Peabody v. Phelps

| Cal. | Jul 1, 1858

Field, J., delivered the opinion of the Court—Terry, C. J., and Burnett, J., concurring.

The time within which a notice of motion must be filed to set aside the report of a referee, and a statement be prepared for that purpose, will depend upon the character of the reference; whether it be special, to report facts, or general, to report upon the whole issue. In the former case, the report has the effect of a special verdict; in the latter, it stands as the decision of the Court, and judgment may be entered thereon, and the decision be excepted to, and reviewed, in like manner as if the action had been tried by the Court. Upon facts found, whether by report of the referee, or special verdict of a jury, the direct action of the Court must be invoked before judgment can be entered. Though the trial, in such cases has ended, judgment does not follow immediately as a matter of course; and the time within which the notice of motion to set aside the report or verdict must be given should be the same in the two eases, and date from the filing of the report or the rendition of the verdict.

But where an action is tried by the Court without a jury, the judgment follows immediately, as the conclusion of law upon the facts found. So, also, upon a report of a referee upon the whole issue j his decision stands as the decision of the Court. The entry by the Clerk, in both eases, is a matter of course. Of the decision of the Court or referee, either upon the facts or law, the parties can have no knowledge until it is announced in the form of a judgment or a direction for its entry. It is seldom that the decision is rendered immediately upon the closing of the testimony. The necessity of stating, in writing, the facts found and conclusions of law, generally causes an interval of several days between the trial and judgment; and if the right to move to set aside the report or judgment dated from the trial, it could seldom be of any avail to the party against whom it is rendered.

In Headley v. Reed, (2 Cal., 325,) it was held that the District Court had no right to entertain any objections to the report of a referee until after the rendition of judgment thereon. The distinction between a reference to report special facts and a reference upon the whole issue does not appear to have been called to the attention of the Judge who delivered the opinion in that case, and we think its general language should be limited to cases where a judgment is ordered to be reported.

In Sloan v. Smith, (3 Cal., 406" court="Cal." date_filed="1853-10-15" href="https://app.midpage.ai/document/sloan-v-smith-5432626?utm_source=webapp" opinion_id="5432626">3 Cal., 406,) Murray, C. J., in considering the objection taken to the judgment, that the referees were not sworn, said, arguendo: “ The order of the Court is to report a judgment; the evidence is not a necessary part. On the filing of the report judgment is entered as a matter of course; and the only mode in which a party can take advantage of it is by moving to set aside the judgment, as on a motion for a new trial.”

It follows from the views we have taken, that the right of the appellant to make his motion and prepare his statement, dated from the entry of the judgment on the 28th of March, 1857, and not from the filing of the report' or the trial before the referee. The judgment previously entered by the clerk in vacation was reversed"on appeal, as a nullity, and could not affect the appellant’s right to move, upon the rendition of judgment by the Court.

This disposition of the preliminary objection of the respondent brings us to the consideration of the case on its merits. The action is to recover damages for deceit in relation to the title of land sold and conveyed to the plaintiff. The alleged deceit consisted of representations by the defendant, made in a conversation with the agent of the plaintiff whilst negotiating for the land, that he was the owner of the property, and had purchased it of Thomas O. Larkin, which representations, it is averred, induced the purchase, and -were falsely and fraudulently made. The conveyance to the plaintiff included a covenant to warrant and defend the grantee, his heirs and assigns, in the title to the premises from the grantor, his heirs and assigns, for ever; and with its execution, possession of the premises was delivered to the plaintiff, who remained in the undisturbed occupation of them for years. In 1853, Larkin recovered judgment in an action of ejectment against the plaintiff and one John T. Peabody, and in January, 1855, issued execution for the possession of the premises. Whether an eviction was actually had under this execution it is unnecessary to determine ; for the purpose of this appeal it will be assumed that an eviction took place. Of the action the defendant received no legal notice, and the judgment cannot, therefore, be evidence against him of a paramount title in Larkin. ' Mere cognizance of the existence of the action is not notice in the legal sense. To be available, the notice must apprise the party whose rights are to be affected, of what is required of him, and the consequences which may follow if he neglect to defend the action. (Miner v. Clark, 15 Wend.,425; Clark v. Baird, 7 Barb., 65.) Previous to the commencement of the ejectmentsuit the plaintiff had conveyed the premises to a third party, and subsequent to the alleged eviction they were re-conveyed back to him.

