42 Mo. 18 | Mo. | 1867
delivered the opinion of the court.
The petition states in substance that the plaintiff, on the 26th day of March, 1860, obtained a loan of money from the defendant, and secured the same by a principal note for the sum of five thousand five hundred dollars, payable at three years from date, with separate notes for the semi-annual interest, together with a deed of trust on his farm, of the value, as alleged, of twenty-five thousand dollars, containing a power to sell on failure of pay
The defendant demurred to the petition, for the reason that it did not state facts sufficient to constitute a cause of action. The demurrer being overruled, an answer was filed substantially
The case was submitted to the court, sitting as a jury, for a trial of the issues, and judgment was rendered for the plaintiff, upon a spe'cial finding of the facts, stating therein the amount charged, for the value of the farm, at $15,000, and the credits allowed for debt and interest; and execution was awarded against the defendant for the balance of $8,087.15.
The petition is certainly not very explicit as to the principles of law or equity on which tlio action was to be founded, nor very accurate as to the kind of relief to which the plaintiff might be entitled. Evidently it was not intended to state a cause of action at law for damages, whether founded upon a breach of contract or upon fraud and deceit resulting in damages merely. It states a case of equitable jurisdiction, if anything; yet the relief prayed for is not exactly such as a court of equity would grant upon the case stated. It is not easy to say whether the case was tried in the court below as an action at law or as a proceeding in equity; but the relief given was not such as equity could grant. It has been argued here as if it might be either or both. The record exhibits such a blending of law and equity, both as to principles and procedure, that we have had great difficulty in determining what to make of the case. This court has had occasion already, in several cases, to animadvert upon the error of confounding law and equity, not only as to principles, but as to the mode of proceeding, as if no distinction any longer existed.
We are inclined to think the demurrer was properly overruled. The petition could not be treated as an action at law. Whether or no it sufficiently states a case for equitable relief, is a question of some difficulty. It has been held, under the practice act, that the relief sought is an essential part of the petition. It is, at least, not clear that the prayer in this case might not include such relief as could possibly be granted on the case made. As to the case stated in the petition (which is taken to be entirely true on demurrer), our opinion is that it might come within the jurisdiction of a court of equity for granting relief under the head of
It has been said by high authority to be a principle of universal law that fraud and damage coupled together will entitle the injured party to relief in any court of justice — Bacon v. Bronson, 7 Johns. Ch. R. 194. At law, fraud without damage, or damage without fraud, will not found an action; but where both concur an action will lie—Pasly v. Freeman, Sm. Lead. C. 55, § 2. There can be no doubt that wherever fraud and deceit resulting in damage can be proved to the satisfaction of the jury, an action at law can be maintained. The cases are numerous to the effect that where a person affirms either what he knows to be false, or what he does not know to be true, to the prejudice of another and for his own gain, he must answer in damages; but independently of any contract no one can be made responsible for representations of this kind unless they be fraudulently made — Taylor v. Ashton, 11 Mees. & W. 400; Stone v. Denny, 4 Met. 151; Allen v. Addington, 7 Wend. 9; 2 Kent’s Com. 489, n. b.)
But general fraudulent conduct, general dishonesty of purpose, or a mere general intention to deceive, amount to nothing unless they are connected with the particular transaction, and are shown to be the very ground on which the other party acted, and on which the transaction took place; and he must have been actually deceived and defrauded by the representations made — Atwood v. Small, 6 Cl. & Fin. 447. He is himself alone responsible for his own weakness, folly, inattention, want of caution, or imprudence, and for his own necessities and misfortunes. Nor Gan damages be recovered for the breach of a mere gratuitous promise of favor, or for the consequences of undue confidence or want of prudence in affairs, or for oppressive conduct in foreclosing a mortgage under a power of sale where the requirements of the contract have been pursued; and the damage resulting from the fraud or misconduct must be the direct and immediate consequence of the wrongful act—Randall v. Hazelton, 12 Allen, 412.
If the proofs in this case had fully sustained the petition, or shown a deliberate scheme of fraud and deceit designed to induce the plaintiff to go away in order that the defendant might get the property at a sacrifice in his absence, in violation of express promises or plighted faith, or upon false representations made, or had clearly established the fact that deceitful inducements had
There was evidence that the farm was worth about fifteen thousand' dollars, though some of the witnesses stated that it would not have sold in 1862 for more than eight or ten thousand dollars ; and the whole indebtedness with interest amounted to some eight or nine thousand dollars. The witness who was present at the first interview says distinctly that the defendant then promised to wait, only on condition that the interest notes were paid up. There was no offer to do this. The defendant states positively that he never at any time promised or engaged to do anything more than this. There is nothing in the testimony of the witness at the other interview that contradicts the truth of this statement. He says nothing on this very essential point. His statements in relation to a parol agreement not to sell under the deed are vague and uncertain as to what was said or promised. The testimony of the plaintiff himself is still more indefinite and unsatisfactory as to any positive understanding or agreement. His statements are at variance with the other witnesses’ in several
One of these witnesses says that the plaintiff (at the second interview) informed the defendant of his purpose to go to California, where he expected to get money from his friend to pay the debt, and that the defendant said “he might go,” that “he need not be uneasy,” and that “nothing would be touched until he came back,” but that he (witness) should stay on the place and take care of the farm; but he says, also, that no bargain was made nor any time mentioned when he was to return; nor is he able to state that there was any more distinct promise than this, not to sell under the deed of trust. The plaintiff himself can say no more than that the defendant said “he might go,” and that “his family and property should not be molested;” and thereupon, he says, he made his arrangements to -go, and went the next day.
