Prewitt v. Martin

• Decision Date: 31 March 1875
• Citation: 59 Mo. 325
• Parties: ROSE HANNAH PREWITT (late HUMES), et al., Respondents, v. SUSANNAH MARTIN, Adm'x of WM. MARTIN, dec'd, Appellant.
• Court: Missouri Supreme Court

59 Mo. 325

ROSE HANNAH PREWITT (late HUMES), et al., Respondents,

v.SUSANNAH MARTIN, Adm'x of WM. MARTIN, dec'd, Appellant.

Supreme Court of Missouri.

March Term, 1875.

Appeal from St. Louis Circuit Court.

Daniel Dillon, for Appellant.

I. Plaintiff's second instruction mis-stated the law. It told them that to establish fraud on part of defendant they had to find but these three facts: 1st. That at the time of sale plaintiff did not know the amount of the money in her guardian's hands. 2nd. That defendant did know. 3rd. That defendant did not tell plaintiff, without reference to whether he knew or had reason to believe her to be ignorant on that point or not, and without reference to why he did not inform her, and without reference to whether or not he was under any obligation to communicate to her such information. This is not the law. Where no confidential relation exists between the parties to a sale, either of them may remain silent and avail himself of his superior knowledge as to facts and circumstances equally open to the observation of both parties, or within the reach of ordinary diligence, and is under no obligation to draw the attention of the other to circumstances affecting the value of the property in question, even though he may know him to be ignorant of them. (Kerr Fraud & Mist., 97 [Am. Ed.]; 1 Sto. Eq., §§ 204. 207, 212, and note; Adams' Eq., side p. 178 [Am. Ed.]; 2 Kent., 644, 11 Ed., & 484. 12 Ed., Sto. Sales, 332 and foll.; Fox vs. McKreth, 2 Bro. C. R. 420; Laidlow vs. Organ, 2 Wheat., 195; Kintzing vs. McElrath, 5 Barr, 467; Harris vs. Tyson, 24 Pa. St., 347; But. App., 26 Pa. St., 63; Matthews vs. Bliss, 22 Pick., 48; Barnett vs. Stanton, 2 Ala., 182; Jones vs. Quick, 28 Ind., 125; Smith vs. Beaty, 2 In. Eq., 458; 1 Smith Lead. Cas., side page, 255 [6, 7, Am. Ed].

Again, the instruction told the jury that if they found certain facts, it would constitute fraud and make the sale void and of no effect, unless plaintiff, after learning all the facts, ratified said sale. A sale effected by fraud is not void but voidable at the option of the party defrauded, and is effective till rescinded. The law does not require that the party defrauded, when he learns the facts, shall ratify the sale in order to render it effective; but on the contrary, that he should rescind, if he does not want it to remain in force. (2 Par. Con., 780, 781, 782 & note [5 Ed].

II. The court erred in giving instruction marked No. 1. This instruction told the jury that if defendant obtained the bill of sale by fraudulent representations, it passed no title, without reference as to whether or not the representations were in regard to material matters or were matters of opinion, or were in regard to matters equally open to the observation of both parties, or were such as plaintiff had any right to rely on, and without reference as to whether or not plaintiff could, by the use of ordinary diligence, have ascertained the truth of the matter in regard to which the representations were made. False representations, in order to render voidable an executed sale, must be, 1st. In reference to material matters. 2nd. In reference to matters not merely of opinion. 3rd. In reference to matters not equally open to the observation of both parties. 4th. In reference to such matters as the other party had a right to rely upon. 5th. In reference to matters of which the other party could not, by the use of ordinary diligence, ascertain the truth. (1 Sto. Eq., §§ 191, 195, 197, 199, 200; Rockafellow vs. Baker, 41 Penn. St., 320; Tindall vs. Harkinson, 19 Georgia, 448; Langdon vs. Greene, 49 Mo., 363.)

Again, this instruction told the jury that if defendant obtained the bill of sale by false representations, or by fraud, it was void. This was telling the jury that the false representations need not amount to fraud in order to avoid the sale, which is not the law.

Gottschalk, for Respondent.

I. The very theory of the defense, that defendant had purchased from plaintiff $450 in money, for $100; or had settled plaintiff's claim of $350 for $50, is presumptive of fraud.

II. The instruction, that if defendant knew the amount of money coming to plaintiff, from her guardian, and concealed it, that this constitutes fraud, of which defendant complains, is evidently good law. (Barr vs. Baker, 9 Mo., 850.) Likewise, when it is duty to speak, silence constitutes fraud. (Bispham Prin. Eq., 211, §§ 213, 218.)

