Steinbach v. Bauclair

Bruce, Oh. J. (after stating the facts as above). The principal error alleged is based upon the action of the court in limiting the testi — 229 — mony to matters concerning fraudulent and deceitful representations, alleged to have been made during the sale, as to the general physical condition of the animal, but precluding the defendants from offering any evidence as to the lack of breeding capacity of the animal, as the same was covered by a specific warranty; and the conditions attached to such specific warranty were neither alleged nor proved to have been complied with. In this, however, we believe no error was committed. The specific warranty, and in fact the only warranty, was as follows: “It is agreed that if said stallion in proper health and condition and properly fed, nourished, and cared for and bred to not more than two mares daily during the next regular season of 1913, said season to begin April 15th and end July 15th, does not get 50 per cent of the mares of breeding age and in breeding condition, bred to him, in foal, and said stallion is delivered back to me at New Rockford, North Dakota, in as good health and condition and as sound as he now is not later than January 1, 1914, I will deliver to said purchaser in exchange for said stallion another stallion of equal value. Provided, however, that said buyer mail me by registered mail at New Rockford, North Dakota, not later than August 1, 1913, a full list of the mares bred to said stallion, with names of owners, description, age, and names of mares, with their dates of service and trial, it is agreed by said buyer that said stallion is accepted by him sound and healthy and in good breeding condition. Further, vendor sayeth not.” There is some testimony in the case which tends to show that the defendants tendered the horse back to the plaintiff sometime in August, 1913, but this merely on the ground that the animal was afflicted with sidebones. There is also evidence that the horse died in October, 1913. There is no evidence, however, that at that time any complaint was made of the lack of breeding qualities of the animal, and there is absolutely no contention or evidence that the list of the mares bred to said stallion, with the names of owners, description, age, and names of mares, with their dates of service and trial, was ever furnished or offered to be furnished to the plaintiff; at any rate, before the date of the trial or prior to August 1, 1913, as provided for in the warranty. There can be no question of the importance and materiality of the requirement of the list of the mares bred. It was incorporated into the contract so that an investigation could be made while the evidence — 230 — was yet fresh, and that opportunity might be afforded to investigate dishonest claims. “The purpose of such a stipulation is not to escape liability, but to facilitate prompt investigation. And, to this end, it is a precaution of obvious wisdom, and in no respect repugnant to public policy.” See opinion of Mr. Justice Holmes in Georgia, F. & A. R Co. Blish Mill. Co. 241 U. S. 190, 60 L. ed. 948, 36 Sup. Ct. Rep. 541. This being the case, it seems perfectly clear that, as far as the answer is concerned, the warranty .as to breeding capacity cannot be relied upon, and that the evidence objected to was properly excluded. There is certainly nothing in this agreement or warranty, or in this requirement of a list of the mares bred, that is in any way harsh, or unreasonable or violative of sound rules of public policy, and as far as the answer is concerned, therefore, the action of the court was unquestionably correct. But was the evidence admissible in so far as' the counterclaim is concerned? We think that it was not. We also are of the opinion that no error was committed in the instructions which were given. The counterclaim alleged that “at the time of the execution of said notes mentioned in the complaint, to wit, July 15, 1912, defendants purchased of the plaintiff a French draft stallion named “Tapen” for breeding purposes; . . . that at the time of the purchase of said stallion and the execution of said notes the plaintiff warranted and represented to the defendants that said stallion was in all respects sound and healthy, a good breeder, and in good breeding condition as warranted and represented. “That the defendants believed and relied upon said warranty and representations, and purchased said stallion for the sum of $1,200 and executed and delivered to the plaintiff said notes as aforesaid; that at the time of said warranty and representations and sale said stallion was not sound and healthy, was not a good breeder and in good breeding condition as warranted and represented by plaintiff, but was suffering from a disease of the throat known as acute laryngitis, was not a good breeder and in good breeding condition, all of which facts were well known to the plaintiff at the time he sold and warranted said stallion as aforesaid. “That said warranty and representations were false and were made — 