He states that no time was agreed on when he was to come hack. The defendant appears to have been anxious that, if he went away, some person should be left on the farm to take care of the place in his absence; and it may very well admit of serious doubt whether his expressions may not have been (as he avers) upon condition that the interest should be paid up, and may not have referred as much to the care of the farm as to any distinct agreement on his part not to proceed under the deed of trust, within any given time. Another witness thinks some time was referred to, but cannot say whether it was one or two years. That the defendant should agree not to sell until he came back (an event that might never happen), would be highly improbable; but it might be reasonable to infer that it was understood that he should have time to go and return.
No false representation of any past event, or any cotemporaneous fact, is proved; there was nothing strictly of the nature of a misrepresentation. There was no other proof of any promise or of any definite agreement to refrain from selling under the deed of trust than what is contained in the above expressions; though another witness states that he asked the defendant, in a casual conversation with him, after this suit was begun, if he had
It does not appear that the plaintiff went to California at the instance or solicitation of the defendant, nor that he held out any inducements to him to go, otherwise than as above stated. There was no proof of any contract. It is needless to say that, as a contract, it was simply nudum pactum. The defendant received no advantage, the plaintiff no detriment, at the instance of the other. It may be said to admit of some doubt whether the plaintiff may not have relied upon the voluntary indulgence of the other, or may not have incautiously suffered himself to be lulled into a feeling of security beyond what was understood ox-agreed to by the other. The debt was already duo by the terms of the instrument. The plaintiff knew that it was in the power of defendant to pi-oceed and sell whatever he pleased, and ordinary prudence might have dictated the propriety of leaving his business in charge of some competent agent, who could have looked after his interests in his absence. It seems not to have been in his power to prevent a sale by payment of the debt or interest; but, though unable to prevent a sale, his personal infiuexxce might have been more effectual than the efforts of any agent in procuring bidders, who might have saved the property from sacrifico or made it bring something near the amount of the debt. The property appears to have been worth nearly double the debt, and it must be conceded that his own absence increased the certainty of his loss, and that he was really injured if there was any fraud.
He received information of the sale soon after his arrival in California, and as early as the ensuing month of July. He made no further efforts to get money in California. It appears that he was unable to raise the necessary amount when he got there. No proceeding was instituted for the purpose of having the sale set aside on any ground of fraud or unfairness in the sale, while a resale might have been ordered, or a redemption allowed, on
The allegations of fraud at the sale are not supported by the proofs. The evidence shows nothing amounting to fraudulent conduct at the sale. One witness states that he urged the defendant to postpone the sale on account of the plaintiff’s family, and that the defendant said, in private conversation with him, that he could protect them, but, “not that he would;” and there was no evidence whatever of any attempt to deter him or others from bidding, nor of any unfairness beyond a hard disposition to enforce a sale in a time of depression and under circumstances the most unfavorable for the plaintiff, and so buy in the property for a song, leaving the greater part of the debt still unsatisfied, and thus sinking the plaintiff, perhaps, into utter bankruptcy. On the other hand, there is much ground to infer that the plaintiff was not willing to depart on his journey until he had received some positive assurance from the defendant that his property would not be sold before he should have time to go and return. Railing to get this assurance at the first interview, it would appear that he went again and took with him a friend who could be a witness. It is rendered highly probable that he regarded the expressions used as amounting to such an assurance, and that he acted upon it. If really given to that effect, and without condition, he might justly consider them as equivalent to an express promise not to sell until his return, within the time supposed. In such case the defendant should be presumed to have intended them as such; otherwise, he should have said, distinctly, JVo! to the proposition. „If they were used, and not so intended, his conduct was dishonest— was bad faith (dolus mains'), and a fraud. It was a doctrine of the civil law (cited by Story with approval) that there is ground to charge a man with dishonesty for not having declared his right, when he was under an obligation to do it, by which the other is misled; and it may be deemed
But we have great difficulty in saying, upon the whole evidence, such as it is, that a fraud or breach of confidence of this nature ought to be considered by the court (without the verdict of a jury) as Satisfactorily established. The question of fact whether such promises or assurances were fraudulently given, and were the sole ground of the plaintiff’s action, to his injury and loss and to the gain of the other, would more properly have been submitted to a jury upon an issue directed to that question— Ward v. Turner, 2 Ves. Sr. 431.
