Humphrey v. Merriam
| Decision Date | 12 June 1884 |
| Parties | James K. Humphrey v. William R. Merriam |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from an order of the district court for Ramsey county, Brill, J., presiding, refusing a new trial, the action having been dismissed by the court upon the trial when the plaintiff rested.
Judgment affirmed.
H. J Horn and W. K. Gaston for appellant.
Chas E. Otis and Geo. B. Young, for respondent.
This was an action for damages for deceit in the sale of stock of the Florence Mining Company. The deceit consisted, as alleged by plaintiff, in the false and fraudulent statements of one Carver, defendant's agent, who made the sale, as to the value, condition, and productiveness of the company's mine, and as to the amount of its indebtedness. Assuming that the alleged representations were made, and that they were untrue, (of which facts there was competent evidence,) and that they were material, (which some of them undoubtedly were,) it was incumbent on plaintiff in such an action also to prove (1) that they were fraudulently made; and (2) that he believed them, and relied on them in making the purchase. Deceit is the type of fraud, and an intention to deceive is a necessary element or ingredient. False representations do not amount to a fraud at law in such case unless they be made with a fraudulent intent. Of course, to constitute a fraudulent intent, it is not necessary that the party knew them to be false. The intent to deceive may be shown in either of three ways: (1) That the party knew his statements to be false; or (2) that, having no knowledge of their truth or falsity, he did not believe them to be true; or (3) that, having no knowledge of their truth or falsity, he yet represented them to be true of his own knowledge. In the first case there would be a knowingly false assertion as to the fact, in the second, as to his belief, and in the third as to his knowledge, of the fact; and in each case the intent to deceive would be a necessary inference. But in each case the intent to deceive must exist, and must be proved. If this intention is absent, there is no fraud. Hence if Carver honestly stated what he believed to be the facts, and did not misstate the source or extent of his information, the defendant is not liable in this action. Kerr on Fraud & Mistake, 54, 55, et seq.; Pasley v. Freeman, 2 Smith, Lead. Cas. (7th Amer. Ed.) 92, and notes; Chandelor v. Lopus, 1 Smith, Lead. Cas. 299, and notes; Haycraft v. Creasy, 2 East, 92; Stone v. Denny, 4 Met. 151; Marsh v. Falker, 40 N.Y. 562; Chester v. Comstock, Id. 575; Meyer v. Amidon, 45 N.Y. 169; Oberlander v. Spiess, Id. 175.
The evidence in this case is so voluminous that it is impossible to state it in full, and the different parts of it are so connected that a statement of a portion would give an imperfect and inaccurate idea of the case. But, after reading the whole carefully, we are of opinion that it wholly fails to show that Carver's representations were fraudulently made, that is, made with intent to deceive. We find nothing tending to show that he knew them to be false, or that he did not honestly believe them to be true, or that he misstated the extent or sources of his information. On plaintiff's own showing it is clear that Carver had never been to the mine, and hence had no personal knowledge of its character and condition, but made his statements upon reports received and information derived from others, and that plaintiff knew that fact.
2. We also think the evidence utterly fails to show that plaintiff believed these representations, and relied on them in making the purchase. It is true that in his examination in chief he states generally that he relied on them; but his cross-examination conclusively shows that he did not rely on them as true when he made his purchase. He makes the following among other statements: ...
To continue reading
Request your trial