Hammatt v. Emerson ( 1847 )

The opinion of the Court was afterwards drawn up by

Siikplev J.

This suit is upon a promissory note, made by Hazen Mitchell, as principal, and the defendant, as surety, and received with others by the testator in part payment for a township of land, at that time conveyed by the testator to the defendant. The other notes have been paid. The defence is a partial failure of the consideration paid for the land, not arising out of a partial failure of the title, but out of misrepresentations, respecting the quantity of standing timber trees then upon it.

I. The first question presented is, whether the defendant can be permitted to make such a defence to this note. The law, as most generally administered in this country, allows such a defence to be made to a bill or note received in payment for personal property sold, while it remains in the hands of the seller, or in the hands of one having no superior rights.

A partial failure of the title to real estate conveyed, has not been permitted to operate as a defence pro tanto to a note received in payment for it. Lloyd v. Jewell, 1 Greenl. 352; Howard v. Witham, 2 Greenl. 390; Wentworth v. Goodwin, 21 Maine R. 150. In such cases the parties have been considered as entitled to that remedy, which was secured to them by their own agreements in the covenants contained in their deeds, as best suited to the fair adjustment of their rights.

When the purchaser obtains a perfect title to the whole estate, and yet finds the estate to be different, from what it was fraudulently represented to be, he can have no remedy upon any covenants usually found in conveyances. Not hi v-ing contemplated such an event he could not be expected to have provided a remedy for it by any covenant or special contract. He must rely upon the remedy which the law may provide. That he finds in an action on the case, suited to enable him to recover damages for the injury thereby occasioned. Should he be allowed to prove the amount of such damage and to have it applied to reduce the amount to be recovered in a suit upon the note, the principles of law and rules of evidence applicable to an action on the case, would guide the Court and jury in making the estimate. While the note is in the hands of the payee or of one having no superior claims, the rights of the parties may be as well and as fully determined in one, as in two suits. Circuity of action may thereby be avoided, and should the vendor prove to be insolvent, the rights of the injured vendee may be better secured.

2. The second question presented is, whether the relations of the parties to the sale and purchase and their rights arising out of the form of this note, presenting the defendant as a surety for Mitchell, were correctly presented to the jury by the instructions.

It appears, that Goss and Mitchell were desirous of being interested in the purchase, and that the testator required, that the township should be sold to a purchaser or purchasers responsible for the amount of the purchase money; and that they therefore applied to the defendant to make the purchase, under an agreement between them and him, that he should convey to each of them, one third part of the township upon payment by each of one third part of the purchase money. If this arrangement between them was communicated to the testator, he does not appear to have been a party to it, or to have had any connexion with it. The defendant became the purchaser of the whole township; and he paid or secured the whole purchase money. He derived the means to do so from Mitchell and Goss in proportion to the share, which he obliged himself by bond to convey to each of them. The relation of principal and surety between the makers of this note, received by the testator in part payment, did not alter or affect the relations or rights existing between him and the defendant as the seller and purchaser of the estate. This would have been quite apparent, if there had been no agreement, that Mitchell should become interested in the purchase. If in such case, he had paid the amount of the note to the defendant, the right of the defendant to prove, that he had been injured by the fraudulent representations of the testator, who was not therefore entitled to recover it of him, would not thereby be affected. The mere form of the note could therefore present no obstacle to the introduction of the defence. Nor could the relations between the defendant and Mitchell and Goss. The testator could not introduce an agreement or any subsequent dealings or proceedings between others, with which he had no con-nexion, for any other purpose than to prove, that the defendant had made such a disposition of the estate, that he had not suffered any, or if any, not so great loss, as he had alleged. If the defendant made such a disposition of the share, which he had obliged himself to convey to Mitchell, that he suffered no loss, that fact might be properly shown to disprove or to diminish the damages claimed. Mitchell being, according to the testimony, neither in fact, nor by intendment of law, a purchaser from the testator, but only entitled upon certain conditions to become a purchaser from the defendant, his lo >¡¡ or freedom from loss can have no other effect upon the rights of the seller or the purchaser. If he had paid his share of the purchase money in full to the defendant, and had sustained a serious loss, that fact could not have been introduced by the defendant to enhance the damages claimed by him. It w ould still continue to be true, that he had suffered no loss on account of that share. The plaintiff does not appear to have been aggrieved by the instructions on these points.

