Robinson & Co. v. Roberts

By agreement these causes were consolidated and tried to a jury, which returned a verdict in favor of defendant. Plaintiff appealed, and the first assignment of error is that the court erred in refusing to instruct the jury at the close of the testimony on both sides as requested by plaintiff:

"That this is not a case under the law and the evidence wherein the minds of reasonable men may differ, and you are instructed to return a verdict for plaintiff for the amount due on the notes, which the uncontradicted evidence shows is $554.40, with six percent. interest from October 12, 1903, and for the possession of the property sought to be replevined."

This, in effect, was a request for the court to instruct peremptorily for the plaintiff, and the first question for us to consider is, was there sufficient evidence of fraud to support the verdict? In Gulf, C. S. F. Ry. Co. v. Ellis, 54 Fed. 481, 4 Cow. C. A. 454, Justice Caldwell, speaking for the court, said:

"If there is any evidence, direct or circumstantial, fairly tending to support the verdict, it must stand. Every presumption is in its favor, and all doubts must be resolved in its favor. This court will not weigh or balance the evidence."

The verdict of the jury, in effect, found that defendant was induced to sign the order for the threshing outfit in question by the fraudulent representations of Brandt, and that the contract between plaintiff and defendant pertaining thereto was as set forth in defendant's answer. Tested by the above rule, let us see if the evidence is legally sufficient to support the verdict. The proof shows that about June 13, 1903, J. M. Brandt was agent for plaintiff, and located in Enid, Okla.; that defendant was a farmer and lived a few miles in the country; that about that time defendant was looking around to buy or trade for a threshing outfit and ran across Brandt, who stated that he had a machine in Enid that he would trade for defendant's old outfit; that they talked the matter over several times, and finally agreed that defendant would let Brandt have his old outfit and give him $1,800 for the one Brandt had in stock in Enid, provided that on 10 days' trial after the threshing season commenced it was found by defendant to do good work and thresh 1,500 to 2,000 bushels a day. No other than a verbal contract was spoken of between the parties until defendant went to get the outfit from Brandt, at which time Brandt wanted a contract and things fixed up to show that the machinery was turned over to the defendant, and so informed him, and that he would hold the notes, mortgage, and contract in his possession and permit defendant to hold his outfit in his possession until defendant had the 10 days' trial agreed to, and that, if defendant accepted the property after trying it, it was understood between them that the notes and mortgage were to be turned in to the company; that in case the outfit did not do as verbally agreed between them it was to be turned back to Brandt, and plaintiff's contract, notes, and mortgage were to be returned to the defendant. This was done with that understanding, and the notes and mortgage set forth in this cause were prepared and delivered to Brandt. At the same time Brandt presented to him to sign a contract, of which Exhibit A to plaintiff's petition is a copy, which purports to be an absolute sale of the threshing outfit by plaintiff to defendant in consideration of $1,550, defendant's old outfit therein described as "a sixteen horse power Stephens traction engine and a Reeves separator, with wind stacker, weigher, and drive belt," payable according to the terms of three promissory notes of $450 each, and further containing covenants of warranty on the part of the seller. The verbal agreement above set forth is nowhere mentioned in said contract. When presented for defendant's signature, he did not read it, because he did not have his spectacles, and depended on Brandt to read it for him, which he did.

Defendant testified:

"He read the contract down to where it stated in the original contract that according to our verbal contract where I was to have 10 days to try the machinery, if it wasn't satisfactory, it wasn't mine, and quit. He said the other didn't amount to anything; just kind of machine form; didn't concern our verbal contract at all. Q. Did you rely upon his statement as to whether or not he read the contract that you signed? A. Yes, sir; I relied on it."

And again:

"Q. What part did he read you? A. He read the contract the same as our verbal contract. * * * He read out what I understood the verbal contract was, but I do not think he read anything about the notes or any mortgage."

