Bartlett v. Bonazzi , 91 Vt. 192 ( 1917 )

Haselton, J.

This is an action on the ease for fraud and deceit. It has once been here for the consideration of a plea in abatement which was held bad. 90 Vt. 284, 98 Atl. 80. The declaration is in four counts, two original, and two amended. The defendant when the case was remanded demurred to each count for causes assigned. The demurrer was overruled by the court below, the defendant excepted, and the case was passed to this Court before trial on the merits.

The case stated in each count is, with some variations, in brief, this: The defendant knowingly made material and detailed misrepresentations, particularly set out, as to existing facts affecting the financial condition and ability of a firm of which he was a member, and thereby induced the plaintiffs, who relied upon the representations and believed them to be true, to become sureties upon notes of the defendant’s firm which the sureties were obliged to pay.

One ground of the demurrer is that the misrepresentations were not actionable. But as their character was as above stated they were actionable as has been frequently decided. Darling v. Stuart, 63 Vt. 570, 22 Atl. 634; Childs v. Merrill, 63 Vt. 463, 22 Atl. 626, 14 L. R. A. 264; Johnson v. Cate, 75 Vt. 100, 53 Atl. 329; Corey v. Boynton, 82 Vt. 257, 72 Atl. 987; Belka v. Allen, 82 Vt. 457, 465, 74 Atl. 91; Crompton v. Beedle, 83 Vt. 287, 75 Atl. 331, 30 L. R. A. (N. S.) 748, Ann. Cas. 1912 A, 399; Adams v. Ladeau, 84 Vt. 460, 79 Atl. 996; Howton v. Strout Farm Agency, 90 Vt. 50, 96 Atl. 330. In Fisher v. Brown, 1 Tyler 387, 4 Am. Dec. 726, and in Dyer v. Tilton, 23 Vt. 313, it is held broadly that an action on the case will not lie for misrepresentations as to one’s own existing financial circumstances. The cases have been criticized and departed from. See Childs v. Merrill, 63 Vt. 463, 471, 472, 473, 474, 22 Atl. 626, 14 L. R. A. 264, and upon the point above noted are now expressly overruled.

The plaintiffs’ loss through the fraud of the defendant was according to the declaration somewhat reduced by what the plaintiffs realized from chattel mortgage security taken by them. The defendant claims that the plaintiffs could not realize on the chattel mortgage without waiving the fraud. That if they wished to rely upon the fraud they should have returned the chattel mortgage security, that by realizing on the chattel mortgage they elected not to rescind. But it was not necessary to this action that they should attempt to rescind, for there could be no rescission, since both parties could not be restored to their former condition, and it was not necessary that the defrauded plaintiffs should return what security they had in order to enable them to sue in this action to recover from the wrongdoer such damages as they had suffered from his fraud after realizing all they could from such security as they held. Oben v. Adams, 89 Vt. 159, 94 Atl. 506; Priest v. Foster, 69 Vt. 417, 421, 38 Atl. 78; Merchants’ National Bank v. Taylor, 66 Vt. 574, 29 Atl. 1012; Childs v. Merrill, 63 Vt. 463, 468, 22 Atl. 626, 14 L. R. A. 264; Mallory v. Leach, 35 Vt. 156, 82 Am. Dec. 625.

The questions raised by the demurrer have not been taken up in their various subdivisions, but all claims raised have been sufficiently considered.

The judgment overruling the demurrer is affirmed, the counts of the declaration are adjudged sufficient and the cause is remanded for trial tipon its merits.