Chilson v. Houston
| Decision Date | 29 October 1900 |
| Citation | 84 N.W. 354,9 N.D. 498 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Richland County; Lauder, J.
Action by John J. Chilson against W. F. Houston. Judgment for plaintiff. Defendant appeals.
Affirmed.
F. W Murphy and Charles A. Tuttle, for appellant.
Antecedent representations made by the vendor as an inducement to the buyer, but not forming a part of the contract when concluded are not warranties. Benjamin on Sales, § 610; 2 Parsons on Contracts, 477; Hopkins v. Tongueray, 15 C. B 130; Halley v. Folsom, 48 N.W. 219; Sculley v Bailey, 1 H. & C. 405; Bloss v. Kittridge, 5 Vt. 28.
Freerks & Freerks, for respondent.
Under the evidence in this case the question of the right to rely, and of reliance by plaintiff on the false representations of the defendant in making the contract in question is one of fact and not of law. Nash v. Minnesota Title Ins. Co., 159 Mass. 437, 34 N.E. 625; Ingalls v. Miller, 121 Ind. 188; Christmas v. Frei, 44 N.W. 329; Hopkins v. Hawkeye Ins. Co., 57 Ia. 203; Sim v. Pyle, 84 Ill. 271; Farr v. Peterson, 91 Wis. 182. It will be presumed that the defrauded party acted in reliance upon the false representations when the contrary is not shown. Benjamin on Sales, § § 382-390; Kerr on Fraud & Mistake, § 79; Boyce v. Grundy, 28 U.S. 210; Connersville v. Wadleigh, 41 Am. Dec. 214; § § 3940-3942, Rev. Codes. This is not an action on contract of warranty but an action for deceit by which respondent was mislead into making a disadvantageous contract. Stanhope v. Swafford 45 N.W. 403; Phelps v. James, 44 N.W. 543; Andrews v. Jackson, 37 L. R. A. 402; Benjamin on Sales, § 610; Gustavson v. Rustemayer, 70 Conn. 125, 39 L. R. A. 644; Crane v. Elder, 15 L. R. A. 795. Plaintiff was not bound to forget before the final trading all that had been stated to him six months before concerning the character of the note. "A lie six months old is quite as likely to mislead an innocent party to his damage as one hot from the liar's mouth." Lindauer v. Hay, 17 N.W. 98. A false affirmation, made by defendant with intent to defraud, whereby the plaintiff receives damage is ground for action, and it is not necessary that defendant should be benefited by the deceit or that he should collude with the person who is. Pasley v. Freeman, 2 Smith's Lead. Cas. 1; 3 Waite's Actions & Defenses, 452; Crause v. Busaker, 81 N.W. 406; Bird v. Kleiner, 41 Wis. 134; Cotzhansen v. Simon, 47 Wis. 473; Lumber Co. v. Myhills, 80 Wis. 541; Beetle v. Anderson, 98 Wis. 560. These are actions for damages for false and fraudulent representations inducing the making of contracts, and not contracts for breach of warranties, either embodied in or originally proven to form part of contracts. Everton v. Miles, 6 Johns. 139.