At that time Brandt did not tell him not to read the contract, and did not read it all to defendant. Defendant further said:

"Q. He did not tell you what else was in it? A. No; just read on down to where I tell you. Then he said: 'This is just merely machine form; don't amount to much.' * * * Q. He didn't read the lower part of the instrument at all? A. No, sir."

Plaintiff took; the threshing machine outfit home with him, together with a copy of the contract which Brandt gave him, which he "threw down in the house somewhere, and never looked at it at all or read what was in it until after the difficulty came up about the machinery." When he did notice it he observed for the first time that it differed from their verbal agreement. After 10 days' trial by defendant, the outfit proving unsatisfactory, he notified Brandt, who attempted to make it do as verbally agreed, but failed. Brandt afterwards put an expert on the machine, who also failed to make it do as agreed, during which time it was turned over to Brandt by the defendant, and afterwards ran out in the public highway and left by the agents of Brandt, and where it was when this mortgage was foreclosed. About that time, to wit, August 6, 1903, defendant wrote plaintiff this letter:

"Mr. Robinson, Dear Sir: In regards to your machine and contract I had ten days triel and it failed to do the work I turned it back to your agent Mr. Brant and then wee maid another verbel contract before witnesses that he was to make the machen do the work and he put an expurt in charge of the machen and he failed to make it do the work and he was fired out of the field with the machen broke and he had full charge of the machen and he left it in the road and you had better see me and investigate this matter. Yours truly, C. F. Roberts."

Defendant's old outfit was never turned over by him to plaintiff. We are not unaware that Brandt testified that no such verbal agreement was made; that he and defendant talked the matter over thoroughly before the order was signed; that he told him nothing about a 10 days' trial of the machinery before purchase; and that he told him nothing about holding the notes and mortgage given for the purchase price and sued on in this cause; and returning the same if the machine did not suit him. And the witness Brooks, an employe of the plaintiff at that time, testified that he did not know of any such verbal agreement; that the order was written by Brandt and signed by defendant in his, presence, at which time Brandt gave defendant a copy thereof; and that "there was no verbal contract any more than is in that order, that is, in my presence"; also that the order was dated June 13, and the notes and mortgage June 18, 1903. But we will not "weigh or balance the evidence." We think it sufficient to say, in the light of authority, that the evidence is ample to support the verdict.

Warden, Bushnell Glessner Co. v. Whitish, 77 Wis. 430, 46 N.W. 540, was a suit to recover the purchase price of a Champion light binder, manufactured by plaintiff, and delivered to defendant under a written contract with a warranty annexed. The answer alleged, and the proof showed, that the contract was signed under the false and fraudulent representations of the agent that said "binders were as good as any other binder"; that if defendant would buy one he might take it and try it until he was satisfied, and if it was not as good as they had represented, and he was not suited with it, he could return it, at any time and not pay for it; that the defendant was induced by such representations to take one of plaintiff's machines upon such terms; that thereupon said agent produced and asked defendant to sign a paper, which be then represented to defendant as nothing more than an order for a machine upon the terms and conditions stated; that said agent did not read said paper to him; that the defendant is and was an illiterate person, incapable of reading and writing, and relying upon such representations he signed the paper and received from the plaintiff a machine; that upon trial under the supervision of plaintiff's agent it was found not to be such a machine as represented by him, nor made of the materials represented, and that it did not operate as had been represented by him; that the defendant thereupon notified the agent of the plaintiff that he did not like the machine, and would not keep it; that said agent thereupon again tried said machine without being able to make it work as represented; that defendant thereupon informed said agent that the machine was not such as he had ordered and did not do good work; and that he would not keep it, and would return it. The court held that the verdict was supported by the evidence, and said:

"This is not the case of a party, in the absence of fraud or mistake, failing to know the contents of a written instrument signed by himself by reason of his own negligence or want of reasonable care, as in the cases cited by the learned counsel for the plaintiff, and many others which might be cited, as, for instance, Herbst v. Lowe, 65 Wis. 316, 26 N.W. 751, where the distinction between those cases and cases like this is pointed out. Certainly no one will contend that a person can procure the signature of a party to a contract by false representations, and then enforce the contract on the ground that, had the party so deceived been more vigilant, he would have discovered the fraud in time to have withheld his signature from the contract. In other words, a person cannot procure a contract in his favor by fraud, and then bar a defense to it on the ground that, had not the other party been so ignorant or negligent, he could not have succeeded in deceiving him."

