Lott Town Improvement Co. v. Harper , 204 S.W. 452 ( 1918 )

Appellant, the Lott Town Improvement Company brought this suit against appellees, Corilla and Ruth Harper, to recover the amount of a note for $7,642.60, made April 8, 1910, together with interest and attorneys' fees less credits indorsed upon the note, and to foreclose the lien of the vendor, expressly retained by recitals in the deed. The amount of the note and the lien were admitted by appellees, but they alleged a cross-action for damages caused them by the deceit of appellant. Special issues were submitted to the jury. Judgment was rendered in favor of appellant for $2,873.07, which sum the judgment states is the difference between the amount due on the note, including attorneys' fees, and the amount of damages appellees suffered by the deceit. The petition alleged a cause of action upon the note and for foreclosure of lien. The answer, as stated, admitted the appellant's cause of action; but set up a cross-action for deceit against appellant and against several individuals and corporations, each of whom, it was prayed in the cross-bill, should be served with citation. But no citations were ever issued and none of the impleaded parties appeared, hence appellees' suit upon the crossaction is limited to appellant.

The cross-bill fails to state a cause of action, could not be maintained against a general demurrer, and its consideration by the court may be fundamental error, as will appear from the following abbreviation of it: Paragraph 1 admits appellant's alleged cause of action. Paragraph 2 qualifies the admission by adding:

"Note sued upon was executed as a part payment of the purchase price for said land, but upon the conditions and with the covenants hereinafter more fully set forth."

Paragraph 3, with much detail, avers the efforts of appellants and their grantors to secure by contract, with others, the establishment of an adequate irrigation system, which efforts and contracts, it is alleged entitled appellees to sufficient water to irrigate their lands. Paragraph 4, of the cross-bill alleges that appellant represented itself to be the owner of the land sold to appellees at the time the sale was made. The purpose of the fifth paragraph was to allege the deceit which is the foundation, for this cross-bill. Said paragraph is, in substance: That at the time of executing and delivering said deed plaintiff (appellant) represented to the defendants (appellees) that said land would be irrigated by a canal system with adequate facilities for the proper irrigation of such lands for agricultural purposes, plaintiff representing to these defendants that said canal system would be permanent, thereby maintaining said lands as irrigated lands and at irrigated values. The sixth paragraph avers that appellant caused, the La Donna Canal Company to execute and deliver to appellees a contract to irrigate their lands, and that said representations, covenants, agreements, and undertakings on the part of appellant was a part of the consideration of said contract of sale and was a part of the consideration for the execution by the appellees of said note. The seventh paragraph sets out that the measure of damages is the difference between the actual value of the land without irrigation, $10 an acre, and what its value would have been if adequately irrigated, $'250 an acre. In the eighth, ninth, tenth, and eleventh paragraphs it is alleged that the La Donna Canal Company entered into a contract to furnish the irrigation, for executing which contract it was to receive $10 an acre for each acre agreed to be irrigated; that appellant became obligated to these appellees to adequately irrigate their land; and that neither the appellant nor the La Donna Canal Company built an adequate irrigation system The Twelfth paragraph is that, by the breach of the contracts to irrigate appellees' land, appellant has damaged appellees in the sum of $60,000, which amount, it is alleged is the difference between the value of the land without irrigation and what it would be if irrigated as represented.

The facts are: The appellees came on an excursion train in February, 1910, to investigate the lands offered for sale by appellant. They inspected the land and saw the canals. The canals did not look very promising to Corilla J. Harper, and, as she had been warned to inquire about the irrigation facilities, she told Mr. Scobey, the sales manager for appellant, that the canals did not impress her favorably. He replied that it was a new enterprise, just being installed, but said he would guarantee that the water supply would be sufficient. He explained to her that a canal company would give her its contract to furnish the water. Shortly thereafter, Corilla J. and Ruth Harper, through their agent, executed a contract to buy the land from appellant and to receive the water contract from the La Donna Canal Company, and paid $1,500 cash as earnest money. Subsequently the deed, two notes for like amounts, and the first cash payment were all made and the trade closed. Neither the deed nor notes mention irrigation or canal systems. One of the notes was paid when due. Interest and part of the face of the second note were later paid. The contract price for the land was $95 an acre for some of the lots and $90 an acre for the rest. The aggregate acreage purchased was 250.16 acres, and the aggregate contract price was $22,927.80.

The jury found, in answer to the sixth special issue, that the value of the land at the time of purchase by appellees, with the irrigation facilities as they actually were, was $150 an acre, or $37,524 for the 250.16 acres of land.

The evidence discloses further that at times La Donna Canal Company furnished ample water, but at times failed because the canals became choked with silt and water grass, and because of lack of fuel for their engines and because of breakdowns in the pumping machinery. This continued until a district irrigation system was organized and took over the equipment and obligations of the La Donna Canal Company in 1915, after which no further complaint is made of insufficient irrigation facilities.

