Bank of North America v. J. H. Sturdy & Co.

Ames, C. J. It is plain that a-gross fraud has been practiced upon the plaintiffs, by palming off upon them worthless paper for discount to a largo amount, manufactured by the defendants for this purpose, at the same place, and by the same hands that manufactured their jewelry. Two juries have passed upon the facts of the case, with the same result; once, upon the submission of evidence by the plaintiffs only ; and at the last trial,'' upon a full submission and discussion of evidence, on both sides. There was some conflict of testimony on the point whether the representations charged in the declaration to be false and fraudulent were made, and especially whether the arrangement for discounts, entered into between the plaintiffs and defendants, was confined exclusively to the trade or business paper of the latter ; but upon this the jury have passed, and we se,e no good reason, to disturb their verdict. That a moral fraud has been perpetrated by the defendants upon the plaintiffs in this matter, no one can deny; the 'principal perpetrator himself testifying that he did not inform the plaintiffs of the character of the paper that he offered for discount, knowing if he did, that they would not discount it; in other words, admitting that, at the time of offer, he knew that he was deceiving them. Indeed, the simulation of the business paper of the defendant’s firm by the variety of the amounts inserted, in dollars and cents, and by the false dating and places of payment, to correspond with their known places of sale, not only indicates fraud, but implies a consciousness of an arrangement with the plaintiffs by virtue of which they were to have business paper, and aids their proof that thus it was positively agreed. Admitting, then, that this positive arrangement, looking to the future, as found by the verdict, was made, and that both parties understood that the business jjaper only of the defendants was to be offered to the plaintiffs for discount, the question made upon the remaining ground for a new trial is, whether, when the def‘en~ dants fraudulently offered for discount, under this arrangement, *114 the worthless stuff ’which they got up to simulate their business paper, they did not, coupling the prospective arrangement with the offer, falsely and fraudulently represent to the plaintiffs, that the paper offered was their business paper, as alleged in this declaration? It seems to us that one must be more nice than wise, — more taken up with the show of things than with their substance, — who can entertain an, opinion to the contrary. It is evident, and the jury have found, that this paper was offered by the defendants and accepted by the plaintiffs for discount, as the business paper of the firm of J. H. Sturdy & Co.; and its real character, and the fraudulent contrivances of the defendants to make it appear to be the business paper of their firm, satisfy, with the consequential injury suffered by the plaintiffs, the-other requisites necessary to support an action for deceit. It is said that the paper, the subject of the supposed false representation, did not exist at the time that the representation was made; and for that reason, legally considered, this transaction was a mere breach of agreement. The easy answer is, that the arrangement was a prospective and continuing one; and that the successive offers under it, as the offers of this simulated paper clearly were, was a recognition and reassertion of the representation contained in it, made at the time of each offer. The very statement under oath of the offerer, that he gave no notice to the plaintiffs of the character of this paper, because he knew that if he did, they would not discount it, is complete evidence to this effect. Such conduct was, indeed, a breach of the agreement with the plaintiffs, but like many other breaches of agreement, it has another element in it, which renders it capable of sustaining an action for deceit, as a false and fraudulent representation. It is undoubtedly true, as suggested at the argument, that cases may be found to the point, that deceit will not lie for a false affirmation, when he who sustains damage from it might, by ordinary vigilance and attention, have ascertained that the statement upon which he acted was false. But these cases do not apply to affirmations of facts, as in this case, peculiarly, if not exclusively, within the knowledge of the defendants; and especially where fraudulent contrivances have been resorted to, to make the subject of the affirmation seem to be what it was rep *115 resented. Brown and others v. Castles, 11 Cush. 348, and cases cited. In such a case it comes with a peculiarly ill grace from the defendants, that reliance upon their truth and honor prevented minute and searching enquiry, and enabled,them to defraud. This motion must be overruled upon all the. grounds upon which it rests, and judgment be entered upon the verdict.