Avery v. Chapman

• Decision Date: 05 December 1883
• Citation: 17 N.W. 454,62 Iowa 144
• Parties: AVERY, SPANGLER & CO. v. CHAPMAN
• Court: Iowa Supreme Court

17 N.W. 454

62 Iowa 144

AVERY, SPANGLER & CO. v. CHAPMAN

Supreme Court of Iowa, Des Moines

December 5, 1883

Appeal from Guthrie District Court.

THIS is an action at law by which the plaintiffs seek to recover damages of the defendant for fraudulently representing to the plaintiffs the financial condition of one Hutley, whereby plaintiffs were induced to extend credit to Hutley to their injury, There was a trial by jury, which resulted in a verdict for the defendant. A motion for a new trial was overruled, and judgment was rendered upon the verdict. Plaintiffs appeal.

AFFIRMED.

Sims & Caswell, for appellants.

C. S Fogg, for appellee.

OPINION

ROTHROCK, J.

I.

The plaintiffs are grain merchants at Walnut, Iowa. The defendant is a banker at Stuart.

On the twenty-first day of August, 1878, one of the plaintiffs addressed a letter to the defendant, of which the following is a copy: "Jonathan Hutley bought several cars of corn from us, which we will ship to-day. How is he; all right? Please answer by return.

"Yours respectfully,

"J C. SPANGLER."

The letter was answered on the same day as follows: "In my opinion Jonathan Hutley is all right, and will pay for all grain he buys as soon as it is on track. He has a good account with me.

"Yours truly,

"E G. CHAPMAN."

On the day these letters were written, a person whom the plaintiffs supposed to be Hutley appeared at Walnut, and the plaintiffs sold him two carloads of corn. They held the corn until they received the above letter from the defendant. When the letter was received, the corn was shipped, and it was paid for, as we understand the evidence, by a draft drawn by defendant. It appears that at that time there was deposited with defendant some $ 450 or $ 500 to the credit of Hutley. It turned out afterwards that the person who appeared at Walnut and made the contract with the plaintiffs was not Hutley, but that he claimed to be Hutley's agent. At the time of the purchase of these carloads of corn, the person claiming to be Hutley's agent made arrangements for the purchase of other grain of plaintiffs, to be delivered in the future; and between that time and the twenty-eighth of August the plaintiffs shipped to Hutley several carloads of corn and wheat. Hutley, or some one representing him, sent to them in payment for the shipment certain drafts on Culver & Co., commission merchants of Chicago. These drafts were protested for non-payment, and the plaintiffs thereby lost some $ 1,300.

It is charged in the petition, in substance, that the plaintiffs were induced by the letter of the defendant to ship the grain to Hutley, to the amount in value of $ 1,500; that the defendant well knew, at the time of writing the said letter, that Hutley was not able to pay for said grain, and was not fit to be trusted therewith on credit, and that the said Hutley was, at the time of making said purchases, and still is, wholly worthless and irresponsible pecuniarily, "and was at the time of the writing of the letter, as aforesaid, by said Chapman, and known to him to be so worthless and irresponsible; that, by reason of said false and fraudulent representations of the defendant, the plaintiffs have been damaged in the sum of fourteen hundred dollars."

It will be seen that the defendant was by the petition charged with liability because of false and fraudulent representations as to the financial character and responsibility of Hutley. The court gave the jury the following, among other instructions:

"9. Before the plaintiffs can recover a verdict for anything in this case, you must find from a fair preponderance of the evidence that they have proved substantially the most material allegations of their petition, to-wit: that the defendant wrote and sent to J. C. Spangler the letter introduced in evidence as having been written and sent by the defendant to said Spangler; that the defendant wrote and sent said letter with the intent and design to induce the plaintiffs to sell grain on credit to the said Hutley; that the representations made by said letter were false and fraudulent within the knowledge of the defendant, and that they were made intentionally to deceive, and induce the sale of the grain mentioned to said Hutley on credit. In other words, to maintain an action for damages for a false representation and fraud, three circumstances must combine: first, it must appear from the evidence that the representations were contrary to the fact; second, that the party making them knew them to be contrary to the fact at...