Sachs v. Blewett
| Decision Date | 05 June 1933 |
| Docket Number | 26,341 |
| Citation | 185 N.E. 856,206 Ind. 151 |
| Parties | Sachs et al. v. Blewett |
| Court | Indiana Supreme Court |
From Marion Superior Court; William O. Dunlavy, Judge.
Action by Effie Blewett against Max Sachs and another. From judgment for plaintiff, defendants appealed. Transferred from Appellate Court under § 10, cl. 2, Acts 1901, ch. 247 p. 565, § 1357, Burns 1926, § 1359, Baldwin's 1934.
Reversed.
Saul I. Rabb and Richard L. Ewbank, for appellants.
Telford B. Orbison, for appellee.
OPINION
The appellee brought this action against the appellants by a complaint in two paragraphs, alleging in substance: That in June, 1928, the appellee was the owner of certain real estate in the city of Indianapolis; that she advertised said property for sale at auction; that it was announced before the sale that the successful bidder would be required to immediately make a deposit of ten per cent of the purchase price of the property as good-faith money and part payment on the property; the balance of the purchase price to be paid upon delivery of the proper conveyance and abstract of title; that when the bidding began one John Hauk made a bona fide bid of $ 12,100.00; that thereupon the defendants (appellants) bid $ 12,150.00; that Hauk then made a bona fide bid of $ 12,200.00, and that thereafter the defendants bid $ 12,225.00; that no other bids were made and that the auctioneer declared the property sold to the defendants for $ 12,225.00, the highest bid received; that plaintiff then demanded of the defendants a ten per cent deposit, and that defendants represented that they did not have the money with them with which to make the deposit, and that they did not have money in bank so that a check could be given; that plaintiff then informed them that a $ 500.00 deposit would be acceptable in lieu of a ten per cent deposit; that the defendants represented that they would pay her the $ 500.00 deposit at their place of business in the afternoon; that plaintiff relied upon said representations and believed them and consented to wait for the deposit money; that she went to their place several times and each time they made some excuse for not paying; that defendants finally told her they did not believe the property was worth the amount of the bid; that they would only pay $ 10,750.00; that defendants had attended said auction sale for the fraudulent purpose of "blocking the sale of said property," and to make fraudulent bids therefor in order to prevent the sale to any honest bidder; that all of the bids made by the defendants were fraudulently made with the intention of cheating and defrauding the plaintiff and with no intention to comply therewith, and for the purpose of preventing the sale of the property; that the plaintiff and her agent, the auctioneer, were ignorant of the fact that the bids were false and fraudulent and believed them to be in good faith; that she was at all times ready to comply with the conditions of the sale as announced by the auctioneer; that John Hauk was a qualified bidder at said sale and was ready and willing to purchase the property at his bid of $ 12,200.00; that except for the fraudulent bid of the defendants he would have been declared the successful bidder and the property sold to him at that figure; that afterwards Hauk refused to purchase the property at the price offered, and that plaintiff made a diligent effort to sell the property for $ 12,200.00, and was finally forced to hold a second auction sale approximately three weeks after the first and that at said sale the property was sold for $ 10,350.00. By reason of said facts she claims damages for the difference between the amount of Hauk's bid at the first auction and the price at which the property sold and the expenses of the sale, interest, and attorney's fees. The second paragraph is practically identical with the first, except that it further alleges that the defendants conspired to cheat and defraud the appellee, believing that if they were able to prevent any honest bidder from purchasing the property and have themselves declared successful bidders, they would be able to obtain the property for a sum much less than their bid because of the fact that it was necessary for the appellee to sell immediately in order to prevent foreclosure.
There was a demurrer to the complaint as a whole for want of facts, challenging its sufficiency upon the ground that The overruling of this demurrer is assigned as error.
Stripped of its conclusions and descriptive adjectives, the complaint alleges that the appellants orally agreed to purchase the real estate, and that they intended to repudiate the agreement with the object of procuring the real estate at a lower price. The promises and representations were only false in the sense that the appellants intended to and did refuse to comply with them and pay for the property as agreed.
It is provided by statute that no action shall be brought upon any contract for the sale of lands unless the contract or some memorandum or note thereof shall be in writing, signed by the party to be charged. Section 8045, Burns 1926, § 8363, Baldwin's 1934.
It is obvious that no action would be brought upon oral promises and agreements to purchase real estate that were complied with. The statute denying an action upon such contracts refers to oral contracts and agreements for the sale of land which are not carried out.
Modern authorities universally agree that sales by auction are within the statute of frauds unless expressly exempted by the statute. 2 R.C.L. 1135.
It is not alleged that any of the appellants' promises or agreements were in writing, and in the absence of such an allegation in the pleading it must be presumed that they were oral. Horner v. McConnell (1901), 158 Ind. 280, 63 N.E. 472.
It is conceded that there is no liability under the contract because of the statute of frauds. The action is in tort and is based upon the alleged fraudulent misrepresentation of appellants' intention with respect to carrying out the contract at the time it was made. In determining whether the action will lie, it is not material that the contract which the appellants intended not to comply with was unenforcible, since if the action can be maintained at all there would be liability in tort even though the contract to purchase the property were in writing and enforcible. The only difference is that in the latter event the appellee would also have an action for damages for breach of the contract.
It is not alleged that there was any relationship of trust or confidence between the parties, nor are any circumstances shown which would entitle the appellee to place more than ordinary reliance in the promises of the appellants; nor is it alleged that the appellants violated any duty that they owed the appellee except such as was predicated upon their unenforcible oral contract.
If the complaint can be upheld, it must be upon the theory that where a contract is entered into with the intention of not carrying it out, an action will lie in tort for fraud because of the intention not to carry out the contract, independent of and in addition to any action that may lie upon the contract or for its breach.
The appellee asserts that a state of mind is a fact, and that a misrepresentation as to an intention to carry out a contract is a misrepresentation of a fact upon which an action for fraud may be predicated. There appears to be much conflict of authority upon the subject. 12 R.C.L. 261.
But there is no real conflict in the authorities in this state.
A fraudulent intent alone is no actionable. There must be some fraudulent, overt act, or failure to act when duty requires it, or a breach of trust or confidence, and such must be the efficient or proximate cause of injury.
"Fraud cannot be predicated upon acts which the party charged has a right by law to do, nor upon the non-performance of acts which by law he is not bound to do, whatever may be his motive, design or purpose, either in doing or not doing the acts complained of." Franklin Insurance Co. v. Humphrey et al. (1879), 65 Ind. 549.
This court has repeatedly said that actionable fraud cannot be predicated upon a promise to do a thing in the future although there may be no intention of fulfilling the promise. Hayes v. Burkam (1875), 51 Ind. 130; Burt et al. v. Bowles et al. (1879), 69 Ind. 1; Bethell v. Bethell (1883), 92 Ind. 318; Balue v. Taylor et al. (1893), 136 Ind. 368, 36 N.E. 269; Robinson et al v. Reinhart et al. (1893), 137 Ind. 674, 36 N.E. 519.
Two Indiana cases are cited as in conflict with this view, but they are not. Both were actions in equity to set aside a conveyance.
In Basye v. Basye (1898), 152 Ind. 172, 52 N.E. 797, a husband, relying upon his wife's representations and manifestations of love and affection caused his real estate to be conveyed to her. She immediately left him, and it was demonstrated that she had no love or affection for him in the first instance, and that her protestations and manifestations were falsely made for the purpose of inducing the conveyance of property. A wife's love or lack of love for her husband is a present fact, demonstrable by every-day conduct, and from present...
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