Pound v. Clum

Brooke, J.

(after stating the facts). From a careful perusal of this record, it appears to have been conclusively proven that plaintiffs’ equity in the farm in question was actually worth $10,050. . By an overwhelming weight of the evidence it appears that defendants’ equity in the property exchanged, instead of being the sum of $8,200 as shown by Exhibit A, was in fact about $3,650. As shown by the testimony given by and on behalf of the plaintiffs, the representations made by Clum or by his agent, Heine, were as follows:

“That he_ could sell them just as quick as he got back. I think the property he referred, to was the west side over by Perry and' Niagara, for which he said he had buyers. He said he could sell it at a good advance. * * *

“ ‘Are you positive that the property is worth that *32 . — you can get the money out if I listed them with him?’ He said they were worth more and he could get more money than I had in them out of them. * * *

“He said that property cost him more than he was selling them at, they were worth more. * * *

“He said it could be readily converted into cash at the price in Exhibit ‘A’ and perhaps more. * * *

“Mr. Heine represented that the property could be readily converted into cash, and that they could be sold for the amount they were listed for. * * *

“I heard him tell Mr. Pound that was a fair value for those various properties and that he could sell it upon the market for that price or better; that he could readily convert it into cash for Mr. Pound at that price or better.”

It is in evidence that plaintiffs told defendant Clum and his agent, Heine, that they were totally ignorant of the values of the Saginaw property and that they relied upon the representations as to value made:

“I thought they were telling me the facts and relied upon their judgment.”

Broadly speaking, the position of defendants is that all the alleged representations as to value amount to mere “puffing”; that plaintiffs were in just as good a position to judge of the value of the property as were defendants and that the case made by plaintiffs upon the record is such that a decree should have been rendered in favor of defendants under the rule of caveat emptor. Many Michigan cases are cited in support of the appellants’ theory which we find it unnecessary to discuss at large.

The rule as contended for by defendants that where vendor and vendee have equal knowledge or equal means of acquiring information and where nothing is done by the vendor to throw the purchaser off his guard or to divert him from making inquiries. and examinations which a prudent man ought to make, and when there is no concealment of facts of which *33 the vendor has knowledge and of which the vendee is unable to obtain knowledge, mere representations of values are considered as matters of opinion and not of fact, is recognized. The only question here involved is as to the applicability of the rule under the facts in this case. Plaintiffs were absolutely unacquainted with real estate values in the city of Saginaw. They saw the properties in question but three times before the deeds were made and but for a few minutes on each occasion. That they relied. upon the representations made by defendants and their agent, Heine, to their injury is not open to question upon this record. We are of opinion that the relief granted is warranted under the following decisions. In McDonald v. Smith, 139 Mich. 211 , it is said, at page 222:

“The rule that expressions of opinion do not constitute actionable fraud (Myers v. Building Ass’n, 117 Mich. 389 ; Chafey v. Mathews, 104 Mich. 103 [27 L. R. A. 558]), which is a rule subject to exceptions (see French v. Ryan, 104 Mich. 625 ), ‘is applicable only when the opinion stands by itself as a distinct thing.’ See People v. Peckens, 153 N. Y. 593 . And it has been said by an eminent jurist:

“ ‘It is material to observe, that it is often fallaciously assumed that a statement of opinion cannot involve tbe statement of a fact. * * * If the facts are not equally known to botb sides, then a statement of opinion by the one who knows the facts best involves very often a statement of a material fact, for he impliedly states that he knows facts which justify his opinion.’ Lord Bowen, in Smith v. Land and House Property Corp., L. R. 28 Ch. Div. 15.”

In the case of Yanelli v. Littlejohn, 172 Mich. 91 , plaintiff had been induced to purchase a farm under representations made by the owner as to the quality of the land and its value. He examined the land and sent his lawyer to investigate the same, who reported the land poor and advised him not to buy. The court there said:

*34 “A defrauded party does not owe to the party who defrauds him an obligation to use diligence to discover the fraud. Lewis v. Jacobs, 153 Mich. 664 ( 117 N. W. 325 ). It appears that plaintiff did not rely upon the advice and statements of Barassa, the attorney, but acted in disregard of such advice. Had his attorney advised him to purchase the land, and had he relied upon such advice, then the defendant would not have been liable; but the fact that Barassa advised him not to purchase, and that he did not follow the advice, might be urged as evidence of the strength of the representations claimed to have been made by the defendant. The question is not, Was he warned? but, Was he deceived and defrauded by the defendant?”

See, also, Face v. Hall, 177 Mich. 495 . The case of Pratt v. Allegan Circuit Judge, 177 Mich. 558 , is upon its facts very similar to the case at bar. Speaking through Mr. Justice Stone, we there said:

“Can it be said that the language above quoted, that the defendants ‘did then and there falsely represent and pretended to, this affiant that the real estate described in said contract was worth $2,100 cash in the real estate market of the city of Kalamazoo, and that the equity in- said contract was well worth the sum of $1,225 cash, and that said real estate described in said deed above mentioned was worth the sum of $300 cash in the real estate market of the city of Kalamazoo, and that each of said pieces would readily sell for the sums above named at any time, and that said sums were a fair cash price for said pieces of real estate/ was mere ‘seller’s talk/ or may it be said to be the representation of facts which might be relied upon by the purchaser and become an inducing cause of the trade? We are of opinion that the representation that property would readily sell in a certain market at a given price is the representation of an alleged fact, and, where relied upon as here stated, may be made the basis of a false representation.”

An attempt is made by counsel for appellant to distinguish the Pratt Case, but it is asserted that if not distinguishable:

*35 “We are compelled to say that our court has gone farther in its decision of this case than it has in any other adjudicated case in Michigan, and its decision is questionable unless it was intended by the court to lay down a new rule and extend the scope of exceptions to the rule of caveat emptor.”

We are of opinion that the cases are not distinguishable and that Pratt v. Allegan Circuit Judge, supra, is in line with our former decisions.

The decree is affirmed.

Ostrander, C. J., and Bird, Moore, Steere, Fellows, Stone, and Kuhn, JJ., concurred.