The covenant in the deed to the plaintiff is a limited covenant expressed, in which all implied covenants are merged, even if it be admitted, which is a matter of doubt, that any covenants would otherwise be implied from the granting words of the conveyance. (Sanders v. Betts, 7 Wend., 287" court="N.Y. Sup. Ct." date_filed="1831-05-15" href="https://app.midpage.ai/document/sanders-v-betts-5513731?utm_source=webapp" opinion_id="5513731">7 Wend., 287; Frost v. Raymond; 2 Caines, 192 ; Rawle on Cov. for Title, 361.)

The same doctrine prevails in the civil law. In the civil law there are two kinds of warranty—warranty in law or implied warranty, and warranty by deed. The parties may add to the warranty in law, “ and they may likewise restrain the warranty in law; as if it be agreed that the seller shoxxld only warrant against his own proper act, and not against the rights of other persons, or that he shall only restore the price in case of eviction, and not the damages.” (1 Domat’s Civil Law, §§ 375, 376, 377.)

The question, then, presents itself, whether an action for a false and fraudulent representation as to the naked fact of title in the vendor of real estate can be maintained by the purchaser, who has taken possession of the premises sold, under a conveyance with express covenants. The precise question does not appear to have been directly decided. There are dicta in the reports, bxxt we have been unable to find any adjudged case on the exact point. The deceit for which actions have been sustained has generally consisted of representations respecting the location, quantity, quality, or condition of the land sold, the privileges connected with it, the incumbrances upon it, or the rents or profits derived therefrom. In Wardell v. Fosdick, (13 Johns., 325" court="N.Y. Sup. Ct." date_filed="1816-08-15" href="https://app.midpage.ai/document/wardell-v-fosdick--davis-5473720?utm_source=webapp" opinion_id="5473720">13 Johns., 325,) the land which the deed pui’pox'ted to convey had no existence, and it was held that the purchaser might treat the deed as a nullity, and maintain an action for the deceit. The land not being in existence, there could of course be no possession, and no eviction, and consequently no remedy had upon the covenants, and if the action could not have been maintained, the purchaser would have been remediless. In Mon ell v. Golden, (13 Johns., 396,) the representación related to a pre-emptive right, which the purchaser would acquire under the laws of Hew York, as riparian proprietor, to a patent of the adjacent land under the waters of the Hudson river, and the Court, in sustaining the action, said: “ The false representation was not respecting anything to be included in the deed, but with respect to a privilege, which the plaintiffs were to acquire in consequence of owning the land on the shore adjoining the river.” In Leonard v. Pitney, (5 Wend., 31,) the deed was a quit-claim, without covenants, and Marcy, J., said: “Doubts may well be entertained whether an action at law will lie for a deceitful and false representation of title, in the vendor of real estate. Such an action has not, as yet, I believe, been sustained, except it may be in some of the States where the same tribunal is possessed of equity jurisdiction, as well as the powers of a Court of common law.” The question was, however, undecided, and the case passed off upon another point.

In Culver v. Avery, (7 Wend., 380" court="N.Y. Sup. Ct." date_filed="1831-07-15" href="https://app.midpage.ai/document/culver-v-avery-5513753?utm_source=webapp" opinion_id="5513753">7 Wend., 380,) the representation made was that the premises were clear of incumbrances, and that the purchaser would acquire a perfect title; and Sunderland, J., in his opinion, adverted to the distinction made between a false representation relating to the title of the land conveyed, and a false representation relating to some collateral thing attached to it, and observed that the circumstance of the representation being made in reference to the title did not vary the principle upon which the action rested. The distinction was not taken by counsel, or required by the case, and the opinion on the point can be regarded only as a dictum of the Judge. In Whitney v. Allaire, (1 Com., 313,) Gardner, J., agreed in his views with Mr. Justice Sunderland; but Bronson, J., in the same case, after citing several authorities, observed that in none of them was the false representation upon the naked fact of title; that he did not find that such an action had ever been maintained; and that it was a strong argument against the action that no precedent for it had been found, and said: “ In the usual course of business, men insert covenants in their conveyance of real estate, when it is intended that the vendor shall answer for the goodness of the title, and it is easy to see that bad consequences may follow if the vendee shall be allowed to lay aside his deed, and have an action founded upon conversations about the title pending the bargain.” The point was not settled by the decision, and the question may be still considered an open one in the Courts of New York. (See, also, Bostwick v. Lewis, 2 Day, 250, and Wade v. Thurman, 2 Bibb, 583.)