3. The next question presented by the exceptions is, whether the jury were correctly instructed, that the fraud might; be considered as proved, if they were satisfied, “ that representations were made by him that he knew were not true, or hat he had not good reason to believe were true.”

The common law requires good faith in every business transaction, and does not allow one to intentionally deceive another by false representations or by concealments. Put it does not make the vendor responsible in damages for every unauthorized, erroneous, or false representation made to the vendee, although it may have been injurious. The representation must have been false, have been fraudulently made, and have occasioned damage. Fraus includes the idea of intentional deception. When one has made a false representation, knowing it to be false, the law infers, that he did so with an intention to deceive. And when one has made a repres citation positively, or professing to speak as of his own knowledge, without having any knowledge on the subject, the intentional falsehood is disclosed, and the intention to deceive is also inferred. The action to recover damages for such a representation is in law denominated an action of deceit, and the declaration should allege, that the representation was made with an intention to deceive, or that it was falsely and fraudulently made, which is equivalent to it. That a false repres 3 station or concealment, made or withheld with an intention to deceive, is an essential ingredient in the maintenance of such an action, is most clearly established by the decided cases. In the leading one of Pasley v. Freeman, 3 T. R. 51, Mr. Justice Buller says, “ that knowledge of the falsehood of the thing asserted constitutes fraud.” And Mr. Justice Ashhurst says, “ the 'quo animo is a great part of the gist of the action.” The whole current of decisions in England, since that time, runs in the same channel with an apparent diversion occasionally, when some unlawful act, express or implied warranty, guaranty, or agency, becomes an ingredient in the case and affects the principle upon which the decision has been made. In such divergent cases the influence of another element upon the decision is not always very fully or clearly stated. It is true, that Lord Kenyon stated, in the case of Haycraft v. Creasy, 2 East, 104, that “ the intent was immaterial, if the act done were injurious to another,” but he delivered a dissenting opinion and the decision made by other members of the court repudiates such a doctrine. Mr. Justice Lawrence stated, in order to support the action, the representation must be made malo animo.” Mr. Justice Le Blanc said, “ by fraud I understand an intention to deceive.” In the case of Polhill v. Walter, 3 B. & Ad. 114, Lord Tenterden appears to have in some degree yielded assent to a position taken in argument, that it was “ enough if a representation is made, which the party making it knows to be untrue, and which is intended by him, or which, from the mode in which it is made, is calculated to induce another to act on the faith of it in such a way, as that he may incur damage, and that damage is actually incurred.” The case however does not appear to have been decided upon the latter clause of that position, but upon the principle, upon which the cases of Foster v. Charles, 6 Bing. 396, and S. C. 7 Bing. 105, and of Corbett v. Brown, 8 Bing. 33, were decided. His lordship considered a wilful falsehood to be essential to the maintenance of the action, but it does not appear to have occurred to him at that time, that when one makes a representation, which he knows to be untrue, that the law infers, that he did it with a,n intention to deceive. In the case of Foster v. Charles, as reported in 6 Bing. 396, Tindal C. J. said, “ the law will infer an improper motive, if what the defendant says is false within his own knowledge, and if the occasion of damage to the plaintiff.” This explains his meaning, where he said in the same case, that he was not aware, that it was necessary to show the motive, which actuated the defendant, or that it could be material, what the motive was; that is, whether the motive for making a representation, known to be false, was to benefit himself or a third person, or wliat it was, could not be material; the improper motive or intention to deceive, the law would infer from proof, that a representation known to be false had been made. There is danger, that one may be misled by noticing the verdict of the jury in the same case, as reported in the 7 Bing. 105, and that the plaintiff had judgment upon it. The jury returned a verdict for the plaintiff, but added, “ we consider there was no actual fraud on the part of the defendant, and that he had no fraudulent intention, although what he has done constituted a fraud in the legal acceptance of the term.” The verdict was found under instructions, which were considered as explaining the addenda. These were, “ that if the defendant made representations concerning Jacque, the tendency of which was to occasion loss to the plaintiff, knowing such representations to be false, and intending thereby to benefit himself, he was guilty of fraud in the common acceptation of the term; if he made such representations knowing them to be false, without proposing thereby any advantage to himself, but proposing, perhaps, to benefit a third person, he was guilty of fraud in the legal acceptation of the term.” The jury appear to have had their attention called unnecessarily to the consideration, whether the representation was made from a motive of benefit to himself or to a third person. This was immaterial. Judgment was rendered upon the verdict upon the conclusion by the Court, that “ the jury in finding that he had no intention to defraud, mean only, that he was not actuated by the baser motive of obtaining an advantage for himself,” and that he was guilty of fraud by stating what he knew to be false. In the case of Corbett v. Brown, 8 Bing. 33, a new trial was granted on the principle, that fraud or intentional deceit must be inferred from a representation known to be false, by him who made it.

