Watson v. Jones

• Decision Date: 07 March 1899
• Citation: 41 Fla. 241,25 So. 678
• Parties: WATSON v. JONES.
• Court: Florida Supreme Court

25 So. 678

41 Fla. 241

WATSON v. JONES.

Florida Supreme Court

March 7, 1899

Error to circuit court, Escambia county; William D. Barnes, Judge.

Action by Allen R. Jones against Thomas C. Watson. There was a judgment for plaintiff, and defendant brings error. Reversed.

Syllabus by the Court

SYLLABUS

1. Wherever a party makes a false representation of a material fact to a person ignorant thereof, with intention that it shall be acted upon, followed by reliance upon and by action thereon, amounting to a substantial change of position, and the special situation or means of knowledge of the party making the statement were such that it was his duty to know as to the truth or falsity of the representation, such party is in law guilty of fraud as much so as if he actually knew that his statement was false, and an action for deceit based thereon is not, under our statute (Rev. St. s 1294), barred until three years from 'the discovery by the aggrieved party of the facts constituting the fraud.'

2. Averments in a declaration for deceit, to the effect that defendant well knew his statements to be untrue, and that his special situation or means of knowledge were such as made it his duty to know whether his representations were true or false, are but different methods of alleging the same ultimate fact,--knowledge,--and a declaration containing both averments is not bad for duplicity, nor can it be said to be so framed as to prejudice or embarrass the defendant in preparing his defense.

3. When the only relevant fact in issue is whether a judgment has in fact been rendered, nothing need be produced but the judgment entry; but where it becomes necessary to prove that a valid judgment has been rendered by which the party offering it has acquired, or his adversary has lost, some right or title either by the judgment alone or by it and proceedings taken for its enforcement, the whole record, so far as it concerns the formal stages, must be produced, or its absence properly accounted for.

4. The rule caveat emptor applies to sales under mortgage foreclosure as well as to other judicial sales; the purchaser at foreclosure sale only takes what title the parties to the suit have; a prior judgment creditor, not a party to the foreclosure proceedings, can enforce his lien by selling the property under his execution, even in the hands of the purchaser at such a sale; and such judgment creditor has no such right to, or interest in, the proceeds of such a sale as will entitle him to demand, or the master to pay, or the purchaser to require the payment of, any portion of such proceeds in satisfaction of such judgment lien, in the absence of a valid order of the court to that effect.

5. Where a master sells property under a decree of foreclosure for more than sufficient to pay the decree, and the decree does not authorize him to sell subject to prior incumbrances and prior incumbrancers are not parties to the foreclosure suit, and after the sale, but before payment of the purchase money, it is discovered that there are prior incumbrances upon the property, and the purchaser, prior incumbrancer mortgagee, and master, without the consent of the defendant in foreclosure, and without an order of the court to that effect, agree that a sufficient amount of the purchase money be paid over to such prior incumbrancer to satisfy his claim and the surplus only is credited upon the foreclosure decree, and this action of the parties is never ratified by the mortgagor or the court, and no judgment for deficiency is ever entered against the mortgagor, the mortgagee has no standing upon which to enforce a claim for a balance asserted by him to be due upon his decree.

6. In actions for deceit, the scienter can be established by either one of three phases of proof, showing--First, that the party made the representation with actual knowledge of its falsity; second, that the party, having no knowledge whether the statement was true or false, made the statement as of his own knowledge, or in such absolute, unqualified, and positive terms as to imply knowledge on his part; or, third, that from the party's special situation or means of knowledge it was his duty to know as to the truth or falsity of the statement made; and where there is evidence tending to prove the scienter in the second phase, as well as in the first and third, it is not error to refuse an instruction to the effect that defendant will be entitled to a verdict unless it is proven that he had actual knowledge of the falsity of his statement at the time he made it, or that from his special situation or means of knowledge it was his duty to know as to the truth or falsity of the statement made by him.

COUNSEL

Maxwell & Maxwell and John Eagan, for plaintiff in error.

