Hoitt v. Holcomb , 32 N.H. 185 ( 1855 )

Sawyer, J.

The pleadings in this case have, on a former occasion, passed under the examination of the court upon a demurrer to the second, third and fourth replications, as reported in 3 Foster 535. It was there decided that the particular facts constituting the fraud relied upon to avoid the release need not be stated in the replication; that therefore the second replication, alleging that the release was obtained by the fraud, covin and misrepresentation of Montgomery, without specifying the acts in which the fraud consisted, was sufficient, and also that the third and fourth replications, setting out the particulars of the fraud, contained all the allegations necessary to charge fraud in that specific mode.

It is now contended that a nonsuit should have been ordered at the trial, as moved by the defendants on several distinct grounds.

The first is, that the evidence does not sustain the issues on the part of the plaintiff on the second, third and fourth replications.

The third and fourth replications allege, as one of the fraudulent representations made by Montgomery, that it was stated by him that there had been no breach of the condition of the bond ; and the position taken by the defendants is, that the evidence does not show such breach, and that the falsity of the representation thus not being shown, those replications are not sustained by the proof.

If this position should be held to be correct, as to the third • and fourth replications, still it cannot be taken as to the second issue. There the allegation is, that the release was obtained by the fraud, covin and misrepresentation of Montgomery, generally. To prove the fraud under this issue, it was immaterial whether there was or not evidence of a breach of the condition of the bond, or of a representation that there had been such breach. It was sufficient if the evidence shew a false and fraudulent representation in respect to any other material matter; and the matters about which the representations were proved to have been made, that Holcomb was not in arrear, but had paid up promptly, so that it would be safe for the plaintiff to give the release, were, in their character, as material as though they amounted to a technical breach. That the evidence was competent to be submitted to the jury upon this issue, on this view of the question, cannot be doubted ; and the jury having found this issue for the plaintiff, it can avail nothing to the defendants'if the evidence should be held to be insufficient to maintain the finding on the other issues.

But we think the evidence was competent to be submitted to the jury upon those issues. The allegations relative to the breach of the condition are not essential parts of the matter set out in avoidance of the release. They constitute one of the particulars in which the fraud is alleged to consist, but they are merely cumulative. Other instances of fraud are set forth, which, without the support of these allegations, may well stand as a complete specification of the fraud; and as these allegations are of distinct facts and circumstances, not partaking of the character of descriptive averments, they may be considered as surplusage, and the failure of the evidence to prove them, as immaterial, so long as sufficient is proved of the other facts and circumstances, to constitute a ease of fraud as alleged.

Another ground upon which it is contended the motion for a' nonsuit should have been granted, is, that the representations made by Montgomery were in relation to matters about which the plaintiff had equal means of knowledge, and it was his folly to trust to them.

Instructions to the jury were asked for, based upon this view, which the court declined to give, and the same question is presented for consideration upon the exceptions taken to this refusal of the court, as upon the motion for a nonsuit on this ground.

