Abraham Newman v. Samuel R. Kendall

• Decision Date: 05 May 1931
• Citation: Abraham Newman v. Samuel R. Kendall, 154 A. 662, 103 Vt. 421 (Vt. 1931)
• Parties: ABRAHAM NEWMAN v. SAMUEL R. KENDALL
• Court: Vermont Supreme Court

154 A. 662

103 Vt. 421

ABRAHAM NEWMAN v. SAMUEL R. KENDALL

Supreme Court of Vermont

May 5, 1931

January Term, 1931.

Fraud---False Representations---Presumptions---False Warranty and False Representations Distinguished---Instructions to Jury---Exemplary Damages---Request To Charge Based on Assumption Not Warranted by Evidence---Instructions Re False Representations.

1. No representation is fraudulent at law, unless made with actual knowledge of its falsity or under such circumstances that law must necessarily impute such knowledge to party at time of making representation.

2. No presumption of knowledge of falsity of representation is raised from mere fact that representation was false.

3. False warranty, innocently made, though it may deceive, is mere breach of contract.

4. Affirmation which would constitute false warranty, if made with actual or imputed knowledge of its falsity and with intent that it be accepted and relied upon as an assertion of fact, and it is so accepted and relied upon, though in form of warranty, is a false representation, affording basis for action of deceit.

5. In ACTION OF TORT for fraud in exchange of realty, charge, held erroneous as permitting jury to award damages for breach of warranty.

6. In such action, error of court in failing to instruct jury that if representations relied upon were made and were false, in order to recover plaintiff must prove that defendant knew they were false when he made them, or made them under such circumstances that law would impute such knowledge to him held not cured by instruction respecting exemplary damages wherein wilful and intentional purpose to deceive by such representations was made a prerequisite to recovery of such damages.

7. Exemplary damages may be awarded only if liability of defendant for compensatory damages is established.

8. In action of tort for fraud in exchange of realty, refusal to charge as requested, held without error, where request was based upon assumption which could not be found as fact from evidence

9. In such action, requests to charge that false representation is not actionable unless made with knowledge of its falsity held properly denied, since they ignored false representations made as of one's own knowledge without in fact knowing them to be true.

ACTION OF TORT for fraud in exchange of realty. Plea, general issue. Trial by jury at the March Term, 1930, Rutland County, Bicknell, J., presiding. Verdict for plaintiff and judgment thereon. The defendant excepted. The opinion states the case.

Judgment reversed, and cause remanded.

NOTE. MR. JUSTICE WILLCOX sat at the hearing of this case, but took no part in the disposition of it.

Novak, Bloomer & Spero for the defendant.

Jones & Jones for the plaintiff.

Present: POWERS, C. J., SLACK, MOULTON, WILLCOX, and THOMPSON, JJ.

OPINION

THOMPSON

This is an action of tort for fraud in the exchange of real estate. There was trial by jury and a verdict for the plaintiff. The defendant excepted.

The parties exchanged properties, and in the exchange the plaintiff received from the defendant a pasture and timber lot at the price of $ 5,000. About one hundred and fifty acres of the lot was pasture and about one hundred acres was timber land.

The plaintiff's evidence tended to show that, as an inducement to him to take the lot at $ 5,000, the defendant represented and guaranteed to him that there were 400,000 feet of old growth merchantable timber, and an axe had never been put in it; that, in fact, there were less than 200,000 feet of timber on the lot; that it was mostly second growth; that the lot had been cut over about eighteen years before while the defendant owned it; and that the defendant knew that said representations were false or had knowledge of such facts that he was charged with knowledge of their falsity.

The defendant's evidence tended to show that he told the plaintiff that he thought there were 400,000 feet of old growth merchantable timber on the lot; that that was his best judgment and estimate; that he simply gave his honest opinion of the amount of timber on the lot, and did not make the statement as one of fact. His evidence further tended to show that there were about 400,000 feet of timber on the lot.

The court instructed the jury correctly as to the elements of actionable fraud, and later charged them as follows: "If you find that the defendant represented as a fact and guaranteed that there were 400,000 feet of merchantable timber, even though you do not find he intentionally deceived the plaintiff, and that he honestly believed there were in fact 400,000 feet of merchantable timber, while in fact there were not 400,000 feet of timber, still if that statement of amount, however honestly made by the defendant, deceived the plaintiff and induced him to enter into the contract, he is entitled to recover damages sustained by him because of the statement of the defendant as to the amount of timber. In other words, an actual fraudulent intent need not be shown on the part of the defendant. If he honestly believed there were 400,000 feet of merchantable timber, when in fact no such amount was there, and the plaintiff believed and relied on that guarantee and was damaged, he is entitled to recover (in) this action." The defendant excepted to this instruction, and called the court's attention to its particular fault.

It is well settled that no misrepresentation is fraudulent at law unless it is made with...