In Dobell v. Stevens, (3 Barn, and Cress.,) the false representation related to the business done at a public-house and the rent received, for a part of the premises, and the Court, in its opinion, said : “ The representation was not of any matter or quality pertaining to the thing sold, and therefore likely to be mentioned in the conveyance; but was altogether collateral to it, as was the rent in the case of Lysney v. Selby.” (2 Lord Raymond, 1,118.)

In the execution of a conveyance, all previous representations pending the negotiation for the purchase are merged. The instrument contains the final agreement of the parties, and by it, in the absence of fraud, their rights and liabilities are to be determined. The possibility of a failure of title is a matter of consideration between the parties, and when the purchaser desires the goodness of the title guarantied, he requires covenants to be inserted in the conveyance ; but if he assumes the risk of the title, he accepts a deed without covenants. In the latter case, upon failure of title, he is without remedy for the purchase-money ; in the former he is confined to his covenants. When, by the express terms of his conveyance, the vendor has fixed the extent of his liability, upon the failure of title, and the conveyance is accompanied with the delivery of possession of the premises sold, and there have been no false representations as to their quality, quantity, or condition, or as to the incumbrances upon them, or the rights or privileges appurtenant to them, or rents or profits arising from them, we cannot perceive any just ground upon which the purchaser, for a defect of title, instead of seeking his remedy upon the covenants of his deed, should be permitted to maintain an action for representations respecting such title, made in the negotiation for the purchase. Such representations must, in the great .majority of cases, rest in the indistinct and confused recollection of witnesses; and if the doctrine contended for is upheld, it is easy to see, as says Bronson, J., in the case cited above, “ that bad consequences may follow.” In the case at bar, the only evidence as to the representation of the defendant is given by a witness nearly six years after the conversation occurred, in which it is alleged to have been made. In his direct examination, to the request to state the conversation, the witness replied that he did not recollect the whole of it, but the substance of it was, that the \ defendant “ had the certain piece of property, and would sell it on favorable terms ■” and, subsequently, to the question as to the representations, he answered, that the defendant represented that he was the owner of the property, and had purchased it of Larkin, without giving the language of the defendant; and, on his cross-examination, when requested to state the terms of the representations, he said the defendant “ spoke of having such a piece of property—he might not have used the term of owning it.”

It is apparent, from these answers, as well as from the statement of the witness, that his recollection of what transpired was very imperfect. He answers with positiveness only when the answer desired is indicated by the leading questions asked. The principle which requires all evidence of verbal statements to be received with caution applies with peculiar force to the present case, where there has been so great an interval of time between the statements made and the evidence of them given, and it is sought to base upon them a charge of fraud.

The representation that the defendant had purchased the property of Larkin would seem to be true, from the finding of the jury, in the ejectment case; but, whether true or false, it cannot help the plaintiff, if the doctrine be correct that a false representation as to the naked fact of title, where a conveyance with covenants, general or limited, is executed, accomjjanied with delivery of possession of the property sold, will not support an action for deceit. Assuming the fact, which is not proved, that the title to the property was originally in Larkin, the allegation of the possession of a conveyance from him was no more than that the defendant was the owner of the premises. The action is based upon the supposition that the title was originally in Larkin, and that the contract of purchase between the parties was made upon that supposition; the affirmation, therefore, of ownership, or of possession of a conveyance from Larkin, amounted to the same thing.

Besides, if the plaintiff did not think proper to trust to the affirmation of the defendant, he could have called for an inspection of the alleged conveyance, or examined the records where the deed to him states the conveyance is recorded; or he could have made inquiries of Larkin himself. His neglect to avail himself of these means of information, whether attributable to credulity or indolence, takes from his action all claim to favorable consideration, and the remarks of Chancellor Kent are applicable to his case: “ The common law affords to every one reasonable protection against fraud in dealing, but it does not go the romantic length of giving indemnity against the consequences of indolence and folly, or careless indifference to the ordinary and accessible means of information.” (Clark v. Baird, 7 Barbour, 66.)

The judgment must be reversed, and the cause remanded.