231 — by the plaintiff with the intent to deceive the defendants and to induce them to purcbáse said stallion, and that defendants were deceived and defrauded by the falsity of said warranty and representations. “That the plaintiff sold said stallion to the defendants, knowing that defendants wanted him for breeding purposes, and knowing that defendants relied upon his warranty and representations as to the soundness and health of said stallion, and also as to the fitness of said stallion for breeding purposes, and knowing that said stallion was diseased and unfit for breeding purposes as aforesaid, and that he was unsound and not in good health, and knoiving that defendants would not have bought said, stallion or executed said notes had they known the condition of said stallion; yet the plaintiff fraudulently and deceitfully concealed the true condition of said stallion from defendants, and failed and neglected to inform the defendants of said diseased condition of said stallion and his unfitness for breeding purposes.” The question is whether, under such a counterclaim and in the absence of a fulfilment on the part of the defendants of the conditions in regard to the list of mares served, etc., it was competent for the defendants to show, as they offered to show, that 111 mares were bred between April 15 and July 15, 1913, and the result of such breeding; that the stallion was in good hands and properly cared for and served not to exceed two mares a day, and that of all the mares so served, not to exceed forty-four, were gotten in foal, including dead as well as living colts; and did the court err in instructing the jury that they did not have anything to do with the foal-getting qualities of the horse % We think that it did not err. The counterclaim is based not upon the warranty, but on frand and deceit. The bill of sale contained an agreement on behalf of the defendants that it was “agreed by said buyer that said stallion is accepted by him sound and healthy and in good breeding condition.” The question on the counterclaim was whether the agreement entered into by the defendant was brought about by deceit or fraudulent representations made to him with reference to such soundness and health and breeding capacity. The only question then is whether there was any evidence which tended to show fraud and deceit on behalf of the plaintiff at or before the time of the sale and in regard to the breeding capacities of the — 232 — animal. If there was, the evidence which is objected to is competent as tending to show the falsity of the representations. On this subject the defendant Bauclair testifies in effect: Well, I went out there to see what he had to offer, and he showed me what horses he had on the place, and he took me to see the horse, and we talked about the horse. He suited me pretty well, the size and everything’, and I asked him if the horse was sound and all right. He says, “This horse is sound and all right;” and he says, “I will show you his papers.” He showed me the papers of the horse and license, and then, too, we spoke several times in regard to the condition of the horse. I asked him if the horse was sound and all right, and he particularly said that he was sound and all right, and showed me his papers and license to show he was sound. I have never had any experience with horses of this kind before. I never owned a stallion before. Q. Now, Hr. Bauclair, what, if anything, was said by him to you about his breeding qualities? A. He said he was sure. Q. What, if anything, was said by him to you about what per cent he would get, if anything? A. It was, he figured, about 80 per cent. That was the talk between us. He said about 80 per cent. Q. What did he say about guaranteeing any per cent? A. He said 60 per cent, he would guarantee that. That is what he told me at the farm in the house. The next time I saw the horse is when I took it home; that was when we closed the deal, probably pretty near a month afterwards. At the time we had this conversation the horse was in view. I had been looking at the horse. Q. Hid you tell him for what purposes you wanted the horse ? A. Yes, sir. We talked of many things and a good many things were said. I told him what I wanted him for, and he said what he thought he would do, and so on. I couldn’t just give the conversation. When he told me that the animal was sound I believed his statement. I relied on that statement. I had never seen the horse before this occasion and knew nothing about him. When he told me he would get 60 per cent and he was a good foal getter, I believed his statement in that regard. I relied on it in making the deal. — 233 — Q. What' do you mean ? A. Why, I relied on 80 per cent. He told me he would guarantee 60 per cent. The veterinarian, E. H. Eitch, testifies that he examined the horse-in July, 1912, and that he found that it had sidebones and that the cartilage was ossified. He testified that a stallion afflicted with side-bones has a tendency to transmit the same to its offspring, and that a stallion is