Ansley v. Bank of Piedmont , 113 Ala. 467 ( 1896 )

COLEMAN, J.

The suit is by the Bank of Piedmont, against the appellant, upon certain promissory notes executed by him in part payment of the purchase price of town lots sold by the Piedmont Land & Improvement Company at speculative prices and in anticipation of further advances, and which notes were assigned by the vendor to plaintiff after maturity. According to the pleas of the defendant, the present and real value of the lots did not exceed fifty dollars 'per lot, but their supposed prospective value at the time of the purchase exceeded five hundred dollars per lot. The defendant purchased at prospective prices. The defenses relied upon, as we gather from the seven special pleas, covering over seventeen printed pages, are in bar on account of the false and fraudulent representations by the vendor made with the intent to deceive, and which the defendant, with many others, relied upon, and had the right to rely upon, and without which false and fraudulent inducements, the defendant would- not have purchased; and the breach of certain promises, assurances and guarantees made by the vendor, which resulted in damage to the defendant and which are claimed in recoupment and set-off. The pleader declares that these representations were made in “divers ways” to-wit, viva voce, newspapers, journals, handbills, circulars, “teeming with inspirating and transporting prophecies and predictions of the rapidly budding and surely approaching glory and renown of the embryonic city, • and were replete with representations, promises and assurances of many magnificent improvements, plants and industrial enterprises, among others, rolling mill, car wheel foundry, a furnace, splendid hotel, water works and electric plants, a three story bank building;” and in one place the pleader avers that the land company promised, and the unsuspecting public believed, that “one hundred millions of dollars” would be invested in industries in' Piedmont as fast as they could be built. We presume the pleader intended one million, instead of one hundred million. In contrast, tlie pleader avers that the lots where these magnificent and vast enterprises were to be constructed are now almost worthless, and only used for pasturage. The pleader did not add to his pleas, as a fitting sequel “him Mae lachrymx” and “this defense.”

Each of these special pleas were demurred to, upon several grounds, and the court sustained the demurrer to all except as to pleas 4 and 6. The demurrers to pleas 4 and 6 were overruled, and on the ruling, the plaintiff, appellee, assigns cross errors. From this ruling of the court, sustaining the demurrers, under a special statute for the city court of Anniston, the defendant appealed.

Much litigation has resulted from the financial depression which for several years past has pervaded the country, and which followed the speculative era. We have had frequent occasion to declare the law applicable to many of such transactions. In a court of law, the purchaser of land can not resist the payment of the purchase money on the ground of the fraud and misrepresentation of the vendor, so long as he remains in possession, and refuses to surrender; and a plea which avers that the consideration of the contract sued upon was the purchase of land, and seeks to avoid liability upon the ground of fraud and misrepresentation on the part of the vendor, is defective unless it avers a surrender of the land, or some sufficient reason for not surrendering the same before suit brought.-Jones v. The State, 100 Ala. 209; Garner v. Leverett, 32 Ala. 410. The rule is different in a court of equity.-32 Ala. 410, supra. The ploas of defendant, setting up fraud and misrepresentation as a defense, going to the maintenance of the action by the plaintiff, were subject to this objection.

In the case of Howle v. North Birmingham Land Co., 95 Ala. 391, we used this language: '‘The deceived party can not remain quiet, and hold in reserve his option to rescind, to be asserted if a turn in events shall make it to his advantage to get rid of his obligations, but to be abandoned if it shall suit his purposes to hold the other party to the contract. Fraudulent misrepresentations in the sale of real estate do not confer upon the defrauded party the speculative advantage of being entitled to wait for the rise or fall in the value of the property, and then act according to his interest in the matter. If the deceived party, after discovering the falsity of the representations upon the truth of which he claims to have relied, does not promptly avail himself of the right to rescind, he loses the right, and his failure for a considerable length of time to impeach the transaction raises a presumption of his acquiescence in its validity. Lockwood v. Fitts, 90 Ala. 150; Orendorff v. Tallman, 90 Ala. 441; Sheffield Land, I. & C. Co. v. Neill, 87 Ala. 158; Garrett v. Lynch, 45 Ala. 204.” The notes were executed in January or February, 1890, and were due in one and two years. The suit was instituted in March, 1895.

In some of defendant’s special pleas, he offers to set-off, and others to recoup, damages sustained by him in consequence of the false and fraudulent misrepresentations of the vendor. When set-off and recoupment are pleaded, the defendant thereby recognizes and admits the validity of plaintiff’s contract. A plea of set-off is in character a cross action, and exists independent of plaintiff’s cause of action. Recoupment springs out of the contract or transaction between the parties.-Grisham v. Bodman, 111 Ala. 194; Watson v. Kirby, 112 Ala. 436.

