115 Mich. 185 | Mich. | 1897
This cause was commenced by capias to recover the value of two car loads of lumber, which plaintiffs claim were fraudulently obtained' from them. The case was tried by the court, without a jury. Written findings of fact and law were filed by the judge, and a judgment entered in favor of the plaintiffs. From that judgment the defendant appeals.
It is conceded that the findings of fact justify the conclusions of law, but it is contended by the defendant that there is no testimony in the case upon which to base a finding that he perpetrated a fraud upon the plaintiffs in obtaining the lumber. Prior to 1890, defendant had been engaged in business at Grand Rapids, in his own name, and had failed. In 1889 and 1890 judgments were obtained against defendant for upwards of $25,000, and in 1895 for upwards of $20,000. At the time of the transaction between the parties to this cause, those judgments were outstanding and unpaid. In 1892 the firm of Frank Chickering & Co. was organized, Its office was at Bucyrus, Ohio, and its principal business was near there. . The members of the firm were the defendant, who' was without means, and Mr. Monnette and Mr. Hull, who were worth from fifty to seventy-five thousand dollars. Mr. Monnette and Mr. Hull lived at Bucyrus, and Mr. Chickering continued to live at Grand Rapids. Mr. Chickering was not obliged to spend all his time with the Bucyrus firm, and he did business for himself at Grand Rapids, in his own name and in the name of Chickering & Co.; and he claims that he did business at Grand Rapids for himself in the name of Frank Chickering & Co.
The plaintiffs were residents of Dexter, Mo., where they were manufacturing hardwood lumber. The latter part of 1895, and early in 1896, the defendant ordered, by correspondence, two car loads of lumber from plaintiffs in the name of Frank Chickering & Co, The parties prior to this had had no dealing with each other. The plaintiffs were subscribers to Dun & Co.’s mercantile reports, and found the firm name of Frank Chickering & Co. rated
Upon the trial, the city directory of Grand Rapids for 1895 and 1896 was received in evidence. It contained the following entries:
“Frank Chickering (Frank Chickering & Co.), H. 257 Madison Ave.
“Frank Chickering & Co. (Frank Chickering, J. C. F. Hull, M. J. Monnette), Hardwood Lumber, 26 Tower Block.
“George Chickering, Student, Boards 257 Madison Ave.
“Chickeripg & Co. (Frank Chickering), Lumber, 26 Tower Block.”
The name of Chickering did not appear elsewhere, alone or in any connection.
The ratings of R. G. Dun & Co. at Grand Rapids were received in evidence. They showed:
“Grand Rapids, Kent County, Mich. Frank Chickering & Co., Hardwood .Lumber, D 2.
“Chickering & Co., Lumber, -.”
The rating “ D 2 ” was explained to mean worth fifty to seventy-five thousand dollars. The rating blank was explained to mean no rating. These were the only entries in
“He met me by accident, and called my attention to the fact that we did not rate the firm of Frank Chickering & Co. at Grand Rapids; that is to say, they were not printed in the Grand Rapids list. And he further stated that ‘ we are in business in Grand Rapids, doing business here right along.’”
It was also shown that Mr. Chickering had been for 14 or 15 years a subscriber to Dun & Co.’s reports, and, according to his own testimony, he knew as early as 1894 just how the ratings were in Dun & Co.’s reports. The defendant, in his correspondence with plaintiffs addressed them as follows:
“Some time ago you wrote us you could deliver us inch quartered white oak. * * '* If you can ship us * * * [Signed] F. C. & Co.”
It is the claim of the defendant that he had nothing to do with the rating in Dun & Co.’s reports, and that all the time from his failure until this transaction he was engaged in business in Grand Rapids in the name of Frank Chickering & Co., and that to keep silent was not a fraud, when he was not inquired of as to his financial standing. It does not appear from positive proof that defendant was responsible for the mercantile reports. It does appear, however, from his examination, that a representative óf Dun & Co. inquired of him about the standing of the firm of Frank Chickering & Co., and he referred him to Bucyrus, Ohio, for information. Reference has already been made to his interview with Bradstreet’s superintendent.
Mr. Chickering knew the use which was made of these
It is true, as claimed by counsel, that in this country a man, although insolvent, - may lawfully buy on credit, even if he does not make his financial condition known to the vendor, if, at the time, he intends to pay. Wright v. Brown, 67 N. Y. 1; Zucker v. Karpeles, 88 Mich. 413. But if the purchaser knows he is insolvent, and makes the- purchase with the preconceived purpose not to pay, the purchase is void, even though.there may not have been at the time of the purchase any fraudulent representations. Shipman v. Seymour, 40 Mich. 274; Zucker v. Karpeles, supra. This was not a case of simply remaining silent when one was under no obligation to speak. The defendant knew, as already stated, that the
“Fraud is never presumed, and the party alleging and' relying upon it must prove it. This, however, is one of those rules of law which is to be applied with caution and circumspection. * * * Fraud is therefore as properly made out by marshaling the circumstances surrounding the transaction, and deducing therefrom the fraudulent purpose, when it manifestly appears, as by presenting the more positive and direct testimony of actual purpose to deceive. * * * In general, mere silence — a mere failure to apprise the party with whom one is dealing of facts important for him to know, for the protection of his own interest in the particular transaction — is no fraud. * * * Therefore, where, the sources of information are equally open to both parties to any dealings, and the one obtains an advantage of the other, without resort to any trick or artifice of concealment calculated to throw the other off his guard, or to any false presentation of facts, the advantage he gains is deemed legitimate, and the losing party must bear such loss as has resulted from his own want of vigilance or prudence. * * * Therefore, if one who is insolvent buys goods of another without disclosing his circumstances to his vendor, who is ignorant of them, but makes no inquiries, and is not deceived by misrepresentation or artifice, there is in law no fraud, although the vendor, when he sold, fully believed the vendee to be responsible and entitled to credit. In order to make out deception, it is not essential that false assertions should be made in words. A nod, a wink, a shake of the head, or a smile artfully contrived to induce the other party to believe in a nonexistent fact which might influence the negotiations, may have all the effect of false assertions, and be equally deceptive and fraudulent. So, one may accomplish a fraud by encouraging and taking*191 advantage of a delusion known to exist in the mind of the other, though nothing is directly asserted- which is calculated to keep it up.”
"When the defendant gave this order for himself in the name of Frank Chickering & Co., he knew just how that company was rated upon the books of the mercantile agency. He knew that rating would be consulted as a rule by the average business man. He also knew that, with such a rating, a firm who were selling upon credit would not be likely to make further inquiries as to financial standing, and would be likely to fill an order for goods at once if the price and terms of payment were satisfactory. It is impossible to read this record without coming to the conclusion that the lumber was fraudulently obtained of the plaintiffs by the defendant. The purchase of this lumber, and the appropriation of the proceeds, under the circumstances disclosed by the record, cannot be justified either in morals or law.
Judgment is affirmed.