HOUGH, Judge, delivered the opinion of the court.

This was an action for money loaned by plaintiff to defendant. Defendant, in his answer, denied that any loan was ever made by plaintiff to him, of the money in question, and alleged, in substance, that on September 14, 1868, he purchased from the plaintiff, and took a bill of sale for, all her interest in a certain fund, then in the hands of her guardian, the amount of which neither she nor defendant knew at the time, and that the sum received by defendant, under said purchase, from said guardian, was the same money alleged to have been loaned to defendant and sued for by plaintiff; that said sum having proved to be larger than was expected by plaintiff, she became dissatisfied, and demanded that a portion thereof be returned to her, and that afterwards, on July 3, 1869, she and defendant compromised and settled all their differences in relation thereto, the defendant paying plaintiff the sum of fifty dollars, and the plaintiff receiving the same in full settlement and satisfaction of all claims or demands which she had, or claimed to have, against him on account of any money received by him of her guardian.

Plaintiff replied, denying the alleged ignorance of herself and defendant of the amount of money belonging to her in the hands of her guardian; also, the alleged sale of her interest in the same, and the alleged compromise and settlement, and charged that she was induced to sign the bill of sale and receipt, set up by defendant, by false and fraudulent representations of defendant to her, as to their contents, and prayed judgment as in her petition.

It appears, from the testimony, that the plaintiff, soon after coming of age, for and in consideration of the sum of one hundred dollars, executed and delivered to the defendant a bill of sale for all her interest in her father's estate, then being or that might thereafter come into the hands of her guardian, and authorized him to collect the same. The consideration expressed on the face of the bill of sale, was four hundred dollars, and the estate consisted of money in the guardian's hands, amounting to four hundred and fifty dollars. After the defendant received the money, plaintiff and defendant both receipted for the same to the guardian. According to defendant's testimony, some dispute arose between them as to whether the money was loaned to defendant or absolutely transferred to him, and he, thereafter, by way of compromise and settlement of their conflicting claims, gave plaintiff the sum of fifty dollars, and took from her a receipt in full of all money collected by him of her former guardian. This receipt is referred to in defendant's instructions, as exhibit “A.” The testimony for the plaintiff strongly tended to show that she was ignorant of the true character of both these instruments, signed by her, being unable to read manuscript, though able to write her name; she testifies that she had previously borrowed from defendant the sum of one hundred dollars, and that she thought, in signing the bill of sale, that she was only enabling the defendant to collect the money belonging to her in her guardian's hands and hold the same as security for the sum so borrowed. No satisfactory explanation was given for inserting a consideration of four hundred dollars in the bill of sale, when the sum really paid was only one hundred dollars. The defendant himself testifies that he does not know why it was inserted. It further appears, that the plaintiff herself received the said sum of four hundred and fifty dollars from her guardian, in the presence of the defendant, and afterwards, as she testifies, delivered it to him as a loan to the extent of three hundred and fifty dollars, the amount remaining due to her after deducting the one hundred dollars previously borrowed, which sum of three hundred and fifty dollars, defendant then promised to return to her on the following Saturday. Testimony was introduced, tending to show ignorance on the part of the plaintiff, and knowledge on the part of the defendant, of the amount of plaintiff's patrimony, and a fraudulent purpose on the part of defendant prior to the execution of the bill of sale, to possess himself of the same, for the sum of one hundred dollars.

Defendant testified to the utmost good faith, on his part, in making the alleged purchase, denied all knowledge at the time of the real amount in the guardian's hands, and in support of his own, introduced other testimony to show that plaintiff was correctly informed of the contents of the bill of sale and receipt, before they were signed by her. He also offered to prove, as a reason for making the purchase and as showing the estimated value of the plaintiff's estate, certain statements made to him by Mrs. Alton, with whom plaintiff at the time resided as a member of her family, which statements were by the court excluded, and defendant excepted. On the cross-examination of the plaintiff, defendant read to her portions of her deposition, taken in the cause, and asked her whether she had sworn to the same when her deposition was taken, and she answered that she supposed so. The court thereafter permitted the plaintiff's counsel to read in evidence the whole of said deposition, against the objections of the defendant to which action of the court, the defendant excepted. There was testimony tending to show a promise by the defendant, after the dispute arose as to the nature of the transaction between him and plaintiff, to pay back to plaintiff the money...