Nysewander v. Lowman

• Decision Date: 17 May 1890
• Citation: 24 N.E. 355,124 Ind. 584
• Parties: Nysewander v. Lowman.
• Court: Indiana Supreme Court

124 Ind. 584

24 N.E. 355

Nysewander

v.Lowman.¹

Supreme Court of Indiana.

May 17, 1890.

Appeal from circuit court, Jay county; Leander J. Monks, Special Judge.

Haynes & Cox and Headington & La Follette, for appellant. D. T. Taylor, R. H. Hartford, J. B. Jaqua, and J. A. Jaqua, for appellee.

Elliott, J.

The appellee filed a complaint against the appellant, and caused notice to be given him by publication. At the time fixed by the notice the appellant appeared by counsel, and filed an application for a change of judge, and his application was granted. After the appearance thus entered the appellee filed an amended complaint, different in some material respects from the original, but based upon the same transaction, setting forth substantially the same facts, and relating to the same real estate. In various modes the appellant objected to the filing of the amended complaint, and challenged the right of the court to compel an answer.

We are satisfied that there was no error in any of the rulings of the trial court upon this subject. The appellant, by his general appearance, was in court for all legitimate purposes, and, both by our Code and under our decisions, it was within the discretion of the trial court to permit the filing of an amended complaint, and this was all that was done in this instance; for the complaint, as amended, related to the transaction and property embraced in the original pleading. There was no substitution of an independent transaction for a radically different one. It is well settled that the trial court has a wide discretion in the matter of amendments, and, unless it clearly appears that there was an abuse of discretion, this court will not interfere. The notice by publication was such as the law requires, and it is a valid notice. Quarl v. Abbott, 102 Ind. 233, 1 N. E. Rep. 476. In this instance it accomplishes all that a personal notice by the service of a summons could possibly do, for it brought the defendant into court, and gave him full opportunity to litigate the legal controversy. Where a notice, whatever its character, brings a defendant into court, secures an appearance, and gives an adequate opportunity to the defendant to be heard, there is due process of law, and objections are unavailing.

The complaint alleges that the plaintiff exchanged a tract of land with the defendant for 43 shares of the capital stock of a corporation known as the “Superior Manufacturing Company;” that the defendant was at the time, and long had been, the president of the corporation, which was located and engaged in business at the town of New Carlisle, in the state of Ohio; that he knew the financial condition of the corporation, and the value of its capital stock; that for the purpose of defrauding the plaintiff, and to induce him to accept the stock, the defendant represented that the corporation was in a good financial condition, and that its capital stock was of par value; that for the purpose of preventing the plaintiff from ascertaining the condition of the corporation, and the value of its capital stock, the defendant fraudulently requested the plaintiff to make no inquiries as to the financial condition of the company, or as to the value of its capital stock, for the reason that he did not want other stockholders to know that he was selling his stock; that the plaintiff, having no knowledge of the financial condition of the corporation, or of the value of its capital stock, relied upon the representations of the defendant; that the corporation was insolvent, and its capital stock worthless; that the defendant, at the time he made such representations, knew that they were false, that the corporation was insolvent, and its capital stock worthless; that the plaintiff, relying upon the representations of the defendant, exchanged his land for the stock. The complaint states facts entitling the plaintiff to some relief, and such a complaint will repel a demurrer. Bayless v. Glenn, 72 Ind. 5. If it were conceded that the facts stated do not entitle the plaintiff to a vendor's lien, it would not avail the defendant, for, as the complaint states a cause of action for damages caused by fraudulent representations, a demurrer will not prevail against it. We have assumed that the complaint shows that the fraud of the defendant entitles the plaintiff to damages, if it does no more, and we are clear that this assumption is well grounded; for the complaint shows that false representations of a material character were knowingly made, and that the defendant resorted to an artifice to deceive and defraud the plaintiff, and such a tort gives the wronged party a cause of action. The case of Johnson v. Cookerly, 33 Ind. 151, is not in point; for in that case the plaintiff sought a rescission of a contract, and yet clung to part of the property he had received in exchange, while here the property which the defendant retains is averred to be worthless. But a party may retain property, and sue for damages caused by fraudulent representations. This doctrine is as well established as any within the whole range of the law. Johnson v. Culver, 116 Ind. 278, 19 N. E. Rep. 129; St. John v. Hendrickson, 81 Ind. 350;Burnham v. Mitchell, 34 Wis. 117;Parker v. Marquis, 64 Mo. 38;Nauman v. Oberle, 90 Mo. 666, 3 S. W. Rep. 380;Whitney v. Allaire, 4 Denio, 554;Grabenheimer v. Blum, 63 Tex. 369. A party who suffers injury by the fraud of another may, however, waive his right to damages. St. John v. Hendrickson, supra; Cooley, Torts, 505. But a mere affirmance of the contract by retaining the property received under it does not bar an action for damages, although it may defeat a suit for rescission. Johnson v. Culver, supra; McQueen v. Bank, 2 Ind. 413; Campbell v. Fleming, 1 Adol. & E. 40. Mr. Bigelow seems to carry the doctrine to the extent of holding that in no event can a claim for damages caused by a fraud be waived. Law of Frauds, 69. But, as shown by Judge Cooley and by the authorities he cites, Mr. Bigelow's position is untenable. Cooley, Torts, 505, and authorities cited in note. The appellant's counsel mistake the point in dispute, and, instead of proving that the plaintiff cannot recover damages, prove that he cannot rescind the contract. Their arguments and their authorities are entirely without weight, because they are totally irrelevant.

The measure of damages in such a case as this is the difference between the actual value of the corporate stock and its value had the facts been as represented by the defendant. Booher v. Goldsborough, 44 Ind. 490;Morse v. Hutchins, 102 Mass. 439; Stiles v. White, 11 Metc. 356; Noyes v. Blodgett, 58 N. H. 502. We do not hold, nor mean to hold, that the amount of damages is to be determined solely from the statements of the defendant as to the value of the stock, for it is...