{ "id": 8718251, "name": "Fausett & Company, Inc., v. Bullard", "name_abbreviation": "Fausett & Co. v. Bullard", "decision_date": "1950-04-24", "docket_number": "4-9153", "first_page": "176", "last_page": "180", "citations": [ { "type": "official", "cite": "217 Ark. 176" }, { "type": "parallel", "cite": "229 S.W.2d 490" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "272 S. W. 856", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "168 Ark. 1028", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8726466 ], "opinion_index": 0, "case_paths": [ "/ark/168/1028-01" ] }, { "cite": "11 Ark. 58", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8727433 ], "opinion_index": 0, "case_paths": [ "/ark/11/0058-01" ] }, { "cite": "1 S. W. 2d 3", "category": "reporters:state_regional", "reporter": "S.W.2d", "opinion_index": 0 }, { "cite": "175 Ark. 839", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1403430 ], "opinion_index": 0, "case_paths": [ "/ark/175/0839-01" ] }, { "cite": "141 S. W. 759", "category": "reporters:state_regional", "reporter": "S.W.", "weight": 2, "opinion_index": 0 }, { "cite": "101 Ark. 95", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1311119 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ark/101/0095-01" ] }, { "cite": "135 S. W. 458", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "98 Ark. 44", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1316118 ], "opinion_index": 0, "case_paths": [ "/ark/98/0044-01" ] } ], "analysis": { "cardinality": 476, "char_count": 6522, "ocr_confidence": 0.506, "pagerank": { "raw": 5.722414007193489e-07, "percentile": 0.950004034984279 }, "sha256": "09b475b4b63ed9470daad822254d45ae5a9ceb49e12f5e321f69ca38337cfd4f", "simhash": "1:137fbc44bd2db691", "word_count": 1108 }, "last_updated": "2023-07-14T21:48:24.265381+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Fausett & Company, Inc., v. Bullard." ], "opinions": [ { "text": "George Rose Smith, J.\nThe appellees, W. T. and Aliene Bullard, brought this suit to recover damages resulting from misrepresentation made by the appellant\u2019s agents in connection with the sale of a dwelling house in Little Rock. This appeal is from a judgment entered upon a verdict for $4,463.\nThe appellant is a corporation engaged in buying and selling real estate. In April of 1948 it owned the house in question and advertised it for sale. For several months the house had been occupied by E. L. Fausett, president of the company. The appellees saw the advertisement and began negotiations that led to their purchasing the property on April 26, for $16,500. Bullard testified that twice during, the negotiations he inquired about conditions underneath the house, as the front of the house was so low that the floor was almost even with the yard. On both occasions Fausett replied that his crew had been under the house doing some work and it was in excellent condition. Mrs. Bullard corroborated her husband\u2019s testimony as to one of these occasions, while Fausett denied having made the statements attributed to him.\nAfter the Bullards took possession they found that the floors vibrated noticeably. In July, Bullard crawled under the house and found a state of serious deterioration and disrepair. These conditions need not be described, as the amount of the verdict is not questioned.\nAppellant\u2019s principal contention is that it was entitled to a directed verdict. It is insisted that the theory by which the case was allowed to go to the jury is erroneous in two respects.\nFirst, the appellant contends that the proof does not show that Fausett knew his statements about the house to be untrue. It is argued that since the representations were made in apparent good faith there can be no liability in an action at law for deceit.\nThere was certainly a time in the early development of the common law when the plaintiff in an action of this kind had to prove a conscious and deliberate intention to deceive on the part of the defendant. But since those early decisions it has long been settled that representations are considered to be fraudulent if made by one who \u201ceither knows them to be false, or else, not knowing, asserts them to be true.