Hartford Life Ins. Co. v. Hope

• Decision Date: 05 June 1907
• Docket Number: No. 5,892.,5,892.
• Citation: 40 Ind.App. 354,81 N.E. 595
• Parties: HARTFORD LIFE INS. CO. et al. v. HOPE.
• Court: Indiana Appellate Court

40 Ind.App. 354

81 N.E. 595

HARTFORD LIFE INS. CO. et al.

v.HOPE.

No. 5,892.^*

Appellate Court of Indiana, Division No. 1.

June 5, 1907.

Appeal from Circuit Court, Hamilton County; Ira W. Christian, Judge.

Action by Edgar Hope against the Hartford Life Insurance Company and others. From a judgment for plaintiff, defendants appeal. Modified and affirmed.Elmer J. Binford, Jonas P. Walker, and Kane & Kane, for appellants. Charles L. Tindall, for appellee.

HADLEY, J.

This is an action in deceit by appellee against appellants and one Ora F. Boyce for damages; the basis of the action being fraudulent representations made by appellant Walker and said Boyce, as agents of appellant insurance company, in procuring an application and a note for the first year's premium for life insurance from appellee. A demurrer was filed to the complaint, which was overruled. Answers in general denial by appellants; trial by jury; verdict and judgment for appellee against appellants, the insurance company and Walker, and against appellee for costs in favor of Boyce. Appellants filed separate motions for new trial, which were overruled. Error is assigned on the ruling of the court on the demurrer and on the motion for new trial. The only objection raised to the complaint is that the representations therein alleged to be fraudulent were not representations of existing facts. The averments of the complaint covering this point are: That said Walker and Boyce represented to appellee that said insurance company was issuing a certain policy to many persons, and would issue the same to the appellee for the consideration of $31.08 per year, which was the premium on said policy for $1,000, for one year for a person of appellee's age; that said policy would insure the appellee's life for $1,000, and would provide that, if appellee lived to pay premiums above stated on said policy for the term of 20 years, it would mature at the end of that time, and said company would pay appellee the amount of the face of the policy, and, in addition thereto, the said policy would participate in the surplus earnings of said company, which at the end of that time would be $350, or thereabouts, and appellee could then surrender his policy, and said company would pay him said $1,000, and said $350, making a combined sum of $1,350 in cash; that said Walker and Boyce further represented to appellee that by the terms of said policy, at the end of three years from its date, appellee could surrender said policy, and said company would pay nearly as much as it had received from him in premiums. It is then averred that all of said representations were false, and known by the appellants to be false when made; that said Walker and Boyce knew that said company would not issue such a policy to appellee; and that said representations were made with intent to defraud appellee, and to induce him to execute to them his note for $31.08, the amount of said premium. These averments show that the representations were made with regard to existing facts. There is no promise to write a special policy for appellee, but there is the statement of the fact that the company which appellants represented were issuing, and would issue to appellee, a particular kind of policy which contained certain provisions.

It is well settled that a statement of intention merely, or the expression of an opinion, cannot be a representation amounting to fraud. Hartman v. International Building Association, 28 Ind. App. 65, 62 N. E. 64. But as is said in the case cited: “That the fact, however, concerning which the statement is made, is future, does not of itself prevent the misrepresentation from being fraudulent. The statement of matter in the future, if affirmed as a fact, may amount to a fraudulent misrepresentation, as well as a statement of a fact as existing at present.” See, also, 2 Pomeroy's Eq. (2d Ed.) § 878 et seq. In the case at bar, it is alleged that appellee falsely represented to appellant that, if he would become a member of the association, and contract the loan, and pay the dues, interest, and premiums, the bond and mortgage would be paid and canceled by a specified number of payments. The statements made to appellant were not merely statements of what appellee had an intention of doing, nor were they simply the expression of an opinion that a certain specified number of monthly payments would satisfy the bond and mortgage; but the representation made was that of a fact, and, although it was of a matter in the future, having proved to be false, the rights of the injured party relying upon it are not different from those growing out of the misrepresentation of a present fact.” The complaint is sufficient, and the demurrer was properly overruled.