Again, an engagement or promise to be fulfilled in the future is not a representation. The making of such engagement or promise, having no intention at the time of performing, and made for the purpose of deceiving, constitutes fraud which will avoid the contract.-Nelson v. Shelby M. & I. Co., 96 Ala. 532; Joseph v. Decatur Land &c. Co., 102 Ala. 346; Birmingham Warehouse & Elev. Co. v. Elyton Land Co., 93 Ala. 549; Bradfield v. Elyton Land Co., Ib. 527; Cooke v. Cook, 100 Ala. 175. Generally, the mere expression of an opinion, though acted upon, does not constitute a fraud, or give rise to a cause of action. Authorities supra. A party who knows that representations as to facts, when made, are untrue, can not claim to have been deceived and misled by them.-Baker v. Maxwell, 99 Ala. 558. The breach of a promise contractual in its nature, or of an engagment, which will support a claim for recoupment or set-off, must be one capable of enforcement. If void by reason of the statute of frauds, or otherwise; or if the damages claimed from the breach of a valid promise or engagement are speculative merely, remote and incapable of ascertainment with reasonable certainty, in either event, the damages are not recoverable in a direct action or by way of set-off or recoupment. A plea which sets up a breach of a contract in support of a claim of set-off or recoupment, must be as distinct and unambiguous as if suing directly for the breach of the contract. He must advise his opponent of the precise grounds of his complaint. As a general rule, representations as to prospective values are mere expressions of opinions, and any statement or representation, incapable at the time, because of their character, of ascertainment as an existing fact, must be classed as mere expressions of opinion.

A defendant by separate pleas may make as many defenses as he sees proper, and the pleas are not objectionable because of repugnancy or inconsistency with each other. The rule does not apply to single pleas. A single plea should be consistent with itself. Facts which show fraud, and averred in a plea in bar to the action because of fraud, can not be made the basis in the same plea to support a claim of set-off or recoupment. In one plea the defendant might plead fraud in bar of the action, and in another plea he could ratify the sale and purchase, 'recognizing the right of the plaintiff to maintain the action for the purchase money, but claim damages for breach of the agreement or for a deceit practiced upon him. Any breach of an agreement, or any deceit which would support an independent action, growing out of the contract, is available by recoupment. When the plea is in bar on account of fraud, the plea must show a return of the property. A restoration is not required in order to authorize an action to recover damages for deceit, or for broach of agreement.

None of the pleas show a failure of consideration available as such to defendant. There is no pretense that there 'was any defect in title or that defendant was not able to obtain possession or that the lot was other than represented. The defenses are based upon rescission for fraud, and claim for damages, for breach of contract and for deceit. Another rule which applies to pleas as well as to declarations is, that a claim for damages ex contractu cannot be united in the same plea with a claim in tort. This rule was totally disregarded in some of the pleas. Another rule is, that if a plea contains good matter of defense and also immaterial matter, the defect connot be reached by a demurrer to the whole plea. It may be that .the court would entertain a demurrer directed specially to the immaterial matter, but the proper mode is by motion to strike out the immaterial matter. The plaintiff did not avail himself of either of these methods.

The demurrer of the plaintiff to some of the defendant’s pleas raises the question as to whether, the damages claimed as set-off or recoupment are not too uncertain for ascertainment, and purely conjectural. The basis upon which defendant’s claim for damages rests, is that the vendor represented that it had a large amount of cash capital on hand for improving and building up valuable enterprises, and promised and agreed to erect, and guaranteed the erection and construction of, many valuable improvements in the “embryonic” city of Piedmont, as an inducement to purchasers, which undertakings and guarantees had been broken ; and in some of the pleas it is averred that these statements were false and fraudulent &c., to the damage of the defendant. The pleas nowhere state the existing boundaries of ‘the contemplated city, nor the location of these several improvements, nor the relative location of plaintiff’s lot thereto! But independent of these difficulties which meet us at the very beginning, is there any data, other than purely conjectural, by which the enhancement of property can be reasonably ascertained from such causes ? If the im-improvements had been actually made, by comparing the value of the lot after the improvements with the value before the improvements, the difference would show with some approximation the effect of the improvements. There would be facts upon which a jury might base calculations, but it seems to be the climax' of conjecture and guess to undertake to declare in advance how any particular lot would be affected in the future by improvements, if made, and especially is this true when there is no obligation or representation as to their relative location. There is no standard in such a case by which the enhancement in value can be calculated. The plea shows on its face that the purchase of the lot was a mere adventure — an adventure, it may be, encouraged and induced by the fraudulent statements or promises of the vendor, and which deceptive inducements might be sufficient to authorize a recission of the purchase, but t-lie facts averred, if embodied in a complaint suing for damages, are wholly insufficient to support the action for their recovery.-Brigham v. Carlisle, 78 Ala. 243; Young v. Cureton, 87 Ala. 727. Pollock v. Gantt, 69 Ala. 377; Sherman Center Town Co. v. Leonard, 26 Am. St. Rep. 101 (46 Kan. 354); Edward Roberts v. New York R. R. Co., 13 L .R. A. 499. Mere representations as to the present pecuniary value of a lot would hardly be actionable, for the reason that values are but the expression of opinions ; much less could the representations as to the future value of a lot be actionable. Clearly this would be but the expression of an opinion.-Deming v. Darling, 2 L. R. A. 743.

The plea of usury is objectionable. The note was given for the purchase of land. There was no question of the loan of money in the transaction. It may be that the notes as written represent truly the purchase price as agreed upon. It does not follow as a matter of law that a note antedated is usurious. Much depends upon the nature of the transaction and the intention of the parties. If the note was antedated, merely to avoid the law of usury, it would be usurious, but facts should be averred, followed by an averment that it was done with a usurious intent.

Applying the principles of law applicable to the pleas of the defendant, as declared in the foregoing opinion, and it will be seen that none of them, including pleas 4 and 6, are good.

Affirmed on direct appeal, and reversed on cross appeal.