Beckwith v. Ryan

Hamersley, J. The plaintiff obtained the notes sued upon with full knowledge of the fraud by which the defendant was induced to execute them, and so the second defense is as good against the plaintiff, as it would be against the payee of the notes in a suit brought by him. The fraud proved is this: The special agent of a life insurance company in soliciting the defendant (who is entirely ignorant of the system and principles of life insurance) to take out a policy in his company, undertakes to satisfy him that a ten-year endowment policy for $5,000 is a good business investment, by which the money paid for premiums will be safely kept and returned at the end of the ten years, with at least six per cent interest; that this result is accomplished by the reduction, after payment of the first premium, of the amount of the annual premium fixed by the policy, through dividends made by the company from its surplus earnings; and for that purpose he represents to the defendant as a fact, that holders of such policies in the past have had their premiums so reduced by such dividends, that the aggregate amount of cash paid by them for premiums, instead of being $4,786.50 (ten times the amount of the annual premium) did not exceed $3,000; whereas in fact the largest dividends before declared by the company had not reduced the premiums on any such policy so that the aggregate amount of cash paid in premiums was less than $4,143.97. In other words, the agent represents that the dividends previously declared by the company had been at the average rate of $178.65 a year, when in fact such dividends had never exceeded the average rate of $64.25 a year. This statement is well known to the agent to be false, is fraudulently made with intent to deceive the defendant, and induce him to take out the policy ; it is believed by the defendant and in reliance upon such representation he takes out the policy, and in payment of the first premium gives the agent the notes sued upon. [595] The defendant might have ascertained the falsity of the statement. He was put off his guard by the agent pretending to figure the result stated from tables furnished by the company for that purpose, a process which, as would seem from the record, the defendant was himself unable to perform. In Watson v. Atwood, 25 Conn., 313, 320, we held that it was no defense for a man when sued for making a false and fraudulent representation respecting the title of another, by which the purchaser became deceived and defrauded, that by searching the records the purchaser might have discovered the falsity of the representation; and W aits, C. J., speaking for the court says: “ The very object in making those representations, was to throw the purchaser off his guard, and induce him to act upon them without further enquiry. And the very foundation of the plaintiff’s claim is, that he believed those representations to be true, and was thereby induced to act as if they were so, and thus became defrauded.” It is of course essential in such case that the person claiming damages for the fraud should in fact have believed the false statement to be true, and in fact have relied upon the statement; and in determining those facts the ease with which the falsity of the statement may be ascertained may become important. In this case the court below has found the principal facts. The record does not show that at the trial any claim was made that, upon the detailed facts as found by the court, the falsity of the representations made was so apparent, or the failure to exercise common prudence and caution was so clear, that as a matter of law the defendant could not rely upon the false representation; no such question of law is raised by the appeal. Assuming, as we must upon the finding, that the representation was both false and fraudulent, and that the defendant believed it, and in reliance upon it and deceived by it, took out the policy of insurance and gave the notes sued upon in payment of the first premium, there can be no doubt of the right of the defendant to rescind the contract as he did, and to maintain an action of tort for the deceit, or to set up the fraud as full defense to a suit on the notes. [596] The claim of the plaintiff, that the false representations “ were matters of opinion and ordinary trade talk, and would not be a defense to the note,” cannot be sustained in respect to the false statement of a fact, as made in this case. Penn Mut. L. Ins. Co. v. Crane, 134 Mass., 56; Hedden v. Griffin, 136 id., 229. The plaintiff’s claim that the evidence of a single witness is insufficient in law to prove fraud, if denied by the person against whom fraud is charged, has no foundation. The quality of the testimony given, as well as the number of witnesses produced, must be considered in determining questions of credibility or preponderance of evidence. ' The. plaintiff’s claim that the attempt to disaffirm and repudiate the contract was too late, can hardly raise a question of law, when the finding shows that the defendant returned the policy for cancellation on the day when he first ascertained the falsity of the representations on which he had relied, and that he immediately thereafter notified the plaintiff. Counsel for the plaintiff urged in argument that the defendant did not act with sufficient promptness in ascertaining the falsity of the statement relied on. If in fact the defendant believed the statement, it would hardly be claimed that he was under an obligation to investigate the truths of a statement he believed and acted upon. The considerations urged were entitled to weight with the trial court in coming to its conclusion that the defendant did believe and did act upon the statement; but such conclusion cannot be held erroneous merely because the record shows there were some considerations entitled to weight which might support a different conclusion. It does not appear that the trial court did not give these considerations due weight. And indeed, so far as this claim made in argument raises a question of law, the record does nof; show that the question was distinctly raised at the trial. The fifth reason of appeal assigns as error, “ the refusal of the court to comply with the statute of 1893, An Act concerning Appeals in Civil and Criminal Cases,” and to find facts and correct errors of fact in the finding, as requested [597] by the plaintiff in his “ request for a change of finding of facts.” It appears that the plaintiff’s original request for a finding, was so framed that the court might properly treat it as a request for a finding under § 1182 of the General Statutes, and not as a request for the incorporation of facts in the finding under the Act of 1893; and that the plaintiff’s “ request for a change of finding of facts,” filed after the court had made its finding in pursuance of the original request, was not so framed and filed as to bring the appeal within the operation of the later Act. The claim is substantially disposed of by Schlegal v. Allerton, 65 Conn., 260. It would seem from the record, that the court below did in fact alter its finding, so as to include every fact found by the court which the plaintiff, in his request for a change of the finding, asked to be included for the purpose of properly presenting his questions •of law. The other errors assigned by the appeal present no questions of law. There is no error in the judgment of the Court of Common Pleas. In this opinion the other judges concurred.