29 Ind. App. 344 | Ind. Ct. App. | 1901
Lead Opinion
On May 23, 1893, Joseph S. Finch & Co., merchants, replevied four barrels of whisky from the appellants and the Indianapolis Warehouse Company, and the same were delivered to them upon the execution of the
The errors assigned, are that the court erred in its conclusions of law and in overruling appellants’ motion for a new trial. The alleged breach of the undertaking is that the plaintiffs in said action of replevin dismissed the same without returning said property, or paying any sum of money realized from the sale of said property to these plaintiffs, or to any other of the defendants in said action. The special findings show that the action of replevin was dismissed by the plaintiffs therein, and costs therein fully paid by them, without prejudice, and without any trial of said cause upon the merits, and the title to, ownership, and right of possession of said four barrels of whisky was in no way determined in said cause.
The undertaking is defective in that it does not provide, as required by §1290 Burns 1901, §1270 Homer 1901, that the plaintiffs will prosecute their action with effect.
Section 1290 Burns 1901, not only contemplates, but requires, that the party giving the bond shall obligate himself that the plaintiff will prosecute his action with effect. Appellants, plaintiffs below, as authorized by §1235, supra, suggest in their complaint the defect, so that the undertaking is to be considered as containing the stipulation to prosecute the action with effect. Hawes v. Pritchard, 71 Ind. 166, and authorities cited. When, therefore, plaintiffs dismissed their action, there was a breach of the bond for which the bondsman became liable. Peffley v. Kenrick, 4 Ind. App. 510, and authorities cited.
As to the reasons for a new trial, viz., that the decision is not sustained by sufficient evidence; is contrary to law; and that the part of the fifth section of the special finding of facts, finding fraud upon the part of Schwabacher, which misled the vendors of the whisky, is not sustained by sufficient evidence, we can not agree with the learned counsel for appellants. Courts are permitted, in determining the weight of testimony, to draw reasonable inferences from the facts found. The findings are sustained by sufficient
Judgment affirmed.
Rehearing
On Petition for Rehearing.
Appellants’ counsel argue in their brief upon the petition for a rehearing that the finding of the trial court, to the effect that the sale to Schwabacher was induced by fraud, is without support in the evidence. The facts are not in dispute. If they are such as to admit of the inference of fraud, the finding must stand. The argument is based upon the statement that the facts show a settlement of an existing controversy, and a sale of the goods thereafter uninfluenced by fraud. If the premise is granted, the conclusion is irresistible. Appellees’ agent sold five barrels of whisky to Schwabacher, to be paid for upon delivery. Schwabacher had no title to the goods, and no right to the possession thereof without paying the price. Curme v. Rauh, 100 Ind. 247, 255. Upon learning that the whisky was at the depot at Indianapolis, to which place it was to be shipped, Schwabacher wrote appellees a letter as follows: “Indianapolis, Ind., March 15, 1893. Messrs. Jos. S. Einch & Co., Pittsburg, Pa. Gentlemen: I am in receipt invoice & B — L. 5 Bbls. G. W. Eye Spg. ’90. The goods wore bought on 4 mos. time & you mark bill cash. I will not receive the goods & they will remain at depot subject to your order until I can hear from you. Sorry there should be a misunderstanding on first order. Very truly yours, &c. Jos. Schwabacher. I inclose copy memorandum made with your agent. Memorandum C'opy,
It is specially found that the statements that said whisky was bought on four months’ time, and that such memorandum had been made with the agent, were false and were made by Schwabacher with the fraudulent intent and purpose of deceiving Einch & Co., and inducing them to permit bim to take the whisky from the depot without the immediate payment of its price.' Immediately upon receipt of this letter, Einch & Co. answered that Lyons, their salesman, had reported the sale of the five barrels as cash, but, as there had been a misunderstanding, to settle it they were willing to malee the terms four months, and directing Schwabacher to go ahead and receive the goods. Schwabacher, upon the receipt of such letter in due course of mail, got the whisky from the railroad company, and later mortgaged it to appellants to secure the payment of a preexisting debt. The appellant does not, therefore, occupy the position of bona fide purchaser. Boling v. Howell, 93 Ind. 329, 331; Hewitt v. Powers, 84 Ind. 295. Appellees were, at .the time ignorant of the fact as to the terms of credit, except as the same was stated to them by the agent when the sale was made, and assented to the delivery of the goods on four months’ time in order to compromise, as they believed, a genuine misunderstanding.