John C. Avery and William Fisher, for defendant in error. On February 10, 1894, defendant in error began an action on the case for deceit against plaintiff in error in the circuit court of Escambia county. The seventh or additional count added to the declaration as an amendment by leave of court alleges: 'And because, to wit, on the 18th day of August, 1885, the defendant, then and there being the agent of one John D. Gray, and for the benefit and advantage of him, the said defendant, as agent of John D. Gray, craftily and fraudulently procured and induced the plaintiff to make a loan of two thousand dollars to said John D. Gray on a mortgage upon certain real estate, which real estate the said defendant falsely and fraudulently represented to be free of incumbrances, whereas, as defendant well knew or ought to have known, the said real estate was subject to the prior lien of a judgment of this honorable court, of which plaintiff was ignorant, and which would have prevented plaintiff from making said loan had he had knowledge of it, and the said defendant concealed and continued to conceal the same, and the plaintiff remained in ignorance of it until after the foreclosing of the said mortgage, to wit, on the 24th day of November, 1891, and by reason of the said judgment lien plaintiff realized from the said security upon the foreclosure thereof one thousand and fifteen and 94/100 dollars, less than amount to which he was entitled under the provisions of the decree of foreclosure, whereby the said one thousand and fifteen and 94/100 dollars has been lost to the plaintiff.'

The defendant moved to strike this count, because--First, it states two causes of action; second, it is double; third, the defendant cannot properly set forth his defenses thereto as framed. Defendant also filed a special demurrer to this count, the grounds thereof being the same as the motion to strike. The motion and demurrer being overruled, defendant filed two pleas, as follows: '(1) That he is not guilty; (2) that said count is based on transaction connected with the loan by plaintiff to J. D. Gray of $2,000 on the 19th day of August, 1885, and was completed on said date, at which time the alleged causes of action, if any there were, accrued to plaintiff, and this was more than three years before the institution of this suit.' Plaintiff replied to the second plea 'that, by reason of the matters and things stated in the seventh count of the declaration, he did not discover the existence of said judgment until within three years before the institution of this suit.' The defendant demurred to this replication as being 'bad in law and substance, and insufficient answer to said plea.' The demurrer being overruled, defendant joined issue on the replication, plaintiff joined issue on defendant's plea of not guilty, and the parties proceeded to trial, which resulted in verdict and judgment for plaintiff in the sum of $1,273.51 and costs. Defendant's motion for a new trial being refused, he sued out the present writ of error from the judgment rendered against him.

There was evidence on behalf of plaintiff tending to prove the following facts: In 1885 defendant was agent for John D Gray, and in August of that year he approached plaintiff with a view of procuring a loan of $2,000 for Gray upon the security of a mortgage upon certain real estate in Pensacola. Plaintiff asked him if there were any liens upon the property, and defendant replied there was a mortgage to a building and loan association which would be paid from the loan. Plaintiff told defendant he must have the records examined, and an abstract made of the title to the property, so as to be sure that the title was good and unincumbered, as he wanted a first lien if he made the loan. Subsequently the defendant, by representing to plaintiff that he had examined the title to the property, and that the title was good and unincumbered, procured from plaintiff for Gray $2,000, which was secured by a mortgage upon the property executed by Gray and wife, dated August 18, 1885. Defendant, as Gray's agent, paid the interest on the mortgage until December, 1890, when he ceased to be agent for Gray, and plaintiff in March, 1891, began suit to foreclose his mortgage. The foreclosure suit was brought against John D. Gray individually and as administrator of Margaret E. Gray, his wife, who died after the execution of the mortgage, and Thomas C. Watson, the defendant, who was alleged to have purchased all the interest of John D. Gray as an heir of his wife in the property embraced in the mortgage from one J. J. McCaskill, who had purchased such interest at a public sale under execution against John D. Gray. Decrees pro confesso were entered against the defendants in the foreclosure suit, and thereupon the court entered a decree of foreclosure for the sum of $2,177.66 for principal and interest, and $217.76 for attorney's fees, and directed: That the mortgaged property be sold by Hunt Chipley, special master, at public...