Tyssowski v. F. H. Smith Co.

Mr. Justice Kobb delivered the opinion of the Court: The first assignment of error relates to the action of the trial court in excluding evidence tending to sustain the count in tort. We-think this point well taken. The case made by count two amounts to about this: The defendant, as the agent of the plaintiffs, represented to them that it had a purchaser who had bound himself to take their property at their price, and had deposited $5,000 forfeit money; the property was to be sold “as a good title;” taxes, interest, rents, and insurance were to be [407] adjusted to date of transfer. The defendant company then knew what it carefully suppressed from the plaintiffs, namely, that it had consented to a change in its contract with the proposed purchaser, whereby all ambiguity, if any theretofore existed in that contract, was removed, and the proposed purchaser by its terms was required to carry out his contract of purchase only in the event that title “free of leases” could be given. On the strength of the representations of the defendant, the plaintiffs signed an agreement which bound them to withdraw their property from the market for sixty days, and to sell it within that time upon the terms and conditions mentioned in said agreement of sale. Having examined the books of the plaintiffs, and knowing not only of the lease to the Pennsylvania Railroad, but also of other leases of offices in said building, the defendant, as the agent of the plaintiffs, had every reason to know that the plaintiffs, in agreeing to sell their property as of good title, and to adjust the rents to date of transfer, understood that it was to be sold subject to the leases thereon. There being ambiguity in the terms of said agreement of sale, extrinsic evidence was admissible as to its meaning, and its interpretation became a mixed question of law and fact. Janes v. Jenkins, 34 Md. 1, 6 Am. Rep. 300; Effinger v. Kenney, 115 U. S. 566, 29 L. ed. 495, 6 Sup. Ct. Rep. 179; Gill v. Ferrien, 71 N. H. 421, 52 Atl. 558. The question is, Did the plaintiffs’ agent, knowing all the conditions surrounding the making of this agreement by the plaintiffs, suppress a material fact which, had it been made known to the plaintiffs, would have prevented the plaintiffs from signing such an agreement, and which the defendant had every reason to believe would so result ? The gist of the action of deceit is the producing, with fraudulent intent, of a false impression upon the mind of the other party. It is unimportant, if this result is accomplished, whether the means employed are affirmative or negative, that is, whether they consist of words or acts, or amount to no more than a concealment or suppression of material facts peculiarly within the knowledge of the guilty party. Stewart v. Wyoming Cattle [408] Ranche Co. 128 U. S. 383, 32 L. ed. 439, 9 Sup. Ct. Rep. 101. Here one party, sustaining a fiduciary relation to the other party, has held out to him the existence of a certain state of facts material to the subject of the contract. Knowing that the action of the other will be induced by such statement, it is incumbent upon him, if a change has occurred which may affect the action of the other, to make full disclosure to such other party. By suppressing knowledge of such change, he becomes responsible for the misapprehension and damage ensuing. Loewer v. Harris, 6 C. C. A. 394, 14 U. S. App. 615, 57 Fed. 368. When, therefore, the officers of the defendant company induced the plaintiffs to enter into said agreement of sale, it was incumbent upon them to disclose to the plaintiffs, the material fact that, under said contract of purchase, title was to be given free of leases. Knowing of the existence of leases, and knowing of the provision in said contract of sale, that rents should be adjusted to date of transfer, it certainly cannot be said as matter of law that the officers of the defendant were not guilty of-fraudulent representation by the suppression of said provision in said Hutchins contract of purchase. They must have known that the suppression of such information would be likely to produce a false impression upon the minds of the plaintiffs, and induce them to enter into a contract which, had they known all the facts, they would not have entered into. It is apparent that the real object of the defendant was to induce the plaintiffs to enter into the contract of sale, and thus withdraw a valuable piece of property from the market for a term of sixty days, probably hoping, during that period, to induce Mr. Hutchins to accept the title subject to leases, or, failing in that, to procure another purchaser. At all events, as the result of this duplicity, it obtained for sixty days the exclusive right to sell plaintiffs’ property. Objection was made for the first time at the trial term that the second count does not contain a sufficient averment as to damages. It is therein averred that, “by reason of the mating of ' the contract aforesaid, so obtained by and through the false and fraudulent representations so made by [409] the defendant to the plaintiffs aforesaid, the plaintiffs were put to great cost and expense, and suffered great loss, to wit, $10,000, to the damage of the plaintiffs in the sum of $10,000.” This averment at least entitled the plaintiffs to recover nominal damages. Whether it is subject to the objection urged in the trial court, we do not stop to inquire, for the reason that the plaintiffs, in the circumstances, should have been permitted to amend, if they were so advised. It is difficult to perceive upon what theory the plaintiffs base their right of recovery under the first count of their declaration. As previously stated, in their particulars of demand they expressly limit their right of recovery under this count to the $5,000 which Mr. Hutchins deposited with the defendant company. Unfortunately, however, for the plaintiffs’ contention, this sum never was forfeited, for the manifest reason that, by the terms of said contract of purchase between the defendant company and Mr. Hutchins, the $5,000 was not to be forfeited unless title free of leases was tendered. In other words, even assuming that said contract of sale was subject to leases, the contract of purchase clearly was not. This is not an action against the defendant company for breach of contract, but, as above stated, the plaintiffs base their claim upon the contention that the sum of $5,000 came into the hands of the defendant company as a forfeit to plaintiffs, and was withheld by said defendant company. The judgment must be reversed, with costs, as to count two, and the cause remanded with leave to the plaintiffs to amend, if so advised, and with directions for further proceedings in accordance with this opinion. Reversed. Mr. Justice Anderson, of the supreme court of the District of Columbia, sat with the court in the hearing and determination of this appeal, in the absence of Mr. Chief Justice Shepard.