Eraud vitiates contracts. It is frequently, in case of sales, based upon the concealed insolvency of the purchaser and his intention not to pay. It does not follow, however, that such facts alone justify rescission and the recovery of goods. The remedy may be had whenever the contract is induced by fraud, without regard to what particular form it may assume, or what devices may have been followed in working it out. The representation as to the time of payment was a material one. The copy of an alleged memorandum made with appellees’ agent went to the substance.
The petition for the rehearing is overruled.
Comstock, O. J., Black, Henley, and Robinson, JJ., concur.
Dissenting Opinion
Dissenting Opinion.
Upon the original hearing I concurred with my associates in the second division in the opinion affirming the judgment. On the petition for rehearing, I have had occasion more carefully to reexamine the questions presented by the record, and have reached the conclusion that the judgment should be reversed. This has necessitated a
Appellee has not filed any brief in support of the judgment. This itself, under the recent holding of the Supreme Court, is sufficient reason for a reversal. Neu v. Town of Bourbon, 157 Ind. 476; Berkshire v. Caley, 157 Ind. 1. But in my judgment the facts disclosed by the record do not support the judgment in favor of appellee. It is clear that appellees’ defense rested upon the sole ground that by the letter of Schwabacher it was claimed that the sale of the whisky to him by Einch & Co. was upon a credit of four months, when in fact the sale was for cash. Erom this it is evident that the whole controversy had reference to the terms of the contract of sale, and not to outside facts furnishing the inducement to the contract.
The point in controversy between Einch & Co. and Schwabacher was as to the terms of the sale. The former represented through their agent who sold the whisky, that the sale was for cash, while the latter claimed it was on a credit of four months. Schwabacher was fortified by a memorandum, made at the time of the sale, showing that it was on a credit of four months, but this' memorandum was not signed by either party. The contract of sale, therefore, was within the statute of frauds, and not binding; for it was for goods of the value of more than $50, and not in writing. §6635 Burns 1901. Schwabacher had a right to repudiate the contract, refuse to accept or receive the goods, and, if he had, he would have been freed from liability. The pivotal questions in the case, it seems to me. arise upon the correspondence between the parties after the whisky had been shipped to Schwabacher, and he had received a bill showing that the sale was for cash. Ele at once informed the sellers that the sale was to be on a credit
So we are confronted with the plain proposition that in order to settle a misunderstanding between Einch & Co., the sellers, and Sehwabaeher the purchaser, it was agreed that the latter should have a credit of four months. It was not a misunderstanding or dispute as to any outside or extraneous facts influencing the transaction, but merely as to the terms of the contract, and as to this, both parties are supposed to have been fully and equally informed. By mutual agreement the dispute between them was settled, and the terms fully agreed upon. Einch & Co., through their agent, whose knowledge is imputed to them, knew just what the contract was. Sehwabaeher had like knowledge, and neither of the parties to the contract were bound by it. There was no binding contract between the parties until the one was made by the correspondence between them. If Einch & Co., upon receipt of the letter from Sehwabaeher informing them that the sale was on a credit of four months, had not desired to close the transaction upon such terms, a speedy determination of the dispute between them could have been made by ordering the goods reshipped to them. But this they did not do, but proposed to settle the misunderstanding between them upon the exact terms claimed by Sehwabaeher.
