5'1

NO.  P  i: ht  F; 1'; ﬁll?

IN THE‘ COURT OF CIVIL APPEALS FOR THE

SECOND SUPREME JUDICIAL DISTRICT OF TEXAS   

IgﬁuiZLE I I r_lw_ M
JERRY D. CAMERON RN SUPREME CQURijON \iL'. .*"/#:Li"."liih
ﬂ? VFW W63 LILEg- H;
AND JO ANN CAMERON APPELLANTS
UL I 8 198©
W. J
' , I I C K
TERRELL & GARRETT, INC. GAmgow H JACKSON LEQ APPELLEE

DEPUT‘

mmmN B @6Q? {

Jerry D. Cameron and wife, Jo Ann, have appealed a judgment
notwithstanding the verdict rendered in favor of Terrell & Garret-t,
Inc. The Camerons' suit claimed a violation of the Texas Deceptive
Trade Practices— Consumer Protection Act, TEX. BUS. & COMM. CODE ANN.
sec. 17.41 e_t_ s_e_g. (Supp. 1980) (DTPA). The trial court's judgment
was on the basis that there was no evidence to support a jury finding
that a DTPA violation had occurred under the facts in this case.

We affirm.

The Camerons purchased a house in Arlington, Texas from a third
person not a party to this suit or appeal, who had listed the house
for sale through Terrell & Garrett. In listing the home for sale,
Terrell 8: Garrett had 23 summary of information regarding the house
published ill a Multiple Listing Service guide of the Arlington Board
of Realtors which stated that the house had "sq.ft. 2,400". There was
expert testimony offered that the abbreviation "sq.ft." in the MLS
Guide means square footage which was heated and air conditioned space.

When the Camerons were looking for a house and using the
services of their own real estate agent, they found the house in
question. Their real estate agent let them look at the MLS guide.

According to allegations of the Camerons, based on, among other

things, the figure in the listing stating that the house had "sq. ft.

2,400“, which they presumed to mean heated and air conditioned space,
they ultimately purchased the house. After they had moved in, they
had the house appraised. The appraisal showed that the house had only
2,245 square feet of heated and air conditioned space, and that, if
one included the garage space taken up by the walls in the house and
a porch, the house did have a total of 2,400 square feet of space.

At trial the jury responded to three special issues as follows.

"SPECIAL ISSUE NO. 2.

l'o

“Do you find from a preponderance of the evidence
that the Defendant's representation that the house in
question contained two thousand four hundred square
feet was false, misleading or deceptive act or prac—
tice?

". o n o
"ANSWER: 'We do' or 'We do not.‘
"ANSWER: 'We do'
“SPECIAL ISSUE NO. 3

"If you have answered Special Issue No. 2 above
'We do,‘ and only in such event, then answer this
special issue.

"Do you find from a preponderance of the evidence
that the Defendant's representation of the quantity of
square feet in the house in question was a producing

cause of actual damages sustained by the Plaintiffs?

"ANSWER: 'We do' or 'We do not.‘
"ANSWER: 'We do'
"SPECIAL ISSUE NO. 4.

"If you have answered Special Issue No. 3 above,
‘We do,‘ and only in such event, then answer this
special issue.

"What sum of money, if any, if paid now in cash,
do you find from a preponderance of the evidence would
fairly and reasonably compensate the Plaintiffs for
their actual damages, if any?

"ANSWER in dollars and cents, if any.
"ANSWER: $3,419.30".

After these findings were made, the Camerons moved for judgment on

the verdict and Terrell & Garrett filed a motion to disregard such

findings on the ground that there was no evidence to raise any of
these issues nor to support SUCh findings. The trial court sustained
the no evidence objections and rendered judgment notwithstanding
verdict.

From the record, we find that there is evidence to support each
finding We sustain points of error one, two and three. We also
sustain Terrell & Garrett's cross point of error complaining of the
application of the DTPA to them. For this reason, despite our holding
relative to the jury's findings, we conclude that this was not a
proper case for the imposition of liability on Terrell & Garrett. We
affirm the judgment of the trial court, although the rendition of our
judgment is for reasons other than those applied by the trial court.

