Summary
In Wright v. Weaver, Mo.App., 231 S.W.2d 857, plaintiffs contracted with defendants' agent for purchase of a restaurant "provided the credit of Edith M. Wright is approved."
Summary of this case from Tietjens v. General Motors CorporationOpinion
No. 21320.
June 5, 1950.
APPEAL FROM THE CIRCUIT COURT, JACKSON COUNTY, THOS. J. SEEHORN, J.
Marion D. Waltner, Clarence C. Chilcott, Kansas City, for appellants.
C. W. Prince, Wm. Dennis Bush, Guy W. Runnion, Kansas City, for respondents.
This is an action instituted by Edith M. Wright and Harold K. Howard to recover damages for alleged fraud in connection with the sale of the restaurant or lunch counter known as "Trailer Inn", located at 4631 Troost Avenue in Kansas City, Missouri. The petition alleged that defendant, Madeline Graves Rosser, on and prior to April 29, 1946, was the owner and operator of said "Trailer Inn"; that shortly prior thereto defendants Howard S. Weaver and Robert Lee Hart, as agents of defendant Rosser, offered the same for sale together with the good will thereof for the sum of $5,500.00.
The petition further alleged that defendant Hart had falsely and fraudulently represented to plaintiffs that said restaurant produced a net income of more than $500.00 per month, and that the owner of the real estate, upon which said restaurant was situated, through her agent, John F. Campion, had consented to the sale of said restaurant and agreed to a continuance of the occupancy thereof by plaintiffs for a rental of $40.00 per month; that relying upon the truth of said statements, plaintiffs paid defendants the sum of $3000.00 and gave their notes for the sum of $2,500.00, secured by a chattel mortgage upon the fixtures in said restaurant, and thereafter paid defendants the additional sum of $100.00 on said notes; that the owner of said real estate, through her agent Campion, at no time authorized defendants to represent to plaintiffs that they would be acceptable as tenants of said owner and, on July 25, 1946, said owner, through her agent Campion, ordered plaintiffs to vacate said property, and thereupon they were required to close and surrender said restaurant.
The answer of defendant Rosser, admitted that she was prior to April 29, 1946, the owner of said "Trailer Inn" and that she offered the same for sale through the American Real Estate and Appraisal Company and that plaintiffs paid her the sum of $3000 and gave her their promissory note in the sum of $2000, on which the sum of $50 was paid by plaintiffs. After denying the other allegations of plaintiffs' petition, she set forth her counterclaim against plaintiffs for the balance due her.
The answer of defendant Weaver admitted that he was engaged in the real estate and brokerage business under the name of "American Real Estate and Appraisal Company"; that defendant Hart was a salesman associated with him; that defendant Rosser on April 29, 1946, and for a long time prior thereto, was the owner and operator of said "Trailer Inn". It then denied the other allegations of plaintiffs' petition.
Defendant Hart's answer, after admitting that he was associated with defendant Weaver as a salesman, denied the other allegations of plaintiffs' petition. It then set out his counterclaim against plaintiffs upon a note in the sum of $500 given by them to him on which $50.00 had been paid.
Plaintiff Wright was a school teacher and the aunt of plaintiff Howard. She did not know any of the defendants and her attention was attracted to the property here involved through an advertisement which appeared in the newspaper under date of April 28, 1946, which stated: "Hamburger Stand — Plenty business; transfer corner; net better than $500.00 per month. Hart with American A R 1007."
That day plaintiffs contacted defendant Hart, and went with him to view the hamburger stand. Hart told plaintiffs the business netted more than $500 per month; that there was no lease, but that plaintiffs "could definitely continue the occupancy". On the same day Mrs. Wright, after consulting with her nephew, Howard, signed a contract for the purchase of said restaurant, and gave Hart a check for $100. The contract provided for a down payment of $500 and the further payment of $2500 within 30 days, and a purchase price mortgage of $2500, payable $100 per month. On April 30, 1946, defendant Hart took plaintiff Howard and his wife to see Campion, a real estate agent representing the owner of the premises upon which the hamburger stand was located. Campion stated that he would have to check the credit references of plaintiffs and approve them as tenants before he could accept their occupancy of the restaurant. Howard testified that Campion then stated that "he would let Mr. Hart know if we were accepted as tenants in that business." Later that day Mrs. Wright paid to Hart the sum of $400, the balance of the initial payment called for by the contract. Within four or five days, or possibly a week, thereafter Hart called plaintiffs over the telephone and told them that Campion had approved their credit and accepted them as tenants.