It is worthy of remark that the record does not disclose any representations by Sehwabaeher, such as usually appear where contracts for the sale of goods are rescinded and the property sought to be recovered. He made no representations as to his solvency. He did not make any
Counsel for appellants, in their brief, use very strong and pertinent language in discussing this point as follows: “If the contention of one side as to the terms of a contract could be made the basis for the undoing of the settlement made, what value would a settlement be in any case? Eecessarily, in all disputes one side is right and the other is wrong. In all disputes one side inevitably claims that the other is wrong. If the adjustment reached does not settle the contention of each as to the terms of the contract as claimed by the other, then it settles nothing, for there is nothing else to settle. To illustrate: A suit is brought on a parol contract, as claimed by the plaintiff. The^defendant answers, setting up an entirely different contract, which he alleges was the agreement entered into. Both statements can not be true. Thereupon, as in the present case, in order to settle the controversy or misunderstanding the claims made by the one side or the other, in whole or in part, are allowed, or perhaps new terms agreed upon. But whatever be the conclusion reached, the truthfulness or falsity of the claims made by each are abandoned, and
If there is a matter in dispute between two parties, and they reach an agreement determining such matter, it is certainly too late for the one who makes a concession to say or affirm that he was deceived by the very thing it was
The case of Adams v. Sage, 28 N. Y. 103, is exactly in point. In that case, as in this, the information in regard to the terms of sale was conveyed to the principal by an agent who conducted the transaction. Upon the question in dispute between the parties a compromise was reached and a settlement had, and in an action to rescind -the settlement the court said: “Indeed, upon such evidence, it would be error to submit to a jury the question whether reliance was or was not placed upon the reiterated false representations. Under the circumstances assumed, the law presumes that the party relied, in making the agreement, upon his own investigation, and not upon the representations of the party with whom he is dealing. This conduct, in acting in opposition to the knowledge acquired by inquiry from one who knows the facts, is attributable, and is set down by the law, to his own indiscretion and recklessness, and not to any fraud or surprise, of which, under the circumstances, he has any right to complain. Knowledge that the representations made in relation to the subject of an agreement, as an inducement to entering into it, are false, will deprive the party having such knowledge, of all title to relief in equity. (1 Story’s Eq. Jurisp., §202.) And when a party has been defrauded, and with full knowledge of the fraud settles the matter in relation to which the fraud has been committed, he has no claim to relief at law or in equity on account of such fraud. * * * In 2 Parsons on Oont., 210, the rule is laid down in relation to defenses to actions on the ground of false representations, that it must appear that the injured party not only did, in fact rely upon the fraudulent statement, but had a right to rely
If this case states a correct rule of law, then it settles this appeal in harmony with the contention of appellants.
There is an absolute failure of evidence upon which to base that part of finding number five, to the effect that the statement in the letter and memorandum of Schwabacher to Pinch & Oo. was fraudulent and intended to deceive the latter. If this judgment is upheld, we will have a case in our reports which asserts the anomalous doctrine that a party to a compromise and settlement can assail the same on the ground that a different result might have been reached upon the trial of the issue, raising such question, and also that there may be a rescission of a contract because of representations made to the seller by the purchaser, representing matters upon which he had no right to rely, and concerning which he was already fully informed.
