Hubbard v. McLean

115 Wis. 9 | Wis. | 1902

Cassodat, O. J.

The facts stated are all admitted by the demurrer. It appears that the plaintiff’s father was financially embarrassed. He had a large amount of land, upon which Smith held a mortgage and tax deed, and there were several judgments against him. Under -such circumstances the father went to the defendant, an attorney at law in the county, and who was at the time agent for the mortgagee, for advice and counsel. In pursuance of the defendant’s advice and counsel, the father transferred his property to Hatch, who was to hold and convey the same, when requested, for the father’s benefit. Accordingly Hatch gave two mortgages on the land to Smith, aggregating $2,200. The defendant caused both of such mortgages to be foreclosed, and on the foreclosure sale caused the lands to be struck off in the name ' of the plaintiff; all of which was without the knowledge or consent of tbe plaintiff. That tools; place September 22, 1882. Tbe plaintiff bad no interest in tbe land nor any of snob indebtedness, and whatever be did and whatever papers be signed were at tbe request and by tbe direction of tbe defendant, as such attorney, and for tbe benefit of bis father. Tbe indebtedness was really that of the father. The plaintiff was forced to tali© the legal title by tbe unauthorized conduct of tbe defendant, and without tbe plaintiff’s knowledge or consent. As tbe bolder of such mere nominal title, tbe plaintiff, at tbe request and by tbe direction of tbe defendant, as such attorney, executed the five Smith notes and mortgage, and subsequently tbe two Parker notes and mortgage, and tbe note and mortgage to William 0. McLean, upon tbe defendant’s false representations at tbe time of each of such transactions that the plaintiff would thereby incur no personal liability, and upon which tbe plaintiff relied; and by reason of tbe plaintiff’s ignorance of all tbe facts and the defendant’s fraud, concealment, and false representations tbe plaintiff did not know that by signing such notes he bad incurred any personal liability until be was compelled to pay tbe $1,000 July 26, 1900. It appeal’s from the complaint that tbe defendant acted as tbe attorney, adviser, and counselor of tbe plaintiff’s father throughout tbe several transactions; and that after tbe defendant bad got tbe title to tbe land in tbe name of tbe plaintiff, without bis knowledge or consent, tbe defendant assumed full control, and tbe plaintiff acquiesced, and signed whatever papers be was requested and directed to sign by tbe defendant.

It is true, as contended by defendant’s counsel, that a false representation, to be actionable, must relate to a past or present state of facts, and not to the mere nonperformance of a promise looking to tbe future. Patterson v. Wright, 64 Wis. 289, 25 N. W. 10; Sheldon v. Davidson, 85 Wis. 138, 55 N. W. 161; Louis F. Fromer & Co. v. Stanley, 95 Wis. 64, 69 N. W. 820; Field v. Siegel, 99 Wis, 609, 15 N. W. 397; Horton v. Lee, 106 Wis. 444, 82 N. W. 360; Milwaukee B. & C. Co. v. Schoknecht, 108 Wis. 457, 465, 84 N. W. 838. But tlie misrepresentation here relied upon is not the mere failure to perform a promise. On the contrary, tire representation here alleged related to the legal effect of a then present transaction, made by the request and direction of a learned lawyer knowing all the facts, acting as the adviser and counselor of the plaintiff’s father, addressed to the plaintiff, who was ignorant of the facts and the law applicable, and who had no interest in the transaction except to cany out what he supposed to be the wish of his father as expressed by the defendant, upon whose statements he relied. True, this court has held in a case cited by counsel for the defendant that:

“A false or mistaken representation of what the law is upon an admitted state of facts is no basis of an action, especially where there are no confidential relations between the parties.” Gormely v. Gymnastic Asso. 55 Wis. 350, 13 N. W. 242.

That proposition is, well sustained by authority. 14 Am. & Eng. Ency. of Law (2d ed.) 54. But it is there said that:

“If a promise to do something in the future is accompanied by false statements as to existing facts, or an intentional concealment of facts which the promisor is under a duty to disclose, the rule that a mere promise does not constitute fraud does not apply. In such a case the fraud consists, not in the promise, Nut in the false representation or concealment. It is immaterial in such cases that the promise, as well as the representation of fact, was relied upon; for a false representation, to amount to fraud, need not be the sole inducement for action.”

The same authority states that:

“It has repeatedly been held that the general rule as to representations of law does not apply where a relation of trust or confidence exists between the parties, nor if the person making the' representation knows that the other is ignorant of the law, and tapes advantage of his ignorance to mislead him by a false statement of the law. In such cases the representation may constitute fraud in equity, and even at law.” Id. p. 57.

Among the numerous cases cited in support of the proposition is a case from Alabama, in which it is said, and in effect held, by the court, that:

“If any peculiar relationship of trust or confidence existed between the parties, and the plaintiff has availed himself of such trust or confidence to mislead the defendant, by a misrepresentation as to the legal effect of the contract, it would constitute a fraud. So, if the defendant was in fact ignorant of the law, and the other party,, knowing him to be so, and knowing the law, took advantage of such ignorance to mislead him by a false statement of the law, it would constitute a fraud.” Townsend v. Cowles, 31 Ala. 428, 436.

Also a Michigan case, in which it is said by the court that:

“There is also an abundance of authority that fraudulent representations as to the legal operation and effect of an instrument will be sufficient to avoid the same when made to a party who is able to read, or who has actually read the instrument, but who is unable to judge of its true character and construction. To have this effect, the fraud must be contemporaneous with its execution, and must consist in obtaining the assent of the party defrauded by inducing a false impression as to its legal or literal nature and operation.” Berry v. Whitney, 40 Mich. 65, 72.

The facts alleged in the case at bar bring it within the principle of the authorities cited. It is quite analogous to numerous cases in this court where there has been a mistake of law occasioned'by fraud, imposition, or misrepresentation. Kyle v. Fehley, 81 Wis. 71, 72, 51 N. W. 257, and cases there cited; Whitmore v. Kay, 85 Wis. 251, 55 N. W. 708; Kropp v. Kropp, 97 Wis. 142, 72 N. W. 381; Lardner v. Williams, 98 Wis. 521, 74 N. W. 346; Wisconsin M. & F. Ins. Co. Bank v. Mann, 100 Wis. 596, 618—620, 76 N. W. 777; Allen v. Frawley, 106 Wis. 638, 82 N. W. 593. But it is unnecessary to pursue, the discussion further. As- the alleged cause of action did not arise until July 2G, 1900, the question of the statute of limitations is not involved in the case.

By the Gourb. — The order of the circuit court isi affirmed.