ALICE V. MAGUIRE AND OTHERS v. MARY MAUD MAGUIRE AND ANOTHER.
Nos. 25,928, 26,265.
171 MINNESOTA REPORTS
June 17, 1927.
171 Minn. 492 | 214 N. W. 666
Reported in 214 N. W. 666.
ALICE V. MAGUIRE AND OTHERS v. MARY MAUD MAGUIRE AND ANOTHER.1
June 17, 1927.
Nos. 25,928, 26,265.
Gist of fraud in action on false promissory representations.
1. In an action based upon false promissory representations, which may constitute actionable fraud, the gist of the fraud is not the failure to perform the promise, but thе fraudulent intent of the promisor, at the time of making the promise, not to faithfully perform the promise and to thereby deceive the promisee.
A broken promise does not prove fraud. It must be made affirmatively to appear that the рromisor had no intention to perform at the time the promise was made.
Application of doctrine of res judicata.
2. If a particular fact at issue in a second action was decided in a prior action involving the same parties, no matter how different the form of actions, the doctrine of res adjudicata is applicable.
Fraud, 26 C. J. p. 1087 n. 43; p. 1094 n. 99.
Judgments, 34 C. J. p. 743 n. 76; p. 745 n. 79; p. 813 n. 66; p. 869 n. 56; p. 902 n. 92.
See note in 10 L. R. A. (N. S.) 640; 12 R. C. L. 261; 2 R. C. L. Supp. 1410; 5 R. C. L. Supp. 640; 6 R. C. L. Supp. 702.
Plaintiffs appealed from that part of the judgment specified in the first sentence of the opinion on page 498. Affirmed.
H. E. Fryberger and Charles B. Elliott, for plaintiffs.
Orin M. Oulman and Harry S. Swensen, for defendants.
WILSON, C. J.
DEFENDANTS’ APPEAL.
Defendants appealed from a judgment for the specific performance of an oral contract.
Plaintiffs Alice V. Maguire, Thomas F. Maguire, and Thеresa Maguire Justice are adult children of Thomas M. Maguire. Their mother, Agnes B. Maguire, died June 25, 1906. Ada L. Maguire, who became the stepmother on October 28, 1908, was one of the original defendants herein. She died April 29, 1924, and Mary Maud Maguire and Myrtle M. Oulman, as her rеpresentatives, were substituted as defendants.
On October 18, 1905, Agnes B. Maguire and husband executed, but did not deliver until March, 1906, deeds conveying her property, which included that now in controversy, to the two daughters. Before her mother‘s death, Theresa quitclaimеd all the property to her sister Alice, who took possession under such deeds, managed the property, sold some of it, and kept an account of the income and disbursements.
In 1915 the father and son sued the two daughters for an accounting, сlaiming that Alice held the property in trust. Defendants claimed to own the property. A written agreement was made and signed by the father and the defendants. It in part reads:
“As a compromise and settlement of the above entitled action, and оf all claims of each party against the other, whether set forth in the complaint herein or otherwise, it is * * * agreed * * *:
1. Defendants shall convey certain (Lake street) property to the father.
2. Alice V. Maguire shall pay the father $5,500 in cash аnd give her note to him for $500.
3. Alice V. Maguire shall permit her books to be audited and if she has not correctly accounted for all income she shall pay one-half of any excess.
4. “In consideration of the foregoing agreements, on the рart of the defendants, the plaintiffs hereby release and discharge the defendants and each of them from any and all claims, demands and obligations of every name and nature, whether as set forth in the complaint or otherwise, from the beginning оf the world to the present time, and particularly, do the plaintiffs * * * release * * * all claim * * * to or upon” certain property, and to convey the same to Alice V. Maguire.
On September 21, 1915, said cause “came on for trial.” All parties with their сounsel appeared. The stipulation for settlement was read to the court and put in evidence. The father testified that if the settlement was carried out he would pay the son the equivalent of what the son would have received had the mother died, owning the property, intestate, and that the son had agreed to settle on the basis of the written agreement, which the son had not signed, and let some judge of the district court fix the amount he was to receive from the father. Witnesses were examined and an accounting was made between the parties. The son testified that he refused to sign the stipulation because he was not named as a party to it. His testimony shows that he knew the purpose of being before the judge. On September 30, 1915, the judge made formal findings of fact which embraced the stipulation, found that the son agreed in substance to its terms, covered the matter of the accounting, and found that when the stipulation was carried out it would be in full settlement of all claims bеtween the parties. The conclusions of law were that the father owned the Lake street property free of all claims of defendants; that the father should pay the son $3,521.81; that Alice V. Maguire owned the Nicollet avenue property free of all claims of plaintiffs; that the father, son, and Theresa should quitclaim to Alice; that the children should give a quitclaim deed of the Lake street property to the father. Judgment was entered October 9, 1915. On December 10, 1915, further stipulation was entered into
This action seeks to recover the Lake strеet property conveyed and the $6,000 paid pursuant to said judgment, and to have said judgment vacated. Inferentially it seeks the specific performance of an alleged oral contract made at the time of entering into said stipulаtion wherein it was agreed that the father would hold said property in trust until his death, when, subject to the dower interest of the stepmother if then living, it would go to the three children equally; also that the father agreed not to make a will but if he did he would give two-thirds of sаid property to his three children; and that if the Lake street property was conveyed to him he would greatly improve it for the benefit of the children.
