Fed. Sur. Co. v. Midwest Const. Co.

• Decision Date: 24 December 1929
• Docket Number: No. 5701.,5701.
• Citation: Fed. Sur. Co. v. Midwest Const. Co., 58 N.D. 937, 228 N.W. 432 (N.D. 1929)
• Parties: FEDERAL SURETY CO. v. MIDWEST CONST. CO. et al.
• Court: North Dakota Supreme Court

58 N.D. 937

228 N.W. 432

FEDERAL SURETY CO.

v.MIDWEST CONST. CO. et al.

No. 5701.

Supreme Court of North Dakota.

Dec. 24, 1929.

Syllabus by the Court.

Evidence is admissible to prove that a signature to a written instrument was procured by means of a false statement of fact reasonably calculated to deceive another, and induce him to do that which he would not do with knowledge of the truth.

A litigant, seeking to recover on the ground of fraud and deceit, may testify directly that he relied upon the representations made, and that but for such representations he would not have entered into the contract.

The instructions of the trial judge to the jury must be considered as a whole, and if it appears therefrom that the law has been correctly given to the jury, it follows as a matter of course that there is no error in the instructions.

In the instant case it is held that there was sufficient evidence on questions of fact to submit the case to the jury.

Appeal from District Court, Cass County; A. T. Cole, Judge.

Action by the Federal Surety Company against the Midwest Construction Company and another. From a judgment for defendant Herbert F. Schumacher, and from an order denying its motion for judgment notwithstanding the verdict or for a new trial, plaintiff appeals. Affirmed.Pierce, Tenneson, Cupler & Stambaugh, of Fargo, for appellant.

Lemke & Weaver, of Fargo, for respondent.

BURKE, C. J.

This is an action to recover on a general contract of indemnity. There was a judgment against the Midwest Construction Company by default, Herbert Schumacher appearing in defense of his answer. After the taking of the testimony, and both parties having rested, the plaintiff moved for a directed verdict, which was denied, and, the jury having returned a verdict for the defendant Herbert Schumacher, the plaintiff thereafter moved to vacate and set aside the judgment, and for judgment for the plaintiff notwithstanding the verdict, or in the alternative for a new trial, which motion was denied, and the plaintiff duly appeals from the judgment entered in said action, and from the order denying the motion for judgment notwithstanding the verdict, or for a new trial.

It was stipulated in effect, that on the 3d day of March, 1926, the defendant the Midwest Construction Company was awarded a contract by Clay county, Minnesota, for the construction of a section of road in said county, and that on the 3d day of March, 1926, the defendant, the Midwest Construction Company, applied to the plaintiff for a bond as required by laws of Minnesota, and that on the 3d day of March, 1926, the plaintiff, as surety, executed such bond, with the defendant the Midwest Construction Company as principal; * * * that the Midwest Construction Company entered upon the performance of the work of constructing said highway, employing labor, purchasing tools, machinery, and material, and that on about the 6th of July, 1926, the defendant the Midwest Construction Company abandoned said work; that the Midwest Construction Company became indebted for the labor, tools, machinery, materials, insurance premiums, equipment, and supplies in the sum of $4,546.24, which sum was paid by the plaintiff for the Midwest Construction Company as a liability on said bond. The plaintiff further expended the sum of $2,500 in purchasing material, supplies, and labor, in completing the building of said road, and the further sum of $819.21 in other necessary expenses, receiving from the said county of Clay on the completion of said work the sum of $4,010.13. The plaintiff claims that it is entitled to recover on a general indemnity bond executed on the 6th day of May, 1923.

[1] The general contract of indemnity was signed by the defendant Herbert Schumacher on the 6th day of May, 1923. At that time the defendant testified that he was working for the Midwest Construction Company as foreman, in building a road near Dale, Minn.; that his father, Charles Schumacher, and one Mr. Fevig, an agent of plaintiff, drove out to the place where he was working on the road. His father introduced Mr. Fevig, and witness said: “We didn't have much conversation; I was busy, and he just pulled out this paper (meaning the general contract of indemnity), and he said, ‘sign it.’ It relates to some work up in North Dakota, and I signed it, and went on to my work. I did not read it. Q. Why did you not read it? (Objected to, as calling for a conclusion of the witness. Objection overruled.) A. I was busy, and I believed Mr. Fevig, what he said was truth. At that time the Midwest Construction Company had two jobs in North Dakota, one in Barnes county, and one in Ransom county. They were the only jobs that the Midwest Construction Company had at that time, and the one in Dale, Minn., upon which I was working. It was after dinner, in the afternoon some time, that Mr. Fevig and my father came out. About one year later I quit working for the Midwest Construction Company. The crew of about 25 men was busy working when they came out, and I was in charge of it. He just pulled out this here paper, and told me to sign it; it was for some North Dakota job, and I signed it.”

This testimony was all objected to, by the plaintiff, on the ground that it was an attempt to change and vary the written terms of the contract by parol testimony. It was not an attempt to change the terms of a written contract, but it was offered for the purpose of showing fraud and deceit in the securing of the defendant's signature, by making it appear to the defendant that it related to some work in North Dakota. It is the theory of the defense that the defendant's father came with the representative of the indemnity company to where Herbert Schumacher was supervising, as foreman, the work of some 25 men, who were working in the building of a road; that they came there during working hours, and the defendant Herbert Schumacher was told to sign the bond, which related to some road construction in North Dakota, and which the Midwest Construction Company had a contract for at that time; that, relying upon the statement that it related to the work in North Dakota, he signed what turned out to be a general bond of indemnity. “Of course, if the other party induces the signer to sign the paper without reading it, and to rely on his statement as to the contents, this may give the signer a right, if the statement was fraudulent, to avoid the contract as against him on the ground of fraud.” 13 C. J. 371; 6 R. C. L. 624, §§ 43, 44; Standard Manufacturing Co. v. Slot, 121 Wis. 14, 98 N. W. 923, 924, 105 Am. St. Rep. 1016;Keller v. Ruppold, 115 Wis. 636, 92 N. W. 364, 95 Am. St. Rep. 974;Willard v. Nelson, 35 Neb. 651, 53 N. W. 572, 37 Am. St. Rep. 445;Wilcox v. Am. Tel. Co., 176 N. Y. 115, 68 N. E. 153, 98 Am. St. Rep. 650;Crim v. Crim, 162 Mo. 544, 63 S. W. 489, 54 L. R. A. 502, 85 Am. St. Rep. 521;Black v. Wabash, St. L. & P. Ry. Co., 111 Ill. 351, 53 Am. Rep. 628;Finkelstein v. Henslin, 152 Minn. 386, 188 N. W. 737.

[2] There was no error in the admission of the testimony. Appellant contends that it was error to permit witness to answer the question, viz.: “Now, then, why didn't you read it?” (meaning the contract of general indemnity), over the objection that it was calling for a conclusion; the answer being, “I was busy, and I believed Mr. Fevig, what he said was the truth.” It is well settled that, in actions where fraud or a warranty is pleaded as a defense, the defendant is entitled to testify that he believed and relied on the statements made.

Jones on Evidence, vol. 2, p. 1337, § 714, states the rule as follows: “Where fraud or deceit are alleged, or recovery is sought for breach of warranty, the party seeking recovery may testify directly that he relied upon representations of the promisor, and that but for such representations he would not have entered into the contract. Collier, Inc., v. Bailey, 31 Ga. App. 197, 120 S. E. 427;Breshears v. Callender, 23 Idaho, 348, 131 P. 15;Chester v. American T. & S. Bank (...