Culver v. Avery

By the Court, Sutherland, J. The finding of the jury disposes of the question of fraud. They have pronounced the defendant guilty of the false and fraudulent representations . alleged in the declaration, and that they were made with the fraudulent intent to deceive and injure the plaintiff. A verdict must be most clearly and manifestly against evidence to justify the court, in an action like this, in setting it aside. This is not a case of that description ; whatever may be the opinion of the court upon the strict weight of evidence, as it appears on the case, the jury, whose province it was to weigh and pass upon it, and who saw and heard the witnesses, have thought the preponderance against the defendant. I should have been inclined to a different conclusion; but the jury not only had the right, but were more competent, fairly and discreetly to decide the question than we are. Their decision cannot be disturbed. 3 J ohns. R. 180. 8 id. 369. 9 id. 36. 15 id. 493. The only question, then, is whether the action is sustainable. It appears to me to rest upon the soundest and best established principles. Fraud or deceit, with damage, gives a [385] good cause of action. In the celebrated case of Pasley v. Freeman, 3 T. R. 56, it was held that a false affirmation, made by the defendant with intent to defraud the plaintiff, whereby he sustains damage, was the ground of an action upon the case, in the nature of deceit; and that it was not necessary, in order to sustain the action, that the defendant should be benefitted by the deceit, or that he should collude with the person who was benefitted. The opinions of Lord Kenyon, of Buller, and Ashurst, justices, place this doctrine, in my judgment, upon unanswerable grounds, and they have been sustained by the most learned and eminent of their successors. 1 East, 318. 2 id. 92. 3 Bos. & Pull. 367. 5 id. 241. 1 Campb. 4, 277. Pasley v. Freeman was the case of a false representation in-relation to the responsibility and credit of a third person, by which the plaintiff was induced to sell to him a large amount of goods. This case was expressly recognized and followed by this court in Upton v. Vail, 6 Johns. R. 181, and Barney v. Dewey, 13 id. 224. Upton v. Vail, was also a false representation of the responsibility of a third person. Kent, Ch. J. expresses his entire approbation of the reasoning and decision of the judges in Pasley v. Freeman. He considers it not a new doctrine, but merely the application of a principle of natural justice long recognized in the law, that fraud or deceit, accompanied with damage, is a good cause of action. He considers it a principle of universal law, independently of all adjudged cases, and places his opinion upon that broad foundation. Ch. J. Spencer, in Barney v. Dewey, reiterates the doctrine. See also Wise v. Wilcox, 1 Day’s Cas. in Err. 22. These cases, it is true, were representations relating to the sale of personal chattels ; but it is not perceived how the nature or description of the subject of the false representation can affect the principle. In Monell & Weller v. Colden, 13 Johns. R. 395, it was applied to representations made upon the sale of real estate. The defendant in that case owned a lot of land in the village of Newburgh, bounded on the east by high water mark on the bank of the river. The plaintiffs were in treaty for the purchase of it, and the defendant, in order to induce them to purchase and give an enhanced price, falsely represented to them, that if they became the purchasers, they would, by virtue [386] thereof be entitled to make an application to the commissioners of the land office for the land under the water of the river, adjacent to the lot, agreeably to the laws of the state ; and the declaration averred that giving faith to such affirmation1, and not knowing to the contrary, the plaintiffs were induced to purchase and pay a large sum of money. The defendant demurred to the declaration', and it was' held by the whole court that the action was well brought. Ch. J. Thompson delivered the opinion of the court, and after recapitulating the facts, he observed that he could not see why they did not show a good cause of action. They show a most palpable fraud, practised on the plaintiffs in the sale of land, by which fraud they have been essentially and materially injured. The defendant knowingly and falsely misrepresented the fact with respect to the situation of the land under the water, and he is chargeable with all the damages resulting from such false representation. That a deed'has been given, cannot affect the plaintiff’s claim for the fraud; the false representation was not respecting any thing to be included in the deed, but with respect to a privilege appurtenant to the land. Can the circumstance of the false representation relating to the title of the land conveyed, instead of some collateral thing attached to it, vary the principle 1 If it does, it can only be upon the ground that the whole agreement of the parties is, in judgment of law, merged and incorporated in the deed or written contract. This is undoubtedly true, so far as the transaction rests in contract; but it has nothing to do with the false and fraudulent representations of the parties. Whatever is said or done in good faith, in a treaty for a sale and purchase, is merged in the purchase itself when consumated, and you •cannot overhaul it, whether the representations were true or false; but if they were known to he false when made, and have produced damage to the opposite party, the subsequent •consumation of the agreement cannot shield the defendant. The case of Early v. Garret & Lankester, 9 Barn. & Cresw. 928, sustains this distinction. The defendants, as assignees in bankruptcy of one Covard, sold to the plaintiff a piece of land belonging to the estate; the plaintiff before the contract was consumated, enquired of the defendants whether it was [387] subject to rent, or any rent had ever been paid on it, and they replied that no rent had ever been paid, either by the bankrupt or any person under whom he claimed. This turned out not to be true, and the plaintiff was finally ejected for the nonpayment of the rent. He then brought an action for money had and received, to recover back the consideration money, on the ground that the defendant’s representation was false and fraudulent, and rendered the purchase void. The judge who tried the cause charged the jury that the plaintiff was entitled to recover, if the defendants knew that rent had been paid and fraudulently suppressed the fact otherwise not. The jury found for the defendants. Upon a motion for a new trial, Bayley, J, said, if a seller fraudulently conceal that which he ought to communicate, it will render the contract null and void. I make no distinction between an active and a passive communication, but the authorities establish, that the concealment must be fraudulent. The jury have found here that th?re was no fraudulent concealment. Parke, J. said the decisions show that the purchaser cannot recover, unless he prove fraud on the part of the seller. Here the plaintiff paid his money for the land, to be taken with all faults. That being so, I think the learned judge properly stated to the jury that mere non-communication was not sufficient to avoid the contract, but that it must be fraudulent. The question in substance left to the jury was, whether the concealment was fraudulent; they have found that there was no fraudulent concealment. If the circumstances of that case had been such as to entitle the plaintiff to recover back the consideration money, an action for the deceit or fraud would undoubtedly have been maintained. In Schneider v. Heath, 3 Campb. 505, a ship had been sold by the defendant to the plaintiff, to he taken with all faults ; and it was held that notwithstanding that provision, if the defendant knew of secret defects in her, and used means to prevent the purchaser from discovering them, or made a fraudulent representation of her condition at the time of the sale, he would be responsible, and the contract would be avoided, and the consideration money could be recovered back. In Baglehite v. Walters, 3 Campb. 153, Lord Ellenborough held the same doctrine. Pickering & others v. Dowson and others, [388] 4 Taunt. 779, was an action upon the case, for a deceit in the ga]e 0p a ^¡p. anc[ (]le game rule was adopted as in the preceding cases: that if th evendormadeuseof any fraud or practices to conceal faults, he was responsible. These authorities , , . appear to me rally to sustain this action. The official character of the defendant in making the sale cannot protect him. The representations made by him had nothing to do with his official character. He then spoke as an individual, and the misrepresentation was in relation to a fact known by him, in his private capacity alone, and which had no connection with his office as commissioner of loans. It was not necessary to prove that a suit had been commenced by the plaintiff, to recover the possession of the premises; it was proved that the judgment on which the land was sold was older than the mortgage, and that it had been regularly sold and conveyed by the sheriff. The plaintiff of course acquired no title under the mortgage. The doctrine in relation to breach of warranty does not apply to a case of fraud. Motion for new trial denied.