Brager v. Friedenwald

A careful study of the record in this case leads me to a different conclusion from that of the majority of the Court. There will be no attempt to review all the details of the case, but only to point out certain matters which do not appear to me to have been given their proper weight.

The action is one for deceit and the defendants in this case are six of the children of the late Joseph Friedenwald, viz., Jacob H., Benjamin B. and Hiram Friedenwald, Mrs. Hecht, Mrs. Thalheimer and Mrs. Goldenberg. Some of the others have been sued in Baltimore County, and some are beyond the reach of the process of the Courts of this State.

Two distinct matters of deceit are charged in the declaration, one an alleged concealment of the amount of the estate of Joseph Friedenwald, and of the sum which each of his children would be entitled to in the event of his intestacy as the consequence of setting aside his will. The other consisted of a misrepresentation of the grounds upon which the attack was to be made upon his will executed in 1903. As the second of these grounds only is dealt with in the opinion of the majority of the Court, nothing is now said in regard to the first grounds except that I do not find any such concealment or misrepresentation as would sustain this action.

In considering the second ground it is well to have in mind what is necessary to maintain an action of this character. The requisites have been repeated in a large number of cases in Maryland, but nowhere with greater clearness and precision than in Boulden v. Stilwell, 100 Md. 543, where JUDGE PEARCE, speaking for this Court, said: "The foundation of the action is actual fraud, and nothing short of this will suffice. Consequently a misrepresentation believed by the speaker to be true, though induced by his ignorance or negligence, will not sustain an action for deceit. There must be either knowledge of the falsity of the representation or such reckless indifference to truth in making it, as is held equivalent to actual knowledge. The fraud must be material, by which is meant that without it the transaction would not have been made. It must be the statement of an alleged existing fact or facts and not merely of some future or contingent event, or an expression of opinion as to the subject of the statement. The party to whom it is made must rely upon its truth, and must have the right, as a person of ordinary business prudence, to rely upon it, otherwise it is his own folly or fault for the consequence of which he can not ask relief of the law. Finally, there must be damage directly resulting from the fraud."

Applying the standard thus given to the facts of this case, of what do the misrepresentations consist? Are they to be found in a conspiracy upon the part of twelve of Mr. Friedenwald's children to defraud their sister, Mrs. Brager, out of her interest in her father's estate? There is no direct evidence of such conspiracy. Is it a necessary inference from the facts which are testified to? Mr. Friedenwald had urged his children to live in harmony with one another. Within a few days after his death, Mr. Brager acting for his wife, had indicated his purpose to seek to set aside the will of 1910, and then by his counsel had followed up the attorney for the estate, seeking to be bought off from making a contest, and was paid by eight of the children $45,000 to avoid his threatened litigation. After the will of 1910 had been set aside as the result of proceedings instituted by others aided and urged on by Mr. Brager, he again appears by other counsel eager to be again bought off from attacking the will of 1903, and again he is successful in being paid a price for peace. Is not the inference as reasonable that the twelve children of Mr. Friedenwald paid the price of $44,500 in addition to the earlier payment of $45,000, in order to carry out the solemn injunction of their father, as that of a conspiracy to defraud Mrs. Brager? If so, the plaintiff has not met the burden of proof required in an action of deceit.

As there must be an actual misrepresentation to sustain a suit of this nature, it follows that is must be made by some person or persons. Who was it in this case? All of the twelve or only some of them, and if so, which? Mr. Brager in his testimony fails to state. The negotiations preceding both settlements made were not between th parties directly, but through their counsel. Mr. Barton was representing Mrs. Brager. His negotiations appear to have been almost entirely with Mr. Harley. Did Mr. Harley practice a deception on Mr. Barton as to the grounds upon which reliance was to be placed in the caveat to set aside the will of 1903? That is best answered by Mr. Barton himself in his testimony: "During our conversation the exact ground of attack was never gone into very particularly with me, it was not a matter of any very particular interest to me at that time, but it was stated, I can not remember the exact time, it was an attack to be made upon the ground of testamentary incapacity, by Mr. Harley. I may say the subject was not gone into in detail." * * * Q. Do you think anybody was guilty of fraud? A. I do not. * * * We have made no such charge. Q. Whom do you charge with being guilty of acting deceitfully; what persons do you refer to? A. I don't charge anybody. Q. Do you charge Mr. Gans in acting towards you deceitfully with intent to defraud you? A. No, I do not charge him with it. Q. Do you charge Mr. Harley with not having fully disclosed the facts to you? A. I have stated the facts; what the explanation may be I don't know. * * * My knowledge of such men as Mr. Harley and Mr. Gans and Mr. Frank is such that I haven't the slightest idea they would be guilty of any suppression of facts, or anybody. * * * Q. Whom do you charge with fraud? A. The six defendants. Q. You never saw any of them? A. Never. Q. You never talked with any of them? A. I think the only time I ever came in contact with any of the people personally was at Mr. Gans' office when I think the papers were exchanged. * * * Q. Do you charge Mr. Harley with having intentionally made any false statements to you in connection with this matter? A. No, sir; I certainly do not. I know so much about Mr. Harley I do not believe he would; I believe he is an honorable man as I try to be myself." It does not seem to me that this testimony furnishes a sufficient ground upon which to base a legitimate inference of a deception practiced upon Mrs. Brager or her attorney to sustain the action of deceit.

