Overby v. Beach - 220 La. 77, 55 So. 2d 873 (1951)

Rule:

Under La. Civ. Code Ann. art. 1847(3), a false assertion as to the value of that which is the object of a contract, is not such an artifice as will invalidate the agreement in cases where the object is such that he who claims to have been induced to contract might have with ordinary attention detected the falsehood.

Facts:

Appellant buyer filed suit seeking rescission of the sale of an apartment building. The buyer alleged that the seller claimed a higher rental income than that which was allowable under the Office of Price Administration. The seller filed an exception of no right or cause of action. The seller alleged any fraudulent statements merely respected the value of the rentals and not the value of the property, and the actual rent could have easily been discerned. The trial court dismissed appellant buyer’s suit. On appeal, the buyer contended that trial court erred by sustaining appellee seller's exceptions of no cause or right of action because the alleged rental was the stated value, but the actual rental could have been discovered under the ceiling of rent charges.

Issue:

Did the trial court err in sustaining appellee seller’s exception of no cause or right of action?

Answer:

Yes.

Conclusion:

The court examined the inducement of the buyer to make the purchase and held that because the representation was part of the inducement, the exception of no right or cause of action required that the buyer's assertions be considered as true. The court therefore held that under art. 1847(3), the buyer had disclosed a case of nullity for fraud. Accordingly, the court reversed the judgment of the trial court.