not supposed to be used for breeding purposes that has sidebones. An objection was then made and sustained to a question asking him if he owned any colts out of the horse Tapen. He then testified that a horse with sidebones would be apt to produce offspring that didn’t have them, but more frequently that did, and he didn’t think they should be used. He testified that he believed that the State [Registration Law provides for the giving of certificates in certain cases, and citing therein that the horse has sidebones, and they license him to go ahead and stand. Bauclair further testifies that before purchasing the horse he looked him over as to size, and examined some of his colts, — some seventy or eighty, — as many as he kept, and that he was relying partly on his own investigation in buying the stallion. He says that Steinbach told him in the house that the horse was sound. “He said that the horse-was sound and all right, and, T will show you the papers;’ ” and that he showed him the papers, and he looked them over a little and he looked over the horse then a little later on. “At the time he sold the horse he delivered to me the pedigree and license, — the whole bunch of papers; that Steinbach told me that the horse was a sure breeder, and that he believed I could figure on 80 per cent. He said I could figure on that, and then later he substituted that for the year’s work. The last year. I saw what the horse had done before that. He didn’t tell me about the past of that horse. He may have told me about the record of that horse or what he had done before, which I believe he told me, that he came into the possession of the horse in the spring of 1912, so that I knew he hadn’t used the animal for a year before. Q. And didn’t he tell you that the man he bought the horse from had told him that he could figure on 15 or 80 per cent of the colts? — 234 — A. I would not say positively whether he did or he didn’t. He might have. Q. Now, don’t you remember he told you those were what the man he bought bim from told him that he could figure on 80 per cent ? A. I don’t remember that. At the- time when I looked at the horse, before the notes were given, I looked at the front feet. I ran my hands over them; felt of them. I called Mr. Steinbach’s attention to something on the front legs. It was on this one here. I asked him what that was. He said it was nothing. Q. What did you say? A. I had his word for it that it was a bruise or something like that. I called his attention to that at that time. Neither he nor I said anything about sidebones. Q. And never knew anything about the horse having sidebones until you got this certificate you testified to, the next year? A. I found out then. I didn’t know my horse had them. I found it out about the 1st of May, when I got those papers back. Then I spoke to Mr. Steinbach about the matter, and told him the horse had sidebones. He told me he did not. I told him my paper shows that he has. He said if the horse was affected that way he would throw off $200. He said he didn’t want to take the horse back and that he would come down $200. Hntil I found the horse had what is called “sidebones” I was well pleased with it in every particular. I told Mr. Steinbach that several times. In none of my talks with Mr. Steinbach did he admit that the horse had sidebones when he sold him to me, and so far as I know, Mr. Steinbach himself didn’t know any more than I did that the horse was affected with sidebones at the time he sold him to me. I first noticed those lumps on the horse’s feet that are spoken of as sidebones when the papers came back. He wasn’t limping at the time that I got him, — not that I noticed. . He began to limp the same fall that I got him. I noticed him favoring his feet — limping. Q. Did you notice that in the summer when he was traveling ? A. I thought it was his shoes, and I had them changed. Q. Did he limp then? A. The next spring I didn’t notice it so much. When I bought the horse I could pick out any I wanted. — 235 — Louis Bauclair, the sou of the defendant, testifies that at the time he brought the horse home in July, 1912, he noticed growths on the feet. Dr. Babcock, a state veterinary inspector, testified that he examined the horse in 1910, and more than a year prior to the sale; that the disease of sidebones lessens the value of a horse as a breeding animal; that when he examined the horse there was nothing in particular in the front feet to indicate sidebones; that he again examined the horse in 1913; that he treated it in the spring of 1912 for acute laryngitis; that he made no examination for sidebones in 1912; that there were sidebones in the spring of 1913; that it would take about three months to develop sidebones. Q. I believe you examined him in 1910, didn’t you? A. Yes, sir. I examined his front feet at that time. Q. Well, Doctor, what did you observe about these front feet at that time? A. Nothing in particular in regard to the front feet. Q. I mean the general conformation of the legs or feet, — anything that would indicate