Vincent v. Corbitt

• Citation: 94 Miss. 46,47 So. 641
• Decision Date: 07 December 1908
• Docket Number: 13,576
• Court: United States State Supreme Court of Mississippi
• Parties: ALBERT J. VINCENT v. SAMUEL R. CORBETT

47 So. 641

94 Miss. 46

ALBERT J. VINCENT v. SAMUEL R. CORBETT

No. 13,576

Supreme Court of Mississippi

December 7, 1908

FROM the circuit court of Washington county, HON. SYDNEY SMITH Judge.

Vincent appellant, was plaintiff in the court below; Corbett appellee, was defendant there. From a judgment in defendant's favor, predicated of a peremptory instruction, plaintiff appealed to the supreme court. The facts are fully stated in the opinion of the court.

Judgment reversed and cause remanded.

Percy &amp Moody, for appellant.

The defendant, acting by his agents, falsely represented the boundaries of the land so as to induce the belief that the entire tract of cleared land, with the six houses, were located on the land sold, that the appellant relied upon these false representations, and by reason of his belief that they were true was induced to make the purchase, whereby he was damged, are facts so well established by the evidence that they cannot be controverted. It is, however, contended that the evidence showed that defendant, or his agents, did not know the falsity of these representations at the time the same were made; that to sustain this action it is necessary for the plaintiff to show something beyond the bare falsity of the information upon which he acted in making the purchase; that it is necessary for him to have shown that the representations were knowingly false, or that they were so recklessly made as to amount to knowledge of their falsity.

There is a vast distinction between the liability of a party making a false representation honestly, to another's injury, whereby the person making the representation does not derive any profit, and where a person makes a false representation honestly to his own gain, and to another's injury. In the former case a recovery is permitted because of the fraudulent character of the representations, in other words, to punish the party for his fraud, while in the latter a recovery is permitted on the theory that one should not be permitted to pocket gains by false representations. In other words, in the latter case, the law does not allow the action to punish the untruth, but as a compensation to the party injured by its consequences. The true principle on which a recovery is permitted in the latter case is well stated in one of the authorities. "He who affirms either what he does not know to be true, or knows to be false, to another's prejudice and to his own gain is, both in morality and law, guilty of falsehood, and must answer in damages."

The seller who owns the land and who proposes selling it, must be presumed to know more about the lines and what land is embraced within the tract than the buyer. In this case whether he did or did not, he assumed to know the fact that certain good land, which formed an inducement to the purchase, was included, and he, by his agents, asserted this as a fact, upon which the appellant relied and might well rely in concluding the bargain. He thus induced the purchase upon his false statement of a matter of fact, and pockets the gains, and he should not when sued, say "I did not know that I was telling an untruth." It is sufficient that he misrepresented the fact and did not care that he did so--in other words, that he asserted as true and as matter of knowledge that which was untrue, and which he either knew nothing about or knew to be false. In either case he has been benefited and another injured. 20 Cyc. 45 et seq., and notes; Ib. 55; Cottrill v. Krum, 18 Am. St. Rep. 549; Mitchell v. Zimmerman, 51 Am. Dec. 717; Tyson v. Passmore, 44 Am. Dec. 181; Lynch v. Mercantile Trust Co., 18 F. 486; Ainslie v. Medlycott, 9 Ves. 21; Brooks v. Hamilton, 15 Minn. 31 (Gil. 10); Porter v. Fletcher, 25 Minn. 493; March v. Walker, 40 N.Y. 562; Munroe v. Pritchard, 50 Am. Dec. 203.

In conclusion we rest our case upon the following quotation from the opinion of the court in the case last cited: "He who affirms either what he does not know to be true, or knows to be false, to another's prejudice, and his own gain, is, both in morality and law, guilty of falsehood and must answer in damages."

However, "did the law allow the action to punish the untruth, and not as a compensation to the party injured by its consequences, then it would be proper to make the action depend (as contended by appellee's counsel) upon the scienter; but the action is for the injury sustained by reason of the reckless, false assertion of the vendor, which was calculated to deceive, and did deceive the purchaser--consequences which to him are precisely the same, whether the vendor knew or did not know or care to know that the assertion was false."

Campbell & Cashin, for appellee.

