Byrd v. Rautman
| Citation | 36 A. 1099,85 Md. 414 |
| Parties | BYRD v. RAUTMAN ET AL. |
| Decision Date | 01 April 1897 |
| Court | Court of Appeals of Maryland |
Appeal from circuit court of Baltimore city.
Bill by Clyde P. Byrd against Emil Rautman and William H. Marriott. Decree for defendants, and complainant appeals. Affirmed.
Argued before McSHERRY, C.J., and BRYAN, FOWLER, BRISCOE, BOYD, and PAGE, JJ.
Hodson Kines & Hodson and Hodson & Hodson, for appellant.
R. B Tippett & Bro., for appellees.
This case comes before us on demurrer to the bill filed by the appellant. The substance of the complaint is that by means of certain false representations the appellant was fraudulently induced to sell to the appellee certain stock in the North Baltimore Land & Improvement Company of Baltimore city whereby the appellant suffered injury. The prayer of the bill is that the transaction may be declared null and void; that Rautman and the secretary of the company may be enjoined from delivering, selling, transferring, or otherwise disposing of the stock until the further order of the court; and for general relief. It is contended that such relief ought not to be granted, because it does not appear that the contract was rescinded within a reasonable time after the discovery of the alleged fraud. The contract has been fully executed, as will hereafter appear; and in such cases it is not only necessary for the complainant to establish the alleged fraud by indubitable proof, but he must "elect to repudiate the contract at once upon the discovery of the fraud," and be "guilty of no unnecessary delay in coming to a court of equity for relief." Motor Co. v. Purnell, 75 Md. 120, 23 A. 134. The bill leaves it uncertain at what precise period the appellant became aware of the alleged misrepresentations. The averments of the seventh paragraph are that he did not discover the fraud "until long after the time when they were made," but "did discover them to be false within three years before the bringing of this suit"; and that he remained ignorant of the real facts "until the reorganization of the said corporation which was considerably within one year before the bringing of this suit." The contract between Rautman and Lord was made in 1893, as appears by the receipt of the former to the latter, and the misrepresentations complained of were at or about the same time. So that it appears that the contract now sought to be declared null and void was entered into more than three years ago; and that the appellant has waited, after full knowledge of the real facts, for nearly a whole year, before doing or saying anything indicative of his desire to have the contract rescinded, or before coming to a court of equity for relief. Having abided by the transaction for so long a period after becoming cognizant of the fraud, he has now no standing in a court of equity. But, apart from this, are the misrepresentations contained in the bill such as will entitle the appellant to the relief for which he prays? The law is well settled that where one, by artifice and fraud, inflicts an injury upon another, courts of justice will rectify the wrong by sustaining an action for the deceit, or by annulling all that has been done. Even before the leading case of Pasley v. Freeman, 3 Term R. 63, it was held that, where there is a concurrence of fraud and damage, an action lies. In our own court the subject has been exhaustively treated. In the case of McAleer v. Horsey, 35 Md. 452, this court, after stating the impossibility of defining the fraud, since from its very nature it eludes all laws without appearing to break them in form, proceeds, nevertheless, to lay down certain rules, based upon precedent and common sense, for the guidance of tribunals in determining what shall "amount to cognizable fraud." These rules, as thus laid down, may be summarized as follows: First. The fraud must be material; that is, it must "relate distinctly and directly to the contract, and affect its essence and substance," "for, if it relate to another matter, or to this only in a trivial and unimportant way, it affords no ground for the action of the court." Second. While there is no positive standard for determining whether the fraud be material, there can be no better rule than this: If the fraud be such that, had it not been practiced, the contract could not have been made, or the transaction completed, then it is material to it; but if it be shown or made probable that the same thing would have been done in the same way if the fraud had not been practiced, it cannot be deemed material. Third. The misrepresentations must be made with a design to impose upon or cheat the party complaining; that the latter relied upon them, and had a right to rely upon them, in full belief of their truth, and in consequence suffered actual injury. If, however, the misrepresentations relate to another matter, or to the one in question only in a trivial and unimportant manner, the party complaining would have no right to rely upon them as governing his conduct. His action then could not be...
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