Rice v. Press

• Decision Date: 06 January 1953
• Docket Number: No. 528,528
• Citation: 94 A.2d 397,117 Vt. 442
• Parties: RICE v. PRESS.
• Court: Vermont Supreme Court

Page 397

94 A.2d 397

117 Vt. 442

RICE v. PRESS.

No. 528.

Supreme Court of Vermont.

Jan. 6, 1953.

John L. Folsom and Harold C. Sylvester, St. Albans, for plaintiff.

P. C. Warner, St. Albans, A. Pearley Feen, Burlington, for defendant.

Before SHERBURNE, C. J., and JEFFORDS, CLEARY, ADAMS, JJ., and HUGHES, Superior Judge.

ADAMS, Justice.

This is an action of tort for fraud against the defendant, an attorney at law, for withholding too large a fee in connection with legal services performed for the plaintiff. Trial was by jury with verdict and judgment for the plaintiff. The case is here on exceptions of the defendant.

After verdict and before judgment thereon, the defendant filed a motion in arrest of judgment. The motion contained various grounds which are summarized in the defendant's brief as raising the question: 'Were the allegations in the plaintiff's declaration sufficient to constitute actionable fraud?' The motion was denied and the defendant allowed an exception. This is the first one briefed.

A judgment cannot be arrested unless the complaint is so totally defective in substance that it would have been bad on general demurrer. Raithel v. Hall, 97 Vt. 469, 471, 124 A. 586; Johnson v. Hardware Mutual Casualty Co., 109 Vt. 481, 499, 1 A.2d 817.

The declaration alleges in substance that the plaintiff entered into a contract with the defendant regarding a claim of the estate of Arthur Rice against one Reginald Baker in the sum of $7,263.23, which Baker was ready to pay as soon as he could obtain a veteran's loan based upon the distress of Baker; that the defendant agreed to confer with Baker and if necessary bring a friendly suit against him so that he could obtain the loan; that the plaintiff agreed to pay the defendant a reasonable sum for what work the defendant should do in connection with the conference and the bringing of the suit; that the defendant conferred with Baker and brought the suit, whereupon Baker obtained the loan and paid the defendant $7,263.23 and the suit was marked, 'Settled and Discontinued'; that the defendant expended less than one day's work and it became his duty to refrain from charging the plaintiff more than a reasonable sum for his services and to truthfully inform the plaintiff what such reasonable sum was and the basis upon which it was computed, yet the defendant, being an attorney-at-law practicing in Vermont and well knowing the statement to be false, falsely and fraudulently and with intent to deceive the plaintiff, informed him that he, the defendant, was by law entitled and without any agreement on the part of the plaintiff, to charge him 33 1/3% of the $7,263.23 but he would charge only 20% or $1,452.65; that the statement was made to induce the plaintiff to pay the defendant a larger sum than he was entitled to; that the plaintiff being ignorant of the falsity of the defendant's representations and relying upon them allowed the defendant to retain $1,452.65 as pay for his services which services were worth only $100 and the defendant should have charged only that sum; that the plaintiff had demanded of the defendant the difference between said amounts, namely, $1,352.65 which the defendant had refused to pay to the damage of the plaintiff.

In considering the motion in arrest of judgment, we are concerned only with the sufficiency of the allegations in the declaration. After verdict every presumption is to be made in favor of the sufficiency of the pleadings. Newton v. Brown, 49 Vt. 16, 18; Johnson v. Hardware Mutual Casualty Co., 109 Vt. 481, 499, 1 A.2d 817. After verdict all averments on the side of the successful party that were involved in the issue tried, will be taken to have been duly proved or admitted, unless something is placed upon the record to show the contrary. Gates v. Bowker, 18 Vt. 23, 26; Newton v. Brown, supra; State v. Freeman, 63 Vt. 496, 499-504, 22 A. 621, and cases cited.

To constitute actionable fraud, the representations must be of existing facts relating to the subject matter of the contract and affecting its essence and substance, made as inducements to the contract, such representations being false and at the time known to be false, or made as of knowledge without in fact knowing them to be true, not open to the knowledge of or known to the other party and relied upon by him in making the contract to his damage. Thomas v. Johnson, 108 Vt. 363, 369, 187 A. 375.

