16 Wis. 485 | Wis. | 1863
By the Court,
We shall not attempt to go over all the ground covered by the counsel in the argument of this case. A great many exceptions were taken to the rulings of the court, as to the admission or exclusion of testimony. There were likewise a great number taken to the ruling of the court in giving or refusing instructions asked on the one side or the other. The case will now be disposed of in considering chiefly the following portion of the general charge, which we deem erroneous.
Among other things, the circuit judge instructed the jury, that “ if they should And the fraud alleged in the answer of the defendant established, they might give him exemplary and vindictive damages, to punish the plaintiff by way of example ; that is, damages over and above the damages actually .sustained by the defendant, to act as a punishment of the. plaintiff, by way of preventing such fraudulent practices.” If
The action was upon a promissory note given by the defendant to the plaintiff! The defense set up in the answer to defeat a recovery in part or entirely, was, in substance, that the note in suit was given in part consideration of the purchase of a quantity of stock of the Hubbardton Manufacturing Company ; that the/property of the company consisted entirely of real estate, situated in Dodge county; that the- whole value of the stock depended upon the company owning and having a perfect title to such real estate; that the plaintiff had been, prior to the purchase,, the president of the company,' familiar with the condition of the real estate, and of the title of the company; that the defendant was not familiar with its condition, or, the state of the title, and resided at a distance from the county of Dodge ; that at the time of the purchase the plaintiff knew that a large amount of the real estate had been sold for non-payment of taxes; that the plaintiff purchased the tax certificates, and caused a tax deed to be executed for the express purpose of divesting the company of its title to the land, and that immediately thereafter, the plaintiff came to Milwaukee, and induced the defendant to purchase the stock of the company, and at the time of such purchase, the plaintiff knowingly and fraudulently concealed from the defendant the fact that a tax deed had been executed of said land so owned by the Manufacturing Company, and knowingly, purposely, designedly and fraudulently concealed the fact from the defendant, that the company had no title to such lands, with the purpose and design of obtaining from the defendant the same price for the stock which he would have paid, had the title to the real estate been perfect in the company. Thus it will be seen, that the defendant resists the payment of his note on the ground of fraud in the original consideration, the plaintiff suppressing the truth of material facts about the subject matter of
It is objected that there is no direct allegation in the answer that the value of the stock of the company was depreciated by the existence of the tax deed. But the only natural and fair inference from the matters stated in the answer is, that the stock was greatly depreciated, or that there was a partial failure of consideration in consequence of the fraud practiced. If the plaintiff was guilty of a suppression of the truth upon a matter material to the contract, and about which he was bound to make a full disclosure, and did this with intent to deceive and defraud, the defendant has a good defense to the note to the extent of the damages which he has sustained by the fraud. Whether the jury would be authorized in a case of this character, to give vindictive damages over and above the actual damages sustained by the defendant, is a proposition about which I have considerable doubt. It is undoubtedly a well established principle of the common law, and one recognized by this court, that in a certain class of actions a jury may inflict what are called punitive or vindictive damages, by way of punishment of the defendant for his wanton and lawless conduct. This rule of damages is frequently acted on in actions of trespass to the person, slander, libel, crim. con., &c. But I doubt much its application to a case like this, even where it appears that the defendant has sustained something more than nominal damages by the false representation. There is a still more conclusive reason why it cannot apply here, which is this: Assuming that the existence of. the tax deed was a material fact which the defendant had a right to know, yet if he has sustained no actual injury on account of this outstanding title, what cause has he to complain ? There must not only be a false representation made with intent to deceive, but this representation must be relied on, and cause damage to a party, before an action will lie. Now, in what way has the defendant been injured by the concealment of the existence of the tax
It was contended, with much earnestness, by the counsel for the appellant, that the plaintiff was under no legal obligation
It was further contended by the same counsel, «hat the relation which the plaintiff sustained to the company, as president and stock holder, prevented him from acquiring any title to the company’s lands through the tax deed; which would be valid against the company, or which would 'not inure to the benefit of the company. 'The case, it is said, comes strictly within the reason and principle of those decisions which hold that an agent, trustee, or any person acting in a fiduciary capacity, cannot acquire title to the property of the principal. And if he does acquire such title, a court 'of equity treats him as a mere trustee for the principal, without any beneficial interest in the property. There is certainly much sound reason and excellent sense in this view of the case. But as we have already said that it appeared from the defendant’s own testimony, that the statute of limitations had run against the tax deed, it becomes unnecessary to inquire whether the plaintiff ever took any beneficial interest in the lands under that deed, or could have maintained -an action upon it. It is no longer
The judgment of the circuit court is reversed, and a new trial ordered.