Penn Mut. Life Ins. Co. v. Taggart
| Decision Date | 30 August 1928 |
| Docket Number | 18675. |
| Citation | 144 S.E. 400,38 Ga.App. 509 |
| Parties | PENN MUT. LIFE INS. CO. v. TAGGART. |
| Court | Georgia Court of Appeals |
Syllabus by Editorial Staff.
Under Civ. Code 1910, § 4622, actual fraud involves moral guilt since there must be intentional purpose to deceive, while constructive fraud does not involve moral guilt, since act itself, when taken in connection with relationship of parties, and not guilty intent, constitutes constructive fraud.
[Ed Note.-For other definitions, see Words and Phrases, First and Second Series, Actual Fraud; Constructive Fraud.]
Under Civ. Code, § 4622, either actual or constructive fraud may consist in misrepresentation of material fact.
Under Civ. Code 1910, § 4622, whether fraud is actual depends on whether false representation was made with purpose and intent to deceive.
Material misrepresentation, constituting actual fraud, may give rise to independent action in tort for deceit to recover damages thus occasioned.
In suit to recover damages for deceit, under Civ. Code 1910, § 4410 it must be shown, not only that material misrepresentation was made to induce plaintiff to act, that he had right to act, and that he did act thereon to his injury, but also that representation was willfully and knowingly false, or reckless or fraudulent representation about that which party pretends to know, but about which he knows that he does not know, which is legal equivalent of knowledge, and by which false pretense purpose is to deceive.
Constructive fraud, defined by Civ. Code 1910, § 4622, as act or omission contrary to duty or confidence, is broadened, in so far as relating to misrepresentation of material fact, by section 4623, making innocent misrepresentation, acted on, fraud, without reference to relationship between parties; hence fact that party occupies confidential relationship does not change constructive fraud, in which there is no intent to defraud, into actual intentional fraud.
Innocent misrepresentations, made by one charged with special duty to opposite party to know and to impart truth, cannot amount to anything more than constructive fraud, under Civ. Code 1910, §§ 4622, 4623, and as such do not create independent right of action for damages in tort in favor of injured party, but may support action in equity to rescind contract induced by misrepresentations, under § 4113, or be pleaded in defense to contract.
Civ. Code 1910, § 5406, requiring superior courts to give effect to all rights of parties, legal and equitable, as case may allow, is intended to afford party opportunity to have all rights in regard to subject-matter tried in one action in superior court, but does not support to create rights otherwise unauthorized or prohibited.
Civ. Code 1910, § 4623, providing that innocent misrepresentation of material fact, acted on by injured party, constitutes legal fraud, does not define rights or remedies accruing to injured party from perpetration of constructive fraud, which rights are limited by section 4410, requiring guilty purpose to deceive to support action in tort for fraud.
Only such rights as litigants have must be given effect by superior courts of state.
Petition by assignee of insurance policy to recover damages in tort against insurance company for misrepresentation of cash surrender value of policy, inducing assignee to indorse note to his damage, not being grounded on actual fraud, involving conscious moral guilt, with intention to deceive, did not set forth cause of action in tort for damages.
Error from Superior Court, Chatham County; Peter W. Meldrim, Judge.
Action by G. I. Taggart against the Penn Mutual Life Insurance Company. Judgment for plaintiff, and defendant brings error. Reversed.
H. Wiley Johnson, of Savannah, for plaintiff in error.
Lawrence & Abrahams, and Edwin A. Cohen, all of Savannah, for defendant in error.
Syllabus OPINION.
1. Fraud is either actual or constructive. Either constitutes legal fraud. Actual fraud "consists of any kind of artifice by which another is deceived." It involves moral guilt, since there must be an intentional purpose to deceive. Constructive fraud "consists in any act of omission or commission, contrary to legal or equitable duty, trust, or confidence justly reposed, which is contrary to good conscience." It does not involve moral guilt, since it is the act itself, as taken in connection with the relationship of the parties, and not the guilty purpose or intent, which constitutes constructive fraud. Civil Code 1910, § 4622.
(a) Either actual or constructive fraud may consist in the misrepresentation of a material fact. Whether the fraud is actual depends on whether the false representation was made with the purpose and intent to deceive.
(b) A material misrepresentation, constituting actual fraud, may give rise to an independent action in tort for deceit, to recover for damage thus occasioned. In such a suit it is necessary to show, not only that a material misrepresentation was made for the purpose of inducing the plaintiff to act, that he had a right to act, and that he did act thereon to his injury, but it must be shown that such representation was willfully and knowingly false, or what the law regards as the equivalent of knowledge, a reckless or fraudulent representation about that which the party pretends to know, but about which he knows that he does not know, and by which false pretense his purpose and intent is to deceive. Thus, in any suit sounding in tort for damages on account of actual fraud, the gist of the action is the purpose and design to deceive. Civil Code 1910, § 4410; Wooten & Goolsby v. Calahan, 32 Ga. 382, 386; Cooley v. King & Co. 113 Ga. 1163 (2), 39 S.E. 486; De Vaughn v. Harris, 103 Ga. 102, 29 S.E. 613; Gordon v. Irvine, 105 Ga. 144, 148, 31 S.E. 151; Burpee v. Holmes, 132 Ga. 464, 466, 64 S.E. 486; Dumas v. Ware & Harper, 143 Ga. 212, 84 S.E. 538; Camp v. Carithers, 6 Ga.App. 608 (5), 65 S.E. 583; Michie's Encyclopedic Digest, vol. 10, p. 409, 3.
(c) Constructive fraud, as limited and defined by section 4622 of the Civil Code of 1910, and made to "consist in any act of omission or commission, contrary to legal or equitable duty, trust, or confidence justly reposed, which is contrary to good conscience," is broadened in so far as it relates to misrepresentations of a material fact by the succeeding section of the Code (section 4623), since the last-mentioned section specifically provides that innocently made misrepresentations, if acted on by the opposite party constitute fraud, without any reference to any limitation being fixed upon the relationship occupied by the parties to whom and by whom such representations are made. Consequently, an innocently made material misrepresentation, which the opposite party has a right to act on, and does in fact act on to his injury, is...
To continue reading
Request your trial