Leonard v. Peeples

By the Court. Lumpkin, J., delivering the opinion. Leonard sold to Peeples and two others, an occupant claim, which he held in the gold diggings of California, for $1,000. The purchaser paid, say $575 00 cash, and gave the note sued on for the balance. This action is brought to collect this note, and the defense set up is two-fold — fraud in the contract and failure of consideration. There was much testimony read on the trial, and amongst the rest, the Court allowed the defendant to prove that according to the law and custom of that country, that whenever a note was given for a gold mine and it proved unproductive, or did not turn out according to expectation, it was given up, and this is the first error complained of. California was a State when this transaction took place in the fall of 1853, and no evidence is adduced of any such law at that time, and no such custom was established as to author [64] ize the Court below to recognize and act upon it. No proof was offered that Leonard had notice of any such custom, or of the existence of any such custom which was public and uniform and peaceable, so as to infer that this contract was made in reference to it. If there be such a custom, it is so unreasonable, that it was probably enforced by the bowie knife. All the other exceptions grow out of the charges and refusals to charge on the part of the Court. As we shall send this case back, we forbear to express any opinion as to the preponderance of the proof. And before examining each specification in the motion for a new trial, I would remark, generally, that the Court seems to have labored under this misapprehension, that anything said at the time of the trade, whether it amounted to a positive representation or a mere expression of opinion, was a warranty for the breach, of which the plaintiff was responsible. Indeed, this is the very language of the first charge which is assigned as error. “ Because the Court charged the jury that whatever representations were made by the plaintiff, pending the negotiation and at .the time of the sale, to the defendant, were binding on the plaintiff, and amounted in law to a warranty that the mine sold, was of the character it was represented.” All the evidence on the part of plaintiff, was to the effect that if the mine proved as productive as it had been, the upper end of it would reimburse the purchasers, and the lower end would be net profit. Surely the opinion thus expressed, does not amount that these results would follow. Another error complained of is this: The Court charged the jury that if they should believe from the testimony, that the mine sold was of some value, and that it was equal in value to the amount that the plaintiff had received at the time of the purchase, and no more, that then the plaintiff was not entitled to recover the balance. This is putting the issue upon value, alone, irrespective of fraud or warranty. This cannot be the law of the case, or the rule of the plaintiff’s rights. We do not think the Court was bound to charge, as law, the first request made by counsel for plaintiff, namely, that, “if the defendant inquired of the witness Freeman,” (the treasurer of the company) “as to the value of the mine, [65] and the said witness showed him a book of their mining, which was true and correctly kept; that defendant was upon equal terms with the plaintiff.” It will be borne in mind, that the parties were fifty miles distant from the mine, when the sale was made. The plaintiff had been working it for some time The defendant had never seen it. Of course, then, a bare inspection of the book kept by the company, would not itself put the defendant upon an equality with the plaintiff. We cannot sustain the instruction which the Court gave the jury, that “ the testimony of Freeman, the witness, was admitted for the purpose of showing that the defendant in making the purchase, did not act solely upon the plaintiff’s representations, and that only for that purchase could they consider it.” Mr. Freeman was present at the trade, and his evidence is full, as to all that transpired at the time ; and his testimony, if credible, establishes that all the plaintiff said was by way of opinion only; and he substantiates the truthfulness of Leonard’s representations. His evidence, therefore, was material on many accounts. We do not think the plaintiff was entitled to the second charge which he asked, that “ the sale of gold mines was peculiar, and that representations concerning them are matters of opinion only, and do not amount to a warranty, that they are as represented. This, we apprehend, depends entirely upon the nature of the representations. They may be so positive as to amount to a warranty, and if so, they stand upon the same footing as representations concerning any other species of property. The second and last charge are very similar. The second is to this effect: That “ if the plaintiff represented the mine sold to be a good one, (he being a miner and having an opportunity of knowing,) and Peeples had not seen and examined it, and these representations were the inducement to purchase, then it is wholly immaterial whether the representations were fraudulently made, or by mistake. The plaintiff must suffer the consequences resulting therefrom.” And the last charge was, that “ if the plaintiff was a miner, and had a practical knowledge of the business, and had operated in the mine sold, he was bound by any false representation made by him to Peeples as to the value of the [66] mine, especially as Peeples had not seen nor examined the mine, and bought only upon the faith of such representations.” Much has been written upon the principle of law involved in these charges. This ought to be the doctrine of the Courts upon this subject: When one misrepresents a fact, knowing it to be false, or asserts a thing to be so, not knowing whether it be true or not, and it turns out to be false, he is, in both of these cases, guilty of a moral, as well as a legal fraud. But where one honestly believes the truth of what he affirms, he is clearly not guilty of moral turpitude, and I should be slow to convict him of a legal fraud, so as to subject him to a liability for the mistake, unless the representations were of a character to amount to a warranty. (See Thorn vs. Bigland, 8 Exch. Rep., 731; Wilde vs. Gibson, 1 H. L. Cases, 605, 603; Taylor vs. Ashton, 11 M. & W., 407, 415.) If the defendant’s witnesses in this case have sworn the truth, the mine did not pay expenses. And yet, after Johnson and Baker had been six weeks at work in the mine, they bought out Mr. Peeples’ interest at the price he paid Leonard, and continued to work the mine until they had dug out every foot of it. It will be for another jury, who will be more competent to the task than we are, to reconcile this and other portions of the testimony.