The case of Fuller v. Wilson, 3 Ad. & El. N. S. was an action on the case alleging, that the defendant made false representations with an intention to deceive, injure and defraud. As it was presented on the first trial, it did not appear, that the defendant made personally any representations. It did appear, that her attorney, without any instructions from her, made false representations without knowing them to be false. Lord Denman, in his opinion, appears to have adopted a proposition contained in a dissenting opinion of Lord Abinger, C. B. delivered in the case of Cornfoot v. Fowke, 6 M. & W. 358, “ that whether there was moral fraud or not, if the purchaser was actually deceived in his bargain, the law will relieve him from it.” If such were the law, upon which actions on the case for deceit were to be decided, the only question would bo, whether the purchaser was actually deceived by the false representations, without any regard to the consideration, whether the seller fully believed them to be true and made them without any intention to deceive. Such a doctrine cannot be admitted without making a great change in the well settled principles of law. That case was again tried, a special verdict was found, judgment was entered for the plaintiff in the Queen’s Bench, and a final decision was made in the Exchequer Chamber, upon a writ of error. The facts, as stated in the special verdict, were in some respects different from those proved on the first trial. The judgment of the Queen’s Bench was reversed. 3 Ad. & El. N. S. 68. In the case of Evans v. Collins, 5 Ad. & El. N. S. 804, Lord Denman, in delivering the opinion of the court, again exhibited doctrines similar to those, which he had advanced in the case of Fuller v. Wilson. The plaintiffs being sheriffs of London, handed a writ against one John Wright to their officer, Slowman, for service. Slowman, hearing of a person of that name, described him in a letter to the defendants, received by their clerk, who told Slowman, that the perspn described was the John Wright named in the writ. Slowman detained and imprisoned ;him. As he proved to be a different man, Slowman, or plaintiffs as his principals, were obliged to pay him damages. Lord Denman said, “ the sufferer is wholly free from blame, but the party, who caused his loss, though charged neither with •fraud nor , with negligence, must have been guilty of some -fault, when he made a false representation.” — “ The allegation, that the defendant knew his representation to be false, is .therefore immaterial.” Upon this ground, the plaintiffs recov•ered in an action on the case for deceit. The essence of this doctrine is, that an injury occasioned by a false representation •accompanied by “ some fault,” is sufficient to support such an .action. The law of England on this subject does not appear ■to be so vague and unsatisfactory. The plaintiffs might have been entitled to recover in a proper action, upon the principle, ■that if one directs his servant to do an act supposed to be law.ful, and the servant suffers damages in consequence of his •obedience, he may call upon his master for indemnity upon an [implied engagement to save him harmless.