This is not a case for the application of that 'doctrine. _ Where the representations are made in the course of a negotiation between the parties, in relation to the subject matter about which they are treating, with a view to a contract concerning the same subject matter to which the representations relate, a contract reciprocally beneficial, and founded on mutual considerations, as in the case of a purchase and sale, the question whether the party imposed upon by representations, made in the course of such negotiation, had equal means of knowledge, may be a material one. There, each party is negotiating for his own advantage, and each is supposed to trust to his own knowledge, skill and diligence ; neither being considered as reposing confidence in the other. Indeed, they may be said, to some extent, to stand in the attitude of adverse parties, and are thereby put upon their guard against each other. And the care and attention which they are to exercise in the negotiation, to protect themselves from surprise and imposition, are to be tested by the principles involved in the maxim, caveat emptor. It may be credulity amounting to folly in either to trust to the representations of the other about the matter which is the subject of such negotiation between them, while at the same time either may be at liberty to confide in the same representations from a third person, not a party to the. negotiation, or to similar representations from the other party about some other matter, in relation to which they do not stand in that adverse position. Such is the case of Medbury als. v. Watson, 6 Met. 246, where the false representations made by a third person, not a party to the negotiation, were held to be sufficient to support an action for the fraud, it being expressly stated by the court that, as between the parties to it, they would have been insufficient. In such cases the fraudulent representations would furnish ground for an action in favor of the party imposed upon, only in case it should be made to appear that he did not stand upon equal ground, by reason of his not having equal means of knowledge, or being prevented from using the means at hand by trick, or artifice, or the like. The distinction between cases of that character and the case at bar is marked and obvious. In the transaction which resulted in the plaintiff’s giving the release, he was not negotiating a contract of the character and under the circumstances to place him in an attitude of opposition, like a vendee in treating for a sale, admonishing him to be upon his guard, and subjecting him to the same rule of vigilance as a vendee. That there are a variety of cases in which the party imposed upon is left without remedy, where the question of equal means of knowledge is no less immaterial than in this case, is undoubtedly true. But they depend upon principles not applicable to this case. Such are the cases of Vernon v. Keyes, 12 East 631, which was a false representation of the intention of a third person. Gallager & al. v. Burnel, 6 Cowen 346 ; a promise to do a future act, at the time not intended to be performed, Starr v. Bennett, 5 Hill. 303, cited in the argument for the defendant; said by the court to be a false assertion concerning a matter of opinion, or judgment; or, if considered as a false statement about a matter of fact, yet, being a matter appearing upon the public records, open to the inspection of every one ; for that reason, in principle, like the cases of false affirmation respecting titles to real property, of which it is said by Lord Kenyon, in Pasley v. Preeman, 3 T. R. 51, that “ a person does not have recourse to common conversation to know the title of an estate which he is about to purchase ; he may inspect the title deeds, and he does not use common prudence if he rely on any other security.” Of the same class with Starr v. Bennett, considered as a case of false assertion concerning a matter of opinion or judgment, is the case of Harvey v. Young, cited by the counsel for the defendants in Yelv. 21; in commenting upon which in Pasley v. Freeman, Buller, J., says, “ the ground of the determination in that case was that the assertion was of a mere matter of judgment and opinion ; of a matter of which the defendant had no particular knowledge, but of which many men will be of many minds, and which is often governed by whim and caprice.” So, too, the case of Bayley v. Merrill, Cro. Jac. 386 ; also reported in 3 Bulst. 95, cited for the defendants, if not considered as a case of false assertion concerning a mere matter of opinion, is, nevertheless, one concerning a fact of such character, that, like assertions relative to the public records, it was a want of common prudence to trust to it. The decision of the case is expressly placed by the court on the ground of “ gross negligence.” None of these cases bear any analogy to the case at bar, and indeed it may be safe to assert that no one is to be found in which the representations are held not to be actionable, that the decision will not, on examination, be found to rest on some ground not applicable to this case.

If, however, this case is considered one for the application of the doctrine that the party suffering the imposition is without remedy, if he neglect to give attention to the means of knowledge accessible to him, the utmost limit to which the principle has been carried even in those cases when the maxim, caveat emptor, applies, is to .require him to give reasonable and proper attention to such means as may be supposed to be within the reach of his observation and judgment.. He is not to exhaust all the sources of information, but to give due attention to those to overlook or disregard which would be negligence and indiscretion.

Judged by this rule he would not seem to have been guilty of such carelessness or inattention, that he should be left without indemnity against the fraud practiced upon him. Extreme caution might, perhaps, have prompted him to deny the favor solicited, until he had proceeded to make inquiries of Holcomb himself, and of the attorneys who entrusted their business to him. The objection that the plaintiff did not, by practising this caution, learn the falsehood that had been told him, and so protect himself against it by refusing to give the release, is not entitled to great favor, coming as it does from Montgomery and his co-defendant, who, in making it, are seeking to avail themselves of the fruits of his fraud. It is not the exercise of caution which the law in this respect requires ; it is only the absence of negligence ; of careless indifference and inattention ; of that indiscretion in trusting to the representations which may be designated a “ foolish credulity.”

Besides, if the plaintiff was bound to resort to other sources of information, before giving credit to the representations of Montgomery, the use of any artifice or device, calculated and designed to mislead, inducing the plaintiff to forego further inquiry, would be sufficient to justify him in refraining; and the statement of Montgomery, that he had made inquiries of the attorneys relative to Holcomb’s affairs, and had learned the facts to be as represented, may properly be considered of that character. This was well calculated to lull suspicion and induce the belief that further inquiry was unnecessary.

Upon any view that can be taken of this point in the case, we entertain no doubt that the motion for a nonsuit on this ground was properly refused.

Another ground upon which the nonsuit was moved is, that no misrepresentation made to the sheriff upon the subject of the liabilities of his sureties, can be considered in law as a fraud upon him, because he is presumed to know at all times their official proceedings and situation, and is not at liberty to claim that he has been imposed upon by misrepresentations relative to their official doings.

