Chesnut-Hill Reservoir Co. v. Chase , 14 Conn. 123 ( 1840 )

Williams, Ch. J.

The first question to be considered, ⅛ was there such a variance in the note declared upon and the note exhibited, as that it should not have been admitted in evidence? It is objected, that the note declared upon is alleged to be signed by James A. Arnold, and the note shown is signed by James S. Arnold ; and much learning has been adduced as to the effect of a mistake in the middle name, oí the letter in the middle of a name. We do not think the case requires us to examine that subject; for, admitting that this constitutes a part of the name, the allegation is not, that Arnold signed this note by the name of Janies A: Arriold, but that James A. Arnold signed it. This he might have done, by the name of James S. Arnold. Nor was the objection, that James A. Arnold was not one of the committee, but James S. Arnold. The objection was, that the note exhibited varied from that declared on. But the declaration does not set out the names appended to the note ; but that the note was executed by the defendants, by their committee, James A. Arnold, &c.; and we see nothing on the face of the note disproving that fact. It only shows, that if James A. Arnold executed the note, he did it by the name of James S. Arnold, a fact not impossible, or inconsistent with the fact alleged. We think, therefore, there is no variance.

Another objection was, that the committee Were not authorized to make this note; and that; therefore, the court should so have charged the jury. The votes of the company set out in the bill of exceptions, shew the powers given to the comm'ttee* These were, to purchase the lands necessary for company: to take conveyances thereof: to advise the ,. x , . , ,. . , , , directors; and to give obligations, in the name of the company, for notes to be given, signed by the president, and countersigned by the secretary, in payment of said land. Here are their powers distinctly defined ; and it is hardly necessary to say, that where an agent is appointed with limited powers, he cannot exceed them. Is this note, then, in accordance with these powers? It purports to bind the company to pay to the plaintiff, or his order, a sum of money at a future time, with interest. Now, the company, for some reason, chose, that notes to be obligatory upon them, should be signed by their president and countersigned by their secretary. This is not signed by either. But the note went further, and imposed an ¡obligation, that it was to be exchanged for one duly executed by the president of said company, as soon as he was able. This, however, does not make it such an obligation as the company authorized this committee to give: and they had no more right to give the note in question than a clerk in a bank, who, is authorized to pay out the notes of the company, signed by the president and cashier, has to bind the company, by a note in his own name, promising to pay notes of the company. Of course, the opinion of the county court was wrong; and it follows, that upon the first three counts the defendants might have been entitled to a verdict.

But the fourth count declares for the price of certain lands, sold by the plaintiff to the defendants, it being the consideration for which the note was given ; and if that note is void, as has been decided, and the committee had power to make a contract for the lands,-whith is not denied, then the plaintiff has a right to recover upon that Count, unless the defendants can shew some new fact by way of defence. This they have attempted to: do, by their second plea. We are then to inquire as to the effect of that instrument, as connected with the facts set up in the replication.

These facts are, that the plaintiff, before the suit was commenced, had assigned this note to Elisha Stone, and had no* interest in it whatever; that the suit was commenced and prosecuted by Stone; and that the defendants had notice of it. It is not indeed alleged, that the debt for the land was assighed, but only that the note was assigned. We think, however, it is apparent, that the parties intended, by this assignment, that Stone should have all the right or claim of plamtiff, to the debt secured by the note. It was<not the paper merely he meant to assign, but that of which the paper was the evidence. If, therefore, the note became unavailable, it is not to be believed, that the assignee was only to have the paper, and the assignor the debt, or all which made the paper valuable. Something more must have been meant; as in the case of Bulkley v. Chapman & al. 9 Conn. Rep. 5. where on the back of a mortgage deed, the mortgagor assigned all his right, title and interest in the property mortgaged, this court held, that it conveyed the interest in the debt secured by the mortgage. Here we must intend, that the debt was assigned, so that Stone was the owner of the debt or claim ; for the replication alleges, that this suit was commenced and prosecuted, by Stone, for his own benefit; and this suit embraces a claim for the price of the lands, as well as one on the note itself. The plaintiff, in his replication, ought to have stated this according to its legal effect, as an assignment of the debt; but no objection has been made upon that ground ; and we think, in this stage of the cause, it could not have availed, had it been made. We consider, then, that Stone is the real plaintiff, and Chase merely the nominal plaintiff.

In such a case, in England, the defendant would not be suffered to set up a release obtained from a nominal plaintiff. Legh v. Legh, 4 Bos. & Pul. 447. Our courts did not adopt this practice ; but in 1822, the legislature passed an act, providing, that when the defendant in any suit upon a bond, note, or other chose in action, shall plead a discharge, the plaintiff may reply or prove an assignment, and notice given to the defendant, after which such discharge shall be no otherwise available than in a court of equity. And we do not see how, upon the facts stated in this replication, the defendants could have protected themselves in a court of equity.

But however this may be, other facts are disclosed, in this replication, which, we think, are decisive to avoid the plea ; (we say nothing of the plaintiff's having been an illiterate man, as it is not averred that the discharge was not read to him.) We refer to that part of the plea in which it is averred, that he was induced to execute the receipt, by false and fraudulent representations of the defendants, in relation to the effect "sc^arSe> and an assurance of the plaintiff that it would have no effect upon the suit then pending. The inducement, . , , , . . . , . then, held out to procure him to sign this instrument, was one materially affecting the rights of the owner of this claim ; and if the defendants are right in their construction of the law upon the last point, it was utterly false ; and the use the defendants now attempt to make of it, shews that it was fraudulent.