\u201d Hunt v. Davis, 98 Ark. 44, 135 S. W. 458; Brown v. LeMay, 101 Ark. 95, 141 S. W. 759; Whaley v. Niven, 175 Ark. 839, 1 S. W. 2d 3. The best statement of the reasons underlying the stricter rule has been made by Williston: \u201cThe inherent justice of the severer rule of liability which in some cases at least holds a speaker liable for damages for false representations, though his intentions were innocent and his statements honestly intended, is equally clear. However honest his state of mind, he has induced another to act, and damage has been thereby caused. If it be added that the plaintiff had good reason to attribute to the defendant accurate knowledge of what he was talking about, and the\nstatement related to a matter of business in regard to which action was to be expected, every moral reason exists for bolding tbe defendant liable.\u201d Williston on Contracts (Rev. Ed.), \u00a7 1510.\nSecond, it is earnestly urged that the appellees were not entitled to rely on Fausett\u2019s statements, not only because they had an equally good opportunity to make an inspection but also because Bullard made some inquiries of third persons before he bought the property. The' appellant relies chiefly on this language in Teates v. Pryor, 11 Ark. 58, decided in 1850: \u201cIf the means of information are alike accessible to both, so that, with ordinary prudence or vigilance, the parties might respectively rely upon their own judgment, they must be presumed to have done so; or if they have not so informed themselves, must abide the consequences of their own inattention and carelessness.\u201d\nThis quotation pretty well summarizes the doctrine of caveat emptor, but it has not been applied inflexibly to every situation. There are many circumstances that justify the buyer in acting upon the seller\u2019s statements, even though there is an opportunity to discover their falsity. For instance, in Brown v. LeMay, 101 Ark. 95, 141 S. W. 759, the seller represented that a tract contained 35 acres when in fact there were only 30.9. Of course the buyer could have ascertained the truth by having the land surveyed, as she did later on. Nevertheless we upheld a judgment for damages, it being shown that the seller knew that his statement was being relied upon. In Myers v. Martin, 168 Ark. 1028, 272 S. W. 856, it was held that the buyer may credit the statements of a seller who has peculiar knowledge of the subject-matter of the sale.\nIn this case Fausett was engaged in the business of buying and selling houses. 'He had been living in this house for a number of months. He said that his crew had been under the house and it was in excellent condition. In view of these circumstances the trial court correctly refused to declare as a matter of law that the Bullards were not entitled to trust Fausett\u2019s assurances. \u201cThe recipient in a business transaction of a fraudulent misrepresentation of fact is justified in relying on its truth, although he might have ascertained the falsity of the representation had he made an investigation. . . . The rule . . . applies not only where an investigation would involve an expenditure of effort and money out of proportion to the magnitude of the transaction but also where it could be made without any considerable trouble or expense.\u201d Best., Torts, \u00a7 540.\nNor are the appellees precluded from recovery merely because Bullard made some inquiries about the house. The court instructed the jury that the appellees could not recover if they relied upon information obtained from other sources and not upon Fausett\u2019s representations. This theory of the case was correct. \u201cIt is not enough to relieve the maker of a fraudulent representation from liability that the person-to whom it is made makes an investigation of its truth. It is necessary that the other shall rely upon his investigation and shall not rely upon the false statement.\u201d Best., Torts, \u00a7 547;\nVarious errors are assigned in the giving and refusal of instructions, but they all relate to the matters already discussed. The judgment is affirmed.", "type": "majority", "author": "George Rose Smith, J." } ], "attorneys": [ "Moore, Burrow, Chowning & Mitchell, for appellant.", "Oivens, Ehrmcm*& McHaney and John M. Lofton, Jr., for appellee." ], "corrections": "", "head_matter": "Fausett & Company, Inc., v. Bullard.\n4-9153\n229 S. W. 2d 490\nOpinion delivered April 24, 1950.\nRehearing denied May 29, 1950.\nMoore, Burrow, Chowning & Mitchell, for appellant.\nOivens, Ehrmcm*& McHaney and John M. Lofton, Jr., for appellee." }, "file_name": "0176-01", "first_page_order": 200, "last_page_order": 204 }