Preston v. Mann

Storrs, J. On the trial in the court below, the right of the plaintiff to recover against Savage, one of the defendants, was disputed on various grounds; chiefly, because the note in suit, although purporting to be executed in the name of the firm of B. E. Mann & Co., of which Savage had been a member, and bearing date during the continuance of the partnership, was in fact executed by another partner, after that relation had been dissolved, and was therefore antedated. It is insisted that such a defence, whatever incidents may be connected with it, which might make it unavailable against a holder who had received it in good faith before maturity, may be successfully set up against a party, who, like the plaintiff, bought the note after it became due. To meet this position of the defendant, the plaintiff offered, and was permitted to prove, that while the note, which was payable to the order of the makers, and by them endorsed and transferred to one Freeman, who before its maturity transferred it by endorsement to one Glazier, was in the hands of the latter, a transaction passed between Savage and Glazier, which, upon the principles of the doctrine of estoppel, would preclude the former from setting up against Glazier, the defence referred to; and that the plaintiff, as a purchaser for value from Glazier, succeeded fully to all his rights and equities. It is not denied that such would be the legal — 127 — operation of the purchase; but the defendant urges that the plaintiff can not under the allegations of his declaration, take advantage of the incidents of the intermediate title; having averred an endorsement by the payees directly to himself, omitting any reference to the former endorsees and virtually striking their names from the note. The defendant says further, that the conduct which is imputed to Savage, and is assumed to amount to an estoppel, and which might do so, if connected with a contemporaneous knowledge of the facts to which his conduct had reference, fails in the absence of such knowledge, to constitute any estoppel whatever. The difficulty which is suggested, relative to the declaration, would seem to be nicely technical, and should not be favored unless in conformity to established authorities. The point made is not supported by any American decisions, and we are referred only to a marginal note of an English exchequer case, (Steen v. Yglesias, 1 Gale, 98,) no report of which has been produced, in which appears a qualified and guarded suggestion, sometimes repeated in text-books in the same qualified manner, that the omission in a declaration of a statement of intermediate endorsements would seem to deprive the plaintiff of the benefit of the intermediate title. There are technical objections which make the suggestion at least questionable. The right of a plaintiff to omit to trace his title in his declaration through all the previous endorsees, and to allege an endorsement from any one of them to himself, must depend on the principle that the legal effect of a transfer through various prior endorsers is the same as a transfer to the plaintiff from the first endorser. A defendant would otherwise be permitted to contradict a declaration like the present by showing that the transfer was not made by the first endorser to the plaintiff, but to a third person from whom the plaintiff took his title. This is not so, and the plaintiff, it would seem, should be permitted, under such an allegation as he has made, to prove, in strict conformity with the substance of his declaration, that his title came through a chain of several former holders; and to avail himself of any of the incidents of the title of any of them. However this — 128 — may be, we have concluded that, inasmuch as the plaintiff had made out a prima facie case, and introduced evidence of an intermediate title, merely to meet a matter of defence set up by the other party, he was rightly permitted to do so, although he had not specifically declared upon such title. The question of estoppel involves graver considerations, and in sustaining the charge of the court below, w.e may approach to the verge of the law. The doctrine of estoppel in pais, notwithstanding the great number of cases which have turned upon it, and are reported in the books, can not be said even yet to rest upon any determinate legal test, which will reconcile the decisions, or will embrace all transactions, to which the great principles of equitable necessity, wherein it originated, demand that it should be applied. In fact, it is because it is so purely a doctrine of practical equity, that its technical application is so difficult, and its reduction to the form of abstract formulas is still unaccomplished. An able judge (.Baron Park,) has suggested that only such acts and conduct should be treated as an estoppel in pais, as would sustain an averment of false representation in an action on the case. This test, however, does not seem to have been adopted by leading jurists. In Connecticut, and in fact in the courts of this country, and of England generally, the proposition of Lord Denman, (Pichará v. Sears, 6 Adol. & El., 469,) seems to have met with approbation. “ Where one by his words or conduct wilfully causes another to believe in the existence of a certain state of things, and induces him to act on that belief so as to alter his own previous position, the former is concluded from averring against the latter a' different state of things, as existing at the same time.” The ,_word “ wilfully,” as used in this connection, is not to be taken i in the limited sense of the term maliciously, or of the term fraudulently; nor does it of necessity imply an active desire to produce a particular impression, or to induce a particular line of conduct. Whatever the motive rnay be, if one so acts or speaks, that the natural consequence of his words and conduct will be to influence another to change his condition, he is legally chargeable with an intent, a wilful design, to in — 129 — duce the other to believe him, and to act upon that belief, if such proves to be the actual result. It is enough that “ a reasonable man in the situation of that other would believe that it was meant that he should act upon it.” ( 1 Saund. PI. & Ev., 1088.) The precise question, by the claim of the defence, relates therefore, not to the intent, design, or wilfulness, with which Savage produced the impression on Glazier’s mind, that the note was a valid note of B. E. Mann & Co., for the intent sufficiently appears; but the real enquiry is, how far his ignorance of the facts, to which his representations had reference, will qualify and excuse bis conduct, and relieve him of the responsibilty which would ordinarily attach to 'it. For it is undeniably true, inasmuch as the doctrine of estoppel especially concerns conscience • and equity, that ignorance unaccompanied with culpability of any kind, ought to excuse conduct and language which would otherwise render the author justly responsible for the injury resulting to another who had placed confidence in them. For instance, it often happens that a mere omission