American Soda Fountain Co. v. Spring Water Carbonating Co.

Loring, J. This is an action upon an account annexed, only three items of which were disputed, they being items based on a written order for one hundred special drought arms to be manufactured “as per drawing submitted.” At the trial it was admitted that one hundred special drought arms manufactured according to the “drawing submitted” had been delivered to the defendant, and that $272 of the purchase price had been paid by it on account. But the defendant contended that the contract was procured by fraud and that it had been avoided on that ground. It set this up in defense to the action for the unpaid balance of the purchase price and filed a declaration in set-off to recover back the $272 paid by it to the plaintiff on account. In support of its contention the defendant offered to prove: “ That during preliminary negotiations and at the time this order or contract was signed the plaintiff represented to the defendant that it would manufacture special drought arms to be used for the purpose of drawing root beer from wooden kegs, which would deliver automatically two streams of different volume and at different degrees of velocity and which would be durable and practical for the purpose for which they were designed, and submitted to the defendant a drawing or plan of a drought arm, claimed by the plaintiff to be durable and practical for the purpose aforesaid and represented that it would manufacture for the defendant special drought arms in accordance with said plan, which would accomplish the purposes aforesaid; that the defendant, relying upon said representations and believing them to be true, ordered the plaintiff to manufacture for it one hundred of said special drought arms, made according to said [490] drawing or plan.” The judge * ruled “ that the offer of proof, if maintained, did not constitute a defense to the action and did not entitle the defendant to recover on its declaration in set-off.” The case is here on an exception to that ruling. It is stated by the defendant in its bill of exceptions that it was induced to give the order sued on “ by certain false representations, not fraudulent in fact, but amounting in law to fraudulent representations ”; and its sole contention is that the representations of the plaintiff which it offered to prove were representations of fact made by the plaintiff as of its own knowledge and so of themselves fraudulent without proof of a scienter within the rule applied in Chatham Furnace Co. v. Moffatt, 147 Mass. 403, where the earlier cases are collected. For a latter case see Adams v. Collins, 196 Mass. 422. To make out a fraud of that kind the defendant had to prove that the plaintiff had in fact tested the special drought arms made according to the “ drawing submitted,” or represented that that had been done, and that the result of the test was that they would do what the defendant wished them to do. Or the defendant had to prove something equivalent to that. What he offered to prove manifestly was short of that if it had stood by itself. But it did not stand by itself in the case at bar. Witnesses called by the plaintiff had testified “ that the defendant desired to procure a faucet through which both still and live beer could be drawn; that the draughtsman of the plaintiff made a working drawing of a drought arm designed to draw both still and live beer, and submitted it to Mr. Flynn. It appeared that Flynn, the defendant’s manager, examined this sketch and signed and delivered to the plaintiff ” the order sued on, and there was no offer to contradict this. On this bill of exceptions it must be taken that the plaintiff caused its draughtsman to design the arm shown in the “ drawing submitted ” for the purpose of accomplishing what the defendant wished, and that the representations which the defendant offered to prove were not representations by the plaintiff as of its own knowledge as to what these special drought arms had done, but a representation of its opinion as to what they ought to do. Such misrepresentations “not fraudulent in fact” are not [491] ground for rescinding a contract. No cases in this Commonwealth have gone further than McCusker v. Geiger, 195 Mass. 46; Goodwin v. Massachusetts Loan & Trust Co. 152 Mass. 189. O. A. Warren, for the defendant. P. Ketchum, for the plaintiff. Exceptions overruled. Footnotes [*] Bell, J.