Mears v. Accomac Banking Co.

• Citation: 160 Va. 311
• Case Date: April 07, 1933
• Court: Supreme Court of Virginia

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160 Va. 311 UPSHUR T. MEARS
v.
ACCOMAC BANKING COMPANY, INC., ET AL. Supreme Court of Virginia, Richmond. April 7, 1933.

Present, All the Justices.

1. PLEADING — Second Amended Declaration — Plaintiff Allowed to Develop His Case as Fully as He Could under the First Amended Declaration — Sustaining Demurrer to the First Amended Declaration Held Harmless Error — Moot Question — Case at Bar. — In the instant case the trial court sustained demurrers to plaintiff's original declaration and to his first amended declaration. Plaintiff filed his second amended declaration in accordance with the leave granted by the court and was allowed to develop his case thereunder as fully and completely as he could have done under the first amended declaration. Plaintiff having excepted to the ruling of the trial court sustaining the demurrers to the original and first amended declarations, insisted that the Supreme Court of Appeals should pass on the sufficiency of the original and amended declarations.

Held: That if there was error in sustaining the demurrers to the original and first amended declarations it was harmless, and the question presented was moot.

2. APPEAL AND ERROR — Harmless Error. — The Supreme Court of Appeals does not undertake to correct harmless errors.

3. EVIDENCE — Motion to Strike out Evidence — When Motion Sustained. — A motion to strike out all the evidence of the adverse party is very far-reaching and should never be entertained where it does not plainly appear that the trial court would be compelled to set aside any verdict for the party whose evidence it is sought to strike out.

4. EVIDENCE — Motion to Strike out Evidence — Evidence Viewed Very Much as on a Demurrer to the Evidence — Inferences from the Evidence Must Be Drawn in Favor of Plaintiff. — In considering a motion to strike out all the plaintiff's evidence, the evidence is to be considered very much as on a demurrer to the evidence. All inferences which a jury might fairly draw from plaintiff's evidence must be drawn in his favor; and where there are several inferences which may be drawn from the evidence, though they may differ in degree of probability, the court must adopt those most favorable to the party whose evidence it is sought to have struck out, unless they be strained, forced, or contrary to reason.

5. FRAUD AND DECEIT — Action against Bank and Its Cashier — Striking out Plaintiff's Evidence and Directing a Verdict for Defendant Held Error. — In an action against a bank and its cashier for fraud in the sale of bonds to plaintiff, the fraud consisting of misrepresentations to the plaintiff in regard to the worth of the bonds and as to the banking company being behind them, considering the evidence and all just and proper inferences which might have been drawn therefrom by the jury, the trial court erred in striking out the plaintiff's evidence and instructing the jury to find for the defendant.

6. FRAUD AND DECEIT — Misrepresentations — Actual and Constructive Fraud — Misrepresentations Innocently or Knowingly Made. — If one represents as true what is really false, in such a way as to induce a reasonable man to believe it, and the representation is meant to be acted on; and he to whom the representation is made, believing it to be true, acts on it, and in consequence thereof sustains damage, there is such fraud as will support and action for deceit at law, or a bill for rescission of the transaction in equity. Whether the representation is made innocently or knowingly, if acted on, the effect is the same. In the one case the fraud is constructive; in the other it is actual.

7. FRAUD AND DECEIT — Misrepresentations — Party Relying on Misrepresentations Entitled to Relief. — Where one, who is reasonably expected to know, makes a positive representation of a material fact, when he is ignorant whether the fact is true or untrue, and it turns out to be untrue, causing damage to another who in good faith relied upon the representation as true, the injured party is entitled to relief.

8. FRAUD AND DECEIT — Misrepresentations — Party Relying on Misrepresentations Entitled to Relief — Parties Not on an Equal Footing — Representations Matters of Opinion. — Where the parties are not on an equal footing with reference to the subject of the transaction (as where one of them has or is presumed to have means of information not equally open to the other), and the party to whom the false representations are made is induced to enter into the contract by reliance on the truth of such representations, such representations, even though of matters of opinion as to the value of property and the like, will be regarded as fraudulent, and afford the injured party good ground for relief.

9. FRAUD AND DECEIT — Representations — Promise or Representation of Fact. — When, through inducements held out by one person, even only by means of a promise, another person is influenced to change his position so that he cannot be placed in statu quo, and will be seriously damaged unless the promise is fulfilled, then the refusal to perform is fraud.

10. FRAUD AND DECEIT — Limitation of Actions — Section 5811 of the Code of 1930 — Time of Discovery of Fraud — Case at Bar. — Section 5811 of the Code of 1930 provides that the right to recover money paid under fraud or mistake shall be deemed to accrue at the time such fraud or mistake is discovered, or by the exercise of diligence ought to have been discovered. In the instant case, an action for fraud arising out of the sale to plaintiff of certain bonds, the interest on the bonds was regularly paid by the defendants from the time they were purchased by the plaintiff in 1923 until August, 1929, and up to that time plaintiff had no reason to suspect that they were worthless, or to make inquiry in regard to them. On the other hand, the conduct of the defendants concealed the true status of the bonds from the plaintiff, and he had every reason to believe, until default was made in the payment of interest and the transaction was repudiated by the defendants in 1929, that his money was safely invested, as represented to him by the defendants at the time he was induced to turn it over to them for that purpose.

Held: That plaintiff's claim was not barred by the statute of limitations because of lack of diligence on his part to discover the fraud.

Error to a judgment of the Circuit Court of Accomac county, in an action of trespass on the case. Judgment for defendants. Plaintiff assigns error.

The opinion states the case.

Mapp & Mapp and Herbert Barnes, for the plaintiff in error.

James E. Heath and Stewart K. Powell, for the defendants in error.

CHINN, J., delivered the opinion of the court.

This is an action brought by Upshur T. Mears, herein referred to as plaintiff, against the Accomac Banking Company, Incorporated, J. Merritt Chandler, cashier of said bank, and J. Merritt Chandler, individually, herein referred to as defendants, to recover damages for fraud and deceit.

The original declaration was demurred to by the defendants on the ground that it blended an action of tort with an action ex contractu. The demurrer was sustained with leave to the plaintiff to file an amended declaration, which was done. The amended declaration was then demurred to on the same ground, which demurrer was also sustained by the court, whereupon plaintiff asked leave to file a second amended declaration, which leave was granted upon condition that the plaintiff pay the costs which had accrued up to the date of the order sustaining the last mentioned demurrer. This action of the court is assigned as error.

1, 2 It appears that the plaintiff filed his second amended declaration is accordance with the leave granted by the court and was allowed to develop his case thereunder as fully and completely as he could have done under the first amended declaration.

Practically the same situation arose in the case of Forbes & Co. Southern Cotton Oil Co., 130 Va. 245, 108 S.E. 15, 16. In that case the plaintiff filed an original and also an amended declaration to both of which the court sustained a demurrer, and the plaintiff by leave of the court filed a second amended declaration, a demurrer to which was overruled. The court said: "The plaintiff was permitted to prove its whole case under the second amended declaration, but, having excepted to the ruling of the trial court sustaining the demurrer to the original and first

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amended declarations, as provided by section 6116 of the Code, it insists that we shall pass upon the sufficiency of the original and amended declarations. If there was error in sustaining the demurrer thereto it was harmless, and the question presented is moot. The statute was not intended to apply to such a case. This court does not undertake to correct harmless errors."

After the conclusion of the plaintiff's evidence, the defendants, without introducing any evidence, moved the court to...