On the trial appellee was permitted to prove by other witnesses living in the neighborhood that appellants had made similar representations for a similar purpose, and upon receiving an application and premium delivered similar policies to said applicants as that delivered to appellee. This evidence was introduced over the objection of appellants, and it is earnestly insisted that the introduction of such testimony was error. It is contended on the part of the appellee that this evidence was admissible for the purpose of showing the intent or guilty knowledge of appellants in making the representations; also, that it was admissible to prove agency of the said Walker and Boyce. On the other hand, it is contended by appellants that the intent is immaterial; that, if the misrepresentations are shown, fraud is imputed, without regard to the intent with which they were made. And counsel cites some authorities which apparently sustain their position, but in our opinion, when carefully considered, they may be distinguished. The apparent conflict of authorities is attributable to the difference in the character of the actions of the individual cases. This is an action in deceit for damages for fraud, and not an action for the rescission or cancellation of a contract. The action for deceit or fraud is based upon the evil intent-the intent to deceive. Union Pacific R. R. Co. v. Barnes, 64 Fed. 80, 12 C. C. A. 48;Lord et al. v. Goddard, 13 How. 198, 14 L. Ed. 111;Hutchinson, Assignee, v. First Nat. Bank of Mich. City, 133 Ind. 271, 30 N. E. 952, 36 Am. St. Rep. 537;Lincoln v. Ragsdale, 9 Ind. App. 555, 37 N. E. 25;Pittsburg, L. & T. Co. v. Northern C. & L. Ins. Co. (C. C.) 140 Fed. 888;Frenzel et al. v. Miller, 37 Ind. 1, 10 Am. Rep. 62;Kirkpatrick v. Reeves et al., 121 Ind. 280, 22 N. E. 139;Furnas v. Friday, 102 Ind. 129, 1 N. E. 296;Hardy et al. v. Brier, 91 Ind. 91;Oliver v. Hubbard et al., 29 Ind. App. 639, 64 N. E. 927.

In Kimber v. Young, 137 Fed. 744, 70 C. C. A. 178, the rule, as established by all of the authorities that have given consideration to the subject, is stated as follows: “The basis of the action of deceit is the actual fraud of defendant-his moral delinquency-and therefore his knowledge of the falsity of the representation, or that which in law is equivalent thereto, must be averred and proved. There is much confusion in the authorities upon this subject, due in part to the erroneous assumption that that which is merely evidence of fraud is equivalent to the ultimate fact which it tends to prove, and also to the assumption, likewise erroneous, that an untrue representation which would be sufficient to support a suit in equity for a rescission of a contract is equally as available in an action of deceit.” In Derry v. Peek, 14 App. Cas. 337, 356, a well-reasoned case, Lord Fitzgerald said: “The action for deceit at common law is founded on fraud. It is essential to the action that moral fraud should be established, and since the case of Collins v. Evans, 5 Q. B. 804, 820, in the Exchequer Chamber, it has never been doubted that fraud must concur with the false statement to maintain the action. It would not be sufficient to show that a false representation had been made. It would further be established that the defendant knew at the time of making it that the representation was untrue, or, to adopt the language of the learned editors of the Leading Cases, that ‘the defendant must be shown to have been actually and fraudulently cognizant of the falsehood of his representation, or to have made it fraudulently without belief that it was true.”’ In the same case, Lord Herschell said: “I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be a proof of fraud, and nothing short of that will suffice; secondly, fraud is proved when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, carelessly, whether it be true or false.” In Lord v. Goddard, 13 How. (U. S.) 198, 211, 14 L. Ed. 111, it was said: “The gist of the action is fraud in the defendants and damage to the plaintiff. Fraud means an intention to deceive. If there was not such intention, if the party honestly stated his opinion, believing at the time that he states the truth, he is not liable in this form of action, although the representation turned out to be entirely untrue. Since the decision in Haycroft v. Creasy, 2 East, made in 1801, the question has been settled to this effect in England. The Supreme Court of New York held likewise in Young v. Covell, 8 Johns. 23, 5 Am. Dec. 316. That court declared to be well settled that this action could not be sustained without proving actual fraud in the defendant, or an intention to deceive the plaintiff by false representations. The simple fact of making representations which turn out not to be true, unconnected with a fraudulent design, is not sufficient. This decision was made 40 years ago, and stands uncontradicted, so far as we know, in the American courts.” In Frenzel et al. v. Miller, supra, the court say: “We are of opinion that, independently of any contract between the parties, no...