McIntyre v. Dawes

MR. CHIEF JUSTICE CALLAWAY delivered the opinion of the court. In the language of counsel for plaintiffs this is an action for damages sustained by plaintiffs by reason of their reliance upon a promise made by defendant without any intention of performing it at the time that he made it, whereby defendant willfully deceived plaintiffs with the intent to induce them to alter their position to their injury, which they, by reason of believing defendant’s promise, did do to their damage. The action, if maintainable at all, rests upon these statutory provisions: “Every person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his rights.” (Sec. 7573, Rev. Codes 1921.) “One who willfully deceives another, with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.” (See. 7574, Id.) “A deceit, within the meaning of the last section, is either: * * * (4) A promise, made without any intention of performing it.” (Seci 7575, Id.) Proceeding upon the postulate that the quoted provisions are merely declaratory of common-law rules, to which respective counsel agree, it is contended in behalf of defendant that upon the facts stated plaintiffs have not any right of action. Defendant’s counsel says: “Do these statutes make one liable for damages for deceiving another, in the absence of any duty to speak, and in the absence of any relationship, contractual or otherwise? This question overlooks two important points: The first, that one may commit a breach of duty in deceiving another by speech; the second, that if a person “without contract” — irrespective of the existence of a contractual relation between him and another — -injures the person or property of the other, or infringes upon his rights, he does the other a wrong. For every wrong there is a remedy. (Sec. 8752, Rev. Codes 1921.) [374] It is also urged by counsel for defendant that “misrepresentation as to what will be done in the future, or statements' of intention, do not constitute fraud.” It is true, generally speaking, that in order for false representations to be the basis of fraud, they must be relative to facts theretofore or presently existing and not to those based upon promises as to future acts. But this rule does not apply to a promise accompanied with an intention not to perform it, made for the purpose of deceiving the promisee and inducing him to act where otherwise he would not. (Blackburn v. Morrison, 29 Okl. 510, Ann. Cas. 1913A, 523, 118 Pac. 402; Goodwin v. Horne, 60 N. H. 485; 1 Bigelow on Fraud, 485.) Speaking of actionable fraud Lord Bowen in Edington v. Fitzmaurice, 29 L. R. Ch. Div. 459, observed: “There must be a misrepresentation of an existing fact: but the state of a man’s mind is as much a fact as the state of his digestion. It is true that it is difficult to prove what the state of a man’s mind at a particular time is, but if it can be ascertained, it is as much a fact as anything else. A misrepresentation as to the state of a man’s mind is, therefore, a misstatement of a fact.” (Hill v. Gettys, 135 N. C. 373, 47 S. E. 449.) A promise to do an act in the future which is the medium of a deception and which the promisor has no present intention of performing will support an action of deceit. (Sallies v. Johnson, 85 Conn. 77, Ann. Cas. 1913A, 386, 81 Atl. 974; Olson v. Smith, 116 Minn. 430, 134 N; W. 117; Rogers v. Virginia-Carolina Chemical Co., 149 Fed. 1, 78 C. C. A. 615.) In Kelly v. Ellis, 39 Mont. 597, 104 Pac. 873, this court said: “If the complaint had charged that the defendants entered into the written contract of April 17 without any intention of performing their part of it, or without any intention on their part of performing any one or more of the provisions therein made by them relating to a material matter, then, in either of those events, the plaintiff would show himself entitled to damages for the deceit.” (And see Buhler v. Loftus, 53 Mont. 546, 165 Pac. 601.) [375] The mere making of a promise which the promisor fails or refuses to perform does not ordinarily constitute actionable fraud (12 Cal. Jur. 734), but where by reason of the promise one has been induced to change his condition and relations so that it is impossible to place him in statu quo, a failure to fulfill the promise works a fraud which may entitle him to relief (Id., 735.) Of course, the breach of an honest promise relating to something to be done in the future cannot be ground for an action for fraudulent deceit; but there is a wide distinction between the nonperformance of an honest promise and one made in bad faith and without any intention at the time of making it to perform it. (McLean v. Southwestern Assur. Co., 61 Okl. 79, 159 Pac. 