Summary
In Drew v. Christopher Const. Co. (1942), 140 Ohio St. 1, the Ohio Supreme Court considered a situation in which a vendor's false promise regarding the sufficiency of a water supply was relied upon by the purchaser of a residence.
Summary of this case from Brothers v. Morone-O'Keefe Dev. Co.Opinion
No. 28905
Decided May 20, 1942.
Vendor and purchaser — False representations of vendor of real estate — Purchaser may maintain action for damages, when — Evidence admissible to show material misrepresentation as inducement to contract, when.
1. Where false representations of a vendor made as positive statements of facts clearly implying his knowledge of the truth thereof induced a purchaser to buy and pay for a residence property and such representations were material, being of such a nature as to affect the character, utility and value of the property, and were then known by the vendor to be untrue, but were relied upon by the purchaser as true, he may maintain an action to recover the damage sustained as a result thereof. ( Gleason v. Bell, 91 Ohio St. 268, approved and followed.)
2. In an action for the recovery of damages based upon a claim of false representations in the sale of real estate, evidence is admissible not to contradict or vary the terms of the written contract of purchase and sale but to show material misrepresentations relative to the subject-matter of the contract whereby the party was induced to enter into the contract which resulted in his loss or damage.
APPEAL from the Court of Appeals of Cuyahoga county.
This action originated in the Court of Common Pleas of Cuyahoga county. Suit was brought upon a promissory note. A cross-petition was filed by the defendant wherein damages are claimed by reason of certain misrepresentations alleged to have been made by the plaintiff in the sale of a residence property, the note sued upon having been given by defendant as balance of the purchase price. The only issues presented arise from the cross-petition and answer thereto.
It is alleged in the cross-petition in substance that the plaintiff falsely represented that the home had "an ample water supply, sufficient and fit for all household purposes, by way of a well then existing upon said premises," upon which statements and representations defendant fully relied; that the water supply was not ample, which fact was known by plaintiff or ought to have been known by him; and that within ten days after possession of the premises by the defendant there was no water supply whatever.
Similar allegations were made with reference to faulty and defective construction of the house by reason of which the roof leaked and also faulty construction or installation of the sanitary system, all of which defective conditions were known by the plaintiff but which were impossible of observation or ascertainment by the defendant.
Upon the trial of the case the introduction of evidence in support of the allegations of the cross-petition was objected to by counsel for the plaintiff upon the ground that a written contract for the purchase and sale of the premises had been entered into and that the evidence tendered would contradict or vary the terms of such contract.
The portion of the purchase agreement relied upon to support the objection made to the introduction of evidence is the italicized clause in the first paragraph thereof, which is as follows:
"The Christopher Construction Co., the undersigned (hereinafter called purchaser), do hereby offer and agree to buy the following described property, situated in the village of Moreland Hills, county of Cuyahoga and state of Ohio, and known as being: a parcel of land situated on the southerly side of Jackson road and containing about 1.55 acres, title now held in the name of Harold W. Drew together with all buildings and appurtenances now thereon, in their present condition." (Italics ours.) Such clause is a part of the printed form of contract.
Some evidence was adduced and other evidence proffered in support of defendant's claim, but the court sustained the motion of counsel for plaintiff for a finding in his behalf upon the pleadings, the opening statement of defendant's counsel and the evidence adduced and proffered, the court stating that "there is absolutely nothing in this law suit in the way of this proffer which would cause the court to find that there was any fraudulent misrepresentations whereby the defendants were induced to buy this property. * * * This is a question of law, whether you can violate any written agreement; whether the written agreement means something, or doesn't mean anything."
The court thereupon dismissed defendant's cross-petition and rendered judgment for the plaintiff, which was affirmed by the Court of Appeals, one of the judges dissenting. The case is in this court by reason of the granting of a motion for an order of certification. Additional facts are stated in the opinion.
Mr. Keith Lawrence, for appellee.
Messrs. Nicola Horn, for appellant.
The decision of this case turns upon the question of the validity and sufficiency of the cross-petition and the admissibility of evidence proffered in support thereof. The trial court held that the pleading and the evidence proffered contradicted or varied the terms of the written agreement between the parties for the purchase and sale of the property involved herein. The question presented is whether, by reason of a clause in a purchase and sale agreement referring to the premises as "the following described property * * * together with all buildings and appurtenances now thereon, in their present condition," the purchaser is precluded from asserting and maintaining a claim for material misrepresentation by the vendor, either as to the water supply or the condition of the building, though made for the purpose and with the effect of inducing the sale thereof. If the answer is in the affirmative, the judgment rendered in this case should be affirmed; if not, it should be reversed.