a predisposition to the disease of sidebones that you observed? A. The conformation was faulty. The pasterns were too short and too straight. Q. I will ask you whether or not a horse with that faulty conformation is more subject to sidebones than a horse with'a proper conformation? (Objected to by counsel for defendant, and objection sustained.) Q. From your examination at that time of that horse, did it appear to you at that time that the horse, in all probability in your judgment, would develop sidebones; basing your answer upon the examination of the horse at that time? (Objected to by counsel for the defendant, and objection sustained.) Q. You say you examined the horse in 1910? A. Yes, but that wasn’t my first knowledge of the horse. Q. What sort of an impression or what kind of an impression did you form of this horse as a breeder at that time? A. Barring faulty conformation of the front feet, I considered him a very fair animal. — 236 — Q. And at that time I believe you stated there were no sideboneson the horse? A. Yes, sir, there were no sidebones in evidence. Q. And while there was that faulty conformation, it was possible-that no sidebones would ever occur on the horse at the age he was, wasn’t it? A. It would be possible with proper care that they never would develop. The testimony of the plaintiff, Steinbach, absolutely denies any knowledge of the existence of sidebones. He states that the defendant was given the choice of taking any horse that he wanted, and was not urged to take the one in question, and that he examined his legs before taking him. He also testifies that he based his representations; of the soundness of the animal on what Dr. Babcock told him and. on the papers he had received from the Agricultural College, and that he told the defendant of this fact. It would seem from all of this evidence that the only suggestion of fraud is the possible fact that at the time of the purchase there was a swelling of the foot of the animal which might develop into-a sidebone, and that the plaintiff stated that the swelling might have been occasioned by a bruise, and the later fact that sidebones developed. There is absolutely no proof that the plaintiff knew that the horse had sidebones beyond this fact, and there is positive proof that defendant himself examined the horse to a greater or lesser extent and himself examined the feet, and relied largely on his own' judgment. “Fraud is not to be presumed. It must be proved; and, while it may be established by circumstantial evidence, yet if the reasonable inference from all such evidence does not preponderate toward the conclusion of fraud, then such evidence will not sustain such finding. In other words, if, from the entire evidence on the subject, good faith or an honest mistake even may be as rationally and reasonably inferred as fraud, then the law leans to the side of innocence. While, to prove fraud direct evidence is not essential, and the inference of fraud may be drawn from facts and circumstances, such inference must not be the guesswork or conjecture of a jury, but the inference must be the rational and logical deduction from the facts, — 237 — and circumstances from which it is inferred.” Alter v. Bank of Stockham, 53 Neb. 223, 73 N. W. 667; New York L. Ins. Co. v. Davis, 96 Va. 737, 44 L.R.A. 305, 32 S. E. 475; Ely Walker Dry Goods Co. v. Smith, — Okla. —, 160 Pac. 898; Webb v. Darby, 94 Mo. 621, 7 S. W. 577. We are unable to find any evidence on which we can premise any suggestion of fraud, and which would justify us in overturning the verdict of the jury. Especially as the undisputed evidence shows that the plaintiff was in no manner anxious to sell the particular horse; that he stated to the defendant that he wanted to keep it for breeding purposes and to fill some breeding contracts; that he offered the defendant other horses; and that he was in fact urged into the sale by the ■defendant himself. The only defect in the breeding capacity, and this did not go to capacity, but merely to whether persons would desire the services of the horse and whether a sidebone might be transmitted to the offspring, was a possible tendency to a sidebone or the beginning of such a disease. The only claim made is that the plaintiff said that the horse was a good breeder, and it is absurd to contend that this statement was fraudulently made, or was in fact false, merely because of the possible defect in the foot. Such being the case, not only was there no exclusion of competent testimony, but such exclusion was not prejudicial. We agree with counsel for appellant that if the jury believed the testimony of the defendant to the effect that he called the plaintiff’s .attention to the. swelling on the foot of the horse at the time of the sale, and that the plaintiff told him that it was nothing, and , that the horse had probably been stepped on, that fraud might be found if they found that he stated something as a fact which he did not know to be true or was deliberately false. We believe, however, that this matter was