Carroll v. Hayward

Ames, J. The instructions first given at the trial were correct, and in exact conformity to the rules of law applicable to cases of this class. If the jury were satisfied that the sale from Cosgrove to Bergin was in fraud of the creditors of the former, and so intended by both buyer and seller, it was necessary, in order to maintain the defence in this action, to prove that the plaintiff, who derived his title from Bergin, had knowledge of and participated in the fraud. The jury were cautioned to carefully separate the evidence applicable to Cosgrove and Bergin from that applicable to the plaintiff, and to ascertain what facts the plaintiff had knowledge of when he took his mortgage, and what was his object in taking it. It is difficult to see any reason why the plaintiff should not have been satisfied with an instruction to this effect. Bridge v. Eggleston, 14 Mass. 245, 250. Foster v. Hall, 12 Pick. 89. Johnson v. Johnson, 3 Met. 63. Green v. Tanner, 8 Met. 411. Kimball v. Thompson, 4 Cush. 441. Adams v. Coulliard, 102 Mass. 167. 122 At the close of the charge, the plaintiff saw fit to request a special ruling hy the court, which, although expressed with more brevity, differed in no material respeót from the instructions that had been already given. The effect of this request was to induce the presiding judge to qualify the charge he had already given, and to give a different and erroneous rule for the guidance of the jury. He was requested to rule that it was incumbent on the defendant to prove, not only the alleged fraud on the part of Cosgrove and Bergin, but also that the plaintiff had knowledge of their fraudulent purpose. This instruction the court refused to give, but ruled that, if the plaintiff had “ reasonable cause to know ” that Cosgrove entertained such purpose, the action could not be maintained. From the circumstances under which this last instruction was given, and from the fact that the attention of the judge was called to the necessity of proving knowledge, on the plaintiff’s part, of the alleged fraud, it is impossible to avoid the conviction that the jury must have understood that something short of actual knowledge would be sufficient to maintain the defence. There can be no doubt that knowledge of any purpose or thing may be proved, like any other fact, by circumstantial evidence. The plaintiff’s opportunities and means of knowledge, his greater or less intimacy with the other parties, and his familiarity with their business and financial affairs, his intelligence and observation, would, in such an inquiry, be matters proper for the consideration of the jury. Reasonable cause to know is evidence having a tendency, and generally a strong tendency, to prove that the party in question did know, but it is a mistake to say that it is the same thing as knowledge. What might convince one man might be insufficient to satisfy the mind of another. Thus, in an action for deceit by false representations, the scienter must be proved, and it is not enough merely to prove that the party had reasonable cause to believe the representation untrue. Pearson v. Howe, 1 Allen, 207. Tryon v. Whitmarsh, 1 Met. 1. The distinction between reasonable cause to believe and actual belief is well pointed out in the judgment of this court, given by Bigelow, J., in Coburn v. Proctor, 15 Gray, 38. The same distinction must exist between means of knowledge and actual knowledge. It is impossible to say that this inaccuracy in the instruction may not have open 123 a ted to the prejudice of the plaintiff, inasmuch as it was accompanied with a refusal to rule that knowledge on the part of the plaintiff of the fraudulent character of the original sale was necessary to be proved in order to maintain the defence. To that extent, it was a retraction of the previous charge. The decision in Snow v. Paine, 114 Mass. 520, which is relied upon by the plaintiff, is only to the effect that a similar instruction was sufficiently favorable to the party alleging that a sale was fraudulent. Exceptions sustained.