It is said, however, that the allegation as to fraud and falsehood, is not made in such a manner as to be regarded by the court; as it does not point out what the allegations were, but generally, that it was procured by false and fraudulent representations of the defendants, in relation to the effect of the discharge, and an assurance made by them to him, that it would have no effect upon the suit.

If we admit, that the allegations are so made, that upon demurrer, the replication would be held insufficient; yet, when we look at the rejoinder, we can have no doubt that the fact thus imperfectly alleged, has been fairly presented to the jury. The defendants say, “said release'was not by the defendants obtained and procured from the plaintiff, by false and fraudulent representations of the effect of said discharge, nor by any assurance that the same could not affect said suit.” This question, therefore, was directly tried, and a verdict found against the defendants ; and whatever defect there may have been in the allegations in the replication, they are cured by the verdict; for it is clearly found, that the defendants assured the plaintiff that this release would have no effect upon this suit, and that that assertion was false and fraudulent, i. e. that it was made with the design to impose upon the plaintiff.

The only remaining question then, is, whether an assertion made by one man to another as to the effect of an instrument, which he is desirous to obtain from him, which is false, and fraudulently nft.de, and which is the procuring cause of the execution of that instrument, shall avoid it. It is said, that it ⅛ but an assertion of what the law is ; and as every one is supposed to know the law, it cannot be regarded by the court, the facts being known equally by both parties. How far a mere mistake of the law will be a ground for setting aside a contract, seems to be somewhat doubtful. 2 Evans’ Pothier, 369. (ed. 1806.) Champlin & al. v. Laytin & al. 6 Johns. Ch. Rep. 189. 202. When a contract is just what the intended it should be, in the absence of all fraud, it has been held, that chancery could not interfere, as this would be to make contracts rather than rectify them. Hunt v. Rousmanier, 1 Pet. 1. Wheaton v. Wheaton, 9 Conn. Rep. 96. Nor will ignorance of a legal right take a case from the general rule, where the circumstances would otherwise create an equitable bar to the legal title. Storrs & al. v. Barker, 6 Johns. Ch. Rep. 166.

We know of no decision, however, that where a man ignorant of law has been induced to do- an act injurious to himself or others, by the false and fraudulent assertions of his better informed opponent, even upon a point of law, he could obtain no relief. In Hunt v. Rousmanier, the late Ch. J. Marshall, after saying that courts of equity relieve in cases of a mistake and fraud, remarks, that in that case there was no ingredient of fraud. 8 Wheaton 211. And Washington, ]. says, when commenting upon the case of Lansdown v. Lansdown, Moseley, 364. the heir might have been imposed upon, by some unfair representations of his better informed opponent. 1 Pet. 16. In Wheaton v. Wheaton, 9 Conn. Rep. 99, Bissell, J. says, “there is no-pretence of fraud.” And in Doe d. Lloyd v. Bennett, 8 Car. & P. 124. Coleridge, J. says, “ If a man were indeed to execute an instrument, supposing it would operate one way, when it really operated another, such an instrument would be invalid.” If the judge means nothing more than if the party executing the instrument had one made according to his intention, but operating in a different manner from what he expected, it would therefore be void ; this would be in face of the decisions above cited, by our own courts ; but ifhe meant,induced by another, falsely or fraudulently, then it would be like the case before US.

In Champlin v. Laytin, 1 Edw. 473. the vice-chancellor says, “that if one is ignorant of a matter of law involved in the transaction, and another, knowing him to be. so, takes advantage of such circumstance to make the contract; here the court will relieve, although perhaps more properly on account of fraud in the one party than of ignorance of law in the other.”

The above cases are not cited as authorities ad idem, but as tendinS to s^ew a concurrence of opinion in eminent -jurists, that fraud upon subjects of this kind might be prac-tised, and when it was, it would vitiate the contract procured by means of it. Should a lawyer purchase an estate of hi9 client, the title to which was in dispute, by representing to him that the law was so that he could not hold it, when he knew otherwise, could he defend against a bill to set aside this contract, upon the ground that his client knew the law? When the law prohibits an act to be done, that law cannot be universally enforced, unless all are supposed to be apprised of it. It would be law only for the enlightened, and not for the ignorant. It would indeed be no law, because it would not be general. But when the law affects the rights of individuals only, we see no necessity for a presumption that an individual, who gives up his interest, upon the assertions of another in whose opinion he may have confidence, that the law did not recognize that interest, understood that law. Much less do we see any principle, which requires the court to say, that he who fraudulently made such a representation, shall carry away the spoils so obtained.

The facts contained in this replication shew, that the maker of this release was induced to execute it, upon the representation of him who now claims to profit by it; that this was done, when he could not conscientiously do it, if it is to have the effect contended for; that the defendants, as well as the plaintiff, were aware of this; and that the plaintiff did not intend to do any act inconsistent with the rights of his assignee. What he did, then, was induced, by a reliance upon the assertion of the defendants, that this receipt would not have that effect; and yet they now would use it, for the very purpose of producing that effect. Unless the defendants can produce some authority recognizing such a construction, this court are not disposed to introduce a precedent establishing fraud by law.

We are of opinion that there is no error.

In this opinion the other Judges concurred.

Judgment affirmed.