Campbell v. Hillman

54 Ky. 508 | Ky. Ct. App. | 1854

Judge Simpson

delivered the opinion of the Court—

Two questions arise in this case: 1. Is the appellant responsible for representations made by him at the time of the sale, which he knew to be untrue, in relation to the title of the slaves which he, as the agent and attorney in fact of Richard U. Buckner, sold to the appellee? 2. If the purchaser has a right of recovery on account of the alleged fraud, what is the proper criterion of damages?

An \ agent is responsible individually to the purchaser for a fraud committed by him in the sale of propei’ty, although he does not profess to sell the property as his own, but acts thoroughout in his capacity as agent. (Sugden on Vendors, page 6.)

If the agent represented to the purchaser that his principal had a good title to the slaves, and the purchase was made upon the faith of- that representation, the mere fact that the agent informed the purchaser that his principal derived title to the slaves under his father’s will, and that the latter, after receiving this information, had sufficient time and opportunity to have examined the will himself, before he made the purchase, will not absolve the former from liability for the misrepresentation. When the inquiry about the title to the slaves was made by the purchaser, if he had been expressly referred to the will for information by the agent, or if the latter had expressed any doubt upon the subject, then, although he did state that the title was good and valid, yet it would have been incumbent on the purchaser if the statement were made in such a manner as to suggest a doubt about the title, to have investigated the subject himself, and if he had failed to do so, the mistake he labored under in relation to the title would have been the result of his own negligence, and he would have had no redress against the agent for any injury he sustained in consequence of it. But if the representations were such as were calculated to induce the purchaser to believe that the title was valid and really to prevent him from instituting any further inquiry in relation to it, and he made the purchase relying upon the information on the subject that he re-. ceived from the agent, then the latter would be responsible for the fraud, if one was committed by him, although he did state that his principal derived title to the slaves under the will of his father. The information given by the agent to the purchaser, that he was himself one of the trustees named in the w ill, and consequently that there would be .no difficulty in making him a good title to the slaves, although it suggested the existence of a trust, yet it at the same time conveyed the impression that the will authorized the sale to be made; and as the agent represented himself’as one of the trustees, and stated that a good title would be made to the purchaser, this representation, inasmuch as it showed that he was well acquainted with the contents of the will, and the nature of the title to the slaves which his principal derived under it, instead of diminishing was calculated • to increase the confidence of the purchaser, in the information imparted to him on this subject by the agent.

3. To constitute fraud, it is not only necessary that the representation be untrue, but also that the party making it shall know it to be so at the time when it is made. 4. In an action for a fraud, if the fraud is established, the measure of recovery is, as a general rule, to be ascertained by the injury sustained. The criterion by which the injury, in a case like the present, is to be ascertained, is the difference between the value of the estate purchased and that which he obtained by the contract of purchase. Facts which occur subsequent to the purchase, which are calculated to show' more satisfa c t o r i 1 y what was the real value of the estate which the vendor professed to sell, may be given in evidence to show more clearly the extent of the damages to be assessed.

The argument therefore that this information, being sufficient to put the purchaser upon an inquiry, was constructive notice to him of the contents of the will, and all the trusts and limitations created by it, and that consequently he must be regarded as being aware of the falsity of the representations at the time he made the purchase is entirely fallacious, and the doctrine contended for is inapplicable to the facts of this case. The information in the manner in which it was communicated, was calculated to suppress instead of to excite inquiry on the subject. The pur- ■ chaser did notplace more confidence in the representation than a man of ordinary prudence and circumspection would have done under the same circumstances. It was calculated to mislead and deceive him, and although, by resorting to an examination of the will, he could have had the full means of detecting the fraud and ascertaining the truth, yet when he was prevented from doing this, by the character of the representation itself, it cannot be said with any degree of propriety that the deception under which he labored was the result of his own negligence.

1. To constitute fraud, however, it is not only necessary that the representation should be untrue, but also that the party making it should know it to be so, at the time it was made. If then the agent, when he sold the slaves, actually believed that his principal had an absolute title to them, and that the sale would pass a good title to the purchaser, his repre■sentation to that effect, although untrue, yet having been made in good faith, would not amount .to a fraud, or subject him to any responsibility to the purchaser. The legal effect of the devise of the slaves depended upon the construction of the will; and if the agent honestly believed the representation he made in regard to the title to be true, he could not have made it for the purpose of deceiving or defrauding the purchaser. But this was a matter of fact for the jury to determine, and as the will only vests in the devisee a life etate to the slaves, it devolved upon the agent to prove that he gave a different construction to it, and in fact believed that it conferred upon the devisee an absolute title to them, and not a life estate merely.