of duty (such as the silence of the owner of property, while it is sold in his presence as the property of another,) will create an estoppel in favor of the party who has been misled by such an omission. If, however, the silence were the result of an ignorance of his title, no omission of duty could be charged upon the owner; he would be as innocent as the purchaser, and would not be es-topped from his right to assert his title against the latter. There are, however, other cases where the excuse of ignorance can not be permitted to avail, without defeating the very principle of justice upon which the doctrine of estoppel is founded. It would seem that where the alleged ignorance involves gross culpability, there should be a limit to the facility with which a party whose words or conduct have misled *another to the latter’s injury, should be permitted to qualify his responsibility by pleading his own fault. For instance, if one, who is apparently a party to a bill of exchange, on being enquired of concerning the signature pronounces it to be genuine, he can not afterwards set up against a pur — 130 — chaser whom he has misled, forgery of his own name, although he may have accredited the bill ignorantly. How far the breach of duty should extend to preclude the party guilty of it, from extenuating his false representations by his want of knowledge, it is unnecessary to enquire. Suitably restricted, the principle of which we have given an intimation, unquestionably exists, and indeed was hinted at in the opinion of this court in a recent case. (Whitaker v. Williams, 20 Conn. R., 104.) “ The doctrine,” say the court, “ that one should not be permitted to retract representations, by which he has induced another to adopt a particular course of conduct, supposes, and is to be understood with, the qualification (which is indeed part of the principle itself,) that the one, by whom such representations were made, had a knowledge of his rights. In laying down this qualification we speak of the principle generally, and would not be understood to say that there may not be cases where there is such culpability on the part of the person making such representations, or such particular circumstances or consequences attending them, that he would not be permitted to set up the want of such knowledge.” In one class of transactions, the excuse of ignorance must obviously yield to the operation of the very principle of estoppel inpais. We refer to cases, among which, on the hypothesis that the jury have found the facts as claimed by the plaintiff, the present may properly be classified; cases where the misrepresentations which mislead another, are made by a party, who is consciously ignorant of the matter to which they relate at the very time that he professes a full knowledge of it. This wilful and wrongful assumption of knowledge is the chief element in the imposition which he practices, and he should not afterwards be suffered to disclaim an acquaintance with facts which he has once unjustly and injuriously professed to know. He has voluntarily induced another to believe that he was not ignorant of a certain matter: after the other has been betrayed by this false representation, its author should not be permitted to retract it, any more than he should be permitted to deny any other conclusion which — 131 — he wilfully suffered the other to draw from his words and conduct. He is estopped from pleading a want of the knowledge which he has once designedly assumed to possess, and to another’s hurt. Let us apply this idea to the facts before us. Glazier seeks an interview with Savage on the subject of a note, to which Savage is nominally a party, with the view, which he discloses to Savage at the time, of purchasing the obligation. His enquiry does not in general terms relate to negotiable paper, signed in a certain manner, but he states to Savage all the particulars of the note in question, its date, its amount, the time of its maturity, the form of signature, and the names of the payees. To an enquiry thus intelligently put, Savage replies that it is a good note and will be paid at maturity; an answer from which Glazier might rightfully infer that Savage was acquainted with the particular note spoken of, and the circumstances attending it, and that he. knew it to be a valid note which ought to be paid. Savage was bound to know and did know that Glazier would understand him as.speaking intelligently of a contract with which he was familiar. Shall he be now allowed to say that he knew nothing of the particular note ? that he was totally ignorant of its existence, and the circumstances attending it at the time of his interview with Glazier 1 We can not recognize such a principle. The representations of Savage being made relative to a matter affecting his own pecuniary interest, must have carried with them to the mind of the person with whom he was dealing, all the sanctions of a new promise. In fact, in cases not distinguishable from the present, courts have sometimes chosen to regard declarations of the kind imputed to the defendant, in the light of new and obligatory promises. In a Pennsylvania case, (Carnes v. Field, 2 Yeates, 541,) this idea was applied to circumstances very similar to those now under review. A money bond had been given for certain lands under the belief that the title was good to the whole, while in fact it proved defective in respect to a very large proportion of the entire quantity. Before ascertaining this fact, the obligors were called upon by a person — 132 — who desired to purchase the obligation, and who was informed by them that it was signed by them, and would be paid. The court held, in an action brought by the party who had purchased the bond under these circumstances, that he could recover, notwithstanding the want of knowledge of the state of their title on the part of the obligors, on the ground that the representation of the latter was, under the circumstances, to be treated as a new promise. The reason given for the decision may be somewhat questioned, as the independent efficacy of such a promise is evidently not so great as to make it a substantive ground of legal liability, and its effect would seem to be rather that of a representation or ratification, conclusive upon the party who makes it in favor of the party induced by it to change his condition. It will be seen that the present case furnishes clearer indications than that just cited, of an improper assumption of knowledge by the party now seeking to avoid the effect of his representations on the ground that they were not intelligently made. We are not able to discover that our conclusion is inconsistent with any of the adjudged cases to which our attention has been called. The charge of the court below, on the point which we have considered, being conformable to the views we have expressed, was, in our opinion, correct. Our disposition of that question renders it unnecessary to consider the others which have been presented on the argument. A new trial is not advised. In this opinion, the other judges, Ellsworth and Hinman, concurred. New trial not to be granted.