Fisher v. Smith

• Decision Date: 06 December 1915
• Docket Number: 1915
• Court: North Dakota Supreme Court

156 N.W. 242

32 N.D. 595

HARRY FISHER v. GEORGE J. SMITH

No. 1915

Supreme Court of North Dakota

December 6, 1915

Rehearing denied February 5, 1916.

Appeal from the District Court of Ward County, Leighton, J.

Reversed.

New trial ordered.

F. F Wycoff and Greenleaf, Bradford, & Nash, for appellant.

A mere failure to perform a promise cannot relate back to render the same fraudulent. Fraud cannot be predicated upon a mere promise or statement of intention. 14 Am. & Eng. Enc. Law, 2d ed. pp. 47, 48; Cerny v. Paxton & G. Co. 78 Neb 134, 10 L.R.A.(N.S.) 640, 110 N.W. 882; Miller v. Sutliff 241 Ill. 521, 24 L.R.A.(N.S.) 735, 89 N.E. 651.

Where a vendor represents the value of land lying in a neighboring county, the vendee cannot maintain an action for deceit even if he has never seen the land, as he has it in his power to ascertain the value. Saunders v. Hatterman, 24 N. C. (2 Ired. L.) 32, 37 Am. Dec. 404; Ellis v. Andrews, 56 N.Y. 83, 15 Am. Rep. 379; Page v. Parker, 43 N.H. 363, 80 Am. Dec. 172, 6 Mor. Min. Rep. 544; 14 Am. & Eng. Enc. Law, 2d ed. p. 41; Valuable note to Hedin v. Minneapolis Medical & S. Institute, 35 L.R.A. 417; Kent, Com. 485.

When the terms of a bill of sale as to consideration are contractual, parol evidence is not admissible to show a different consideration. Pickett v. Green, 120 Ind. 584, 22 N.E. 737; Thompson v. Bryant, 75 Miss. 12, 21 So. 655; McFarland v. McGill, 16 Tex. Civ. App. 298, 41 S.W. 402.

One may not rely upon the truth of a statement which he knows to be untrue, or which is manifestly false. Manley v. Felty, 146 Ind. 194, 45 N.E. 74; Dunning v. Cresson, 6 Ore. 241; Morse v. Rathburn, 49 Mo. 91; Hess v. Young, 59 Ind. 379; Fargo Gas & Coke Co. v. Fargo Gas & E. Co. 37 L.R.A. 595, note "A."

A court, in submitting the issue of fraud to a jury, does not perform its duty without instructions upon the nature of the proof required to support fraud. Such proof must be clear and satisfactory, and not merely by a preponderance of the evidence. Parker v. Hull, 71 Wis. 368, 5 Am. St. Rep. 224, 37 N.W. 351; F. Dohmen Co. v. Niagara F. Ins. Co. 96 Wis. 38, 71 N.W. 69; Shaw v. Gilbert, 111 Wis. 165, 86 N.W. 188; Richmond v. Smith, 117 Wis. 290, 94 N.W. 35.

Linde & Murphy, Geo. A. McGee, F. W. Medbery, and W. H. Cherry, for respondent.

The proof in the record is insufficient to support the allegations of the complaint. The measure of plaintiff's damages, if any, is the difference between the value of the property obtained had the statements been true and the value of what he actually received. This represents his actual loss by reason of the fraud of the seller, where recovery is sought on the contract. He might rescind the contract and recover back what he had paid. Fargo Gas & Coke Co. v. Fargo Gas & E. Co. 4 N.D. 219, 37 L.R.A. 593, 59 N.W. 1066; Page v. Wells, 37 Mich. 415; Vail v. Reynolds, 118 N.Y. 297, 23 N.E. 301; Morse v. Hutchins, 102 Mass. 439; Doran v. Eaton, 40 Minn. 35, 41 N.W. 244; Wollman v. Wirtsbaugh, 22 Neb. 490, 35 N.W. 216; Drew v. Beall, 62 Ill. 167; Woodward v. Thacher, 21 Vt. 580, 52 Am. Dec. 73; 3 Sutherland, Damages, pp. 389, 390, 392; Beare v. Wright, 14 N.D. 26, 69 L.R.A. 409, 103 N.W. 632, 6 Ann. Cas. 1057.

Further, the amount of damages to which respondent is entitled has been passed upon by the jury, and is conclusive on appeal. Cox v. Cox, 39 Kan. 121, 17 P. 847; Griffin v. Farrier, 32 Minn. 474, 21 N.W. 553; Long v. Davis, 136 Iowa 734, 114 N.W. 197.

Plaintiff was not required to prove each and all of the statements which he claimed defendant made as inducement to the sale. Long v. Davis, supra; Scholfield Gear & Pulley Co. v. Scholfield, 71 Conn. 1, 40 A. 1046; Somers v. Richards, 46 Vt. 170.

If a vendor has superior knowledge of the property sold, and knowingly gives a false opinion in regard to a material fact, with the intention of defrauding the purchaser, an action may be maintained against him for fraud. Collins v. Jackson, 54 Mich. 186, 19 N.W. 947; Cressler v. Rees, 27 Neb. 515, 20 Am. St. Rep. 691, 43 N.W. 363; Rimer v. Dugan, 39 Miss. 477, 77 Am. Dec. 687; Berge v. Eager, 85 Neb. 425, 123 N.W. 454; Smith v. Werkheiser, 152 Mich. 177, 15 L.R.A.(N.S.) 1092, 125 Am. St. Rep. 406, 115 N.W. 964; Harvey v. Smith, 17 Ind. 272; Shaeffer v. Sleade, 7 Blackf. 178.