The whole doctrine was elaborately examined in Massachusetts, in the case of Stone v. Denny, 4 Metc. 151. Mr. Justice Dewey, in his opinion says, “ that now as formerly to •charge a party in damages for a false representation not •amounting to a warranty, it must appear that it was made with a fraudulent intent, or was a wilful falsehood.” — “ Such fraud will be inferred, when the party makes a representation, which ¡he knows to be false, or as to which he has no information and no grounds for expressing his belief.” — “ So also if he positively affirms a fact as of his own knowledge and his affirmation is false, his representation is deemed fraudulent.” The conclusion was, that the action “ could only be maintained, when the false representation had been intentional on the part of the vendor, or what would be equally fraudulent in law, knowing that he was affirming as to the existence of a fact, about which he was in entire ignorance.”

The law on this subject was examined in an opinion delivered by Savage C. J. in the case of Allen v. Addington, 7 Wend. 1, wherein he states, “it must therefore be considered settled, both in England and in this State, that an action lies for a false recommendation of a third person, by which the plaintiff sustains damage, provided such recommendation be made with an intention to deceive and defraud the plaintiff.” He states, that it is not necessary, that he should have intended to defraud the plaintiff in particular, if there be proof of a general intention to defraud.

In this State, the law in relation to this action was stated in the case of McDonald v. Trafton, 3 5 Maine R. 225, to be that “ fraud in such cases consists in an intention to deceive. Where the evidence does not prove, that the party making the representation knew it to be untrue, the fraud can be established only by proof of a design to deceive by making statements, of which the party knows nothing.” In the case of Ingersoll v. Barker, 21 Maine R. 474, the jury were to find, whether the defendant induced the plaintiff’s agent to relinquish a lien by fraudulent representations. They were instructed, that they must be satisfied, that the property was obtained “ by representations, which were false, known by him to be false, made with a design to deceive and obtain the property, and that the agent of the plaintiffs was thereby deceived.” The instructions also stated, that if the defendant “ made false representations and known to him to be false, the intention would be left to the jury, and intention to deceive would, as a matter of fact, be implied, unless there were facts and circumstances in the case to rebut such implication.” In the opinion delivered by Whitman C. J. it was said, “ we are unable to see wherein the rulings of the Judge, who presided at the trial of this cause, or his instructions to the jury were justly exceptionable. Fraud is almost always a matter of inference from circumstances. Direct proof of it can seldom be expected. Concealment and disguise are often essential ingredients in it. It consists in intention.” Kent, speaking of the principle established by the case of Pasley v. Freeman, and by other English and American cases, says, “ misrepresentation without design is not sufficient for an action.” 2 Kent’s Com. 490.

It is insisted by the counsel for the defendant, that a less rigid rule is exhibited in the authorities cited by him. Story, in his commentaries on equity jurisprudence, <§> 193, says, “ and even if the party innocently misrepresents a fact by mistake, it is equally conclusive ; for it operates as a surprise and imposition on the other party.” His purpose was to speak of the principles of law, upon which relief might be obtained in equity, and he did not design to apply such a doctrine to a false representation made by a vendor. Nor would the cases cited by him in support of the proposition, authorize it. An innocent misrepresentation of a fact, inducing another to act upon it, may conclusively bind the party making it, in certain cases. This rule was admitted and applied in the case in equity of Harding v. Randall, 15 Maine R. 332. But the doctrine has never been applied to representations made by a vendor to a vendee.

By applying the doctrine, as herein asserted, to the instructions in this case, it will be perceived, that if one may make representations, “ that he had not good reason to believe were true,” without any intention to deceive ; the instructions cannot be considered as sufficiently guarded to prevent an erroneous conclusion. The jury would be authorized to determine whether the vendor had or had not good reason to believe that his representations were true. They may therefore have found, that he had not good reason to do so, because he was too credulous or careless to avoid being deceived by information obtained from others, by which no intelligent person in the exercise of common prudence, ought to have been deceived. Such a finding would be based upon the imprudence or carelessness of the vendor, and not upon any fraudulent purpose or intention to deceive. Although it may be highly improbable, that the verdict rests upon any such basis, yet, as the Court cannot by the means afforded, determine that it dees not, injustice might be done, if judgment were rendered upon it.