The defendant says in his brief that in the absence of contract, the defendant was entitled to charge what his services were reasonably worth and the plaintiff was obligated to pay that sum. With that we agree. What that sum is depends upon many things which it is not necessary to enumerate here. Vilas v. Downer, 21 Vt. 419, 424-425; Platt, Adm'x v. Shields and Conant, 96 Vt. 257, 268-269, 119 A. 520. It was aptly said by this Court in the former case, 'It would be wholly unjust, to require a person employing a lawyer to manage a suit, (when of course it could not be known to either party how long it would continue in court, or the amount of professional labor, which would be required to carry it through,) to stipulate as to the amount of his charges, or else be compelled to pay such charges, as the lawyer should see fit to make against him.'

The defendant, in his brief, in answer to his posed question, 'Were the allegations in the plaintiff's declaration sufficient to constitute actionable fraud?' by way of summary, says that neither the allegation that the defendant represented he was entitled 'by law' nor the allegation of the duty of the defendant to refrain from charging more than a reasonable sum for his services are allegations of facts upon which an action of fraud may be predicated. Without question, as a matter of fact, in the absence of agreement, it was the duty of the defendant to refrain from charging more than his services were reasonably worth. The defendant ignores the full allegation which, after setting forth what the defendant was employed to do, states that the defendant represented that he was by law and without any agreement on the part of the plaintiff, entitled to charge 33 1/3% of the $7,263.23, the amount he had received for the plaintiff. The fraud rests upon the statement, that by law he was entitled to charge 33 1/3%. We know of no law, nor has any been pointed out to us, that would entitle the defendant to make that charge under the circumstances alleged.

We are not unmindful of the general rule, that fraud cannot be predicated upon misstatements of law or misrepresentations as to matters of law. 23 Am.Jur., Fraud & Deceit, § 45, p. 809. This rule, however may be rendered inapplicable by the existence of peculiar facts and circumstances. A representation of domestic law may constitute fraud when it is accompanied by some inequitable conduct on the part of the person making it which induces the other party to rely and act thereon. Much depends upon whether the parties deal upon equal terms. Thus relief may be granted because of such misrepresentations when there is a relation of trust and confidence between the parties or where the speaker has, or professes to have, superior knowledge of the law. Hence, the misrepresentation is actionable where one who knows the law deceives another by misrepresenting the law to him or knowing such other to be ignorant of it, takes advantage of him through such ignorance. 23 Am.Jur., Fraud & Deceit, § 48, pp. 812-813.

Misrepresentations involving a point of law will be regarded as actionable misrepresentations of fact if it appears that they were so intended and understood. 37 C.J.S., Fraud, § 55, page 326, note 78. It has been laid down by an eminent English jurist that 'a representation concerning a man's private rights, though it involves matters of law, is as a whole deemed to be a statement of fact.' Anno. 33 A.L.R. 881. See also, Provident Life & Accident Ins. Co. v. Clark, 175 Okl. 282, 52 P.2d 763; Stark v. Equitable Life Assur. Soc. of United States, 205 Minn. 138, 285 N.W. 466; Penn Mutual Life Ins. Co. v. Nunnery, 176 Miss. 197, 167 So. 416; Security Savings Bank v. Kellems, Mo.App., 274 S.W. 112.

Tested by the foregoing rules, we hold that the allegations in the declaration, as against the motion in arrest of judgment, sufficiently set forth actionable fraud. There was no error in denying the motion.

The defendant, at the close of the plaintiff's evidence and again at the close of all the evidence, made a motion for a directed verdict. It was denied and an exception allowed. The grounds of the motion were, in substance, (1) that the plaintiff had accepted and used a check given in settlement by the defendant and there was an accord and satisfaction, (2) that no fraud had been shown and (3) that the plaintiff had shown no damage, he having introduced no evidence showing what a reasonable charge for the services of the defendant should have been.

We consider the second ground of the motion first. In passing upon the question raised by this motion, we view the evidence in the light most favorable to the plaintiff. We do not pass upon the credibility of the witnesses, because the tendency of the evidence and not its weight is to be considered. The effect of modifying evidence is to be excluded. If there is evidence fairly and reasonably tending to support the plaintiff's claim, it is immaterial to the motion that such evidence is contradicted, for contradictions are for the jury to resolve. Johnson v. Hardware Mutual Casualty Co., supra, 109 Vt. 481, 491-492, 1 A.2d 817; Tinney v. Crosby, 112 Vt. 95, 101, 22 A.2d 145, and cases cited; Hill v. Stringer, 116 Vt. 296, 299, 75 A.2d 657.

We need not, in view of our discussion of the declaration, recapitulate the evidence bearing upon the issue of fraud. It is sufficient to say that a careful examination of the record, with the foregoing principles in mind, shows that there was evidence that fairly and reasonably tended to support the...