Griel v. Lomax

89 Ala. 420 | Ala. | 1889

SOMERYILLE, J.

This case was before us on a former appeal, when we fully discussed some of the most important principles involved. — Griel v. Lomax, 86 Ala. 132. We then stated the rule to be, in cases where the vendor of any interest in land had no title, that the purchaser in an executed sale had no remedy, upon such failure of title, unless he had protected himself by taking proper covenants for title, or unless there was fraud, either by misrepresentation or concealment, in the sale.

It is still insisted that Griel had no interest whatever in the land he sold to the plaintiffs, and that there was a total failure of consideration — that he acquired a hundred dollars of the plaintiffs’ money for nothing, and for this reason the money ex cequo et bono belongs to the plaintiffs, and they ought to recover it back in this action. We can not perceive that this changes the aspect of the question, or rescues the case from the principle declared on the former appeal. But it is not true, on the facts set out in the bill of exceptions, that Oriel had no valuable interest in the land in question. Moses had agreed to sell the land to Griel, Matthews and O’Connell, by delivering a deed to them from the Sheffield Land Company; the agreement, it is true, being only verbal, so that it was voidable under the statute of frauds, and its enforcement could have been resisted by either party by interposition of the statute set up by special plea. But Moses made no effort to avoid the agreement on his part. On the contrary, he procured the deed to be signed in proper form, and made every suitable effort to deliver it, as he had stipulated to do, by depositing the papers with Moses Bros., to be delivered to the grantees upon performance by them of their part of the contract. We held in Jenlcins v. Harrison, 66 Ala. 345, that such a delivery of a deed in escrow constituted a note or memorandum of the contract, which "would fully satisfy the statute of frauds; and this ruling was followed in Johnston v. Jones, 85 Ala. 286. On such a state of facts, a bill for specific performance would lie by the grantees in the deed — Griel and his associates. Griel, therefore, possessed a valuable interest capable of being transferred, and sufficient to constitute a legal consideration for a promise to pay money. In fact, the true consideration of the contract, in another phase, would seem to be nothing more than the transfer to the plaintiffs of Griel’s right, such as it was, under the contract with Moses — the placing of the plaintiffs, so to speak, “in his shoes;” an agreement which would be valid unless the vendor, Griel, was guilty of some fraudulent misrepresentation or concealment in the trade, such as would vitiate it. 2 Add. Contr. (Morgan’s Ed.) § 643; Chapman v. Speller, 14 Q. B. 621.

The fraud charged against Griel is one both of representation and concealment. Without extending this opinion so as to examine the numerous rulings of the court, we epitomize the following propositions:

If Griel stated to the plaintiffs that he and Matthews and O’Connell had contracted to buy the land in question from Moses, and were to pay one third cash, and execute their notes for the balance of the purchase-money, this imported prima facie that the notes were to be joint, and not several notes. The mere statement of a joint purchase, in part on credit, would imply the just expectation of a joint promise to pay the consideration price. A failure, therefore, to particularly disclose the independent fact that joint notes were to be given, if such were a fact, would not, under these circumstances, be a fraud.

But, if Griel, on the one hand, represented that separate notes were to be given, and the truth, on the other hand, was that joint notes were to be given by him and his co-purchasers, this would be the misrepresentation of a material fact, which would vitiate the contract, if the plaintiffs relied on such statement, and were justified by the circumstances in relying on it as an inducement to such contract, and were thereby deceived and injured. And this result would follow, although Griel did not know his statement was untrue.

The evidence shows that the facts of the trade with Moses were known to Griel, and entirely unknown to the plaintiffs. This inequality of knowledge or information would justify the plaintiffs in relying on any representation made to them by Griel, as to any material fact connected with the trade.

The alleged statement of Griel, as to what the plaintiffs “would have to do in order to get a good title,” does not necessarily import any affirmation of the terms of the contract with Moses. It may be construed into an expression of opinion by him merely, and nothing more. And if construed as an opinion, to be fraudulent, it must be shown to be knowingly false, made with intent to deceive, and to have been accepted and relied on by the plaintiffs as true.

It is argued that Griel was guilty of fraudulent concealment, because he knew that his agreement with Moses was verbal, and he failed to disclose this fact to the plaintiffs. How this circumstance has operated to injure the plaintiffs is not clear from the evidence, in view of the fact that Moses has not been remiss in performing all he agreed to do, and has deposited in escrow, ready for delivery, a deed to the land, which would furnish the grantees all needful evidence upon which to base a suit for specific performance against the Sheffield Land Company. The agreement of Moses in fact is fully executed, so far as is possible on his part. The fact that the agreement of Moses was verbal, does not in any manner prejudice the plaintiffs in this action. Their difficulty lies in another fact, and that is the refusal of Greil’s associates to unite with them in the notes, and the refusal of Moses to take them in substitution for Griel — a possible miscarriage necessarily incident to the very nature of their trade.

To have been guilty of fraudulent concealment as to any fact, Griel must have had knowledge of such fact. It must have been material, and of a nature which it was Ms duty to disclose under the peculiar circumstances of the case; or, as said by Mr. Story, and often repeated by this court, such concealment, to be fraudulent, must be of “those facts and circumstances which one party is under some legal or moral obligation to communicate to the other, and which the latter has a right, not merely m foro conscientice, but juris et jure to know.” — 1 Story’s Eq. Jur. § 216. The principle may be generalized, in other words, by saying that, to constitute fraud, in cases of mere silence, there must be the suppression of some material fact which honesty and good faith require to be disclosed under the facts of the particular case. There can usually be no fraud in silence, without intentional concealment, for it may be purely accidental. “Fraudulent concealment,” says Mr. Pomeroy, “ implies knowledge and intention;” and he adds, “it is hardly possible to conceive of a fraudulent concealment without a knowledge of the fact suppressed by the party, and an intention not to dislose such fact.” — 2 Pom. Eq. Jur. § 900; VanArsdale v. Howard, 5 Ala. 596; Juzan v. Toulmin, 9 Ala. 662; 44 Amer. Dec. 448; Jordan v. Pickett, 78 Ala. 331; Moses v. Katzenberger, 84 Ala. 95, 98; Hughes v. Robertson, 15 Amer. Pep. 104, and note, 106. Whether the duty to disclose exists in a given case, depends upon the fiduciary or other relation of the parties, the nature of the contract, the degree of trust reposed, whether expressly or impliedly, the value or nature of the particular fact, the relative knowledge of the contracting parties, and other circumstances of the case.

There are “cases in which the very propositions of a party imply that certain things, if not told, do not exist.” — 2 Parsons’ Contr. 776-777. This point is more clearly treated by Mr. Pomeroy than by any other author we have examined, but we are not called on to enter into its discussion more fully in the present case. — 2 Pom. Eq. Jur. § 902 et seq; 2 Add. Contr. (Morgan), 538; Story on Contr. § § 516-521; Bosywick v. Lewis, 2 Amer. Dec. 73, and note; Irvine v. Kirkpatrick, 3 Eng. L. & Eq. 17; Nicholson v. Janeway, 16 N. J. Eq. 585; Conover v. Waddell, 22 Ib. 492.

It is apparent that several of the rulings of the court do not conform to these principles.

The rulings on the evidence seem to us to be without error.

Reversed and remanded.