Jordan & Sons v. Pickett

78 Ala. 331 | Ala. | 1884

CLOPTON, J.

The fraud, which entitles a purchaser of property to a right, of action for deceit, ordinarily, consists in the misrepresentation or concealment of a material fact, on which he has a right to rely, and does rely, operating an inducement to the contract, and whereby he is deceived and injured. It is not indispensable that the misrepresentation or concealment shall be the sole inducement; it is sufficient if it materially contributes, and is of such character that the purchaser would not have consummated the contract, had he known the falsity of the statement, or the fact suppressed. ! In case of an active representation, knowledge of its falsity is not essential. A contract, obtained by misrepresentation, may be avoided, or an action for damages sustained, though the asserting party may not know the statement is false. It is as much a fraud at law to affirm as true what is untrue, though not known to be so, as to assert what is known to be untrue. The law imposes the duty of ascertaining the truth of the statement before making it, and demands in case of omission that the representation should be made good. — Munroe v. Pritchett, 16 Ala. 785.

While it may be more difficult to define, with clearness and precision, the distinction between' suppression and falsehood, as constituting actual fraud, it may be said, generally, that silence, in order to be an actionable fraud, must relate to a material matter, known to the party, and which it is his legal duty to communicate to the. other contracting party, whether the. duty arises from a relation of trust, from confidence, inequality of condition and knowledge, or other attendant circumstances. Though a concealment may be tantamount to a misrepresentation, and equally effective to deceive or mislead, every omission to disclose facts, though material, is not necessarily fraudulent. The rule, best adapted to the proper conduct of business transactions, lies between the two extremes — the rule of the civil law, which requires the seller to disclose every defect known to him, that affects the merits of the contract, or which the purchaser is interested in knowing; and the rule adopted in some of the cases, that it is incumbent on the purchaser, if he does not take a warranty, to ask for information, and that he can not complain of a failure to communicate facts, which he could have learned by inquiry.

In Steele v. Kinkle, 3 Ala. 352, fraudulent concealment is defined to be, “ the failure to disclose a material fact, which the vendor knows himself, which he has a right to presume the person with whom he is dealing is ignorant of, and of the existence of which the other can not, by ordinary diligence, become acquainted.” Concealment implies design, or purpose. That it may furnish a sufficient cause of action, the fact suppressed must, not be only material, but the materiality must either be known to the seller, or the facts must so constitute an element of the value of the contract, as to authorize the inference of knowledge of its materiality. The concealment must be for the purpose of continuing a false impression or delusion under which the purchaser has fallen, or of suppressing inquiry, and thereby effecting a sale — with the intention to conceal or suppress — and it must operate an inducement to the contract.

Though the intention is a question for the jury, where the 4 fact and its materiality are known to the seller, and the sup- j pression is willful or intentional, it may be regarded as done! with .an intention to deceive or mislead, and the purchaser, not having equal access of information, may be regarded as dei frauded. — Hanson v. Edgerly, 29 N. H. 343; Beninger v. Corwin,, 4 Zab. 257: Corneluis v. Molloy, 7 Penn. 293; 1 Smith Lead. Cases, 322, 323. It has been said, too strongly, that the conduct of the suppressing party should be so fraudulently moulded, that the negation of the suppressed fact - must be implied. — 1 Whart. on Contr. § 251. In Steele v. Kinkle, supra, it was held, that mere silence as to the true state of the title will not, of itself, be a fraudulent concealment, where the abstract of the title is sufficient to put the purchaser on inquiry. When the means and sources are equally accessible to both parties, the ignorance of the purchaser is regarded as self-deception, unless art or artifice is employed to prevent investígation, or stifle information. But, when the access to information, is not equal, as when it rests in the personal knowledge of 'individuals unknown, or exclusively in the knowledge of the seller, the concealment of a known material fact, though without art or artifice, if willful or intentional, is, on the same principle" as a misrepresentation not known to be false, sufficient to sustain a right of action.

~The^Heged deceit consists in the failure to disclose that, by a parol agreement contemporaneous with the execution of the written mortgage, a mule, then owned by the defendants, was subsequently exchanged and substituted for the one specially described in the, mortgage. It is not claimed that there was express fraud by misrepresentation, or that there was any device employed by the defendants to put plaintiff off his guard, or to discourage inquiry. Speaking from the record, the mortgagor, having rented land from the plaintiff, had moved with his stock on his plantation, and the plaintiff had seen the mule in the possession of-the mortgagor, before he purchased the debt and mortgage. Ordinary diligence — a casual examination of the written mortgage — would have shown that the mule described therein did not answer the description of the mule in the possession of the mortgagor, and would have put the plaintiff on inquiry. While the defendants did not represent'any particular mule as included in the mortgage, it may be considered that the furnished estimated value referred to the substituted mule, then in the mortgagor’s possession. .Con-, ceding that the agreement to exchange and substitute created only a parol mortgage, and did not, as between the parties, bring the' substituted property under the operation of the written mortgage, a question on which courts differ; an honest and bona fide opinion, or belief, that the substituted mule was' thereby included in, and covered by the written mortgage, is inconsistent with a willful suppression for the purpose of deceiving or misleading. Mere silence in respect to the parol agreement, not deemed or believed to be material, such silence being the consequence of an honest mistake of its legal effect, and of a bona fide opinion that the substituted property was included in the written mortgage as if originally incorporated, is not a fraudulent suppression. There is wanting the element of concealing for the purpose of deceiving or misleading.

Fraud and damage must concur to furnish a cause of action, the damage being the natural and proximate consequence of the fraud. The concealment of a fact, however material, which is not a moving inducement to the purchaser, works him no injury. We do not mean, the relative effects of inducements moving from different sources shall be determined by a comparison of their respective motive power. It is sufficient if a fraudulent concealment of the defendants materially contributed to effect the purchase, irrespective of any other cause. But, if the failure to disclose the parol agreement did not induce the plaintiff to purchase the claim; if he would have purchased it had he been informed that the mortgage was merely verbal; if he purchased it, not relying on the defendants to fully and fairly state the facts, but on the statements of the mortgagor, he is without right to a recovery. Further: if the plaintiff purchased the claim because secured by a lien on personal property, without reference to whether it was a written or parol lien, he practically and substantially obtained what he bargained for. The transfer of the claim carried with it the lien for its payment, whether written or verbal, for the enforcement of which the law furnished a remedy. If its fruits were lost by his negligence or failure to institute proper legal proceedings, when the lien was available, the defendants are not responsible for damage sustained by reason of such negligence or failure]

On the foregoing principles, charges numbered one, two, seven, nine, eleven, twelve, and sixteen, requested by the defendants, should have been given. The instructions, based, in whole or in part, on the hypothesis that the jury believed the evidence of the witness Jordan, were properly refused. Where witnesses are examined on behalf of both parties, and there is a conflict, a charge is improper which refers the jury to the evidence on behalf of one of the parties only, and indicates that they may look to that alone.- — Dill v. State, 25 Ala. 15 ; Tesney v. State, 77 Ala. 33.

Reversed and remanded.