Inderlied v. Honeywell

SMITH, J.

I am unable to discover any principle of law upon which this judgment can be supported. It is nowhere alleged in the complaint that these representations were made by Warner with knowledge of their falsity, or with intent to deceive. Without such allegations, no cause of action for fraud is alleged. The allegation of a false representation is no more than an allegation that the representation was untrue. A false representation may be innocently made. It is unnecessary to discuss, therefore, whether, if a cause of action for fraud were alleged, the proof adduced is sufficient to sustain the same. The judgment must accord not only with the proof, but with the pleadings.

Nor can this judgment be sustained as a recovery upon contract. The complaint alleges that the' trust company, through its agent, publicly stated, represented, and warranted that the sum of $1,800 only was due upon the first mortgage. If this were true, it is difficult to see how recovery could be had until the purchaser has been disturbed in his possession through a claim of a greater amount as due upon the first mortgage. Without ever having been disturbed in his possession—the foreclosure of the first mortgage not having been attempted in any way—no recovery can be sustained, as based upon any covenant of warranty as to the amount due upon the first mortgage.

I have assumed, without holding, that Warner was authorized to make a representation as to the amount due upon the first'mortgage. If Warner had authority to speak for the trust company, and the plaintiff was induced to act upon the sale by false representations made by him, the trust company might well, in some cases, be held estopped, upon the foreclosure of the mortgage, to claim more than was represented to be due thereupon. If the representations are not sufficient to create an estoppel, they are certainly insufficient to create a cause of action. If the purchaser have a defense to the mortgage beyond the amount claimed to be due, a serious question is presented, whether this plaintiff has been in any wa> harmed, even if the representations had been fraudulently made. I know of no principle of law under which the defendant can be compelled to pay over to the plaintiff the difference in the amount which was then due upon the mortgage and the amount represented to be due, at least in the absence of-allegation and proof of actual fraud on the part of the trust company.

The judgment should therefore be reversed and the complaint dismissed, with costs. All concur.