Glaspell v. Northern Pac. R., 43 F. 900

43 F. 900 | U.S. Circuit Court for the District of North Dakota | 1890

Thomas, J.,

(after stating the facts as above.') The bill of exceptions states that the court charged the jury as to the measure of damages that if they found for the plaintiff it must be in a sum equal to the difference between the actual value of the lands and the value of the said lands as they would have been had they been as represented at the time of the sale. The defendant excepted to this instruction, and now contends that it is erroneous, and was prejudicial to the defendant. Did the court give to the jury the correct rule for the measurement of damages as applicable to the facts of this case? The action is for the recovery of damages resulting to plaintiff from alleged false and fraudulent representations. The lands were wild and uncultivated, and at the time of the sale there were only a few settlers, if any, in the vicinity where this land was situated. In an action to recover damages which the plaintiff had suffered by reason of the purchase of stock in a corporation which he was induced to purchase on the faith of false and fraudulent representations made to him by the defendant, the supreme court of the United States, in Smith v. Bolles, 132 U. S. 125, 10 Sup. Ct. Rep. 39, held that the measure of damages is the loss which the plaintiff sustained by reason of such representations, such as the amount which he paid out, and interest, and all outlays legitimately attributable to the defendant’s fraudulent conduct, but it does not include the expected fruits of an unrealized speculation. The rule thus enunciated by the supreme courf is binding on this court if applicáble to the facts of this case. Counsel for the plaintiff contends that the rule laid down in Smith v. Bolles, supra, applies only to the purchase of personal property of a speculative character, and that it does not apply to the purchase of land induced by fraud, and refers to Horne v. Walton, 117 Ill. 130, 141, 7 N. E. Rep. 100, 103, which is one of the cases cited by Chief Justice Fuller in Smith v. Bolles, on page 130 of the opinion. In that case the supreme court of Illinois states that “where the sale of land is made by false and fraudulent representations as to its value, quality, or condition, the measure of damages in any action by the purchaser is the difference between the actual value of the land and its’value as represented to be at the time of the sale.” But that question was not involved in the casé, and it was unnecessary to give the rule of damages on the sale of land induced by fraud. It appears in that case that the party procured a loan of $2,000 through fraud and deceit upon representations that the security was good, the security being land, when as a matter of fact it was worthless. The court held that the actual loss to the party was the amount he had borrowed, with interest thereon while he was kept out of the possession of it. The court say, on page 135 of the opinion. “We think the true measure of damages in this case was the amount of such loss, to-wit, $2,000, and interest.” In the opinion in Smith v. Bolles is cited also the case of Crater v. Binninger, 33 N. J. Law, 513, and it will be found in that case that the New Jersey court laid down an entirely different rule as to the measure of damages on the sale of lands induced by fraud. Courts have sometimes made a distinction as to the rule of damages in the sale of personal property and real property when effected or induced by fraud and false representations, but the supreme court of the United States, in Smith v. Bolles, seem to have laid down a rule applicable to the measure of damages in the sale of both classes of property coming within the line of facts applicable to that ease. Judge Huleas has applied this rule in the ease of the sale of pine lands, induced by false and fraudulent representations. Atwater v. Whiteman, 41 Fed. Rep. 427. The statute of this stale, (section 1967,) which was in force also in the territory of Dakota at the time of the trial of this action, and for a long time prior thereto, is declaratory of the common-law rule as to the measure of damages as enunciated, explained, and applied in Smith v. Bolles. It reads as follows:

“For a breach of an obligation, not arising from contract, the measure of damages, except where otherwise expressly provided by tin's Code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.”

The latter part of the section “whether it could have been anticipated or not” is new, but as there is no question of remote damages in this ease it is not necessary to attempt to define the meaning of these words. The balance of the section, as I have stated, is declaratory of the common law. Fairbanks v. Williams, 58 Cal. 241, 242; 2 Greenl. Ev. § 256; Walrath v. Redfield, 11 Barb. 368-371. Upon this statute and the cases of Smith v. Bolles and Atwater v. Whiteman, supra, I am of the opinion that the court, upon the trial of this action, should have instructed the jury that if they found for the plaintiff upon the other issues that as to the measure of damages they should find the cash value of the land in the condition it actually was at the time of the sale, and deduct such value from the sum of money invested by the plaintiff in the land, and that difference, with interest added, in the discretion of the jury, would be the proper amount which the plaintiff was entitled to recover. It follows that the instruction given by the court as to the measure of damages was erroneous, lor which error a new trial must be granted, unless it appears that the error was harmless, and worked no injury to the defendant.

