Anderson v. Evansville Brewing Association
| Decision Date | 15 February 1912 |
| Docket Number | 7,497 |
| Parties | ANDERSON ET AL. v. EVANSVILLE BREWING ASSOCIATION |
| Court | Indiana Appellate Court |
From Sullivan Circuit Court; Charles E. Henderson, Judge.
Action by Markwood Anderson and another against the Evansville Brewing Association. From a judgment for defendant plaintiffs appeal.
Affirmed.
Walter F. Wood, for appellants.
John W Spencer, John R. Brill, Frank H. Hatfield and John T. and Will H. Hays, for appellee.
Appellants commenced this action to recover damages for an alleged fraudulent sale of "temperance brew" to them by appellee.
The complaint is in one paragraph, to which a demurrer, for want of facts, was sustained, and the only error presented by this appeal is the ruling on the demurrer.
The allegations of the complaint, in substance, are that appellee is a corporation organized under the laws of Indiana; that appellants, on March 1, 1908, were merchants engaged in the sale of general merchandise, restaurant goods and soft drinks in the town of Sullivan; that on said day appellee falsely, wrongfully and fraudulently represented to appellants that "temperance brew," manufactured and sold by said appellee, was a nonintoxicating beverage, and "not such a beverage as would be prohibited by law, and at said time asked appellants to handle and sell said "temperance brew" at retail at their store;" that appellants, relying on said representations and believing them to be true, bought a large amount of said "temperance brew" from appellee for sale at retail in their store, which fact was known to appellee; that said brew was not a nonintoxicating liquor, but was in fact an intoxicating liquor, and could not be lawfully sold without a license, which fact appellee well knew at the time said representations were made to appellants; that thereafter appellants were indicted, tried and found guilty of having in their possession, for the purpose of sale without a license, said "temperance brew," and each was sentenced to ninety days' imprisonment in the Sullivan county jail and to pay a fine of $ 200; that by reason of the false and fraudulent representations aforesaid, appellees were thrown in jail, taken away from their business, and have been disgraced, damaged and humiliated in the sum of $ 5,000.
Considering the general scope and tenor of the averments, it is apparent that the theory of the complaint is that of fraud of appellee alleged to have been perpetrated in the sale of "temperance brew" to appellants. Merica v. Fort Wayne, etc., Traction Co. (1912), ante, 288.
Fraud is not presumed, and to warrant a recovery for fraud or deceit it must be averred and proved.
To make a complaint good for general damages resulting from a fraudulent sale of a commodity, it must, in substance, be averred (1) that defendant made a material representation as to an existing fact; (2) that it was false; (3) that he made it, knowing it to be false, or made it recklessly, without knowledge of its truth and as a positive assertion of a fact; (4) that it was made to induce plaintiff to act on it; (5) that plaintiff relied on it and acted thereon; (6) that by so doing he suffered an injury for which a recovery is sought. 20 Cyc. 13, 24; 14 Am. and Eng. Ency. Law (2d ed.) 21; Hartford Life Ins. Co. v. Hope (1907), 40 Ind.App. 354, 81 N.E. 595; Kirkpatrick v. Reeves (1889), 121 Ind. 280, 22 N.E. 139; Roller v. Blair (1884), 96 Ind. 203, 205.
Knowledge on the part of one making misrepresentations, that the representations are false is not in every case a necessary element of actionable fraud. An unqualified statement that a fact exists, made by one to induce another to act on it, implies that the former knows it to exist, and speaks from his own knowledge, and where the fact does not exist, and the party states of his own knowledge that it does, and thereby induces another to act on the statement, the law imputes to him a fraudulent purpose. Kirkpatrick v. Reeves, supra; West v. Wright (1884), 98 Ind. 335, 339; New v. Jackson (1912), 50 App. --, 95 N.E. 328.
There is no averment in the complaint before us that the beverage received from appellee was of less value than that sought to be purchased, or any similar averment. It is therefore apparent that the complaint does not seek to recover general, but special damages.
The statute makes it unlawful to sell intoxicating liquors without a license; to keep and operate a place where intoxicating liquors are sold, bartered or given away, or to have in one's possession intoxicating liquors for such purpose, without a license duly issued. § 8337 Burns 1908, Acts 1907 p. 27, § 1.
To make a complaint for special damages good against a wholesale dealer, it must show not only the fraudulent sale to the local merchant, but, in addition thereto, the unintentional violation of the law on the part of the merchant, either by a sale of the beverage so purchased, or by having it in his possession for that purpose without a license; that for such violation of the law the merchant was duly prosecuted, convicted and punished to his damage, which should be definitely stated. I Joyce, Damages § 13 and notes; 6 Thompson, Negligence (2d ed.) §§ 7159, 7160; Union Traction Co. v. Sullivan (1906), 38 Ind.App. 513, 76 N.E. 116; Martachowski v. Orawitz (1900), 14 Pa.Super. 175, 184.
The complaint in this case does not allege that appellee delivered to appellants any of said beverage, or that appellants actually had any of it in their possession. Neither does it allege that appellants actually sold any of it to any person, nor that appellants were not duly licensed to sell intoxicating liquors.
When a pleading is tested by demurrer, no presumption is indulged in its favor, and no inferences can be drawn to sustain it, except those that necessarily arise from the facts well pleaded. The pleader is presumed to have stated his cause or defense as fully and favorably to his client as the facts will warrant.
The charge in the complaint that "temperance brew" could not be lawfully sold without a license, "which fact defendant well knew at the time," etc., is insufficient to supply the averment that appellants were not licensed dealers. Nor will the averments showing arrest, fine and imprisonment for alleged illegal sales, or for having said beverage in their possession, take the place of an averment that sales were actually made by appellants, or that said beverage was actually in their possession for the purpose of resale to customers. The averments of arrest, fine and imprisonment serve the purpose of showing that special damages resulted to appellants, but they do not supply the essential averments, either of an actual sale, or of having the liquor in their possession for that purpose.
While we have held that to recover special damages on the theory of appellants' complaint, it is material to allege that appellants were not at the time licensed to sell intoxicating liquors in order to show that the sale was illegal and subjected appellee to possible arrest, fine and imprisonment, we hold that it is not necessary to aver that appellee at the time knew they did not have such license. The complaint proceeds upon the theory that appellants sought to purchase a nonintoxicating beverage, and that appellee, by fraud, sold them instead intoxicating liquor. If under such conditions appellee sold and delivered to appellants intoxicating liquor, it did so at its peril, for it is authorized to make such sales to licensed dealers only. The law in such case does not place upon appellants the burden of alleging and proving appellee's violation, or reckless disregard, of the law.
The complaint attempts to state a joint cause of action in two plaintiffs, but does not aver that they were partners, or state other facts...
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