The official acts of the deputy are 'the acts of the sheriff, in the sense that he is responsible for them as his, without notice. To this extent they may be said to have identity. The positions here taken push this theoretical idea of their identity, in the official proceedings of the deputy, to the extent of an actual identity of knowledge as to all those proceedings. It is possible, perhaps, that a case might occur when sound principles of public policy would forbid that he should be permitted to allege that he had been imposed upon through his want of knowledge as to the official doings of one of his deputies ; as where, for instance, to allege such want of information would be to charge himself with a breach or neglect of duty, if such a case can be conceived. But in such case he could properly be held only to know such facts as could have been learned by him in the exercise of due diligence, and by proper inquiry. We think the doctrine would be quite too severe, that he is not to be at liberty to claim that he has been made the victim of a fraud, because he is bound to know all that may be done or neglected by his deputies in their official capacity upon the instant of its occurrence. No sound reason can be perceived for holding such a doctrine in this case. If it were to be seen that practical mischief must result from holding that he is at liberty to allege his want of information on the subject of the official doings of his deputies, the principles of public policy and convenience might require that he should not be permitted so to allege; but the fanciful idea of the identity of the sheriff and his deputies furnishes no ground for maintaining such doctrine, when its only result is to leave him without indemnity for a fraud practiced upon him.

It is also moved to set aside the verdict, for error in the instructions of the court to the jury. It is contended by the defendants that the instructions were, in substance, that if the jury should find either that the plaintiff relied upon the representations, in the sense of believing and confiding in them as true, or that he relied upon them in the sense of trusting to them as grounds upon which a legal remedy might be had, in case he should find himself imposed upon by falsehood, in either case they should find for the plaintiff. It is not claimed that the jury were so instructed in explicit terms, but that the instructions, as expressed, admit of this construction, and that the jury may have thus understood them. If there be ambiguity in the language used by the court in their instructions, still the verdict will not be set aside, if it appears that the jury were not misled. Hannum v. Belchertown, 19 Pick. 311; Raymon v. Nye, 5 Met. 151; Fitz v. Boston, 4 Cush. 365.

Taking the whole of the instructions together, and considering them in reference to the facts in the case, it is very clear that they must have been understood as requiring them to find that the plaintiff relied upon and confided in the representations as true. They were told they must find that the plaintiff, “ confiding in them and believing them to be true, or not having reason to suppose or believe them to be false, was influenced by them to give the release ;” and again, that they must find that the plaintiff “ relied upon them, believing them to be true, or not having reason to suppose or believe them to be false, and was induced by them to give the release.” It is difficult to conceive how the jury, when told that the plaintiff must be found, upon the evidence, to have “ confided in ” the representations, and to have “ relied upon” them, so as to be influenced and induced by them to give the release, could have understood that the court, by the alternative proposition used in connection with those expressions, namely, “ believing them to be true, or not having reason to suppose or believe them to be false,” intended any thing more or less than that they must find that the plaintiff trusted to them as true, and was deceived. Considering the charge in its whole drift, and in connection with the facts as reported in the case, no other meaning can be derived from it than that the plaintiff must be found to have confided in, relied upon, and trusted to, the representations as true, as being a statement of facts. No question would seem to have been suggested, in the progress of the trial, whether in fact the conduct of the plaintiff in giving the release was to be explained, on the ground that he trusted to the representations as furnishing ground for a remedy at law, if they should turn out to be false, or upon the ground that he confided in them as true. A question of this nature, approaching somewhat to the character of a metaphysical subtlety, would hardly be expected to arise in the minds of the jury without the help of a suggestion from counsel, or a more distinct enunciation of it by the court. The only part of the charge in which it is claimed the distinction is suggested, is that just quoted. Considering it to be an alternative proposition of the form suggested in the argument, still the latter branch cannot be considsidered as negativing the former, excluding the idea of belief contained in the former. To assert that one “ confides in and relies upon” a statement, “ not having reason to suppose or believe it to be false,” imports the highest degree of belief; quite as much so as to assert that he “ confides in and relies upon it, believing it to be true.” The jury, therefore, must have understood the latter branch, not as an alternative proposition, excluding the idea of belief contained in the former, but as a corrected form of expression, substituted in place of the former, and as intended by the judge to bring distinctly before the minds of the jury, which the former did not, the legal principle applicable to cases of this character, that the confidence placed by the party imposed upon in the representation by which he was deceived, must not be the result of a weak credulity, leading him to believe the statements, when he had reason to suppose that they were false.

The result to which we have thus arrived, upon all the points in this part of the case, is, that there must be judgment upon the verdict.

But a further question arises: by what principles are the damages in this case to be assessed ? The judgment is to be for the whole penalty in the bond, but execution is to issue only for the damages which the plaintiff has sustained. Revised Stat., chap. 190, § 9, p. 384.