4. A fourth question presented is, whether the instructions respecting the paper bearing date on March 20, 1833, subscribed by the testator and identified as paper B, were correct. They were instructed, that it “ was in itself the representation of a fact and a statement, that there was the quantity of lumber on the township therein stated.” That paper authorized Mitchell and Goss to make sale of the township of land upon certain prescribed terms, and it contained the following clause. “ I will guarantee, that there is 45,000,000 feet, (board measure) of pine timber on the township ; and the purchaser may elect within thirty days of the purchase, to take it at a survey of all the standing pine timber at one dollar per thousand, or pay the said forty-five thousand dollars.” This clause appears to have been designed to offer to the purchaser an election, to be made within thirty days after he had actually made the purchase for the sum of forty-five thousand dollars, to purchase at that price, or upon payment of one dollar per thousand feet for all the standing pine timber, to be ascertained by a survey. And to bind the seller after such an election to deduct the difference, in case a less quantity than forty-five millions should be found upon it, from the forty-live thousand dollars already secured to be paid. The owner of a township of land without having any personal knowledge or information, upon which he could safely rely, respecting the standing timber upon it, might be willing to make such a contract for the sale of it. The purchaser could not neglect for more than thirty days to make an election and have such survey made, and yet do it at any subsequent time, and then call upon the seller to make good the difference between the amount found upon it, and forty-five millions, and yet the same effect may be produced by regarding the guaranty as a positive representation, that there were in fact forty-five millions upon it. For if it were regarded as such a representation, its wilful falsity might be established by such a survey, and the purchaser, by an action founded upon such false representation, might obtain all the advantages, which he could have obtained by a compliance with the terms of the guaranty. And the result might be, that both parties would find themselves some years after the purchase and sale in the same position, as they would have been, had the election been made under the guaranty within the thirty days. But such could not have been the intention of the parties. The seller could not have intended by that guaranty to assert, that there certainly were forty-five millions feet of standing timber upon the township, for the paper contemplates it as fact yet uncertain and yet to be ascertained by a survey, and that it might fall short of that quantity, and that the seller might be obliged on account of it to make a deduction from the price secured to be paid.

It can readily be perceived, that a person of the most delicate moral sense, might be willing to guaranty or warrant, an article to be of a certain quality, or an estate to contain a certain quantity of limestone, or of coal, or of pine timber upon it, and yet be wholly unwilling to assert the same to be a matter of fact. An agreement then, containing a guaranty does not necessarily include the idea or authorize the inference, that the person making it, knows the fact to be, as the guaranty stipulates, that it shall be for the foundation, upon which business is to be transacted. The document referred to in this case, is of that character, and the extent of the inference fairly deducible from it, is, that the person making it, so fully believed, that thg fact would prove to be so, that he was willing to take a less sum for the land, if it should prove to be Otherwise.

5. Several objections taken to the admission of testimony are still insisted upon, and it may be desirable to have them determined, that they may not arise again on a new trial.

The deed of a grantee of the State, cannot be considered as belonging to the archives of the State, and it cannot be proved, by a copy made by its land agent. The copy thus made and introduced, as annexed to the deposition of George W. Coffin, of the deed from the Commonwealth of Massachusetts to the testator, does not come within any rule authorizing its admission.

The contract made by the agents of the Commonwealth, to convey the township to Charles Thatcher, with an assignment of it made by Thatcher to Hammatt, appears to have been surrendered to the Commonwealth by Hammatt, and to have become a paper belonging to its archives; and proof in such case might be a duly authenticated copy.

The letters addressed to a public officer in his official capacity, when received, become public documents to be proved in like manner. But extracts of portions of them cannot be received.

The letters from Hazen Mitchell to Josiah S. Little and to Cyrus Goss, and the letter from Goss to Mitchell could be legal evidence only upon the ground, that their contents were communicated to, and approved by Hammatt, or that they were written by his agents, acting within the scope of their authority, and their contents made known to the defendant as an inducement to purchase. There appears to have been some testimony tending to prove this, and authorizing their introduction ; but the original letters only, could be thus introduced, without proof that they had been lost.

The copy of the decree of the Circuit Court of the United States, although not made in a case between these parties, was the only legal testimony to prove the fact, that the sale made by the defendant to Warren and Brown, had been annulled, and the consideration decreed to be restored.

