An honest opinion as to the value of property is not a fraudulent misrepresentation, but a statement of opinion, if it is not the real opinion may, be a misrepresentation. A statement of the monetary value or worth of an article, although not expressly phrased as an opinion or estimate, may nevertheless be a representation of an opinion and not of a fact. This is especially true as to property without a definite or known value, or as to property which has only a speculative value. A statement of the value of property for which there is a generally accepted market price, such as bonds of the government, grain or cattle, may be a misrepresentation of a fact. A statement as to value of property may also be actionable as a fraudulent representation of fact under some circumstances, where there is a special reliance placed upon it and superior knowledge on the part of the maker. In such a case it may also be said that the statement of value when the value is known to be different from that stated is a fraudulent misrepresentation of an opinion as existing that does not exist. A statement of the monetary value of property with no definite market value such as a mine, an invention, old and used goods, or of lands, is generally made and understood as an expression of opinion only, and not as representation of a fact, and is not ordinarily an actionable misrepresentation.
The buyer entered into a contract with the seller for the purchase of land, whereby payments would be made over time, possession would be transferred immediately, and ownership would be transferred to the buyer after full payment. However, the buyer discovered that the seller did not own or possess the land. As such, the former filed an action for cancellation of the contract based on fraudulent inducement. The seller moved to dismiss the action, which the district court granted.
Does an incorrect opinion as to the value of a parcel by a seller constitute a fraudulent misrepresentation on his part?
The court held that the seller's brokers' incorrect opinion about the value of the land was not a misrepresentation where there was no evidence that the brokers had special knowledge of the land or a special relationship with the buyer. That the seller's misrepresentation of ownership was not material because it had contract rights to ownership of the land and was willing and able to cause the land to be conveyed to the buyer upon full payment. The court ruled that an honest opinion as to the monetary value of a certain property, is not fraudulent misrepresentation.