price of $4,500. In listing the property with Jones appellant placed no specific restrictions upon his authority to bind appellant, nor was he given express authority to make representations to prospects in behalf of appellant concerning the construction of or quality of materials in the property. The nature and extent of Jones' authority must be implied from the facts and circumstances of the transaction.

The house in question was new, had never been occupied, and in fact its construction was still incomplete in some minor details.

In pursuance of his exclusive agency, and with appellant's knowledge and acquiescence, Jones took possession of the premises and opened the house for inspection of prospects, who were invited to enter by placards, "Open for Inspection," posted in the yard. Attracted by the placard appellees, passing, stopped their car and entered the yard. Jones, already on the premises, greeted them, showed them through the house and over the premises, making the usual sales talk concerning the beauties and advantages of the property. Among other statements, according to jury findings, Jones also made the following representations to appellees, which statements the jury also found to be statements of material facts, and false:

1. That the foundation under the house would give plaintiffs "no trouble and would stand up, and that it was the best foundation for that particular type of house."

2. That he represented to plaintiffs that they "would have no trouble with the fireplace because it was built by an expert" and

3. That "the house and lot at 212 Sunset Road was worth $4500.00."

The jury also found that said representations were believed and relied on by appellees, and induced them to purchase the property.

We conclude that Jones' statement that, if they purchased, appellees would "have no trouble with the fireplace" was not actionable. Jones made no pretense that he had any personal knowledge of the quality of the fireplace, and appellees were bound to have known or assumed in the circumstances that he had no such knowledge, for he coupled the statement with the qualification that he based it upon the further fact that the fireplace was built by an expert, a fact not questioned in the record. At most the statement was of an opinion coupled with a statement of the fact upon which he based the opinion, the basic fact being unrefuted in the record.

Jones' statement that the property was "worth $4500" was purely and obviously but an opinion. That opinion was adduced in this way: Appellees asked Jones if he thought the place was "worth $4500," to which he replied, "I think it is." This opinion, elicited by appellees themselves, was clearly not actionable.

But we are of the further opinion that the evidence was sufficient to support the jury finding that Jones' statement that the foundation of the house would give appellees "no trouble" and would "stand up," and was the "best foundation for that particular type of house," was a representation of fact. Some time after appellees purchased and moved into the house they discovered that the foundation was faultily constructed or adjusted. When appellees complained and called appellant's attention to the condition appellant's contractor at appellant's instance attempted to correct the defects, without results, so that in the course of time it developed that the foundation, instead of being as represented by Jones, had become but a poor makeshift of a foundation, radiating damaging, unsightly and unsafe cracks, sags and buckles throughout the structure. We conclude that Jones' representations as to the foundation of the house proved to be legally false, and being material were actionable. We overrule appellant's fifth point.

Appellant contends in its first point that the uncontradicted evidence showed that Jones was neither its agent, servant or employee in effecting the sale of the property to appellees. The record shows, conclusively, that the property was listed exclusively with Jones, with the authority and duty to procure a purchaser at the stipulated price of $4,500; that with appellant's knowledge and acquiescence Jones took possession of the premises and held the house open for the inspection of prospective purchasers; that under this authority he showed the premises to appellees with the purpose of effecting a sale to them; that he negotiated with appellees during a period of several days, and with appellant's knowledge and advice arranged the matter of terms with appellees; that in appellant's behalf he prepared and procured appellees' signature to an "earnest money" contract for the sale, and that appellant approved and executed this agreement in the form prepared by Jones as the procuring agent; that subsequently and in confirmation of that agreement appellant executed and delivered a deed conveying the property to appellees, and accepted and retained the purchase money from appellees. We conclude as a matter of law that these undisputed facts and circumstances constituted Jones such an agent of appellant as to authorize him to bind appellant in such matters as came within the scope of that particular character of agency. By offering the house for sale as a new and complete structure appellant impliedly warranted that it was properly constructed and of good material and specifically that it had a good foundation, and it was well within the scope of Jones' agency to represent to appellees or any other purchaser that the property had such a foundation. 7 Tex.Jur. p. 395, § 13; Reed v. Hester, Tex.Com.App., 44 S.W.2d 1107; Wimple v. Patterson, Tex. Civ. App. 117 S.W. 1034; Martin v. Ince, Tex. Civ. App.148 S.W. 1178; Sargent v. Barnes, Tex. Civ. App. 159 S.W. 366. We therefore overrule appellant's first point, and, for like reasons, its second point.

In its fourth point appellant asserts, in effect, that appellees failed to prove any legal measure of damages. We are obliged to sustain the contention. Appellees grounded their cause of action upon allegations that "if said property purchased from the Defendant had been as represented, it would have been reasonably worth the sum of $4,500.00; that in fact said property was fraudulently misrepresented to the Plaintiffs as above alleged, and was, at the time of its said sale to the Plaintiffs, only actually and reasonably worth about $2,500.00; that Plaintiffs were thereby damaged to the extent of at least $2,000.00, and which sum of money is here alleged to be their actual damages; * * *." This represents the measure of damages provided for in Art. 4004, R.S. 1925, upon the terms of which appellees apparently based their cause of action. However, appellees failed to prove the elements therein provided for, or set up in their petition. There was no evidence of the value of the property at the time of its purchase, or its value as represented by Jones. The only proof of value at any time or in any condition was contained in the testimony of a single value witness, to the effect that had the subsequently developed defects been anticipated at the time appellees purchased the house its then market value would in his opinion have been $3,000. In short, there was no evidence of the actual value of the property at the time of its purchase, or its actual value had it measured up to Jones' representations.

The question of ratification by appellant is raised by appellees, and appellant in turn urges that upon being apprised of Jones' representations and their falsity it offered to make restitution to appellees of the amount of their loss and accept a reconveyance of the property. We doubt if these matters may be raised by the parties under their trial pleadings, but need not so decide here in view of another trial and probable amended pleadings, nor need we discuss the sufficiency of the evidence to support those contentions.

Because there was no evidence establishing a legal measure of damages in the case, the judgment will be reversed and the cause remanded for a new trial for all purposes.

Reversed and remanded.