properly submitted to the jury. It is true that the court told the jury that they didn’t have anything to do with the foal-getting qualities of the horse. This, however, was correct, as the only possible effect that the sidebones or tendency to sidebones would have had would have been in the possible transmission of the tendency to colts, and there is no evidence or attempt to prove that any of the colts had this tendency. The evidence sought to be introduced, in — 238 — deed, was that hut few colts were produced, and not that the colts that were produced were in any way defective. The court specifically charged the jury that “there is a matter, however, with which you are concerned, and that is this: 'It is agreed by said buyer that said stallion is accepted by him sound and healthy and, in good breeding condition.’ Now, if Mr. Bauclair made such an agreement as that, and I say to you that he did by reason of having accepted this bill of sale,.he is bound by that unless he was induced or gotten to enter into this contract through fraud and deceit of Mr. Steinbach. Now, a contract that one has entered into through fraud and deceit is not binding upon him. In order to make a contract, the minds of the men making it must meet upon the same propositions; and the law says that, if their consent is not free, then they are held not to have a contract, because their minds didn’t meet freely, fairly, and openly; and the law says further that, if a man is induced to enter into a contract by fraud or deceit, then his consent to the contract wasn’t free, and he is not bound by it. Now, it is for you to determine, under all the evidence in this case, whether or not Mr. Steinbach got Mr. Bauclair to enter into this contract, with reference to the buying of this horse, by deceit or fraudulent representations to him, with reference to the soundness and health conditions of this horse. Bemember you don’t have anything to do with the foal-getting qualities of this horse. Now, gentlemen of the jury, the first matter for yoti is this: What were the representations made by Mr. Steinbach to Mr. Bauclair with reference to the health and conditions of this horse, as to the soundness and the other matters spoken of ? What those representations were, you must get from the evidence-as given by the witnesses on the witness stand in this case. You have heard the evidence and testimony given by witnesses on both sides of this case as to what those talks were between those men and what those-representations were, and it is for you to determine what the real truth is, and exactly what representations were made by Mr. Steinbach to-Mr. Bauclair with reference to those matters. Did Mr. Steinbach make the representations to Mr. Bauclair which Mr. Bauclair claims he made to him ? And if he did make such representations to Mr. Bauclair as-Mr. Bauclair claims, were those representations fraudulent under our law? Now, our Code says: 'Actual fraud, within the meaning of this. — 239 — chapter, consists in any of the following acts committed by a party to the contract or with his connivance with the intent to deceive another party thereto, or to induce him to enter into the contract: “ ‘(1) The suggestion as a fact of that which is not true by one who> does not believe it to be true. “ ‘(2) The positive assertion in a manner not warranted by the information of the person making it of that which is not true, though he believes it to be true/ and that last proposition is the one involved in this case so far as any element of fraud may be concerned. I will read it again. ‘The positive assertion in a manner not warranted by the information of the person making it of that which is not true, though he believes it to be true.’ “Now, then, in the first place did Mr. Steinbach make any representations to Mr. Bauelair which were not true ? If you find he didn’t, why then, of course, you will be through with that. If you find he made representations to Mr. Bauelair which were not true, though he believed them to be true, the question in the case would then be, Would the information that Mr. Steinbach had about those matters warrant him fairly as an honest man in making those statements ? . . . “Bemember you haven’t anything to do in this case with the matter of warranties so far as the warranties are concerned, but you should only go back to talks leading up to this sale, — the talks between these men, — in order to determine whether or not Mr. Bauelair was led into the making of this contract through misrepresentations, through fraud and deceit by Mr. Steinbach as I have defined those matters to you.” It would appear to us that these instructions, and the instructions as a whole, clearly presented the only issue in the case to the jury. That sole issue was whether the plaintiff was guilty of fraud and deceit in regard to the question of sidebones; for, as we have before stated, the question of the warranty of the breeding capacity of the animal was out of the case. The judgment of the District Court should be and is affirmed.