In this case, Terrell & Garrett acted as the real estate agent
for the seller of the house which the Camerons purchased. As such,
the common law rules of agent and principal apply. Under the cause of
action brought by the Camerons, they seek t1) impose liability on
Terrell & Garrett for an alleged false, misleading or deceptive
representation of the number of square feet in the house, based on a
listing which Terrell & Garrett placed in E1 realtor's FHA; Guide,
which they contend is cognizable under the DTPA. The information
’which Terrell & Garrett used to formulate the content of the MLS
listing was based on data obtained from the seller of the house.

Although an agent is generally not liable for contracts made by
him for the benefit of his principal, 2 TEX. JUR. 2d Agency sec. 154
(1959), the agent can be held personally liable to a third person for
damages arising out of intentional deceit in procuring such contracts
under certain circumstances. 2 TEX. JUR. 2d Agency sec. 168 (1959).
In cases where liability attaches, the principal is liable both in
contract and in tort. The agent, however, is liable only in tort. The
nature of the agent's tort liability has historically been determined

based (M1 the characterization of the acts of the agent as either

malfeasance or misfeasance, on one hand, where liability was imposed;

and nonfeasance, on the other hand, where the agent escaped lia—

bility. Annot., 20 A.L.R. 97, 100 (1922). This analysis has proved

 

difficult to work with and unsatisfactory. Accordingly, commentators
have indicated that the primary consideration to be made in the
determination of the agent's liability is the issue of whether the

agent owed any duty to the injured third party. Annot., 20 A.L.R. 97,

 

100-101 (1922); 99 A.L.R. 408 (1935).

Thus, an agent will not be personally liable for damages for
deceit if he honestly believes that the representations made to him
to induce the third party purchaser to contract were true. Wimple 3.
Patterson, 117 S.W. 1034, 1035 (Tex. Civ. App. 1909, no writ). lt is
clear that an agent is entitled to rely in good faith. upon the
information supplied to him by a principal concerning sOmething which
the principal seeks to sell. If any misrepresentations about the item
to be sold are made by the seller to his agent, and the agent is
unaware of these misrepresentations, he is not liable to a. third
person injured by such misrepresentations. The agent becomes liable
to an injured third party only (1) if he is put on actual notice of
the misrepresentations; (2) if in the exercise of attempting to
verify the representations of the seller the agent determines that
the representations are false and continues to make such represen—
tations with knowledge of the falsity of them; or (3) if the agent
undertakes to verify the accuracy of the principal's representations
and because of negligence on his own part fails to 'uncover some
evidence of misrepresentation which he either would have discovered
had he .completed his investigation or which, under the same or
similar circumstances, a reasonable person acting as an agent would

discover. 23. Salsbury's Laboratories 2. Bell, 386 S.W.2d 341 (Tex.

 

Civ. App.——Dallas 1964, writ dism'd). This represents an analysis of
whether the agent owes any duty to an injured third party relative to
a sale, and whether by virtue of any misrepresentation, the agent
violates that duty.

None of the three conditions creating liability apply to Terrell

& Garrett. There is no evidence that Terrell & Garrett was put on

actual notice of any misrepresentation, nor is there any evidence
that it undertook t3) verify the accuracy of the seller's represen—
tation that the house did, in fact, have 2,400 square feet of heated
and air conditioned space. In addition, we hold that the fact that
the house had only 2,245 square feet of heated and air conditioned
space was not so large a difference from 2,400 square feet to reach
the proportions where Terrell & Garrett were put on inquiry notice
imposing on them e1 duty t6 investigate further. Terrell & Garrett
were under no duty to verify the information given to it by the
seller, and it was entitled to rely on such information, subject only
to the three conditions creating liability listed above. Based on
this reliance, since none of the three conditions creating liability
apply, Terrell & Garrett were not liable for any ndsrepresentation
with regard to the number of square feet in the house under the facts
of this case.

