# Federal Land Bank Ass'n of Tyler v. Sloane

> Texas Supreme Court · April 8, 1992 · 825 S.W.2d 439

URL: https://www.frixlaw.com/law-library/cases/9765628

## Case

- **Full name:** FEDERAL LAND BANK ASSOCIATION OF TYLER, Petitioner, v. William C. SLOANE, Lettie Sloane, and Robert C. Sloane, Respondents
- **Court:** Texas Supreme Court
- **Decided:** April 8, 1992
- **Citations:** 825 S.W.2d 439; 1991 WL 254271
- **Precedential status:** Published
- **Opinion:** Concurring in part by Mauzy
- **Judges:** Gonzalez, Mauzy
- **Cited by:** 499 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9765628

## How later opinions describe it (automated extraction)

- finding evidence sufficient to support borrowers’ claim that bank has duty to use reasonable care whenever it provides information to its customers or potential customers which it breached when it allegedly encouraged borrowers to incur expenses in reliance on false informatio…
- holding that elements of neglegent misrepresentation include that person made representation “in the course of his business, or in a transaction in which he has a pecuniary interest” and that person “supplies ‘false information’ for the guidance of others in their business”
- holding that damages for negligent misrepresentation are limited solely to pecuniary loss and, thus, that plaintiffs could not recover mental anguish damages for such a claim

## Opinion text

MAUZY, Justice,
concurring and dissenting.
I agree that the statute of frauds does not shield the bank from liability for negligent misrepresentation. I disagree, however, with the court’s conclusion that damages for negligent misrepresentation can never include lost profits. I would hold that the Sloanes are entitled to recover damages sufficient to give them the benefit of their contract with Pilgrim’s Pride.
*444 In a number of jurisdictions, benefit-of-the-bargain damages are clearly available in actions for fraudulent misrepresentation. See, e.g., Freeman v. Bonnes Trucking, 337 N.W.2d 871, 879 (Iowa 1983). Under the circumstances of this case, I disagree with the suggestion that negligent misrepresentation is a lesser cause for concern than fraudulent misrepresentation.
The distinction between negligent misrepresentation and fraudulent misrepresentation is a thin one. Texas courts have recognized the negligent misrepresentation action as a form of “remedial fraud.” See Rosenthal v. Blum, 529 S.W.2d 102, 104 (Tex.Civ.App.—Waco 1975, writ ref’d n.r.e.), and cases cited therein. Where circumstances are such that the defendant is presumed to know the facts to which his misrepresentation relates, a misrepresentation is fraudulent even if it is not made knowingly, willfully, or with actual intent to deceive. See Dugan v. Jones, 615 P.2d 1239, 1250 (Utah 1980).
I see no reason to maintain an artificial distinction between remedial fraud actions and actions for fraudulent misrepresentation. Here, the bank was in complete control of the Sloanes’ loan application, and presumably knew the facts to which its misrepresentation related. Since the Sloanes altered their position in reliance on the bank’s representations, they are entitled to damages based on the benefit-of-the-bargain rule. See LeFlore v. Reflections of Tulsa, 708 P.2d 1068, 1076 (Okla.1985). Thus, I would affirm the trial court’s judgment on the jury verdict awarding the Sloanes damages for lost profits.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9765628. Public record. Not legal advice.