Where a vendee seeks a rescission of a contract of sale, on the ground of false representations, or sues to recover damages for a false warranty, knowledge, on the part of the vendor of the falsity of the representations or warranty, is immaterial, and need not be alleged or proved, in order to maintain his suit, as has been repeatedly decided in this state; but where he sues for deceit, or fraudulent representations, as contra-distinguished from a false warranty, knowledge, on the part of the vendor, that the representations were false, when made, or want of an honest belief in their truth, is essential, and must be alleged and proved in order to maintain the action. An action of deceit cannot be maintained if the false representations are made in the honest belief that they are true. That is the rule established by the weight of authority, and especially by adjudications in this state. 14 Am. & Eng. Ency. of Law, 86; 20 Cyc. of Law and Procedure, 24, 35; 8 Ency. Pl. & Pr. 901; Kountze v. Kennedy, 49 Am. St. Rep. 65; Note to Cottrell v. Krum, 18 Am. St. Rep. 555; McLeod v. Tutt, 1 How. (Miss.) 288; Taylor v. Frost, 39 Miss. 328; Mizell v. Sims, 39 Miss. 331; Sims v. Eiland, 57 Miss. 83, s. c. p. 607.

The doctrine announced in Estell v. Myers, 54 Miss. 174, does not militate against that rule, for in that case, false representations were treated by the court as warranties, and, in that point of view, the decision of the court is in harmony with the rule stated in the outset of this brief, that where the false representations are warranties, knowledge of their falsity is immaterial.

Aside from the fact that the case of Estell v. Myers, was in chancery where the doctrine of constructive fraud as contra-distinguished from fraud in fact, is often applied, recoupment, when relied on in a court of law is treated as an equitable defense, and as involving a failure of consideration. As was said by the court in Myers v. Estell, 47 Miss. 18, in speaking of the doctrine of recoupment, "it looks through the whole contract, treating it as an entirety, and treating the things done, and stipulated to be done on each side, as a consideration for the things done and stipulated to be done on the other. When either party seeks redress for a breach of the stipulation in his favor, it sums up the grievances on each side, instead of the plaintiff's side only--strikes a balance, and gives the difference to the plaintiff, if it is in his favor."

In 2 Warvelle on Vendors, sec. 903, it is said that: "The simple fact of falsity in representation, however, whether made with respect to situation, condition, quality or quantity, will not ordinarily furnish a defense to an action for purchase money, unless such representations were made fraudulently and with intent to deceive the purchaser;" and, in that connection, citing Estell v. Myers, ubi supra, it is there further said: "An apparent deviation from this rule has been permitted in some instances upon the ground that the representations might justly be regarded as warranties, and for breach of which the purchaser might recoup in damages when sued upon the contract; but this has only been permitted in extreme and clearly defined cases."

Here, as will be seen, the author cites Estell v. Myers as an apparent deviation from the rule announced by him, that false representations are not a defense to an action for purchase money, unless such representations were made fraudulently and with intent to deceive the purchaser; and that the deviation from the rule was allowed in that case on the ground that the false representations were treated by the court as warranties.

If the contract of sale, in Estell v. Myers, had been fully executed, and not executory in part, as it was, and the purchaser had brought suit at law against the vendor to recover damages for the same false representations, basing his action upon them as warranties, could he have maintained his action in the face of the deed, which spoke the whole contract between the parties, and which was silent as to any such warranties?

We respectfully submit that the deed would merge all warranties, and would be the sole exponent of all matters of contract between the parties; and that, if there were false representations inducing the contract, such representations would only be the basis of an action of deceit in a court of law. 14 Am. & Eng. Ency. of Law (2d ed.) 29, 101; Mizell v. Sims, 39 Miss. 331.

Perhaps the true ground of the decision of the court in Estell v. Myers, although being in a court of equity, should have been, not that the representations there made, were warranties, but were false and fraudulent, and that the evidence and circumstances of the case were sufficient to charge the vendor with knowledge of their falsity, or want of an honest belief in their truth. Be that as it may, the numerous decisions of our supreme court theretofore rendered to the effect that in an action of deceit for false and fraudulent representations, knowledge or its equivalent, of their falsity must be alleged and proven, in order to...