El Jardin Immigration Co. v. Karlan
El Jardin Immigration Co. v. Karlan
Opinion of the Court
This suit was brought by David Harlan and Jessie liarían, husband and wifé, against appellants, El Jardin Immigration Company and James-Dickinson Farm Mortgage Company, both Missouri corporations, and C. F. Thomas and two other parties, not parties to this appeal. The petition sought—
“the cancellation of the contract of sale, alleging the value of the improvements placed by them on the land as $3,065 and the cost of appellees’ removal from Colorado to Texas at $800, and asked that a lien be created against the tract of land in question to secure the repayment to them of the purchase money paid, value of improvements, and the cost of their removal from Colorado to Texas. In the alternative they prayed for $20,000 damages for fraud and deceit.”
Appellant, El- Jardin Immigration Company, answered by general demurrer and general denial. The latter company further pleaded that appellees with full knowledge of the facts waived the alleged fraud .and ratified the contract sought to be rescinded; that when appellees purchased the land through S. -H. George, the agent, who it is alleged made the fraudulent representations, acted as appellees’ agent, and not as the agent of El Jardin Immigration Company.
The case was tried without a jury, and the judgment decreed a cancellation of a deed by appellant O. F. Thomas, conveying the land •in question to appellees, and the series of second vendor’s lien notes executed by ap-pellees in favor of appellant James-Dickinson Farm Mortgage Company, relieving appellees of liability on the five vendor’s lien notes, and rendered a joint and- several moneyed judgment in favor of appellees against appellants, O. F. Thomas, El Jardin Immigration Company, and James-Dickinson Farm Mortgage Company, for $10,497.
Appellants’ first proposition is:
“The provisions of chapter 43, General Laws 36th Legislature (1919), apply only to actions for damages for fraud, and not' to equitable actions for rescission and cancellation, and in the latter'character of action the parties can only be required to restore what they received as a result of the fraud that vitiates the transaction, or that of which they deprived the opposition party by their own wrongful conduct or that of their agents.”
The actionable fraud law act, described in appellants’ proposition, is embraced in Vernon’s Texas Civil and Criminal Statutes of 1922 Supplement, as articles 3973a, 3973b, and 3973c. It consists—
“of either a false representation of a past or existing material fact or false promise to do some act in the future,' wnieh is made as a material inducement to another party to enter into a contract and but for which promise said party would not haye entered into said contract, tlie burden shall be on the party making to show that it was made in good faith but was prevented from complying therewith by the act of God, the public enemy, or by some equitable reason.”
We can scarcely see how this act can be invoked in this case for any purpose. There was no fact proven to sho-w a “false representation of any past or existing material fact, or false promise in the future.” If so, and it has pertinence in this case, the, appellants would be totally denied any defense, because they were not “prevented from complying therewith by the act of God, the public enemy, or by some equitable reason.”
This statute in respect to the right of recovery in favor of one defrauded against “all persons deriving the benefit of said fraud,” whether they participated therein or had knowledge thereof provides a severe rule of evidence. It provides, if ■ “it should be presumed that it was falsely and fraudulently made, the burden shall be on the party making it to show that it was made in good faith but was prevented from complying therewith by the act of, God,” etc. The long-established rule that fraud must not only be alleged, but must be proven as alleged, is changed by this statute somewhat. Here it puts the burden on the alleged fraudulent party to overcome the presumption of j fraud on his part, that it was not made in good faith, and then he must further show that he was “prevented from complying by the •act of God, the public enemy, or by some equitable reason.” We shall give no construction to that statute that will subject an innocent person to a personal liability for the fraud committed by the agents of another, in Which he was neither a participant nor beneficiary in the fraud.
In this ease, the title to the land was in *1046 Ilarbert Davenport at the date of the transaction between Karlen and El Jardin Immigration Company. James-Dickinson Earm Mortgage Company of Texas, not a party to this suit, had a contract with Davenport in which it could require him to convey any particular tract of land in question upon executing and delivering to him vendor’s lien notes. Lone Star Immigration Company had likewise contracted with James-Dickinson Farm Mortgage Company of Texas to purchase the land at a fixed price, and entitled to compel C. F. Thomas, trustee, to make conveyances upon certain conditions. El Jardin Immigration Company had a similar contract with Lone Star Immigration Company, requiring the latter company to deliver title to any tract of the land to El Jardin Immigration Company, or its vendees, upon the payment of the fixed price in money and notes. The profits accruing to James-Dickinson Farm Mortgage Company of Texas and Lone Star Immigration 'Company were fixed by the contract, and did not depend upon any price for which the El Jardin Immigration Company sold the lands. It is not perceived how, under the contracts and relation of the parties to each other, there could be any benefit to be derived from .the alleged fraud of El Jardin Immigration Company, or its agent, S. H. George, except perhaps to said company. There were to be no profits until that company bought the land, and it was not bound to purchase until it had contracted to sell it. There is no fact in the record that C. F. Thomas and James-Dickinson Farm Mortgage Company of Missouri participated in any alleged fraud of El Jardin Immigration Company or its agents in selling the land.
As this cause will be sent back for another trial, we refrain from a further discussion of the facts, pleadings, or parties, or want of, parties, as nothing herein will prevent recasting the pleadings.
For the reasons given, we believe the trial court erred in the judgment rendered, and the judgment is here reversed, and the cause remanded for a new trial.
Reference
- Full Case Name
- EL JARDIN IMMIGRATION CO. Et Al. v. KARLAN Et Ux.
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- 8 cases
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- Published