The testimony of Cyrus Goss, detailing the representations made to the defendant by him, acting as the agent of Ham-matt, appears to have been properly admitted. That portion of his testimony containing a statement of what induced the witness to purchase, should not have been admitted.

That part of the testimony of Amos M. Roberts, which states, what would have been considered a good township, should have been excluded. He could not properly be admitted to testify to matters of opinion, with certain exceptions not authorizing such testimony.

Another question is presented, not free from difficulty, respecting the admission of a portion and the exclusion of the residue, of a deposition of the plaintiff, taken and used in another court in a case between other parties.

The doubt is, whether the rule respecting admissions made in conversations or declarations, and proved by parol testimony, be applicable; or the rale respecting admissions made in, and proved by bills and answers in chancery, letters, and other written documents.

When proof of the former kind, is introduced by parol testimony, it is by the more recent decisions limited to what was said or done at the same time, relative to the same subject. Prince v. Samo, 7 Ad. & El. 627; Sturge v. Buchanan, 10 idem, 598; Garey v. Nicholson, 24 Wend. 351; Clark v. Smith, 10 Conn. R. 1. If this rule be applicable, it appears to have been correctly applied.

When proof of the latter kind, is made by a document, the whole matter contained in it, becomes testimony in the case, for part cannot be received and a part excluded. 1 Stark. Ev. (ed. by Metc.) 282 to 289; Lynch v. Clerke, 3 Salk. 154; Roe v. Ferrars, 2 B. & P. 548, and note (a); Lawrence v. Ocean Ins. Co. 11 Johns. 260. It has been decided, that this rule does not apply to the day book of a party, containing entries of divers matters at different times. Catt v. Howard, 3 Stark. Rep. 3. Or to the records of proprietors of lands made at different adjournments of the same meeting. Pike v. Dyke, 2 Greenl. 213.

Its applicability to a deposition, presented as in this case, does not appear to have been decided in any case noticed. By the answer of eminent counsel, made to a question put by Mr. Justice Coleridge, in the case of Prince v. Samo, it appears, that the question now presented, was not known by them to have been at that time decided.

The deposition of the plaintiff, after it had been used in the cause for which it was taken, became a judicial document on the files of that court, from which it could not be removed without leave. When thus obtained, and offered in this Court, it could not be legally admitted in the character of a deposition. Nor could it be treated as such. No marks or erasures could properly be made upon it to indicate the portions admitted and excluded, for it must, as a judicial document of another tribunal, be preserved in the condition, in which it was presented. It could be received only after proof or admission of the signature of the plaintiff and as a paper signed by him. If leave could not be obtained for its removal from the files of another court, the signature being proved, a duly authenticated copy might have been received. But to receive a part and to exclude a part of a copy of a document coming from the-files or records of another court, would, it is believed, be an unauthorized course of proceeding.

Inquisitions, examinations, depositions, affidavits, and other written papers, when they have become proofs of its proceedings and are found remaining on the files of a judicial court,, are judicial documents. 1 Stark. Ev. 212, 260.

In the case of Benedict’s adm’rs v. Nichols, 1 Root’s Rep., 434, it was decided, that the statements of one, made and reduced to the form of a written examination in the court of probate, could not be proved by parol testimony ; and that the whole examination being produced, must be read and taken together. But in that case, the present question does not appear to have been decided, for the parts proposed to be received and excluded, contained statements respecting the same subject; and not, as in this case, respecting different subjects.

In the case of Faunce v. Gray, 21 Pick. 243, the deposition of the defendant, taken in perpetuara, was received in evidence, not as a deposition but as a written statement and' confession made by him. It does not appear that any question was made, whether a part of it could be read and the residue excluded.

As the deposition of the plaintiff in this case, could not be-received, or dealt with as such, or in that character, as it had become a judicial document, and could only be proved and received as such; the impression is, that the rule respecting the admission of judicial documents, became applicable to it; and that the whole document would become testimony in the case.

Exceptions sustained, and new trial granted.