28 Ind. App. 65 | Ind. Ct. App. | 1901
The question presented by this appeal is the sufficiency of an answer to a complaint by appellee .asking judgment on a bond for $800 and the foreclosure of a mortgage. This answer alleges substantially that .appellant is a member of appellee association, and that for the purpose of inducing him to become such member, .and to execute the bond and mortgage sued on, appellee, its officers, servants and agents falsely and fraudulently represented to him that if he would become a member and shareholder and subscribe for eight shares of stock of the face value of $100 each, and pay appellee seventy-five cents per share monthly in advance for seventy-two months, at the end of that time it would pay him $800; that believing such representations to be true, and hav
A false representation by one of the parties to a contract does not necessarily put the other on inquiry as to its truth.
In the case at bar it is alleged that appellee falsely represented to appellant that if he would become a member of the association and contract the loan and pay the dues, interest, and premiums, the bond and mortgage would be paid and canceled by a specified number of payments. The statements made to appellant were not merely statements of what appellee had an intention of doing, nor were they simply the expression of an opinion that a certain specified number of monthly payments would satisfy the bond and mortgage, but the representation made was that of a fact, and, although it was of a matter in the future, having proved to be false, the rights of the injured party relying upon it are not different from those growing out of the misrepresentation of a present fact.
The fraud consisted of the false representations respecting the cost of the loan, rather than misrepresentations as to the contents of the bond and mortgage. The bond could have been expressed by appellant in language plain enough that a person signing it must have known exactly what it meant. The representations charged to have been made were not inconsistent with a reasonable construction of the condition named in the bond, but the bond is susceptible of the construction given it in the representations made by appellee. Bo by-law is set out in the pleadings to aid in its construction, and no reference is made to any by-law in either'the bond or mortgage. Appellant was told that if he would take the stock, and make the specified payments, appellee would pay him $800, and that if he would execute the bond, and make the specified payments, the debt would be thereby paid. The bond siniply told him that he was to pay $800 on or before the maturity of the stock by monthly payments. The bond and mortgage do not in and of themselves necessarily charge him with the information that the mortgage was given to secure a bond for the payment of a certain specified sum for an indefinite period of time. So far as disclosed by the pleadings he was not informed by any article of the constitution or by-laws of the association as to the maturity of stock or the cancelation of loans, as
The answer shows that appellant contracted the loan in good faith relying upon the representations made by appellee and believing that his liability upon the bond would cease as appellee represented; that the representations were untrue, and known by appellee to be untrue when made, and were made to induce him to incur the obligation. By these misrepresentations appellant was misled to his injury. The reasons underlying the opinions in Union Central, etc., Ins. Co. v. Huyck, 5 Ind. App. 474, and Elsass v. Moores Hill, etc., Inst., 77 Ind. 72, are applicable in the case at bar. To the complaint filed the answer was sufficient, and the demurrer should have been overruled. See, Sawyer v. Menominee, etc., Assn., 103 Mich. 228, 61 N. W. 521.
Judgment reversed.