Phelps v. George's Creek & Cumberland Railroad

Ritchie, J., delivered the opinion of the Court. This is an action of deceit brought by the plaintiffs to recover damages because of alleged false and fraudulent — 549 — representations and estimates made by tbe chief engineer and president of defendant concerning the cost of constructing and equipping defendant's railroad, whereby the plaintiffs claim they were induced to contract with defendant to build and equip said road for a sum of money much less than tbe amount actually required, subjecting them in consequence to great loss. The vei-dict and judgment being lor defendant, the plaintiffs took this appeal. During the trial below the plaintiffs took a number of exceptions, eleven in all, to the rulings upon the testimony and the prayers; the first, sixth and eighth of which, however, they abandoned in this Court. Tlie second exception was taken to the rejection of plaintiffs' offer to prove by the witness, John W. Phelps, one of the plaintiffs, that Patterson, the chief engineer of defendant, who had made the estimates of the cost of the road, had told him at his house, in the fifth month after the work had commenced under the contract, when witness was complaining to him that the quantities would largely overrun the original estimates, that, “if he had shown to these gentlemen in New York, that the road was going to cost $100,000 or $800,000, they never would have gone on with the building of the road.'' The offer covered by the tenth exception was substantially identical with this, and in our view the same rule of evidence is applicable to them both. We think the declaration sought to ho introduced in both offers, apart from the objection of indeiiniteness in the expression, “these gentlemen in New York,” and the question of relevancy, was clearly inadmissible; because not made by Patterson in tlie course of the negotiations which culminated in tlie contract. It was only during that period Patterson could be regarded as acting as the agent of the defendant company in relation to tbe contract. The declarations of an agent are admissible only because treated — 550 — as the declarations of his principal, and the latter is bound bj'- them only while the former is acting within the scope of the duties for which he was employed. When these duties are ended, his representative character of necessity ceases. What the agent said or did when acting for his principal is part of the res gestee, and is to be proved afterwards as original evidence, and not by hearsay. 1 Greenleaf Evid. secs. 113, 114. “Declarations or admissions by an agent, of his own authority, and not accompanying the making of a contract or the doing of an act in behalf of his principal, nor made at the time he is engaged in the transaction to which they refer, are not binding on his principal, and are not admissible in evidence." Franklin Bank of Baltimore vs. P., D. & M. Steam Navigation Co., 11 Gill & Johnson, 34. The offer of proof giving rise to the third exception was to show that while the plaintiffs were waiting for the defendant to procure a part of the right of way, which they claim was represented by Loveridge, the president of the company, to have been already secured, the price of rails took a sudden rise in the market, so that plaintiffs were obliged to pay more for them, when they concluded to purchase, than they could have gotten them for had the work not been delayed. The contract, however, was not based upon the specific prices at which any of the articles to he furnished by plaintiffs could he bought; no stipulations or restrictions were embraced by it as to how or when they should he procured ; and no responsibility as to what they might cost was assumed by the defendant. It was exclusively within the judgment and option of the plaintiffs when to purchase; the risks of a rising or falling market were entirely with them, and the defendant had no concern with the fluctuations in value. Had the price of rails fallen, instead of the reverse, while plaintiffs were holding off from buying, the gain would not have enured to. the benefit of the company. In our opinion, the loss — 551 — sustained by plaintiffs from the casual rise in the price of steel rails, is, under the circumstances, a damage too uncertain, remote and contingent to constitute a ground of recovery in this action. The fourth exception was to the ruling of the Court in rejecting the testimony of the witnesses, Dickinson and Smith, taken under a commission, in so far as it related to conversations had by them, respectively, with Loveridge, in which the latter made representations similar to those made by him to plaintiffs concerning the capacity of the chief engineer, Patterson, and the correctness of his estimates. These conversations were held with the witnesses with reference to the making of independent bids for the contract by each of them on their own account. Dickinson and Smith had no connection whatever with the plaintiffs, and it does not appear that what Loveridge stated to them was intended to be, or was, communicated to the plaintiffs, or had any influence in inducing them to enter into the contract they made with defendant. The plaintifl's could recover only upon representations made to or affecting them, and not upon representations addressed to others in no wise identified with them with the purpose of inducing them and not the plaintiffs to hid for the contract. Eor these reasons we think the testimony was properly excluded. The fifth and ninth exceptions may he properly considered together. They relate to allowing the engineer, Patterson, to state that he had made up the estimates in good faith, and with no intention to defraud the plaintiffs, and to allowing Loveridge to state that whatever representations he had made to the plaintiffs were made in good faith