Hexter v. Bast

Opinion, Me. Justice Clark: This is an action on the case for deceit. Some of the counts in the declaration might perhaps be read as for an injury arising ex contractu; but, as the plaintiff stated at the trial that the injury complained of arose ex delicto, that the original as well as the amended declaration set forth a cause of action in deceit, and the defendants, conforming to that theory of the case, entered a plea of not guilty, we will consider the questions presented as they were presented at the trial in the court below. It would be unfair to the learned judge to do otherwise, for it would appear that it was upon this suggestion of counsel the amended declaration was filed, and the trial conducted as in deceit. The plaintiff' having thus indicated to the court his election to consider the counts as for deceit, the cause should be considered as if the pleadings were consistent and the- action wholly in that form. Some of the counts are for deceit, by means of fraudulent misrepresentations, and some upon a fraudulent breach of warranty, and all are based upon the certificate accompanying the transfer of the notes and mortgage, which it is claimed creates an express warranty of the facts therein contained. The plaintiff avers that by means of this warranty, which was false and fraudulent, the defendant in his lifetime sold, and the plaintiff was induced to buy, the securities in question. This involves the construction not only of the certificate, but of the various transfers and the release, which, it must be conceded, taken together constitute a single transaction. A warranty, although a collateral contract, must form part of the transaction involving the sale. If the vendor have the possession no special form of words is necessary to create it; an affirmation at the time of the sale is sufficient, provided it was so intended. It is enough, if the words used are not equivocal, and if it appears from the Avhole evidence that the affirm-ant intended to warrant, and did not express a mere matter of judgment or opinion: Warren v. Phila. Coal Co., 83 Pa. 437. At the time of this transaction Bast gave a certificate, in the most positive and unequivocal terms, that he had not received [71] any payment on any of tbe notes described in the mortgage, etc., excepting that which was realized at the sheriff’s sale, etc. This is the only warranty alleged; if there was any other, it was such only as was implied by law, and none such, under the special facts and circumstances of this case at least, would be open to the charge of fraud, but would be available only in some other form of action. The matters set forth in the certificate were certainly not the expression of a mere opinion, or of the defendant’s judgment, in reference to any matter of which he might or might not be correctly informed; it was the positive statement of a fact which was peculiarly and indeed exclusively within his knowledge, and the statement was one upon which Ilexter had a right to rely. That it was intended as a warranty cannot be questioned, and, whether it was or not, was a question of law to be determined by the court upon an examination and construction of the paper. But it must be confined to the particular matters specified therein ; it has no reference and contains no statements, as to the proper execution of the mortgage, nor is there any evidence that the defective acknowledgment of the mortgage was known to Bast. That he knew his certificate was false, however, is apparent, for, although when called as a witness on the trial of the scire facias, he denied having released James and wife, yet he confessed that- he purchased the mortgaged premises at the sheriff’s sale for the claim lie had against it, $12,500, and this is in accord with the plaintiffs claim in the present case. It is true the transfer of the mortgage, which was admittedly the only available security, was “ without recourse to the said Gideon Bast in any event whatever.” These words have no technical import, perhaps, in the transfer of noil-negotiable instruments ; they are important only as they may indicate the understanding of the parties, that the plaintiff should take the mortgage subject to every risk, as well the solvency of the parties, as the validity of the mortgage itself ; but there is no process of reasoning that could extend the effect of this clause to prevent his liability for the eotemporaneous, positive, though fraudulent, representation and warranty, that nothing had been paid upon it, except as stated. The general rule is, that to support an action of deceit, pro [72] perly so called, it must appear that the fraudulent representation complained of was untrue; that the defendant knew, or ought to have known, at the time it was made, that it was untrue ; that it was calculated to induce the plaintiff to act upon it, and that, believing it to be true, he was induced to act accordingly: Cox v. Highley, 100 Pa. 249. As a general rule, the statement must be both false and fraudulent; but, if a person take ‘ upon himself to state as true, that of which he is wholly ignorant, he will, if it be false, incur the same legal responsibility as if'he had made the statement with knowledge of its falsity: the fraud consists in representing that he knows that of which he in fact is consciously ignorant. So, too, if a person is thrown off his guard and deceived, by a false and fraudulent warranty, it is sufficient to prove the warranty broken, to establish the deceit: Addison on Torts, 1181; for one will be presumed to know of the existence or non-existence of a fact which he undertakes to warrant. The first and third assignments of error are to the refusal of the plaintiff’s offer to read the record of the action on the scire facias. The first embraced the offer of the entire record, including the testimony taken in the cause; and the third embraced only the findings of fact, the conclusions of law, and the judgment entered thereon. The action was in the name of Hexter, to whom the mortgage had been assigned, in the form and manner regulated by statute; Bast had no notice of the proceeding and had no control over it; he had no light to adduce testimony, or to cross-examine the witnesses, and could not have reviewed the judgment. But the judgment was, notwithstanding this, admissible to show that Hexter had exhausted his legal remedies, and had failed to recover ; and we think it was competent for the plaintiff to exhibit the issue formed by the pleadings, in order that it might appear upon Avhat ground the judgment went against him, and, if these Avere too general in form for that purpose, it Avas proper for him to resort to the findings of fact, the conclusions of Iuav, and the judgment entered thereon. These findings were perhaps hot receivable in evidence as proof of the facts stated therein, but they were without doubt evidence of the exact^nd particular ground of the defendants’ recovery. If that trial had been by jury, other methods of proof recognized in our practice would [73] necessarily liave been pursued, but tlie formal findings filed of record certainly furnished the best evidence of this fact of which the case was capable. The general principles upon which this proof was admissible are illustrated in the cases of Kauffelt v. Leber, 9 W. & S. 93; Follansbee v. Walker, 74 Pa. 306, and many others which might be cited. It is said that the findings of the court in the previous case were read in the hearing of the jury, in connection with the offer of the judgment, without objection; but, even if this were so, their legitimate and proper effect was wholly neutralized in the charge, as will appear by an extract from it as follows : “ The fact, the judgment of the court,” says the learned judge, “ that he could not recover in that action, is before you, because had he then recovered, he would have no ground of action now, and it is only because he then failed to recover in the proceedings on the mortgage against the property of Mrs. James, as a married woman, that he is authorized now to come into court and claim to recover in this action. There was evidence in that case — it is hardly necessary for me to discuss it, only it has been referred to before you by counsel, to an extent which I think was scarcely warranted — there was evidence in that case that is not in this case. Parties were sworn then that are not sworn now, and the reasons for the action of the court in that case, the reasons for these conclusions, are not matters for your consideration. The conclusion itself, namely, that Ilexter failed to recover is before you in evidence, and properly, as showing the right to institute this action.” The court was right, we think, in excluding the testimony of the witnesses, in admitting the judgment, and also the testimony of Bast; but we think the offer of the pleadings, of the findings of fact, and conclusions of law, were also admissible, for the particular and special purpose stated. We are of opinion, also, that it was proper to prove that there was a suit in equity between Hexter and Bast, although this does not appear to have been very important, for the purpose of showing the matter out of which came the release, and to show the consideration upon which the transfer of tlie securities and the warranty were based. We have not followed the assignments of error in their order, or discussed them singly, but, disregarding and eliminating [74] from tbe case all that is irrelevant to the issue in deceit, we have indicated with as much clearness as we can the principles upon which we think the case should be re-tried. The judgment is reversed, and a venire facias de novo awarded.