Lyons, the agent and salesman of Pinch & Co., knew the terms of the contract, and reported to his principals that the sale to Schwabacher was for cash. It follows that both the agent and principal knew the facts, and neither can plead ignorance. So it matters not whether the statement in SchwabachePs letter was true or false; he asserted it as a truth, and Pinch & Oo. accepted it as such, and upon that understanding the matter iix controversy was settled. Here
The knowledge of the agent is the knowledge of the principal in a particular transaction as to all of its material parts. In this instance, however, Pinch & Co. are chargeable with actual knowledge, f<rr they had the letter of their agent advising them- of the exact terms of the sale. To make the point more forcible, suppose that when Pinch & Co. received the letter from Schwabacher insisting that the sale was on a credit of four months, Lyons, their agent, who negotiated the sale had been present, and had con-filmed the information contained in his letter reporting the
There are three propositions which it seems to me effectually dispose of the case before us in favor of appellants : (1) That the knowledge of the agent is the knowledge of the principal. 1 Am. & Eng. Eney.of Law (2d ed.), 1144-1150, and authorities there cited. (2) That actionable misrepresentation must be concerning material facts, and not concerning matters equally within the knowledge of both parties. Slaughter v. Gerson, 13 Wall. 379, 20 L. Ed. 627; Farnsworth v. Duffner, 142 U. S. 43, 12 Sup. Ct. 164, 35 L. Ed. 931; Richardson v. Walton, 49 Fed. 888, 895; Long v. Warren, 68 N. Y. 426; Brown v. Leach, 107
In Burden v. Burden, supra, the Supreme Court, by Jordon, J., said: “Misrepresentations must be concerning a material fact, and not concerning matters equally within the knowledge of both parties, and it must appear that the party relying upon the same could not, or did not, know the falsity thereof.” ' In Anderson, etc., Works v. Myers, supra, this court, by Lotz, J., said: “If a party blindly trusts where he should not, and closes his eyes where ordinary diligence requires him to see, he is willingly deceived, and the maxim applies volenti non fit injuria In Lincoln v. Ragsdale, supra, at 557, Judge Ross, speaking for the court, said: “However false the representations made by the appellant, if known by appellee to be false, he was not misled thereby.”
In Slaughter v. Gerson, 13 Wall. 379, 383, 20 L. Ed. 627, Mr. Justice Field, speaking for the court, said: “The misrepresentation which will vitiate a contract of sale, and prevent a court of equity from aiding its enforcement must not only relate to a material matter constituting an inducement to the contract, but it must relate to a matter respecting which the complaining party did not possess at hand the means of knowledge; and it must be a misrepresentation upon which he relied and by which he was actually mislead to his injury. A court of equity will not undertake, any more than a court of law, to relieve a party from the consequences of his own inattention and carelessness. Where
In Clarke v. White, 12 Pet. 178, 198, 9 L. Ed. 1046, it was said: “He who purchases unsound property, with the knowledge of the unsoundness at the time, can not maintain an action. So, that if one compounds a debt, of makes any other contract, with a full knowledge of the facts, acting at arm’s length, upon his judgment, and fails to guard against loss, he must abide the consequences. Neither fraud or mistake can be imputed to such an agreement.”
In Farnsworth v. Duffner, 142 U. S. 43, 48, 12 Sup. Ct. 164, 35 L. Ed. 931, Mr. Justice Brewer, speaking for the court, said: “And in 2 Pomeroy’s Eq. Jurisp., §892, it is declared that a party is not justified in relying upon representations made to him (1) when, before entering into the contract or other transaction, he actually resorts to the proper means of ascertaining the truth and verifying the statement; (2) when, having the opportunity of making such examination, he is charged with the knowledge which he necessarily would have obtained if he had prosecuted it with diligence; (3) when the representation is concerning generalities equally within the knowledge or the means of acquiring knowledge possessed by both parties.”
It follows therefore that though the trial court did find that Pinch & Oo. believed the statements made in Schwabacher’s letter, — that the sale was made on credit and not for cash, — such finding can not avail against the plain rule of law stated in the cases I have cited. Here the parties were dealing with each other on an equal footing, and at arms length, and hence, under the authorities cited, Pinch & Oo. had no right to rely upon the statement of Schwabacher, because they were fully informed as to the terms
My deliberate judgment is that the. settlement made between Einch & Co. and Schwabacher, upon the facts which are undisputed, irrespective of the previous contention of the parties, should be held inviolable. This being true, the title to the goods in controversy vested in Schwabacher upon the settlement being made, and he had a right to mortgage them to appellants to secure the payments of tona ;fide indebtedness.
The petition for rehearing should be granted and the judgment reversed.