Dutton v. Pyle

Opinion by

Wickham, J.,

In April, 1889, the defendants, who were engaged in business as private bankers and brokers in West Chester, in this state, sold to the plaintiffs three mortgages, given on as many different properties in southwestern Kansas by the respective owners. These mortgages, which were accompanied by bonds, had been purchased, with others, by the defendants, in the ordinary course of their business, and were by them held for sale. One of the obligations was to secure the payment of $400; another $250; and the third, $400. Each bore interest at the rate of seven per centum per annum. The transaction, so far as it relates to the purchase by the plaintiffs of the first and second, forms the basis of this suit. The payment of each bond was guaranteed, by indorsement, by the Southern Kansas Mortgage Company, which was at the time, so far as the evidence shows, a solvent concern.

For awhile the interest was paid on the loans, then default was made, and finally, on April 3, 1894, tins action of trespass was brought to recover damages for alleged false, fraudulent, and deceitful representations, promises, and warranties made by the defendants, to the plaintiffs, to induce the latter to part with their money. To support the action it was necessary to show that Pyle, the member of the defendant firm with whom the plaintiffs dealt, made the alleged representations knowing them to be false, or with such conscious ignorance of their truth as to be equivalent to falsehood: Griswold v. Gebbie, 126 Pa. 353, and cases there cited.

The plaintiffs’ proof fell so far short of this standard that the learned trial judge very properly directed a nonsuit. In the first place, they utterly failed to show that, in 1889, any one of the mortgaged properties was not held by good title, and was not substantially as valuable as represented. Secondly, the evidence, instead of showing recklessness, bad faith, fraud, or deceit on the part of Pyle, rather tended to prove that, at the time, he believed and had reason to believe all that he said. As to the alleged personal warranty or guarantee of the defendants, if it were given, which is denied, it is clearly within the statute of frauds and not enforceable as a contract: Maule v. Bucknell et al., 50 Pa. 39, and there'is nothing, in the evidence, to sustain the view that it was any part of a scheme to defraud.

The truth of the whole matter, so far as it is inferable from the meager evidence, probably is, that owing to the years of drouth in southwestern Kansas, farms and villages were deserted and abandoned, lands became in many localities almost valueless, and the plaintiffs, in common with thousands of other eastern investors, including even many of the shrewdest bankers and money lenders, who were seeking large interest, shared in the resulting misfortune. The evidence, including that which was rejected, is not sufficient, however, to show that in 1889, the part of Kansas referred to had reached the condition above depicted, or that the defendants did not honestly believe that the particular investments, made by the plaintiffs, were not safe.

The first assignment of .error need not be considered, as no exception or writ of error lies to the entry of a compulsory non-suit : Haverly v. Mercur, 78 Pa. 257. The second is overruled for reasons already given. As to the third, we fail to see how the answer to the question, “ Have you ever had any trouble in collecting interest or principal on these bonds and mortgages?” would tend to prove the value of the land or the alleged deceit in 1889, or at any other time. The offer referred to in the fourth assignment was to prove that Pyle, at some time not definitely fixed, but before he and his partner commenced loaning money in Kansas, which would necessarily be prior to 1886, the year they began doing business in that state, had said something condemning all Kansas investments. This evidence, to say the least, was too remote. The remark attributed to Pyle may, according to the offer, have been made as far back as 1876. Moreover, we can hardly think that the plaintiffs would wish to be understood as wanting the jury to believe that the defendants, or any one else, regarded every loan made in the great commonwealth of Kansas as fraudulent or valueless. Some things are too absurd on their face to be treated very seriously. The last assignment complains that a certain banker was not permitted to testify that he had never loaned money in western Kansas “ for the reason that the rains were very uncertain in that part of the country, and it made the loaning business very unsafe.” The testimony as to this witness’s individual practice was entirely inadmissible, no matter what motive controlled lfim, and, for that reason alone, the offer should have been rejected. But even if this evidence, as well as that mentioned in the third and fourth assignments, had all been admitted, there still would not have been enough to warrant the submission of the case to the jury. . Fraud must be proved; to merely arouse a suspicion thereof is not enough.

Judgment affirmed.