On May 14, 1946, plaintiffs paid the remaining $2500 called for in the contract and executed a promissory note payable to defendant Rosser in the sum of $2,000, and another in the amount of $500 payable to Hart, both being secured by chattel mortgages. In so doing plaintiffs testified that they relied upon the representations of Hart that Campion had accepted them as tenants. When plaintiff Howard went to pay the rent on June 17, 1946, he was informed by Campion that he had never accepted plaintiffs as tenants. On July 25, 1946, Campion wrote a letter to Howard stating "you are not our tenant and we have never recognized you as such" and demanded immediate possession of the premises. Plaintiffs thereupon abandoned the restaurant.
Hart denied that he ever told plaintiffs that Campion had accepted them as tenants. Hart's version as to what occurred at the meeting with Campion was that, after asking for plaintiffs' names, addresses and credit references, Campion said: "Mr. Howard, I will let you know in a few days if I will accept you as a tenant."
The cause was submitted to the jury upon the single issue of whether or not defendant Hart, acting for and on behalf of defendants Weaver and Rosser, made a false representation to plaintiffs upon which they relied and which induced the sale, viz., that the owner of the real estate upon which the hamburger stand was located, had through her agent Campion, consented to the sale of said restaurant and to a continuation of the occupancy thereof by plaintiffs for a rental of $40 per month. The other issues of alleged fraud were withdrawn from the consideration of the jury.
The jury returned a verdict for plaintiffs in the sum of $3100, and further found for plaintiffs on defendants' counterclaims. After unsuccessful motions for new trial, defendants perfected their appeal to this court.
Defendants first contend that the trial court erred in submitting the case to the jury because the alleged fraudulent representation upon which the cause of action herein was based and submitted was made subsequent to the sale of the "Trailer Inn" and, therefore, could not have been relied upon by plaintiffs and could not have induced them to purchase it.
When defendant Hart went with plaintiffs to view the restaurant he represented to them that while there was no lease, the seller had been there for a period of two years, paying $40 per month rent and that plaintiffs "could definitely continue occupancy." While this was a representation relating to a future event, it was a matter about which Hart "professed" to have superior knowledge. Plaintiffs knew nothing about the tenancy and were justified in relying upon what Hart stated. Wendell v. Ozark Orchard Co., Mo.App., 200 S.W. 747, loc. cit. 749. Upon the strength of this representation of Hart the contract to purchase was executed and the down payment of $500 made by plaintiffs. The contract contained these vital words: "Provided the credit of Edith M. Wright is approved." This was a condition which called for the performance of an act before the contract should take effect. Josse's Adm'r v. Newman, 38 Mo. 43; Globe American Corp. v. Miller Hatcheries, Mo.App., 110 S.W.2d 393, loc. cit. 396. Before plaintiffs paid the remaining $2500 called for by the contract, Hart represented to them that their credit had been approved and that they had been accepted by Campion as tenants. Thus this representation went direct to the very condition upon which the contract was to become effective — the approval by Campion of plaintiffs as tenants. This material representation of Hart relied upon by plaintiffs was not made "subsequent to the sale", as defendants contend and the court committed no error in submitting the case to the jury.
Defendant Weaver contends that he is not liable to plaintiffs because "Hart was a subagent of defendant Rosser with whom Rosser dealt directly thereby constituting Weaver merely an intermediate agent and Weaver would not, therefore, be responsible for the alleged torts of defendant Hart unless he actively participated therein of which there is no evidence in the record."