Chapman et al. v. Atlanta Guano Co., 91 Ga. 821, 18 S.E. 41, was a suit upon a promissory note. Defendant pleaded fraud in obtaining his signature thereto. There was judgment for the plaintiff. The court, speaking through Justice Lumpkin, in reversing the case said:

"The pleas, in effect, state that the plaintiff's agent represented the note to be for $53.10, while in point of fact it turned out to be a note for $90.20. This is not a matter for a mere difference of opinion. If the pleas speak the truth, the plaintiff's agent perpetrated a palpable fraud upon the defendants, involving nothing short of actual dishonesty. It is true that in the last plea the defendants aver that the note was signed upon the representation that it was for the account at the price stated in the plea, to-wit, $53.10, without alleging by whom this representation was made; but, construing all the pleas together, we think it was sufficiently alleged that the representation in question was made by the plaintiff's agent, and that the note was signed upon the faith of this representation. * * * In the case at bar one of the pleas alleges that the note was signed at night, when defendant signing the same could not well see, and another avers that the note was made at night, when defendant could not see the amount. These allegations, it is true, are not strong. They do not show that a light might not easily have been obtained, if the defendant had desired it, or that there was any haste about the transaction, or that the plaintiff's agent urged or requested an immediate execution of the note, or did anything, except the making of the representations complained of, to prevent the defendant from fully informing himself of the amount set forth in the note. Still, we think the pleas contain enough to authorize the case to be submitted to a jury, and allow them to determine whether or not a fraud was actually practiced upon the defendant."

So we say in this case that, as the testimony of defendant shows that the agent represented the paper to contain the prior verbal agreement which, in point of fact, it did not do, but turned out to be a contract of sale with covenants of warranty, this was not a mere matter of difference of opinion, or the misstatement of the legal effect of the instrument, but was evidence of fraud sufficient, under all the circumstances, to go to the jury.

In Wood v. Cincinnati Safe Lock Co., 96 Ga. 120, 22 S.E. 909, the court said:

"Whatever may be the rights of third persons, it is a rule of law of universal acceptance that as between the original parties thereto, fraud in its procurement voids a contract, and this upon the theory that, the consent of the parties being necessary to the binding force of the contract, if one apparently consenting by the execution of a written contract can show that he did not in fact consent to its terms as therein expressed, but that his apparent consent was induced by false and fraudulent practices, by means of which he was overreached by the other party, and, without negligence upon his own part really deceived as to the terms of the contract, he would be entitled to be relieved from its apparent obligations."

See, also, Hopkins v. Hawkeye Insurance Co., 57 Iowa, 203, 10 N.W. 605, 42 Am. Rep. 41, where the court said:

"It is incumbent upon the party executing an instrument to exercise reasonable care and diligence to ascertain its contents. Ordinarily, however, what constitutes reasonable care and diligence is a question of fact, to be determined by the jury in view of all the circumstances. In this case the plaintiff was unable to read the note on account of the absence of his spectacles. Whether he was justified in relying upon the reading of the agent, and in neglecting to call upon his wife or son, who were present, constitutes not a question of law, but one of fact. The question is, did he act as persons of reasonable and ordinary care would usually do under like circumstances? If he did, he was not negligent."

See, also, Jeremiah Taylor v. Thomas Atchison, 54 Ill. 197, 5 Am. Rep. 118; Union Pacific R. R. Co. v. Harris, 158 U.S. 326, 15 Sup. Ct. 843, 39 L. Ed. 1003; 9 Cyc. 390, and cases cited.