This action is to recover damages for a deceit alleged to have been practiced by the defendant, whereby the plaintiff claims he was damaged. The complaint, in substance, alleges that on or about December 1, 1898, the plaintiff sold and deeded to the defendant a tract of land situated in Richland county, in this state, for and in consideration of the sum of $ 1,228; that $ 728 of the purchase price was paid to the Bank of Fairmount, pursuant to agreement between plaintiff and defendant, in cancellation of an indebtedness held by such bank against plaintiff; that, in payment of the balance due upon the purchase price of said land, the defendant sold and transferred to plaintiff a certain promissory note for $ 500, executed by one W. T. Boutwell, and payable to the defendant, which note bore date October 19, 1897 and became due two years thereafter; that at the time of the sale of such note and prior thereto the defendant falsely and fraudulently represented to plaintiff that it was a good and collectible note, and falsely and fraudulently stated that the maker was solvent and worth at least $ 7,000 in property, and that said note was perfectly good and would be paid promptly when due; that said statements and representations were wholly false, and known to be false by the defendant, and that the same were made for the purpose of deceiving the plaintiff as to the true character of said note and the financial condition of the maker; that plaintiff relied upon the representation so made as to the character of the note and solvency of the maker, and accepted the same for the balance of the purchase price of the land; that defendant was not acquainted with the maker of the note, and could not by the exercise of reasonable diligence ascertain its character, as defendant well knew; that the note was then and now is wholly worthless and uncollectible, all of which the defendant well knew; that the aforesaid statements and representations were made by the defendant to deceive the plaintiff and to induce him to accept said note, and that by such representations and statements the plaintiff was deceived and cheated, and induced to accept said note for the balance of the purchase price of his land. He lays his damage at $ 500 and interest, and makes tender of the note to defendant. The defendant's answer admits the execution and delivery of the deed to him, and that he is the owner of the land. He also admits that he was the owner of the Boutwell note at the date alleged, and that he indorsed it to the plaintiff. All other allegations of the complaint are specifically denied. At the trial in the District Court the issues were submitted to a jury for determination, and a verdict was returned in favor of the plaintiff, assessing his damages at the sum of $ 569. A motion for new trial was made and overruled. Thereafter judgment was entered. Defendant appeals from the judgment, and urges that the District Court erred in not granting his motion for new trial.
Counsel for defendant relies upon two alleged errors. The first is the denial of a motion for a directed verdict at the close of the case, which motion was upon the ground that the plaintiff had failed to prove facts sufficient to make out his cause of action. Counsel's particular contention on this point is that under the facts as they appear in evidence the representations which plaintiff testifies were made could not, as matter of law, have been the inducement prompting plaintiff to part with his property, for the reason, as he claims, that they were remote in point of time, and wholly disconnected with the actual sale and transfer of the note in question. Before considering the question presented in the foregoing proposition, it will be necessary to set out some of the facts shown by the evidence: The defendant was interested in the Bank of White Rock, of White Rock, S.D. His home, however, was at River Falls, Wis., and he spent only a portion of his time at White Rock. Newell Powell, the cashier of the Bank of White Rock, was his son-in-law. The debt of $ 728 which plaintiff owed to the Bank of Fairmount was secured by a mortgage on the land in question. Plaintiff left word with Powell that he wanted either to sell his land or borrow money on it. Shortly afterwards, and about May 1, 1898, the defendant called on the plaintiff in reference to the matter. All of the witnesses testify that defendant declined to make the loan requested, for the reason, as then stated, that he did not have the money. The witnesses also agree that he offered to buy the land, and in payment therefor to pay or assume the amount due the Bank of Fairmount, and to give plaintiff the Boutwell note, which he then had with him, and exhibited to plaintiff. Plaintiff declined the offer, and no sale either of the land or note was then made, or until a much later date. It was at this first meeting that the alleged false statements were made, upon which plaintiff relies for a recovery. It is not necessary to narrate the particular statements made by the defendant to plaintiff at that time concerning the financial standing of Boutwell, the maker of the note. The evidence is conflicting on this point but it is not contended that such statements were not material, or that the jury were not justified by the evidence in finding that they were made as alleged. Defendant's sole contention is that they were too remote, and were not connected with the sale subsequently made. No further negotiations were had between the parties until early in the following December, when they met, and defendant again inquired whether plaintiff would take the Boutwell note for his land, and the offer was again declined by plaintiff. Defendant then stated that he was going to Wisconsin, and might possibly secure money there to make the loan which plaintiff desired, and that plaintiff could leave word with Powell as to what he wanted to do. Within a few days plaintiff informed Powell that he still wished to secure the loan from defendant. This was communicated to defendant, and he replied that he would make it. On the next day, however, and before the loan was completed, plaintiff informed the...
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