When the settlement was arranged prior to the trial of the validity of the will of 1903, the sum agreed to be paid to Mrs. Brager by the other twelve children was $44,500. But the money was not paid at that time. It, as well as the conveyance of Mrs. Brager's interest in her father's estate, was placed in escrow in the hands of Mr. Edgar H. Gans, and the consummation of the agreement was dependent upon the outcome of the trial of that will case. If it terminated one way, the money was to be paid over to Mrs. Brager and the deed delivered to the twelve other children of Mr. Friedenwald, or their representatives; while if the result terminated the other way the deed was to be returned to the Bragers and the money to the twelve children. The contract was thus an executory contract at the time when the caveat to the will of 1903 was tried.

Even if it be assumed that there was a fraud perpetrated, or that sufficient facts have been shown from which, uncontradicted, there could be a legitimate inference of fraud, which does not appear to me to be the case, nevertheless Mrs. Brager should not be entitled to maintain this suit. If in addition to the above assumption, it is further assumed that prior to the trial of the case involving the validity of the 1903 will, Mrs. Brager was without knowledge of any undue influence practiced upon her father, as the result of which that will was executed in the form in which it was, and that Mrs. Brager was without knowledge that the line of attack was to be made on the theory of undue influence, she became fully cognizant of the fact when that case was tried, and therefore, knew then, even if she did not earlier, of the fraud now claimed to have been practiced upon her. In spite of all this, more than thirty days later, she, by her counsel, called upon Mr. Gans for the payment of the $44,500, and so far as the testimony discloses made no attempt, either for the rescission of the contract or its repudiation. On this demand being made in August upon Mr. Gans, he paid over the money which had theretofore been held in escrow, and there was thus released for delivery to the other twelve the deed from Mrs. Brager. The effect of this demand, at the time when made, under the well settled rule of law, operated to condone the fraud, and waive any right of action which Mrs. Brager had up to that time. This rule is stated in 20 Cyc. 92, as follows: "Although an action of deceit based upon fraud in the procurement of a contract proceeds upon the theory of affirmance of the contract by the defrauded party an important distinction exists with respect to acts done in affirmance of the contract after discovery of the fraud. If the defrauded party acquires knowledge of the fraud while the contract remains executory and thereafter does any acts in performance or affirmance of the contract or exacts performance from the other party, he thereby condones the fraud and waives his right of action. Under such circumstances a recovery would be largely if not entirely for self inflicted injuries and the maxim volenti non fit injuria, applies."

The reasons for this rule are stated with great elaborateness in Kingman v. Stoddart, 85 Fed. Rep. 740.

In the case of Simon v. Goodyear Co., 105 Fed. 573, MR. JUSTICE LURTON concisely recites the doctrine in these terms: "If one after full knowledge of the fraud and deceit by which he has been induced to make a sale of property goes forward and executes it notwithstanding such fraud the damage which he thereby sustains is voluntarily incurred. The maxim volenti non fitinjuria has application to all loss resulting from the voluntary execution of a non-obligatory contract with full knowledge of the facts which render it voidable. Fraud without damage is not actionable. If the fraud be discovered while the contract is wholly executory, the party defrauded has the option of going on with it or not as he chooses. If he executed it the loss happens from such voluntary execution and he can not recover for a loss which he deliberately elected to incur."

And to the same effect are the cases of People v. Stephens,71 N.Y. 527; Fitzpatrick v. Flannagan, 106 U.S. 648;McDonough v. Williams, 77 Ark. 261; Tuttle v. Stovall,134 Ga. 331; Gilmer v. Ware, 19 Ala. 252; Hein v.Westinghouse Co., 172 Fed. 526; Richardson v. Lowe, 149 Fed. 632; Brown v. Brown, 142 Ill. 409; and St. John v.Hendrickson, 81 Ind. 350. See also, 1 Page on Contracts, sec. 139; Schmidt v. Mesmer, 116 Cal. 267.

In view of the testimony in this case and what appears to be a well established rule of law, I feel compelled to dissent from the view entertained by the majority of this Court.

Filed March 2, 1916.