It is apparent that the case was tried by both parties upon the theory that the rule for the measure of damages as given by the court was the correct rule, and it must be presumed that the jury followed the instructions of the court, and applied the rule given in making up and returning their verdict. The jury were the judges of the credibility of the witnesses' and of the weight of the evidence. They were instructed in fact that if they found for the plaintiff they should find the actual value of the property at the time of the sale,- and also that they should find what the value would have been if it had been as represented, and the difference would be the correct measure of damages. The evidence tended to show on the part of the plaintiff that the lands were of no value whatever, but that they would have been worth from $5 to $7 per acre if they had been as represented. The'evidenee on the part of the defendant, given by the witness Atkinson, was to the effect that thej^ were of some value, or, in other words, the jury were at liberty to find from his evidence that the lands were of some value. The witness Nichols testified that they were worth about §3 per acre. Can this court determine from the evidence or from the record whether the jurj’- adopted the evidence of the defendant’s witnesses as to the actual value at the time of the sale, or whether they adopted the theory of the plaintiff’s witnesses that they were of no value whatever? Can the court legitimately find, from the evidence, or from the record sent to this court, whether the jury adopted the theory of defendant’s witnesses, and placed the actual value of these lands at $3 per acre at- the time of the sale, and adopted the theory of plaintiff’s witnesses that they would have been worth $7 per acre if they had been as represented, that being the highest sum placed by plaintiff’s witnesses upon said lands if they had been as represented, and allowed the plaintiff the difference of $4 per acre, and interest thereon, or whether the jury adopted the theory that the. lands were of no value at the time of the sale, and found that they would have been worth $4 per acre if they had been as represented, a sum lower than any of plaintiff’s witnesses'had placed on the land, and added interest to this sum' of $4 p.er acre? The result or the amount of the verdict would have been the same in either case. I think it clear that this court cannot determine that question from the evidence or the record now before it. It must go outside of the record, if at all, to determine on what basis the jury figured, or what rule of calculation they resorted to in determining their verdict. It would seem that the jury would reasonably infer from the comparison of all the evidence that the lands at the time of the sale were of some value. It is notorious that the lands of the Northern Pacific Railroad Company were sought after and were readily sold in the market at and prior to that time at reasonable prices. It is possible also that if the case had been tried upon the correct theory as to the measure of damages, the value of the preferred stock with which the lands, in question were principally paid for might have been a subject of inquiry on the trial, or maj' upon a new trial be inquired into for the purpose of ascertaining the loss sustained by the plaintiff. It is impossible for this court to say, from all the evidence, that a verdict upon a new trial will be the same, or substantially the same. In Atwater v. Whiteman, supra; the court sustained the verdict, and refused to grant a new trial, notwithstanding the jury had been erroneously instructed as to the measure of damages, for the reason that ■ a special verdict, in addition to the general verdict, had been found by the jury. On page 428 of the opinion Judge Siiibas says: ' ■

“The general verdict was as follows: ‘ We, the jury, find a verdict for the plaintiff for $4,924.62, with interest at the rate of 7 per cent, from November 15, 1882, to January 7, 1890, amounting to $2,417.90, which, added to tho last-named amount, makes a total of $7,342.50.’ In answer to specific questions submitted the jury found that the fair cash value of the land at the time of the sale was $1.25 per acre, and that if the land had, at the time of the sale, been equal in quality and value to what defendant represented it to he, the value thereof would have been $11,598.13. The undisputed evidence shows that there was invested in the land the sum of $6,964, belonging to the plaintiff. Deduct from this amount the value of the land at the rate of $1.25 per acre, as found by the jury, and we get the exact sum found by the jury in tho general verdict in the amount of damages, to-wit, $4,924.62. It is therefore clear, beyond question, that the jury, in estimating the damages, in fact carried out the rule laid down in Smith v. Bolles.”