The first assignment complains that the court refused to peremptorily instruct the jury to return a verdict for the full amount of the principal, interest, less credits indorsed on the note, and attorneys' fees remaining due on the note sued upon and for foreclosure of the vendor's lien sued for; and against the appellees, in favor of appellant, on appellees' cross-action.

This assignment must be sustained. Appellant's cause was admitted. The cross-bill fails to allege a cause of action. The contract represented by the deed and notes was performed by both parties. Appellees do not sue for a breach of that contract. But appellees in their cross-action sue to recover damages for fraudulent representation. There is no allegation that appellees were induced to enter into the contract by reason of any misrepresentation by appellant. This ommission is fatal. 8 Enc. Dig. 370, E, 1; 12 R.C.L. 422, § 168.

Then again the alleged representations of appellant's agent, Mr. Scobey, as stated in the case of Mid-Continent Life Insurance Co. v. Pendleton, infra, "giving them their widest scope, amounted to a promise to perform certain acts in the future"; that is, furnish water for irrigating appellees' land in the future.

"It is the general rule that a promise to perform an act in the future will not amount to fraud in the eyes of the law, although it may have been the propelling inducement to the execution of the contract, and, though it may have been totally disregarded, still it cannot be made the basis of a suit to avoid a contract." Lemmon v. Hanley, 28 Tex. 219; Jackson v. Stockbridge, 29 Tex. 394, 94 Am.Dec. 290; Moore v. Cross,87 Tex. 557, 29 S.W. 1051; MidContinent Life Ins. Co. v. Pendleton,202 S.W. 769.

There is no averment in the cross-bill that appellant had no intention at the time of making the representation of having the lands furnished with water for irrigation; on the contrary, the cross-bill alleges, in detail, the efforts and steps taken by appellant to secure an adequate supply of water to these lands. Therefore the cross-bill fails to bring this case within the exception to the above-stated general rule, which exception is thus stated by Chief Justice Fly:

"There is, however, a recognized exception to the rule in Texas that if at the time the promise was made it was the intention of the party making it to disregard it, and that he had no intention at the time of making it to perform it, but made it to deceive and defraud the other party, there would be a basis for a suit founded on fraud and deception. Railway v. Titterington, 84 Tex. 218 [19 S.W. 472, 31 Am. St. Rep. 39]; Railway v. Smith, 98 Tex. 553 [86 S.W. 322]; Ins. Co. v. Seidel,52 Tex. Civ. App. 278, 113 S.W. 945; May v. Cearley, 138 S.W. 165; Chambers v. Wyatt, 151 S.W. 864." MidContinent Life Ins. Co. et al. v. Pendleton, above cited.

The first assignment is sustained.

The second assignment assails the judgment for want of evidence to support it.

The judgment rendered is contrary to the law and facts in this: The measure of damage in this cross-action by appellees is the excess of the contract price agreed to be paid because of the representations, over the value of the land as it actually was at the time the contract was made. George v. Hesse, 100 Tex. 44, 93 S.W. 107, 8 L.R.A. (N.S.) 804,123 Am. St. Rep. 772, 15 Ann.Cas. 456. The jury found, upon sufficient evidence, that the land was worth $150 an acre, or $37,524, with the canal system and available supply of water as they really were at the time appellees made the contract. The contract price, it is admitted, was $22,927.80. The facts therefore show that there was no excess of contract price over the actual value and that no damage to appellees was proven.

The second assignment is sustained.

The third assignment correctly urges that the court erred in overruling appellant's special exception to the effect that the parol promise to have the land furnished with water for irrigation was in violation of the statute of frauds, inasmuch as it appears from the cross-bill that the promise could not have been performed within one year. V. S. R. C. St. art. 3965; Stovall v. Gardner, 100 Tex. 25, 94 S.W. 218; Light Pub. Co. v. Moore, 46 Tex. Civ. App. 259, 101 S.W. 867.

We sustain the third assignment.

The fourth assignment complains of the admission of testimony that was clearly irrelevant and prejudicial. We do not deem it necessary to further discuss this assignment, but sustain it.

The fifth assignment complains of the court's order overruling appellant's motion to set aside the jury's answer to the first special issue for want of evidence to support it.

We sustain the fifth assignment.

The sixth assignment is overruled because the testimony objected to was admissible to prove the alleged false representations.

The seventh assignment is sustained for the reason that the testimony admitted over objection was wholly irrelevant.

The eighth assignment is sustained for the reasons given in our consideration of the first and second assignments.

The judgment of the trial court is reversed, reformed and here rendered for appellant for the amount of the note, including principal and interest, less credits indorsed on the note as of the dates stated, and for attorney's fee. The total amount to be ascertained as of October 1, 1917, together with interest at the rate of 6 per cent. per annum until paid, and for foreclosure of the vendor's lien, for writ of possession, and for all costs.

Reversed, reformed, and rendered.