Olson v. Skroch

Doerfler, J. We will first treat the second assighment of error. Defendant’s counsel contends that his client at no time made false or fraudulent representations with respect to the bonds and that he never represented the bonds as Liberty Bonds. There is evidence, however, which is quite persuasive that when the subject of bonds was mentioned by the defendant, Olson had in mind that they were Liberty Bonds. This is made manifest by his inquiry as to the year and issue of the bonds. This transaction took place not many years after the extensive Liberty Bond campaigns of the war. Plaintiffs were engaged in the operation of a small implement business in the city of Whitehall. Liberty Bonds had been sold and purchased quite generally by the people of the state, and it can readily be conceived that when the subject of bonds was mentioned in that locality it- immediately brought to mind the subject of Liberty Bonds. It appears also,' without contradiction, that before the exchange was [452] effected Olson made inquiry at the bank to ascertain the value . of the various issues of Liberty Bonds. When the check for $170 was delivered to Bautch, Olson requested the delivery of the Liberty Bonds. Defendant therefore became sufficiently apprised of the fact that Olson had in mind that the bonds were Liberty Bonds and that he received the bonds as such. The defendant at all times knew that the land company’s bonds were utterly worthless. Nevertheless, he took advantage of the situation and pawned off upon the plaintiffs these worthless bonds, so tl^at if the contract of exchange were to be sustained the plaintiffs would part with an article of personal property of the conceded value of $800 and receive in exchange therefor bonds which are not worth the paper upon which they are printed. If this transaction on the part of the defendant does not constitute fraud, then it is difficult to conceive a case of fraud under any circumstances. It is true' that the defendant at no time expressly represented the bonds as Liberty Bonds. It cannot be denied, however, that Olson was under the impression that he was receiving Liberty Bonds and that the defendant was fully aware of his state of mind upon the subject. This presented a situation where honesty and fair dealing required the defendant to speak, and to speak the truth and the whole truth, and a failure so- to- do- constituted gross deceit and decep-' tion — a species of fraud as reprehensible as though it had been practiced by affirmative false and fraudulent representations, and silence under such circumstances, to all intents and purposes, operated as a representation that the bonds were Liberty Bonds. 26 Corp. Jur. 1068, and case's cited in note 81; 26 Corp. Jur. 1073, and cases there cited in note; Swift v. Rounds, 19 R. I. 527, 35 Atl. 45, 33 L. R. A. 561, and cases cited in opinion; 12 Rúling Case Law, p. 307, § 68, and notes. The defendant contends that the court erred in refusing to sustain his demurrer ore terms to plaintiffs’ complaint. The pleading of the plaintiffs is not a work of art; it does not. [453] present a complaint in equity for rescission on account of fraud couched in the usual and ordinary terminology of skilled pleaders in actions of that kind. Under our modern and liberal rules of pleading, a pleader may, in substance, present the facts, and it .is from such facts that the court must determine whether the allegations are sufficient to constitute a complaint for rescission based upon fraud. It appears from the complaint that the defendant represented the bonds as Liberty Bonds and that the plaintiffs relied upon such representations and thereupon entered upon the exchange ; that in reliance upon such representations plaintiffs parted with $170 of money and released the chattel mortgage of Bautch and received the worthless bonds in exchange for the tractor. If to any extent, on any reasonable theory, the complaint ■''presents facts sufficient to justify a recovery, it will be sustained.” 21 Ruling- Case Law, 519. This is particularly so where the objection is taken by demurrer ore tenuf. We therefore hold that the complaint was sufficient and that the demurrer ore tenus was properly overruled. From^what has been said, we have come to the conclusion that the judgment of the lower court must be affirmed. By the Court. — Judgment affirmed.