It was admitted that defendant Weaver was engaged in the real estate brokerage business under the trade name of "American Real Estate and Appraisal Company." Defendant Rosser gave written authorization to the "American Real Estate and Appraisal Company" to procure a purchaser for her restaurant. It was an exclusive agency. Exhibit "E" is styled "Agreement for Commission". It recites that the restaurant was listed with American Real Estate and Appraisal Company for sale for the sum of $4750, and that said company having sold it to plaintiff Wright for the sum of $5500, the seller, defendant Rosser, agreed to pay the difference between $5500 and $4750, or $750, to the American Real Estate and Appraisal Company as its commission. The three checks given by Mrs. Wright were all made payable to this "Company" of which Weaver was the sole owner. In addition defendant Hart testified that he "was a salesman under Mr. Weaver." Under these facts there is no merit in defendant Weaver's contention.
Defendants next contend that plaintiffs' evidence that they relied upon the alleged fraudulent representation of Hart, that plaintiffs could obtain occupancy of the premises upon which the hamburger stand was located could not in law have influenced plaintiffs even if made prior to the sale, and consequently was insufficient upon which to predicate a recovery for fraud.
Plaintiffs testified that they relied upon this representation of Hart. We cannot hold, as urged by defendants, that plaintiffs' testimony in this respect was wholly "unreasonable" and "fantastic". This contention merely goes to the weight and credit to be given plaintiffs' testimony, which was a matter coming solely within the province of the jury.
Defendants also assert that plaintiffs had the same opportunity as defendants to ascertain and know whether or not they could obtain occupancy, and their lack of diligence and inattention to their business was such that they cannot say that defendants perpetrated a fraud upon them. This court in the case of Cantley v. Plattner, 228 Mo.App. 411, 67 S.W.2d 125, uses the following language at loc. cit. 130, 131:
"Ordinarily, it is true that neither law nor equity will afford relief for false representations where the parties stand upon an equal footing or where the subject-matter in dispute is equally known to both; and, if one trusts to representations not calculated to impress a person of ordinary prudence, or neglects means of information within easy reach, he should suffer the consequences. McCaw v. O'Malley, 298 Mo. 401, 249 S.W. 41, loc. cit. 44. But such rule has no application where a distinct and specific representation is made to be acted upon or for the purpose of inducing action and which has induced action. Same authorities, supra. In the case of Judd v. Walker, supra [215 Mo. 312, 114 S.W. 979] the court said: `We might add here that the general doctrine laid down in the books as elementary, is that the doctrine of notice and means of knowledge has no application where distinct and positive representations of fact have been made, have been relied upon and have induced action.'"
When plaintiff Howard and defendant Hart went to see Campion, the latter stated, according to Howard, that "he would let Mr. Hart know if we were accepted as tenants in that business." In view of this, it is but reasonable that plaintiffs would rely upon the representation made a few days later to them by Hart that Campion had approved their credit and accepted them as tenants. It came from the person they were expecting to convey this essential information. In addition to this, defendants asked and the trial court gave on their behalf Instruction "A" which required the jury to find before they could return a verdict for plaintiffs that plaintiffs used ordinary care to discover the truth of the representation by Hart that Campion on behalf of the landlord had accepted plaintiffs as tenants. We are not inclined to hold that, as a matter of law, under the facts and circumstances here presented that plaintiffs were guilty of such negligence as would bar their right to recover.
Finally defendants claim that the trial court erred in denying them a new trial because of improper conduct on the part of plaintiffs and their counsel. Some of the matters now complained of went in without objection. It must be kept in mind that a wide discretion is given to a trial court in the conduct of a trial. It is only when it appears from the record that there has been manifest abuse of the court's discretion in such a matter that an appellate court is warranted in interfering. An examination of the transcript herein fails to reveal anything which would warrant us in holding that the trial judge abused his discretion. In fact, it contains no error prejudicial to defendants. They were given a fair trial and the judgment should be affirmed.
It is so ordered.
DEW, P. J., concurs.
CAVE, J., not participating.