A. Landreth Co. v. Schevenel

• Citation: 52 S.W. 148,102 Tenn. 486
• Parties: A. LANDRETH CO. v. SCHEVENEL et al.
• Decision Date: 22 May 1899
• Court: Supreme Court of Tennessee

52 S.W. 148

102 Tenn. 486

A. LANDRETH CO. v. SCHEVENEL et al.

Supreme Court of Tennessee.

May 22, 1899

Appeal from chancery court, Shelby county; Lee Thornton, Chancellor.

Bill by the A. Landreth Company against A. W. Schevenel & Co. Decree for defendants. Complainant appeals. Affirmed.

H. D Minor and S. M. Neely, for appellant.

Watson & Fitzhugh and Carroll & McKellar, for appellees.

McFARLAND J.

This was a bill filed by the A. Landreth Company against A. W Schevenel & Co. for the purpose of rescinding and setting aside a settlement made between the parties, and also to subject certain real estate to the payment of complainant's debt, conveyed by Schevenel, one of the partners, to his wife. The facts are that A. W. Schevenel & Co., a firm composed of A. W. Schevenel and one Pace, was doing business in Memphis, Tenn., in 1897. Beginning with August 20, 1897, the complainants sold to A. W. Schevenel & Co. goods amounting to $1,696.16. A. W. Schevenel & Co. were engaged in the grocery business in Memphis. On the 8th of November, 1897, the firm made an assignment to A. B. Duncan as trustee for certain creditors, and preferring some of the creditors, but the complainants were not included in the preferences. On the 1st of March, 1898, the complainants and said firm compromised their indebtedness, by which the firm paid 33 1/3 per cent. of their indebtedness, amounting to $565.41, in cash, and executed their three notes, due in 6 9, and 12 months, for the balance of their account. It is this settlement and compromise that this bill is filed to set aside. It also seeks to set aside a conveyance of a tract of land made by A. W. Schevenel to his wife March 25, 1897, but not recorded until November 8, 1897. The allegations in the bill upon which relief is predicated as to this compromise are as follows: "This settlement was accepted by your complainants solely upon the express representation that the firm of Schevenel & Co. would continue in the same business as they had conducted, and would resume business as before the assignment. Your complainants aver they would not have accepted any offer of settlement from A. W. Schevenel & Co., less than their whole debt in cash, except such settlement as the above; and this was entered into upon and in consequence of repeated assurances that the firm of A. W. Schevenel & Co. would resume business, and their business relations with your complainants, and it was due absolutely and entirely to these representations and assurances that your complainants accepted settlement on this basis. Your complainants aver these representations were false and fraudulent, and known by the firm to be so, and that these representations have never been carried out by the firm, nor have they paid any of the above notes, although two of them have long since become due and payable." No offer to return the $565.41 was made. The ground upon which it is sought to set aside the conveyance to the wife is that that conveyance was made during the existence of the original indebtedness, and, that indebtedness not being settled, the conveyance was therefore void as to these existing creditors. There was a demurrer filed by the defendants, which raised the question properly as to the sufficiency of this bill. This demurrer was allowed, and the complainants have appealed to this court.

The first question to be determined is whether or not the allegations of the bill as to the representations made by A W. Schevenel & Co. as to future business, if done fraudulently, are sufficient to rescind the contract, without the repayment of the cash received. Independent of the question of whether an offer to return the cash received is necessary, we are of opinion that the grounds alleged in the bill are totally insufficient. "Misrepresentations, in order to be fraudulent, must be of facts at the time or previously existing, and not mere promises for the future." 8 Am. & Eng. Enc. Law, 636; Fenwick v. Grimes, 5 Cranch, C. C. 439, Fed. Cas. No. 4,733; Long v. Woodman, 58 Me. 49; Burt v. Bowles, 69 Ind. 1; Bethell v. Bethell, 92 Ind. 318; Bigham v. Bigham, 57 Tex. 238; Kerr, Fraud & M. p. 88. "Fraudulent expressions of opinions are generally insufficient to justify the rescission of a contract executed and acted on by the parties. An action for rescission for fraud cannot be predicated on a promise to do something in the future, although the party promising had no intention of fulfilling the promise at the time it was made." 1 Beach, Mod. Cont. § 797, and cases cited. In Balue v. Taylor, 136 Ind. 368, 36 N.E. 269, the court declared that these principles, as above announced, are elementary. "As distinguished from the false representation of a fact, the false representation as to a matter of intention, not amounting to a matter of fact, though it may have influenced a transaction, is not a fraud at law, nor does it afford a ground of relief in equity." Kerr, Fraud & M. p. 88. Thus, where it was alleged that the defendant fraudulently represented that he would grant the plaintiff an easement by locating a street, this was held not to be fraud. Richter v. Irwin, 28 Ind. 26. So, where one was induced to grant another a lease on the representation that he intended to use the premises for a certain purpose, whereas he intended to use and did use them for a totally different purpose, it was held that relief could not be granted. Feret v. Hill, 15 C. B. 207. ...