2. In an action for a fraud, if the plaintiff succeed, he is entitled, as a general rule, to recover damages adequate to the injury he has sustained. The criterion by which the extent of the injury in a case like the present, should be ascertained and determined is perfectly obvious. The difference between the value of- the estate which he purchased, and the one that he actually acquired in the slaves, would ordinarily constitute the only standard by which the injury he sustained could be estimated; and if nothing had occurred subsequent to the purchase, which tended to demonstrate that justice would not be fully attained by estimating that difference, by reference to the actual condition of things at the time of the sale, then this mode of estimating it should be resorted to. But it is evident that cases might arise in which this mode of ascertaining the difference in the value of the two estates, and thereby determining the extent of the injury sustained, might work manifest injustice. To illustrate this proposition, let us suppose the case of a sale of a male slave where the owner of the life estate and the slave sold are about of the same age, and the life estate according to all human probability, will continue during the lifetime of the slave, yet nevertheless the tenant for life should die shortly after the sale was made. The purchaser would sustain by the fraud, an injux-y almost equal to the full value of the slave ; and yet, if the difference in the value of the two estates, to be detex-mined by reference to the condition of things at the time of the sale, constitutes the critei'ion by which the extent of the injury must he regulated and governed, the damages recovered would fux-nish vex-y inadequate redress for the injuxy actually sustained. It may be said, however, that to permit in such a case a recovery by the purchaser, to the full extent of the injury he has sustained, would be doing injustice to the owner of the life estate, who could have sold his interest in the slave for its value at the time of the sale. But there is a wide difference between the purchase of a life interest and the purchase of an absolute estate in a slave. The purchaser of the former, by the very nature of his purchase, agrees to risk both the life of the vendor and the life of the slave; the purchaser of the latter agrees to risk the life of the slave only. He might not have been willing to have incurred the double risk, and might have refused to purchase a bare life estate. The law will not compel him to accept and pay for an estate which he did not contract for or purchase, but gives him indemnity for the injury he has actually sustained in consequence of having acquired a less estate than that which was purchased by him.

According to the nature of the thing contracted for, the purchaser, however, agrees to incur the risk of the life of the slave, and if the slave should die before the termination of the life estate, the injury he would actually sustain by the fraud would be merely nominal, because the loss would not be occasioned by his failure to acquire an absolute title to the slave, but would be the result of a risk growing out of the nature of the property, and which every purchaser of such property necessarily assumes.

It is thus fully demonstrated, that the difference in the value of the two estates, without any reference to subsequent events, would in some cases fail to furnish ther purchaser with anything like adequate redress for the injury which he had sustained by the wrong, whilst in other cases it would greatly exceed the extent of such injury. Where, then, any subsequent events have occurred, previous to the time of the trial, which will aid in forming a coi-rect estimate of the difference in the value of the two estates at the time of the sale, and thereby tend to manifest the actual extent of the injury the purchaser has sustamed, they may be relied upon for that purpose. If, however, the condition of things remains as it was when the sale was made, then from necessity, the diiference in the value of the two estates at the time of the sale, estimated according to all the usual probabilities, is the only criterion that can be adopted in order to determine the extent of the injury the purchaser has sustained. But as such estimates, depending, as they must, upon mere conjecture with respect to future events, are, from their very nature, uncertain, they should not be relied upon, when the events upon which they essentially depend, instead of being matters of conjecture merely, have actually occurred, and become known and certain- So far as anything has happened, or any change in the condition of things has occurred, since the sale, which has a bearing upon the relative value of the two estates at that time, and which, if known, would have aided in forming a correct estimate of such value, if made at the time of the sale, should be considered by the jury in determining the amount of damages to which the purchaser is entitled.

The just operation of this principle is exemplified by its application to the facts and circumstances of the present case. The owner of the life estate, whose life was considered so precarious, at the time of the sale, on account of his bad health, that its probable duration was estimated at about two years or a little upwards, was still living when the suit was tried, although more than seven years had then elapsed from the time the purchase was made; and his health had so improved, as to justify the belief, that he might still live for several years longer. Besides, one of the slaves had died in the meantime, and to that extent no substantial injury had occurred or could arise to the purchaser, in consequence of the difference in the value of the two estates, because the estate which he acquired by his purchase did not terminate during the life-time of the slave.

If, therefore, the measure of compensation for the wrong was made to depend upon the apparent difference in the value of the two estates, to be estimated according to the existing condition of things at the time of the sale, without any reference to subsequent events, it is perfectly evident that the damages to which the purchaser would be entitled under the operation of such a rule, would greatly exceed in the present case the actual injury he has sustained. His right of recovery must be restricted to legal compensation, for the loss actually resulting, and not for that which might have resulted, from the wrong inflicted on him. So far as the means for the ascertainment of this loss have been furnished by events occurring subsequent to the sale, they should be relied on for the purpose, and probability and conjecture should only be resorted to, when all other more certain means fail, or are exhausted.

The difference in the value of the two estates at the time of the sale, constitutes, therefore, the measure of damages in this case. But subsequent events and circum'stances, which, from their very nature, are calculated to aid in estimating this difference, and which render certain some important element •in the estimate, upon which it is predicated, and without which it would be uncertain and merely conjectural, may be resorted to and proved for that purpose.

The Circuit Court refused to permit the defendant to avail himself of any of the events referred to, which occurred after the sale, and excluded all the testimony which was offered by him for that purpose.

The inquiry before the jury was confined to the difference in the value of the two estates, when estimated according to the actual state of things at the time of the sale, and thus, in effect, making that difference the measure of damages. The decisions given by the Circuit Court in the progress of the trial, with respect to the testimony relating to the measure of damages, were inconsistent with the principles of this opinion, and are deemed erroneous.

Wherefore, the judgment is reversed and cause remanded for a new trial, and for further proceedings consistent with this opinion.