There are no facts on the face of the record presented to this court in the case at bar that would enable it to say that the jury in estimating the damages in effect carried out the rule laid down in Smith v. Bolles, or reached substantially the same result they might have reached if that rule liad been given to them by the court. The plaintiff claims that there was no prejudicial error in tho giving of the instruction, for the reason that the jury in fact only allowed the purchase money, and interest, and that affidavits of jurors arc admissible to show this fact to sustain the verdict, and in support of his contention therein produced and read upon the hearing of the motion for a new trial in this court the following affidavits signed by eight of the jurors:

“ State of Worth Dakota, County of Stutsman — ss.

“M. W. Wright, P. V. Yellows, J. H. Sears, and Joseph Stine, being each duly sworn, deposes and says, each for himself, that he was one of the jurors in the trial of the above-entitled action, in which a verdict was rendered in the district court of the then territory of Dakota, in the county of Stutsman, on the 24th day of November, A. D. 1888, and in arriving at said verdict the jury estimated the land sold by defendant to plaintiff to be of no value, and that plaintiff paid therefor the sum of $8,960, or $4 per acre, for 2,240 acres. The sale was made on or about March 6th, 1883. They considered that the laud would have been worth, if it had been as represented, the sum of $4 per aero, and that plaintiff had lost by the transaction the price he paid, with interest. It was the intention or aim of the jury to render a verdict for the plaintiff equal to the amount of money which he had paid to defendant, with interest; at 7% per annum.”

“State of Worth Dakota, County of Stutsman — ss.

“ William Harselew, R. M. Clayton, A. M. Davis, and Charles Eiemensclmeider, being first duly sworn, each for himself deposes and says that he was one of the jurors in the trial of the above-entitled action in the district court of the then territory of Dakota, county of Stutsman, in which a verdict was rendered on the 24th day of November, 1888. In reaching such verdict the jury estimated the land sold plaintiff by defendant to be worthless and of no value, and that plaintiff paid therefor the sum of $8,960 on or about March 6th, 1883. We considered that if the land had been as represented that it would have been of the value of $8,960, and that plaintiff had lost, by reason of the transaction, the sum paid, with interest at seven per cent, per annum. ”

And in support of these affidavits of the jurors they also read the following affidavits:

“State of North Dakota, County of Stutsman — ss.

“Theodore E. Branch, being first duly sworn, deposes and says that he is the clerk of the district court for Stutsman county, North Dakota; that at the November, 1888, term he was a bailiff in said court, and was present in said court during the trial of the case of Albert H. Glaspell vs. Northern Pacific. Railroad Company, and was one of the witnesses in said action, and testified in regard to a survey and examination of the lands (2,240 acres) involved in said action made by himself; that he was the bailiff in charge of the jury in said action during their deliberations over their verdict; that said jury returned a sealed verdict into court about eleven (11) o’clock p. m. ; that immediately after said jury left, the jury-room this affiant found therein a paper upon which a calculation of interest had been made upon a principal sum of $8,960, amounting in all to $12,545.48, being the amount of the verdict in said action; that at the same time this affiant returned with said paper into the courtroom, and made the statement to S. L. Glaspell and E. W. Camp that he could tell what the verdict would be. Affiant found said paper on the table used by said jury in arriving at their verdict, and there was no other paper in said room with figures thereon or calculations of any kind. ”

“State of North Dakota, County of Stutsman — ss.

“Edgar W. Camp, being first duly sworn, says he was one of the attorneys for plaintiff in the action mentioned in foregoing affidavit of Theodore E. Branch. Affiant, with others, waited in the court-room till after the jury agreed and returned a sealed verdict. After the verdict had been agreed upon, and the jury had left the jury-room, said Branch went into the jury-room and soon after returned to the court-room, holding in his hand a piece of paper, which he seemed to be examining. Branch said that he would like to make a bet that he could guess within five dollars of the amount of the verdict. To the best of affiant’s recollection affiant soon after saw the said paper and examined it, and that it contained a calculation of interest. Affiant does not recollect the sums and amounts, but recollects that the verdict read the next day tallied with the calculations on the paper. ”

“State of North Dakota, County of Stutsman — ss.

