Smalley v. Morris

Opinion by Mr. Chief Justice Sterrett, This suit is on a note made by defendant to the order of plaintiffs for $1,833.33 at thirty months from the date thereof, October 30, 1889. It was conceded that this note, with others, was given in part payment for an interest in oil-bearing property then conveyed to defendant by plaintiff. The latter, therefore, upon giving the note in evidence, had a clear prima facie case which, in the absence of a valid defence, would have entitled him to a verdict for the full amount of his claim. Defendant contended, and introduced testimony tending to prove [355] that, in his negotiations for the purchase of the property, willfully false and fraudulent misrepresentations as to its productiveness, the amount of indebtedness or charges against it, the extent of surplus production over and above said indebtedness, etc., and other matters affecting its value, were made by Pickett, plaintiff’s agent for the sale thereof, whereby defendant was deceitfully and fraudulently induced to purchase the same at a greatly' excessive price, and give, in part payment thereof, the note in suit and others of like tenor. Without summarizing or specially referring to the testimony, tending to prove these and other facts relevant to the defence that was interposed, it is enough to say that it was quite sufficient to require submission of the case to the jury on the question of the alleged fraud practiced upon plaintiff and the extent to which he was damaged thereby. It is not even alleged that any incompetent or irrelevant testimony was admitted; nor is there any complaint as to the rejection of evidence, except the exclusion of mere statements furnished by the National Oil Company, Limited, referred to in the fourth specification. The court was so clearly right in rejecting these unauthenticated statements that discussion of the proposition is unnecessary. Without proper proof of their correctness they were clearly incompetent ; and no such proof was even proposed. Moreover the specification is not according to rule. As shown bj' the learned judge’s charge and answers to the points presented by counsel on both sides, the case was fairly submitted to the jury, with instructions which were not only warranted by the testimony, but also free from any error affecting the validity of the judgment. After answering the points and adequately instructing the jury as to the kind of proof necessary to establish the fact of Pickett’s agency in the sale of the property, as claimed by defendant, the character and effect of the representations necessary to sustain plaintiff’s claim for damages, etc., he concluded his charge thus: “ If you find all these things; that the representations were in fact both false and fraudulent; that Pickett was Smalley’s agent, or held out in that capacity, then Mr. Morris is entitled to damages. Those damages would be the difference between the value of such property, as it was represented to him, and its actual value as it was, in fact, at the time. But [356] In this case you could go no further than the amount of the note at all events. If you find the defendant is entitled to set off these damages, and that they amount to as much as the note, or more than the note, you will find generally for the defendant. If you find they are less than the note, deduct the amount and find a verdict for the plaintiff for the difference. If you find the defendant is not entitled to any damages, you will find for the plaintiff for the amount of the note in suit.” The verdict, as it was taken and recorded, is “ for the defendant,” generally. It is claimed, however, that it was erroneously entered. That question arises under the fifth and sixth specifications of error, and will be disposed of hereafter. The logical inference to be drawn from the verdict, as recorded, is that the facts, as claimed by the defendant, were found by the jury to be true, and that the damages sustained by him by reason of plaintiff’s false and fraudulent representations were fully as much as, or more than the amount of the note in suit. As already intimated, this conclusion was fully warranted by the testimony. Indeed, the proof as to the extent of defendant’s damages, would have justified the jury in finding an amount much larger than the note in suit, if, under the instructions of the court, they had been permitted to do so. But, as we have seen, they were expressly limited to a sum equal to the amount of plaintiff’s claim in this suit. It follows, therefore, that the judgment should be affirmed unless the court erred in one or more of the matters complained of in the five remaining specifications. The subjects of complaint in the first two of these specifications are the answers to plaintiff’s fifth and sixth points for charge recited therein respectively. After refusing to affirm these points, the learned judge, for further answer to both of them, said: “ The principles stated in these points are applicable where one party is seeking to enforce an executory contract, or to rescind it in equity, upon the ground of fraud. There is no question of rescission in this case. The contract was executed at or about the time it was entered into, and neither party ever offered to rescind, nor are they now in a situation to do so. But if defendant was damaged by the false representations made by the plaintiff or his agent, he may show such damages as a defence to the note in suit.” [357] In view of the facts, established by the verdict, this answer is self-vindicating. The fraudulently procured contract was forthwith executed by conveying to defendant the property, consisting mainly of an interest in mining leases, chattels real, and personal property, together with one fourth interest in a surplus of about $8,000 belonging to said leases, etc., and by paying to plaintiff $2,000 cash, same amount in the four Cable notes of $500 each, and securing residue of the consideration by defendant’s six negotiable promissory notes of $1,833.38 each, payable at intervals of six months, with interest, etc., amounting in the aggregate to $15,000. According to some of the witnesses the property conveyed was not then worth more than one fourth of the consideration paid and secured as aforesaid. As appears from the testimony, the Cable notes were transferred to Pickett for his part in the transaction. The first in order of maturity of the six notes for $1,833.33 each, was indorsed by plaintiff to the Citizens’ National Bank to which it was paid by defendant; and the next three were indorsed to Mr. Bright, to whom defendant paid two of" them. The fifth, being the note in suit, matured in the hands of the payee, and thus was presented the first opportunity defendant had of successfully defending against the payment of said notes. Those that became due previously matured in the hands of innocent holders. Moreover, the defendant, misled by the misrepresentations of plaintiff’s agent, failed to discover the fraud that had been practiced on him until about a year after the contract was executed. It was then too late to rescind. Plaintiff’s action, in the meantime, was such as to preclude the possibility of placing either party in statu quo. Defendant had no other available mode of redress than by an action of deceit, or by defence, in the nature thereof, to such of the notes as had not passed into the hands of innocent parties before maturity. That he had a right to make such defence as he did, we think is clear on principle as well as authority. The following are some of the cases in which the principle for which he contends is recognized: Tyson v. Passmore, 2 Pa. 122; Heastings v. McGee, 66 Pa. 384; Bower v. Fenn, 90 Pa. 359; Blygh v. Samson, 137 Pa. 368; Fisher v. Worrall, 5 W. & S. 478; Brown v. Beecher, 120 Pa. 590; Pennock v. Tilford, 17 Pa. 456; Stubbs v. King, 14 S. & R. 206. [358] There is no error in the learned judge’s answer to plaintiff’s seventh point, recited in the third specification. The fourth specification'has already been noticed and dismissed. For reason given in the learned judge’s opinion discharging the rule for new trial we think there is no merit in the fifth and sixth specifications. To sanction the introduction of affidavits made by some of the jurors after their verdict has been received and recorded by the court would be fraught with the most dangerous consequences. As the court correctly said, the sealed verdict which was brought into court by the jury “ admits of but one interpretation, and cannot be tortured into meaning what the affidavits allege was the finding of the jury.” The case was carefully and ably tried, and there appears to be nothing in the record to justify a reversal of the judgment. Judgment affirmed.