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Byers v. Federal Land Co.

United States Court of Appeals for the Eighth Circuit
3 F.2d 9 (1924)


Federal Land Co. (Federal) (defendant) entered into a contract to buy a tract of land in Wyoming from another company. Federal then entered into a contract with Byers (plaintiff), in which Byers agreed to purchase the tract of land from Federal. The contract contained no statements with regard to Federal’s possession of the land. Byers agreed to pay installments, and Federal agreed to convey the land to Byers when he had paid the balance. As part of the same transaction, Byers leased the land to Federal's president, J.R. Carpenter (defendant), for a five-year term. Byers began paying installments under the contract. The other company contacted Byers and informed him that it would send him a deed for the land once the balance was paid. Byers brought suit, seeking to cancel the contract and recover the installments he had already paid. Byers argued that Federal had fraudulently induced him to sign the contract by making fraudulent misrepresentations that (1) Federal actually owned the land, (2) Federal had actual possession of the land, and (3) the land was worth $35 per acre. At trial, the evidence established, among other things, that the value of the land was $15 per acre, that Byers lived in Nebraska and had not seen the land in person, and that he relied on the representations of real estate brokers about the value of the land. The brokers also represented that Federal was the owner of the land. There was no evidence that the brokers had any special knowledge of the land or had ever seen it, nor was there evidence that Byers had announced any special reliance on the brokers' assessment of the land's value. At the close of Byers's evidence, Federal moved to dismiss the action, and the trial court granted the motion on the ground that Federal had not made actionable misrepresentations. Byers appealed.

Rule of Law


Holding and Reasoning (Munger, J.)

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