“8. L. Glaspell,, being.first duly sworn, says that he was one of the attorneys for the plaintiff in the trial of the above-entitled action; that he saw the paper referred, to in the above affidavit within five minutes of the time the said jury left the jury-room, and returned their verdict, sealed, to the clerk; that he immediately telegraphed the plaintiff, who had previously left the city, the verdict, and based the sum upon the figures in said paper, and he had no other knowledge or information of the verdict than was disclosed by said paper. The same contained a calculation of interest in the sum of $8,960, at 7% interest, to the date Of the verdict. The figures telegraphed by affiant as the verdict in said case was the exact amount as afterwards shown by the verdict when opened in court. Affiant had no conversation with any juror prior to the opening of said verdict in court as to the amount thereof, and had no knowledge or information of the amount thereof save as was disclosed by said paper. ”

i -These affidavits were read subject to the objection of the defendant. Are these affidavits admissible for the purpose claimed? The material part of the affidavit of Branch is that “said jury returned the verdict into court about 11 o’clock p. m.j that immediately after said jury left the jury-room this affiant found therein a paper upon which a calculation of interest had been made, upon a principal sum of $8,960, amounting in all to $12,545.43, being the amount of the verdict in said action;” and that he communicated these facts to Camp and Glaspell; “that affiant found said paper on the table used by said jury in arriving at their verdict, and there was no other paper in said room with figures thereon or calculations of any kind.” The effect of the affidavits of Camp and Glaspell is that they saw the paper immediately after as shown to them by Branch. Giving full effect to these affidavits, the most they show is that the jury figured from a principal sum of $8,960,,at 7 por cent, interest, and reached the sum of $12,545.43, being the amount of the verdict. If the jury had found the actual value of the land to be $3 per acre, and the value as represented at $7 per acre, the same result would follow as above suggested. We must therefore go to these affidavits of the jurors to sustain this verdict, if at all. Are these affidavits of jurors admissible to show on what grounds, or by what process of reasoning, the jury found and rendered their verdict? Can the plaintiff show by these affidavits that the jury disregarded the instructions of the court, and the theory on which the case was tried, in respect to the measure of damages, and that they adopted the correct rule, and gave the, verdict for the loss the plaintiff had sustained by reason of the fraud? This is the proposition presented, and I have been una ble to find any well-considered authority to sustain it. Upon the grounds of public policy, the courts have almost universally agreed upon a rule that no affidavit, deposition, or sworn statement of a juror shall be received to impeach the verdict or to explain it, or show on what grounds it was rendered. Thomp. & M. Juries, § 440, and cases there cited; Id. § 451; Hudson v. State, 9 Yerg. 408; Larkins v. Tarter, 3 Sneed, 681. 2 Thomp. Trials, § 2627, and cases cited. It has been held in Massachusetts that when a jury have returned into court with their verdict, before they are discharged, and while they are yet a jury, it is competent for the court to interrogate them as to the grounds of their finding if there is more than one distinct ground on which the verdict may be given. Parrott v. Thacker, 9 Pick. 426; Biggs v. Barry, 2 Curt. 259. I apprehend that'these courts would not extend the rule so as to admit the affidavits of jurors as to the grounds on which the verdict was rendered, even if all the jurors had made and joined in the affidavits, especially after they had separated and ceased to become a jury in the case. In Roberts v. Hughes, 7 Mees. & W. 399, the English court of exchequer held that the rule does not exclude jurymen from swearing to what took place in open court, but only to what took place in their private room, or as to the grounds on which they found their verdict. While the testimony of the jurors will not be received to impeach their verdict, it will be received to sustain the verdict when assailed. This rule is invoked generally and almost universally when the verdict is assailed on account of alleged misconduct of jurors, and it is not only adopted in the furtherance of justice, but" to vindicate the jurors themselves. Thomp. & M. Juries, § 446; Wright v. Telegraph Co., 20 Iowa, 195; Hall v. Robison, 25 Iowa, 91; Proff. Jury, § 408, and cases cited; People v. Hunt, 59 Cal. 430-432; People v. Goldenson, 19 Pac. Rep. 172.