660.) Under the rule announced in Sweetland v. Barrett, 4 Mont. 217, 1 Pac. 745, Mayger v. Cruse, 5 Mont. 485, 6 Pac. 333, Hefferlin v. Karlman, 29 Mont. 139, 74 Pac. 201, and Blankenship v. Decker, 34 Mont. 292, 85 Pac. 1035, in the absence of a showing to the contrary, a contract required to be in writing will be presumed to be. However, in the instant case it is not only inferable from the complaint that the contract was an oral one but the case has been argued and submitted upon that theory in this court. So it is urged that defendant’s promise to renew the lease for a period of three years was invalid under the statute of frauds, which provides that an agreement for the leasing of real property for a longer period than one year is invalid unless the same or some note or memorandum thereof be in writing' and subscribed by the party to be charged. (Sec. 7519, subd. 5, Rev. Codes 1921.) Such being the case the contract, unless removed from the operation of the statute by an exception, was not only invalid and unenforceable but evidence of its contents may not be received. (Sec. 10613, Rev. Codes 1921; Dreidlein v. Manger, 69 Mont. 155, 220 Pac. 1107.) The general rule is that if one in order to prove his cause of action is driven to rely upon proving a contract barred by [376] •the provisions of the statute of frauds, lie cannot maintain bis action. Upon tbe facts pleaded may plaintiffs prove their case notwithstanding the statute? The answer must be in tbe ■affirmative, for by tbe allegations of tbe complaint there was performance by plaintiffs of an essential part of tbe agreement. Tbe pleading is that tbe defendant promised plaintiffs that if they would surrender tbeir option and remain on tbe premises of tbe defendant he would execute a new lease to them. They did surrender tbeir option because of bis promise and remained in bis building until be caused them to remove therefrom. Part performance which will avoid the statute may consist of an act done in performance of tbe contract which puts tbe party performing it in such a situation that tbe nonenforcement of tbe agreement would be a fraud upon him. (Armstrong v. Kattenhorn, 11 Ohio, 265; Eastburn v. Wheeler, 23 Ind. 305.) Tbe underlying principle for this ■rule is stated by Lord Redesdale in Bond v. Hopkins, 1 S. & L. (Irish Ch. Rep.) 433, as follows: “Tbe statute of frauds says that no action or suit shall be maintained on an agreement relating to lands which is not in writing, signed by tbe party to be charged therewith; and yet tbe court is in tbe daily habit of relieving where tbe party seeking tbe relief has been put ■into a situation which makes it against conscience in the other party to insist on a want of writing so signed, as a bar to his relief.” (Wood v. Rabe, 96 N. Y. 414, 48 Am. Rep. 640.) ‘The application of tbe principle would seem to be clear in a case where one in reliance upon an oral contract induced by the fraud of another has performed tbe contract on bis parf and thereby has changed bis situation to bis injury. (See, generally, Halligan v. Frey, 161 Iowa, 185, 49 L. R. A. (n. s.) 112, 141 N. W. 944; McKinley v. Hessen, 135 App. Div. 832. 120 N. Y. Supp. 257; Sears v. Redick, 211 Fed. 856, 128 C. C. A. 234; Wetmore v. White, 2 Caines Cas. (N. Y.) 87; Byan v. Dox, 34 N. Y. 307, 90 Am. Dec. 696; Martin v. Martin, 170 Ill. 639, 62 Am. St. Rep. 411, 48 N. E. 924; Stone [377] Mountain Granite Corp. v. Patriole, 19 Ga. App. 269, 91 S. E. 286; McLeod v. Hendry, 126 Ga, 167, 54 S. E. 949; Atchison T. & S. F. Ry. Co. v. Hurley, 153 Fed. 503, 82 C. C. A. 453.) In Jennings & Son v. Miller, 48 Or. 201, 85 Pac, 517, a case in some respects very similar to this, it was a part of the alleged contract of leasing that the plaintiff should surrender its option. The court said: “An act of part performance to take a case out of the statute of frauds must be done in pursuance of, or in execution of, the contract alleged, or must obviously be related to or connected therewith, and must be referable solely to such contract.” The facts pleaded here come fully within the quoted language. Depending upon the briefs and arguments of counsel we have discussed this case upon the theory that the applicability of the statute of frauds to the facts presented may be raised by general demurrer. But we do not overlook the fact that the statute may be waived. (Christiansen v. Aldrich, 30 Mont. 446, 76 Pac. 1007; Mitchell v. Henderson, 37 Mont. 515, 97 Pac. 942.) The judgment is reversed and the cause is remanded to the district court of Gallatin county, with directions to overrule the demurrer. Beversed and remanded. Associate Justices Rankin, Holloway, Galen and Stark concur.