And the intention to misrepresent and defraud is generally a question for the jury. Nowlin v. Snow, 40 Mich. 699.

Where reliance upon statements of the vendor is pleaded and proved by plaintiff, the burden is upon defendant to establish the fact that plaintiff did not rely upon his statements. Plaintiff had the right to rely upon his vendor's statements and to assume their truth, and he was not required to further inquire. 2 Pom. Eq. Jur. 891; Hicks v. Stevens, 121 Ill. 186, 11 N.E. 241; Fargo Gas & Coke Co. v. Fargo Gas & E. Co. 4 N.D. 223, 37 L.R.A. 593, 59 N.W. 1066.

"If a vendor combines with a third person so that they conspire to mislead the purchaser as to the value of the property sold, it will be such fraud as will render him liable to an action." Kenner v. Harding, 85 Ill. 264, 28 Am. Rep. 615; Barron v. Myers, 146 Mich. 510, 109 N.W. 862; Griffin v. Farrier, 32 Minn. 474, 21 N.W. 553.

The fact that plaintiff made inquiries elsewhere which did not disclose the falsity of the representations is no defense. Foley v. Holtry, 43 Neb. 133, 61 N.W. 120; Graham v. Moffett, 119 Mich. 303, 75 Am. St. Rep. 393, 78 N.W. 132; Miller v. Curtis, 27 Jones & S. 127, 13 N.Y.S. 604.

The questions of value and of damages are questions for the jury. They are questions of fact to be determined from all the evidence and circumstances in the case. The jury, having passed upon them, settles these questions conclusively. Seckerson v. Sinclair, 24 N.D. 625, 140 N.W. 239; Tubbs v. Garrison, 68 Iowa 44, 25 N.W. 921; Thomason v. Capital Ins. Co. 92 Iowa 73, 61 N.W. 843; Ish v. Marsh, 1 Neb. (Unof.) 864, 96 N.W. 58; Chilson v. Houston, 9 N.D. 498, 84 N.W. 354; Bank of Spearfish v. Graham, 16 S.D. 49, 91 N.W. 340; National Bank v. Taylor, 5 S.D. 99, 58 N.W. 297; Moon v. McKinstry, 107 Mich. 668, 65 N.W. 546.

OPINION

BURKE, J.

Action for damages for alleged misrepresentation inducing a trade of properties.

In November, 1911, the defendant, Smith, was a real estate agent and also was operating a newspaper, and plaintiff was a farmer. About the 8th of that month plaintiff came to the office of defendant and either requested him to print notices of sale of his property, or to list his farm for sale. The property which he had desired to sell, and which was afterwards traded to defendant, consisted of a quarter section of land upon which there was a mortgage of $ 1,000, four mules, one colt, one harvester and binder, one sulky plow, one wagon, one sled, one harrow, one drill, one disk, two sets of double work harness, which personal property was mortgaged in the sum of $ 770. There is some dispute as to the number of horses, but it is not material to a decision of the action. Defendant proposed to trade him a building at Berthhold for the property, and as an alternative offered to trade to him a newspaper plant at Max, North Dakota. Plaintiff made an examination of the property at Berthhold and was about to close a trade when, later, he exchanged said property for the newspaper.

This action is brought for damages alleged to have been sustained by false representations made by defendant in effecting the trade. Plaintiff has not rescinded, but seeks to recover the difference between the value of the plant as represented to him and what it is actually worth. In his brief, plaintiff said: "The false representations which we contend the appellant made to respondent and which constitute the fraud and deceit on the part of appellant, and which were made to induce the respondent to make the deal upon which the respondent in good faith relied, are the following:

"(a) That the newspaper plant, known as the Max Enterprise, was of the value of $ 3,000, whereas in truth and in fact the said newspaper plant was not worth more than $ 600 or $ 700.

"(b) That the Max Enterprise was earning and would earn for the plaintiff from $ 120 to $ 150 per month clear, whereas in truth and in fact, the said newspaper plant, while it was owned by the appellant, did not earn any sum whatsoever clear; and for the respondent, the gross receipts of two months were only between $ 60 and $ 70, which was insufficient to pay the expenses of its operation.

"(c) That the Max Enterprise had 600 subscribers, whereas in truth and in fact the said newspaper plant had only 260 papers, which included not only the paid subscribers, but all the papers printed for all purposes.

"(d) That the appellant, for the purpose of inducing the respondent to exchange property, represented to him that one Taylor would go into partnership with him, and that said Taylor was an expert printer and newspaper man, whereas in truth and in fact the said appellant suggested such a partnership as a part of his general fraudulent scheme to deceive and defraud the respondent in inducing him to make the exchange of the property.

"(e) That in order to induce the plaintiff to rely on his representations and to make the trade in reliance thereon, the appellant agreed to trade back in the event that the newspaper plant was not as represented, whereas, in truth and in fact, the appellant never had any intention of trading back, but that said offer to trade back was made simply for the purpose of bringing about the exchange and for no other purpose."

At the trial, after the evidence was received, defendant moved for judgment dismissing the action on the grounds that plaintiff had entirely failed in his proof. This was followed by a motion for judgment notwithstanding...