In the consideration of this question we must, of course, accept as true the facts which the evidence proffered and rejected by the court tended to establish. Having reference to the water supply, the statement of the representation claimed to have been made by the plaintiff was that there was an ample water supply for all household purposes; that it was inexhaustible; good for all time, plenty of water. The evidence proffered in this respect indicated positive statements of a fact with knowledge of the situation on the part of the plaintiff, and not the expression of a mere opinion or belief. The plaintiff was the builder and owner of the residence. The defendant endeavored to prove that the plaintiff at the time he made the representations had positive knowledge that his representations were false; that, prior to the erection of the dwelling, he had been informed by one living in the immediate neighborhood that the water supplied by a spring on his premises was merely seepage; and that this neighbor had endeavored to obtain water in the immediate locality and, having failed to do so, was compelled to pipe water from the Chagrin river.
Admission of such misstatement as well as his obligation and responsibility under the contract would have been further disclosed by evidence tendered that the plaintiff attempted thereafter to drill a well but could procure nothing but salt water, which was unfit for any household purpose.
It seems unlikely that the use of the words, "buildings and appurtenances now thereon, in their present condition," would be understood to include or have any reference to the sufficiency or quality of the water supply. That the misrepresentations complained of materially affect the character, use and enjoyment of premises concerning which the representations were made there can be no question; that such misrepresentations in fact induced the purchase of the premises and resulted in damage the proffered evidence tended to prove.
Under the rule applied by the trial court, a purchaser would be helpless and a vendor completely absolved, no matter how false or fraudulent the statement which induced the sale, if somewhere in the form of contract, in fine print or otherwise, there be inserted the phrase, "buildings and appurtenances now thereon, in their present condition." It is difficult to imagine a case in which relief would be accorded a purchaser misled and deluded by false representations respecting conditions of premises not readily observable or ascertainable if it be denied under the facts presented in this case.
An informing discussion of the principle involved in actions for misrepresentation of quality, condition, character or adaptability of the subject-matter of contract may be found in 23 American Jurisprudence, 823, Section 54. Many cases are there cited involving misrepresentation of particular facts affecting the quality or condition of the thing dealt with for which action is maintainable. Among these are actions where fraud has been held predicable on false representation that a certain privilege is annexed to land sold, that the improvements thereon are of a certain kind, that it is suitable for certain purposes, or that it has a gusher of water on it. Cases are also cited which negative the right to maintain an action where only general statements are made in regard to the construction or general condition of a building which is the subject-matter of the sale agreement.
Having reference to the claimed defective sanitary system and faulty construction of the roof, it is necessary only to observe that there was no tender of proof of facts which constitute the essential elements of a claim for damages for misrepresentation.
In the trial of the instant case, it was not sought to contradict or vary the terms of a written contract, but rather to show material misrepresentations relative to the subject-matter of the contract whereby the party complaining was induced to enter into the contract resulting in his loss or damage. The authorities are numerous which support the competency and admissibility of evidence in such cases. 22 Corpus Juris, 1215, Section 1651, and cases there cited; 75 A.L.R., 1025, and cases cited; 5 Williston on Contracts, 4212, Section 1509; 17 Ohio Jurisprudence, 527, Section 428; 40 Ohio Jurisprudence, 931, Section 26; Taylor v. Leith, 26 Ohio St. 428; Mulvey v. King, 39 Ohio St. 491; Gleason v. Bell, 91 Ohio St. 268, 110 N.E. 513. In the last cited case, it is held in the syllabus:
"Where a purchaser was induced to buy and pay for a city residence, by false representations made to him by the vendor as positive statements of fact clearly implying knowledge of the owner of the truth of the facts stated, and made under such circumstances that the vendor should have known of the falsity of the representations, and they were of such a nature as to affect the character, utility and value of said property, and the purchaser had a right to and did rely thereon, and suffered damage by reason thereof, he may recover. In such a case an averment that the vendor knew the representations to be false and made them with intent to deceive is not essential."
Being of the opinion that the trial court was in error in rejecting the evidence proffered in support of defendant's cross-petition and in rendering judgment for the plaintiff, and that the Court of Appeals erred in affirming the same, the judgment of the Court of Appeals is reversed.
Judgment reversed.
WEYGANDT, C.J., TURNER, WILLIAMS, HART and ZIMMERMAN, JJ., concur.
BETTMAN, J., not participating.