But the plaintiff insists that the court erred in overruling his request for a peremptory instruction, because "the placing in defendant's hands of a copy of the order of the 18th of June and his failure to object to its terms until the 6th of August is a waiver of any objection to the terms of the contract." In other words, plaintiff, in effect, contends that by failing to read the contract and object to the terms thereof defendant was guilty of such negligence as amounts to a waiver of the fraud in procuring the contract, if any such there were. In support of this proposition plaintiff cites N.Y. Life Ins. Co. v.McMaster, 87 Fed. 63, 30 Cow. C. A. 532, where the court said:

"Neither the company nor its agent, therefore, made any representation, or promise, or used any artifice or deceit, to prevent the insured from learning the terms of his policies. Their contents were not concealed. They were not misrepresented. The deceased must accordingly be conclusively presumed to have known their terms when he accepted them. If one can read his contract, his failure to do so is such gross negligence that it conclusively estops him from denying knowledge of its contents, unless he was dissuaded from reading it by some trick, artifice, or fraud of the other party to the agreement." (Citing authorities.)

This undoubtedly is the rule in case of the absence of fraud on the part of the agent procuring the contract. But in this case the jury found, and we have held, that there was sufficient evidence to warrant a finding that there was fraud on the part of Brandt in procuring defendant's signature to the contract, and hence the rule above cited does not apply. We do not accede to the proposition that under the circumstances the law imposed a positive duty on the defendant to read the contract. That being the case, he cannot be charged with negligence in failing so to do; and that being true, there is nothing upon which to predicate a waiver on his part.

In Kister v. Insurance Co., 128 Pa. 553, 18 A. 447, 5 L. R. A. 646, 15 Am. St. Rep, 696, the court said:

"We cannot say that the law, in anticipation of a fraud upon the part of a company, imposed any absolute duty upon Kister to read his policy when he received it, although it would certainly have been an act of prudence on his part to do so.Insurance Co. v. Bruner, 23 Pa. 50; Insurance Co. v. Wilkinson, 13 Wall. (U.S.) 222, 20 L. Ed. 617. One thing is certain, however, the company cannot repudiate the fraud of its agent, and thus escape the obligations of a contract consummated thereby, merely because Kister accepted in good faith the act of the agent without examination."

In Strohn v. Railway Co., 21 Wis. 562, 94 Am. Dec. 564, the plaintiffs had a verbal agreement with the defendant railway company as to the terms of shipment of a quantity of freight. The freight was delivered to the railway company, and afterwards, upon demand, the company delivered to the plaintiffs bills of lading therefor. These bills of lading contained conditions of shipment inconsistent with the verbal agreement of the parties. The plaintiffs having received and retained these bills of lading without reading them or knowing their contents, the railway company insisted that they were bound by the conditions contained in the bills of lading, which had been received without objection. In answer to this contention the court said:

"Having previously entered into a special verbal agreement, he may rightfully assume, in the absence of notice to that effect, that it is embodied in the paper or receipt, or at least that the receipt contains nothing contrary to it. It is in the nature of a direct fraud or cheat for the company or its agents, after having entered into a verbal agreement, thus wrongfully to insert a contract of an entirely different character, and present it to the party without directing his attention expressly to it and procuring his assent. It is no answer for the company in such a case to say that the other party should have been more diligent and watchful, and should have detected the fraud."

And to the same effect is Boorman v. Express Company,21 Wis. 154.

In McElroy v. Assurance Co., 36 Cow. C. A. 615, 625, 94 Fed. 990, 1000, the Circuit Court of Appeals for the Ninth Circuit say:

"It would certainly have been an act of prudence on his part to read the entire policy, but his neglect to do so cannot excuse the company for the default of the agent in not writing the contract in accordance with the representations made by the insured. The insured had a right to rely upon the agent's performing his duty of making the contract in conformity with the information given, and the agent's failure to do so, whether the result of a mistake or of a deliberate fraud, cannot operate to the prejudice of the insured. The contract of insurance is pre-eminently one that should be characterized by the utmost good faith on both sides."

