Nelson v. Hyde

By the Court, Mullin, J. It was decided in Willson v. Foree (6 John. 110,) that where goods are obtained by a purchaser by means of fraudulent representations, the vendor may waive the tort, and bring assumpsit. In that case the vendee had paid for the goods by the note of a third person, whom he fraudulently represented to be solvent, when in truth he was insolvent. The court say, the taking of the note under a fraudulent misrepresentation was no payment, and any term of credit which the taking of the note may have implied became void. To the same effect is Pierce v. Drake, (15 John. 475.) There is no distinction, in principle, between a loan of money and a sale of goods. (French v. White, [62] 5 Duer, 254.) The rule in England seems to be different from ours. In Chitty on Contracts, § 408, it is said: “This fraud entitles the vendor to avoid the sale. If he sues in assumpsit, he affirms the express contract, and when there is an. express contract the law will not imply one.” While we think the English rule rests upon well settled legal principles and that our own does not, yet it is too well settled to be now disturbed ; and we must hold, that the fraud displaced the credit, and entitled the plaintiffs to recover on the implied promise to repay the sum loaned immediately. Where the issue between the parties to an action is, whether the property which is the subject matter in controversy was obtained by means of fraudulent representations, it is the province of the court to say whether the evidence offered is competent to establish the fraud; but it is for the jury to determine, under proper instructions from the court, whether they were material and were relied upon by the plaintiff. (Chitty on Cont. 684.) We must, upon the findings in this case, hold that the representations alleged and proved were material. It was not erroneous for the referee to receive in evidence representations made at the time of the negotiation for the loan, although not counted on. They were a part of the res gestee, and therefore competent, but not being alleged in the complaint they could not be the basis of a recovery. And it does not appear that the referee allowed them any weight whatever in deciding the case. In the evidence, as well as in the findings, the representations are stated somewhat more fully than they are alleged in the complaint, but they are substantially alike, and I do not perceive that the variance could in any way injuriously affect the defendant. As to the other questions discussed by the appellant’s counsel, my brethren are of the opinion that the admission of the evidence objected to did not injuriously affect [63] the rights of the appellant, and that judgment ought not for that reason to be reversed. [Onondaga General Term, January 2, 1867. The judgment must be affirmed. Bacon, Foster and Mullin, Justices.]