The case of Dalrymple v. Williams, 63 N. Y. 361, and Hodgkins v. Mead, (N. Y.) 23 N. E. Rep. 559, are relied on by plaintiff to support his contention that the affidavits of the jurors are admissible to sustain the verdiet; but in both of these cases the facts aré niateríálly different from the case at 'bar. In Dalrymple v. Williams the foreman announced as the verdict of .the jury a general verdict against both defendants. It was claimed that the real verdict as agreed upon was in favor of Williams and against the other defendant; and. the affidavits of the jurors stating these facts, and the fact that the foreman had made a mistake in announcing the verdict in court, were admitted. The affidavits were admitted simply to correct a mistake made in open court, and not to explain or give the grounds on which the verdict was based. On page 365 of the opinion Mr. Justice Allen, speaking for the court, refers to Jackson v. Dickenson, 15 Johns. 309, and to Roberts v. Hughes, supra, with approval. He says:

“In Jackson v. Dickenson the affidavits of the jurors were held admissible to show that a mistake had'been made in taking their verdict, and that .it was entirely different -from what was intended. The court draws a distinction between what transpires while the jury are deliberating on their verdict and what takes place in open court in returning their verdict, holding the statements of jurors admissible as to the latter, but not as to the former. Roberts v. Hughes, 7 Mees. & W. 399, is like the last case quoted. The affidavits of the jurors were received as to what took place in open court on the delivery of the verdict, to correct it.”

In Hodgkins v. Mead, supra, which was an action brought by a real-estate broker for commissions, the defendant contended that the pajmient of commissions was conditional on the completion.of the contract by the .purchasers, but no question was made as to the amount'. On page 559 of the opinion:Justice Peckham, speaking for the court,-says: -

“The answer set up a special contract between the parties by which the plaintiff was to claim and be entitled to no commissions except upon theperi'ormance by the proposed purchasers of the property of the special contract of sale entered into between them and the defendant, and the answer alleged a failure by the proposed purchasers, and that on account thereof the plaintiff had not earned his commissions. This was the sole question at issue between the parties, and it was assumed and conceded that, if the plaintiff was entitled to a verdict at all, it was for the 1 per cent, upon $80,000, with interest üom the time it was due. The charge of the judge to the jury was explicit upon that point, and he stated in so many words that, if the plaintiff was entitled to a verdict, lie must recover his commissions upon the purchase price with interest, amounting in all to the sum of $848. . The judge further said: ‘How, you have a single question of fact to decide, whether you believe the testimony of the plaintiff, or the testimony of Mead, Sergeant, and Mel-drum', as to this arrangement made on the 21st day of February. If you find that there .was ah arrangement made that the commission of pláintiff was conditional, then your verdict will .be for the defendant, because the condition was never complied with. If, on the other hand, there was no condition, it is.admitted here that the .plaintiff- was employed, and that he found a purchaser, and that the plaintiff would be entitled to a verdict.’” ■ ‘

The precise amount of such verdict had already been stated by the court, and there was no dispute about it. It was conceded that the amount of the verdict, if for the plaintiff, must be 1 per cent, upon the 880,000, with interest. It was clear beyond dispute that the amount must be the same upon another trial. The amount was really agreed upon, bul the foreman neglected to band the amount to the court in the sealed verdict. The case was decided on the principle enunciated in the ease of Dalrymple v. Williams, supra. The affidavits were admissible to correct a mistake made in open court in not announcing the actual verdict agreed upon by the jury, on the principle laid down in Jackson v. Dickenson and Roberts v. Hughes, supra. It was upon this principle that the court allowed the verdict to be amended in Burlingame v. Railroad, 23 Fed. Rep. 706. In my opinion the affidavits of all the jurors ivoulcl not have been admissible to sustain this verdict, much less the affidavits of eight of the jurors, who attempted to speak for the entire jury. The objection of the defendant to the admissibility of the affidavits is therefore sustained. It is claimed by the attorney for the plaintiff that it was admitted upon the argument in this court that the land was worthless, and, that being so, it necessarily follows that the jury must have adopted that theory. I do not understand that defendant’s attorney made so broad an admission, but if he did it does not follow that the jury adopted that theory as the basis of their calculations in view of the evidence. It follows that for the reasons hereinbefore stated a new trial must be granted, and it is accordingly ordered. It is unnecessary to notice the other assignments of error.