In Fitchner v. Association, 103 Iowa, 276, 72 N.W. 530, the Supreme Court of that state say:

"The insured ordinarily rely upon the agent to properly set out the facts in the applications, and Laub did as men usually do in assuming that the defendant's agent had done his duty.Stone v. Insurance Co., 68 Iowa, 737, 28 N.W. 47, 56 Am. Rep. 870; McComb v. Insurance Co., 83 Iowa, 247, 48 N.W. 1038. The mere failure of the assured to read his application, or the copy of it in the policy, does not establish negligence. Haganv. Insurance Co., 81 Iowa, 321, 46 N.W. 1114, 25 Am. St. Rep. 493; Donnelly v. Insurance Co., 70 Iowa, 693, 28 N.W. 607;Boetcher v. Insurance Co., 47 Iowa, 253. Nor is the omission to read the policy negligence. Barnes v. Insurance Co., 75 Iowa, 11, 39 N.W. 122, 9 Am. St. Rep. 450; Jamison v. InsuranceCo., 85 Iowa, 229, 52 N.W. 185; Boetcher v. Insurance Co.,supra. Laub had no reason to suppose the policy and application were drawn differently than understood."

But is not the question whether one who claims to have been drawn into a fraudulent purchase has exercised the proper care and diligence to discover the fraud, and with due promptness in repudiating his contract on the ground of fraud, a question for the jury under all the circumstances of the case? We think so. In Upton v. Tribilcock, 91 U.S. 45, 23 L. Ed. 203, the defense was fraud in procuring a stock subscription. The trial court submitted the question of fraud, together with the question under consideration, to a jury, and the Supreme Court in passing, in the syllabus, said:

"Parties who claim to be relieved on the ground of fraud must act with the utmost diligence and promptitude in discovering the fraud and in claiming to be relieved by reason of it, and whether they have so acted is a question of fact for the jury."

Hence we cannot say as a matter of law that defendant was guilty of such negligence in not reading his contract or under all the facts and circumstances of this case as to amount to a waiver of the fraud in procuring the contract.

Plaintiff was undoubtedly entitled to have this phase of the case submitted to the jury on proper instructions, but since he did not request it he cannot now complain. It follows that the court did not err in refusing to give said instruction, or in giving the one as follows:

"If you believe from the evidence that at the time the contract relied on in this action was made the defendant was unable to read writing readily, on account of defective eyesight, and requested the said J. M. Brandt to read the said contract to him, and said Brandt did so read it to the defendant, and if you further believe from the evidence that the said J. M. Brandt when reading the said contract changed the same in any material part, thus inducing the defendant to sign said contract when he otherwise would not have done so, this would constitute a fraud in law, and such contract is not binding on said defendant. The same is wholly invalid as to him."

The last assignment is that the court erred in giving the following:

"You are further instructed that, if you believe from the evidence that the defendant has clearly shown by a preponderance thereof that he was induced to sign the contract by the actual deception of plaintiff's agent, against which ordinary prudence may not have guarded him, and also, having so signed, the property so ordered failed to do what such machinery should do in the hands of competent men, then you will find for the defendant."

The error, if any there be, in this instruction, is not clearly pointed out, and we can think of none except that it might be objectionable on the ground of repetition, as it is an almost exact reiteration of the first half of instruction No. 4 given for plaintiff. The same idea is conveyed in both in almost identical language. We can see no error in this, as repetition is not a ground for reversal. 11 Enc. Pl. Pr. 299.

Furthermore, if error therein exists, it is such that plaintiff cannot take advantage of, being himself responsible therefor by requesting and having the court give for him substantially the same charge, thereby misleading the court.

"The defendant will not be allowed, then, to take advantage of his own wrong, or the errors of the court induced on his own motion, and then compel the plaintiff to suffer the consequences."

(Union Pacific Ry. Co. v. Harris, 63 Fed. 800, 12 Cow. C. A. 598.)

The judgment of the lower court is affirmed.

Williams, C. J., and Dunn and Hayes, JJ., concur; Kane, J., dissents.