To hold otherwise would be to destroy what, if anything, remains
left of the doctrine of caveat emptor, which we apply here. The only
thing which would cause us to alter' our' holding 'would. be if the
common law doctrines of agency or caveat emptor have been altered,
repealed or replaced by statute. Texas has received the common law of
England, and that common law remains the law of the land 'unless
changed by the legislature. TEX. REV. CIV. STAT. ANN. art. 1 (1969).

In considering any potential changes, we must consider the
effect cﬁf the adoption of the DTPA on the common law as we have
applied it herein. The DTPA has changed many areas of the common law
with respect to torts, particularly in the areas of fraud, deceit and
misrepresenttion, but we do not feel that the DTPA has gone so far as
to alter the law of agency as applied in this case. The DTPA still
requires that where ea non—insuranCe related claim: is involved, an
injured party must be a "consumer", as that term is applied in the
DTPA. TEX. BUS. & COMM. CODE sec. 17.50(a) (Supp. 1980). Implicit in
the determination of whether one is a consumer is what privity, if
any, exists between the consumer and the defendant in the DTPA suit.

Although the requirement of privity has been held to be inapplicable

 

in many instances under the DTPA, we note that the areas where such a

requirement has been held not to exist are ones where the defendant

is a prior grantor in the chain of title, Mitchell 55. Webb, 591

 

S.W.2d 547 (Tex. Civ. App.——Fort Worth 1979, no writ) and Nobility

Homes of Texas, Inc., E. Shivers, 557 S.W.2d 77 (Tex. 1977), or where

 

 

the defendant is a principal, and not an agent, in a course of
dealings where had the dealings run their ultimate course, the
resulting situation would have created a contract where the parties
would be in privity. TEX. BUS. & COMM. CODE ANN. sec. 17.45(4) (Supp.
1980).

These privity considerations involve peeple who are either in
the chain of title or who had the potential to become part of the
chain of title. This differs from a party such as Terrell & Garrett,
who acted as an agent, and who did not have even the potential of
becoming a party in the chain of title to the house. For this reason,
we conclude that the DTPA did not alter the common law with respect
to agents, and we apply the law of caveat emptor to the relationship
between the Camerons and Terrell & Garrett. The Camerons saw the
house, had an opportunity to inspect it and compare it against the
figures in the MLS Guide and based On their inspection and compar—
ison, bought it. Therefore, they cannot now be heard to complain of
any misrepresentations made to them in the sale of the house. As the
old maxim says: "Let the buyer beware." This is a proper case for the
application of that doctrine.

In this opinion we do not pass on the propriety of any lawsuit
founded on liability between the Camerons and the seller of the
house, as the seller of the house is not a party to this suit. It
appears, hawever, that if the Camerons did have any cause of action,
either at common law or under the DTPA, it would have been against
the seller of the house. However, we leave the determination of that
issue to another place and time.

The judgment of the trial court is affirmed.

/
MAY15 1980 . A. GHES JR., JUSTICE.

, MM,  --._ . _ ..  “lime... __.
....u__a.-_...n.mv...w. __. ..- my“; 4.1-.- ﬁning—ax?“.:;;;:;:L;:.~.L.:z.._.._.b;._4_.;ﬁ.._~_-_..__

THE STATE OF TEXAS §
§
-COUNTY'OF TARRANT §

1, Yvonne Palmer, Qlerk of the Court of Civil
Appeals in and for the Second Supreme Judicial District of

Texas, certify that the foregoing is a full, true and correct

c0py of the Opinion delivered by said Court on theisth

day
of May m , l9 80, in ﬁhe above numbered and
entitled cause.

Givenrnnder“my hand and seal of tﬁe COurt of

Civil Appeals on this lﬁth day of July , 1980

m

/ .
/

YVONNE PALMER, CLERK

j W

 

 

No.  

 

 

JERRY D. CAMERON AND 7“
JG ANN 'CA‘ME‘RON‘
VS.

TERRELL & GARRETT, INC.

From Tarranl; County

 

 

CERTIFIED COPY OF OPINION
From the

Court of Civil Appeals

SECOND DISTRICT
AT FORT WORTH