1. The court found, in accordance with the claim of plaintiffs, that the father specifically represented, stipulated, and agreed to the provisions of the oral contract just above mentioned; that the representations were falsely and fraudulently made by the father; and that at the time he had no intention of performing the sаme, but that they were made only for the purpose of deceiving said children who made said settlement and stipulation in reliance thereon. It was also found that similar representations were made to the son, who in reliance thereon еntered into said settlement and joined his sisters in the deed of the Lake street property to the father.
We are thus brought to the consideration of the finding of fraud. Much of the parol evidence received was admissible because of the сlaim of fraud. Such evidence was directed at the fraud which induced the contract and was not intended to vary or add new terms to the contract. False promissory representations made without any intention of keeping them may constitute аctionable fraud. The record discloses testimony to the effect that the oral agreement was made. It also shows that thereafter the father made a will giving the property to the stepmother to the substantial exclusion
The gist of the fraud is not the failure to perform the promise but the fraudulent intent of the promisor, at the time of making the promise, not to faithfully рerform the promise and to deceive the promisee by the false promise. By keeping this in mind we easily come to a logical conclusion. The misrepresentation of his then existing intent to perform must be shown. A subsequent intention to break a promise does not constitute fraud. There is slight authority holding that the fraud is established by showing nonperformance. C. T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S. W. 472, 31 Am. St. 39; Carr v. Craig, 138 Iowa, 526, 116 N. W. 721. We are of the opinion that the prevailing rule is that failure to fulfil the promise alone will not authorize the conclusion of fraud. A broken promise does not prove fraud. It must be made affirmatively to appear that the promisor had no intention to perform at the time the promise was made. Smith v. Vosika, 163 Minn. 12, 203 N. W. 428; Roman v. Lorence, 162 Minn. 198, 202 N. W. 707; Hansen v. Daniel Hayes Co. 152 Minn. 222, 188 N. W. 317; Arcade Inv. Co. v. Hawley, 139 Minn. 27, 165 N. W. 477; Nelson v. Berkner, 139 Minn. 301, 166 N. W. 347; Holmes v. Wilkes, 130 Minn. 170, 153 N. W. 308; Cox v. Edwards, 120 Minn. 512, 139 N. W. 1070; Nelson v. Shelby Mfg. & Imp. Co. 96 Ala. 515, 11 So. 695, 38 Am. St. 116; C. T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S. W. 472, 31 Am. St. 39, note, p. 47; Brison v. Brison, 75 Cal. 525, 17 Pac. 689, 7 Am. St. 189; Lawrence v. Gayetty, 78 Cal. 126, 20 Pac. 382, 12 Am. St. 29; Cerny v. Paxton & Gallagher Co. 78 Neb. 134, 110 N. W. 882, 10 L. R. A. (N. S.) 640, and note; Sаllies v. Johnson, 85 Conn. 77, 81 Atl. 974, Ann. Cas. 1913A, 386; Blackburn v. Morrison, 29 Okla. 510, 118 Pac. 402, Ann. Cas. 1913A, 523; 12 R. C. L. 261, § 28; 26 C. J. 1093, § 26, and 1087, § 25.
“Q. But you had knowledge of the deed and you had knowledge it was a joint tenancy deed, also quit-claim deed in form otherwise.
“A. It wasn‘t any deed at all. It was mere sham from beginning to end. * * *
“Q. I am asking you this question, if you didn‘t know at the time that that deed was executed that it had in there the joint tenancy clause.
“A. No, I don‘t remember anything about it.
“Q. And your name appears on that deed?
“A. I don‘t remember anything about the transaction, except I remember what Thomas M. Maguire told me about it, he was trying to put across a frаud right there, what he told me.”
Fryberger‘s testimony does not point to fraud at the time of making the oral promises nor does it disclose any definite act of fraud. Indeed, it amounts to a mere conclusion. We conclude that the evidence fails to еstablish the claim that the oral promises were induced by fraud.
Reversed.
PLAINTIFFS’ APPEAL.
On October 7, 1927, the following opinion was filed:
PER CURIAM.
Plaintiffs appealed from the judgment in so far as it did not award to plaintiffs the whole of the Lake street property, it having given them only an undivided twо-thirds thereof. We did not formally pass upon the appeal because it would be impossible for plaintiffs to prevail in the face of the reversal upon defendants’ appeal.
The judgment from which plaintiffs appealed is affirmed.
Upon motion of defendants it is ordered that the lower court be and it is hereby directed to enter judgment in favor of defendants and against the plaintiffs upon the merits of the action.