## Facts

- A husband and wife bought waterfront property intending to operate an anglers’ camp where boats needed adjacent deep water.
- The property was listed for sale with a real estate brokerage, and a local representative handled the showing and transaction in the area.
- Before purchase, the buyers told the representative that adequate water depth was essential.
- The representative made specific factual assertions about water depth at low and high tide and stated the property would be suitable for their purpose.
- The representative showed the property at high tide.
- The buyers did not take soundings or otherwise verify the depth, testifying they relied on the representative’s statements and had no reason to doubt them.
- After closing, the buyers discovered the adjacent water was too shallow for boats, making the property unsuitable for the intended use.
- The buyers sued the brokerage for deceit based on the representative’s allegedly false depth statements.

## Issues

1. Whether the trial court properly directed a verdict for the brokerage on the ground that the buyers could have discovered the true water depth by inspecting the property.
2. Whether the evidence, viewed most favorably to the buyers, was sufficient to submit to a jury the questions of misrepresentation, justified reliance, agency, scienter, and damages.

## Decision

- The Fourth Circuit reversed the directed verdict for the brokerage and remanded for a new trial.
- The court held the buyers’ evidence was sufficient to permit a jury to find actionable misrepresentation, reliance, and resulting harm.
- The possibility that the buyers might have discovered the truth by further inspection did not defeat the claim as a matter of law.
- The evidence permitted a jury finding that the local representative acted as the brokerage’s agent in making the sale.
- Questions of fraudulent intent and damages were for the jury on this record.

## Legal Principles

- On a motion for directed verdict, the evidence must be viewed in the light most favorable to the nonmoving party; if substantial evidence supports the claim, the case must go to the jury.
- In deceit based on factual representations, a plaintiff is not barred as a matter of law merely because investigation might have revealed the truth; whether reliance was justified ordinarily is a jury question.
- Specific, quantitative statements about a material condition of property can support a finding of misrepresentation and reliance, even where verification would require additional measurements or checks.
- A brokerage may be liable for misrepresentations of a person acting as its agent if the evidence supports agency and action within the scope of the agency relationship.
- Scienter and damages in fraud cases commonly may be proved by inference from circumstances and are typically jury questions when supported by evidence.

## Conclusion

The appellate court held that the buyers presented sufficient evidence for a jury to decide whether the brokerage, through its local agent, fraudulently misrepresented tidal water depth and caused damages, and that the buyers’ ability to discover the truth through inspection did not justify taking the case from the jury.


Bishop v. E.A. Strout Realty Agency, Inc., 182 F.2d 503 (4th Cir. 1950)