House v. Marshall

RylaND, Judge, delivered the opinion of the court. The points requiring the consideration of this court, arise from the refusal of the Circuit Court to give to the jury the instructions 'which the plaintiff asked. The action is founded on two promissory notes, for three hundred and fifty dollars each; one due and payable in two years, the other in four years after date, and dated 4th of October, 1845. The notes, upon their face, expressly purport to be for the balance of the [372] purchase money of a tract of land in the state of Missouri, bought of the plaintiff by the defendant. It appears that the defendant, at the time of the purchase of the land, was residing in the state of Indiana; that he had never been in Missouri, and that he relied upon the representations of value and condition of the land, improvements thereon, and situation thereof, made by the plaintiff to him at the time of purchase. The plaintiff was living in the state of Kentucky at the time of the sale of the land, and the sale was made in Kentucky. Shortly after the purchase of the land, the defendant moved out to Missouri and took possession of the land, made valuable improvements on it, and still remains in possession thereof, living on it. At the time of the purchase, he paid five hundred dollars, part of the consideration money, the price agreed upon being twelve hundred dollars : the two notes for the balance were given. At and during the treaty for the sale of this land, the defendant alleges, that the plaintiff made many false and fraudulent representations in regard to the soil, improvements, quantity of land under cultivation, springs, orchard, &c., and in his answer sets up the injury and damages sustained by him, by reason of the false and fraudulent representations, as a defence. 1. Upon this state of facts, then, the court below did not err in refusing the first instruction asked for, as above set forth, by the plaintiff. If the defendant, instead of asking to recoup the damages which he had sustained by the deceit and fraud practiced on him by the plaintiff, as he alleges, had sought to rescind the contract, then the principle set forth in the above instruction would have been properly invoked. But here the defendant does not wish to rescind the contract: he asks to be allowed to recoup the amount of injury and damages sustained by him, by reason of the deceit put on him by the plaintiff. The second and third instructions were asked, in order to carry out the first, and, in our opinion of the law, were properly refused. The fourth instruction involved the right of the defendant to set up the injury he had sustained, by the [373] false and fraudulent representations of the plaintiff, by way of recoupment of damages. In our opinion, there is no necessity to compel the defendant to resort to his cross action, when he can obtain all that the law allows him, by way of recoupment of the damages which he has sustained, by reason of the plaintiff’s fraud in the transaction which gives rise to the suit. In this case, the defendant having set up the improper acts of the plaintiff constituting the defence, there was no notice required to be given to the plaintiff before the defendant could prove his defence ; and the principles heretofore decided by this court, in the case of Wade v. Scott, 7 Mo. Rep. 509, fully sustain the Circuit Court in his action in refusing to give the fourth instruction. In 1 Story’s Eq., 201 and 202, it is stated that, “ where the party, intentionally or by design, misrepresents a material fact, or produces a false impression in order to mislead another, or to entrap or cheat him, or to obtain an undue advantage of him, in every such case, there is a positive fraud, in the truest sense of the term; there is an evil act, with an evil intent: dolum malum ad circumveniendum, and the misrepresentation may be as well by deeds or acts, as by words — by artifices to mislead, as well as by positive assertions.” In 1 Maddock’s Chancery, 208, it is said, ££if, indeed, a man upon a treaty for any contract, make a false representation, whether knowingly or not, by means of which he puts the party bargaining under a mistake upon the terms of the bargain, it is a fraud, and relievable at equity.” ££ No doubt, by a representation, a party may bind himself just as much as by an express covenant. If, knowingly, he represents what is not true, no doubt he is bound. If, without knowing that it is not true, he takes upon himself to make a representation to another, upon the faith of which that other acts, no doubt he is bound, though his mistake was perfectly innocent.” Ainslie v. Medlicot, 9 Ves. 21. The misrepresentation must be of something material, constituting an inducement or motive to act, or omission of the other, and by which he is actually mis [374] led to his injury. “It is an ancient and well established principle that, whenever suppressio veri or suggestio falsi occur, and more especially both together, they afford a sufficient ground to set aside any release or conveyance.” Applying these general principles to the case before us, and we cannot, under our present practice, see what is to prevent the defendant from setting up the false and fraudulent representations, (as he' alleges,) in order to lessen the amount which the plaintiff claims of him. It is clear, that the defendant, relying upon the representations made to him by the plaintiff, purchased the land ; the plaintiff had moved from Missouri to Kentucky, leaving the land; he knew its value, its improvements, its condition in regard to water, contiguity to vacant prairie land, &c. Now, the falsity of these representations was an injury to the defendant, and he had a right to recoup the damages sustained by him from these misrepresentations, and have a deduction from the plaintiff’s demand to the extent of those damages. The fifth instruction should have been given, or the principle of law contained in it should have been laid before the jury to direct them in their verdict. If the amount of the injury sustained by the defendant, by reason of the false representations of the plaintiff, was less than the plaintiff’s demand upon the notes, then the plaintiff should recover for the difference ; if equal, or more than plaintiff’s demand, then the jury should find for the defendant. There is error, then, in the court below, in refusing to give the fifth instruction, as prayed for by the plaintiff; and for this error, its judgment must be reversed and the cause remanded. The other judges concurring, the same is done accordingly.