The damages, however, are not to be limited to such as had accrued at the commencement of this suit, but are to include all that may have been incurred down to the time of judgment. Waldo v. Fobes & al., 1 Mass. 10. The remedy to the plaintiff for damages subsequently accruing, is by scire facias on the judgment for further execution. Revised Stat., p. 384, § 10. And the court will not drive the plaintiff to sue out a scire facias for damages which, having already accrued, may bo included in the execution now to he awarded, although such damages have accrued since the commencement of the suit.

The bond in this case is one of indemnity, including within its terms “ all loss, damages and costs,” that may happen to the plaintiff by reason of the acts or neglects of Holcomb, in the office of deputy sheriff. Various suits have been brought against the plaintiff on account of the defaults of Holcomb, in which judgments have been rendered against him. Some of these judgments have been satisfied and discharged by the plaintiff himself, and others by the sureties upon his official bond to the county. In the case of the former, no doubt arises that the amount paid upon the judgments is to be reckoned, with interest, from the time of the payments, and included in the damages. In reference to the judgments paid by the sureties of the plaintiff, some doubt has arisen whether the amount so paid can be considered as paid by the plaintiff, and thus constitute damages arising to him. It does not appear that the money thus paid by the sureties has been reimbursed to them by the plaintiff, and if he should be permitted to recover the amount in this case, it may possibly never be recovered of him by the sureties, to whom in equity it belongs. But, notwithstanding this objection, we are of opinion that it is to be included in the award of damages, as though paid by the plaintiff himself. It is money paid at his request, and upon a promise by him to repay it; the law implying such request and promise from the relation of principal and surety. For this purpose it is to be considered as his money, procured by him upon this implied promise to repay it, no less than if procured for the same purpose as a loan upon his promissory note to the sureties. And it can make no difference to these defendants whether it is so considered, and is included in the damages now to be awarded, or whether it be recovered upon a scire facias for another execution at the next, or some subsequent term of the court, after proceedings may have been had between the plaintiff and his sureties to make the money equitably his.

It is, perhaps, not entirely clear that he may not recover upon judgment rendered against him for the default of his deputy, without payment either by himself or his sureties. Such was the view ■which it would seem was taken by the court in the case of Carman v. Noble, 9 Barr. 366, in which the parties stood, in some respects, in much the same relation as the parties in this case. The plaintiff in that case brought his action upon the agreement of the defendant to indemnify him against' “ debt or damage,” on account of a liability incurred by him as surety ; and a judgment having been recovered against him on account of the liability, it was held that he was entitled to recover without payment of the judgment, it being said by the court that they would take care, on application made to them for that purpose, that the money recovered should be applied to the benefit of the creditor to whom it equitably belonged.

The court may interpose in the same manner in this case, to protect the equitable claim of the sureties to the money recovered, if it should be made to appear necessary, by such proceedings as are not unusual in our practice in the case of a lien, or other equitable claim upon the judgment.

Upon the principles recognized in the cases of French v. Parish, 14 N. H. 496, and Robinson & al. v. Hill, 15 N. H. 477, it is very clear that the reasonable expenses incurred by the plaintiff, in the defence of the actions against him for Holcomb’s defaults, including counsel fees and personal services, should be allowed in assessing the damages.

In the case last cited, Robinson & al. v. Hill, it was held that the necessary expenses incurred in obtaining possession of personal property, mortgaged to secure the mortgagee against liability on a bond, were proper charges upon the mortgaged property, under the condition in the mortgage to indemnify againstts trouble and expense” on account of signing the bond, on the ground that they were necessary expenses, incurred in consequence of the neglect of the mortgagor, and without which the security would have been unavailing. The necessary expenses incurred by the plaintiff in prosecuting this suit, beyond the taxable costs which may be rendered in the judgment as costs, and the personal services of the plaintiff, so far as they were reasonable and proper, stand upon the same ground. They result from the neglect of the defendants to furnish the indemnity promised; they are cleai’ly within the terms of the promise, as expressed in the condition of the bond, and without them the remedy on the bond would have been unavailing. We are, therefore, of opinion that these expenses and services should also be included in the assessment of the damages. But the costs recovered against the plaintiff and his sureties in the suits upon his official bond to the county, and the expenses incurred in and about those suits, are not to be so included. It was the duty of the plaintiff to have paid up when judgment was rendered against him for the default of Holcomb, without waiting for a suit on his official bond. That wrns a matter entirely personal to the plaintiff, which resulted from his own neglect, and cannot be set down to the account of Holcomb, in any view that can be taken of it. Upon these principles, the amount of damages is to be ascertained by the appointment of an auditor, or in some other proper mode in the common pleas, and execution to issue accordingly.