and from the best information lie had. It is urged in support of these exceptions that these witnesses were incompetent to testify to the sincerity with which they did the acts and made the statements alleged to be fraudulent, upon the ground that the good faith of — 552 — these acts and representations was the subject-matter in issue, and that it was for the jury alone to draw the inference from the nature of these acts and representations and the circumstances surrounding them, whether they originated in good faith or not, without a declaration of their bona fides from the parties whose motives were impugned. The competency of parties, the bona fides of whose acts is the matter of inquiry, to testify as to the intent with which those acts were performed, is a point of some nicety, and the decisions are not uniform on the subject. It is manifest that where the law attaches to certain acts the conclusive presumption that they were done in bad faith, the party affected will not be permitted to contravene the legal imputation by his own assertions to the contrary. An illustration of this doctrine may be found in the case of' Echer vs. McAllister, 45 Md., 309, which the appellants have cited. That case, however, was not similar to this. There the question was the legal effect of certain acts in contemplation of the bankrupt law, whose provisions attach the legal presumption of bad faith to preferences given to creditors when the debtor is insolvent. But the law affixes, no presumption of fraud to representations such as were made by Patterson and Loveridge. So far as these representations in themselves are concerned, they were capable of being made either in good faith or bad faith. They might have been incorrect, and the plaintiffs might have been misled by them to their injury, and yet no right of action for deceit arise. Such a suit could be maintained only in case they had been made from a fraudulent design. Even, therefore, if not really true, the fact still to be ascertained was whether they were wilfully untrue. The ultimate and decisive fact therefore to be reached being the animus with which Patterson and Loveridge made their representations, we think they were competent to speak upon that subject. Their declarations, of course, would not be conclusive, but the fact to be ascertained being a. — 553 — disputable fact related to facts and circumstances on which the law has impressed no fixed inference, and that disputable tact being the actual intent with which Patterson and Loveridge had made their representations, we see no reason why they should not have been permitted to say what that actual intent was. We think the weight of authority to be, that, where the fact to be established is the intention with which an act has been done, to which act as matter oí' law no conclusive presumption attaches, as for instance the intention of a party-in determining his place of residence, the party whose intention is the subject of inquiry7 may7 testify to the nature of his intention as he might to any other material fact. As we have intimated, what credit is to be given the testimony of the witness on this point is for the jury to determine, looking to all the evidence in the cause. 1 Wharton on Evid., sec. 508, and authorities there cited. The seventh and remaining exception upon the testimony was to the admission of a letter to the plaintiffs from Loveridge dated March 2nd, 1880. We think this letter was properly admitted because in reply to a letter of February 18th previous from one of the plaintiffs, put in evidence by' them, setting forth the nature of their complaints at that time. It discloses the position of the company communicated by7 it to them, as taken in regard to their complaints as then made, and was proper to be considered by the jury also in connection with the fact that for some twelve months thereafter the plaintiffs continued to prosecute the work under their contract and the modifications from time to time made therein. Whether or not this letter was actually received by plaintiffs was a fact for the jury to find, notwithstanding the plaintiffs denied that they had gotten a reply. It was competent for the jury to infer it from the subsequent conduct and relations of the parties, as well as from the statement of the witness that it had been sent. — 554 — (Decided 6th July, 1883.) In regard to the exception to the ruling of the Court upon the prayers, we think it sufficient to say, that in our opinion the instructions given to the jury by the Count itself fully and correctly set forth the law as applicable to the nature of the action and the evidence in the cause, and that the granted prayers of the defendant were not at variance with the instructions of the Court thus given. As these instructions of the Court amply and even liberally stated the grounds upon which the plaintiff's might recover, no legal injury resulted to the plaintiffs from the rejection of their prayers, which were properly refused for the reason among others that they did not confine the right to recover to the misrepresentations complained of in the declaratiou, and did not refer to or negative other facts in the case which might qualify the propositions stated in them. The principles which govern an action such as the present, in which the right of recovery is based upon false representations, have been fully considered and announced by this Court in the cases of McAleer vs. Horsey, 35 Md., 439, Lamm vs. Port Deposit Homestead Association of Cecil County, 49 Md., 233, and Buschman & Cook vs. Codd, 52 Md., 202; and, in the light of these authorities, the plaintiffs certainly have no just cause to complain of the instructions given to the jury by the Court below. Entertaining these views upon the present appeal, the judgment of the Circuit Court will be affirmed. Judgment affirmed.