In Gartside v. Isherwood, the question of fact whether a confidence has been reposed and abused was sent to a jury, and it was said that ££ where a matter of fact is necessary to be considered, and there is doubt upon the evidence of the fact, then it is proper to send a neat matter of fact to the decision of a jury.” In Evans v. Bick^ell, where the Chancellor was not satisfied with the proof of the fraud, it was ordered that the bill be dismissed unless the parties preferred to have an issue made upon the question of fraud, to be tried by a jury. In other cases, the relief prayed was granted only when the fraud on which it depended had been ascertained by the verdict of a jury; and it was said, in Clifford v. Brooke, that a probable fraud was not enough, but that, as at law, the “ action must stand upon plain, clear fraud and deception, proved to the satisfaction of the jury”—Haycraft v. Creasy, 2 East. 92.
We are not prepared to say that the fraud and deception here alleged are proved to our satisfaction; but if they were so proved,
In Young v. Peachy (2 Atk. 256), the party had acquired the title, under a parol agreement, to hold it for the benefit of the other. The Chancellor said there was no resulting trust, but that relief would be granted, the proof, being clear and satisfactory, by holding him to be a trustee for the benefit of the injured person, under the head of fraud. His conduct, in violation of his promise, being dolus malus, equity would compel him to make it good—Strickland v. Aldridge, 9 Ves. 516; Drakeford v. Wilkes, 3 Atk. 540. In Boyd v. McLean (1 Johns. Ch. R. 582), where a resulting trust was decreed upon a parol agreement, clearly proved against the denial of the answer, the Chancellor did not fail to remark upon the danger of admitting such testimony, contrary to the policy of the statute of frauds, unless it were entirely satisfactory. In these cases the proof was clear that a title or interest had been acquired under a parol agreement or understanding that it was to be held for the benefit of the other, and relief was granted by declaring the party a trustee, on the ground that unless he were compelled to make his promise good the statute of frauds would thereby be made the means of accomplishing a fraud. There was a clear breach of confidence, and bad faith, in violation of a parol promise (which was in itself nudum paclum), by means of which the party had acquired property which, by the terms of the agreement, should belong to the other. The agreement or understanding which this evidence tends to prove was not in terms to the effect that the defendant would hold the property for the benefit of the plaintiff, nor was there any undertaking to buy in the property at the sale for his benefit. But the agreement, if proved as alleged, related to this property, in which the plaintiff had the interest of a mortgagor, and the defendant that of a mortgagee, and was to the
But there must be something more than a mere violation of a parol agreement, or a breach of contract, for which damages may be recovered at law, or a fraud and deceit resulting in damage only, to entitle the party to relief—Robertson v. Robertson, 9 Watts, 32; Haines v. O’Connor, 10 Watts, 318. There must be some ground for specific relief beyond a mere claim for damages, or for the payment of money. Relief will not be granted in equity for damages merely, or for the payment of money, where no other kind of relief is required or can be given, and where there is an adequate remedy at law—Hardwick v. Forbes, 1 Bibb, 212; Waters v. Mattingly, 1 Bibb, 244. In Clifford v Brooke (13 Ves. 131), where the case was purely an action for money, the Chancellor said he doubted extremely whether he ought to make such a decree even if the evidence came up to the charges, and, all other ground of relief failing, he refused a decree and left the plaintiff to his action at law. But where there is any fraud touching property, the court will interfere and administer a wholesome justice in favor of innocent persons, who are sufferers by the fraud without fault on their side, and it will be done * ‘ by converting the offending party into a trustee and making the property itself subservient to the proper purposes of recompense by way of equitable trust or lien”—2 Story Eq. Jur. § 1265.
So far as there is any evidence here of fraud and deception, it concerns the alleged promise not to sell. It cannot be claimed that there was a distinct and positive agreement to that effect, but the circumstances, the expressions used, and the conduct of the parties, were such that a jury might reasonably infer, perhaps, that
In Clarkson v. Creely (40 Mo. 114), an agent of the grantor in the deed of trust had called upon the beneficiary and informed him that he would be ready to pay the debt secured whenever it should become necessary to proceed under the power to sell; and his agreement to do nothing until he should let the other party know, being distinctly proved, a redemption was allowed on the ground that the acts of the party as clearly operated a fraud for his own benefit, in violation of the agreement, as if it had been a trap expressly set and designed to cheat. It is a general principle that a court of equity will look with a jealous eye upon these harsh modes of disposing of the equity of redemption, and will require that the power shall be exercised in all fairness and integrity—Goode v. Comfort, 39 Mo. 313. Where the beneficiary or mortgagee becomes himself the purchaser, and there is any fraud touching the sale, he will be considered as a mere mortgagee in possession, and the grantor will be entitled to the rights of a
But he has sold and conveyed the property to an innocent purchaser, and placed it beyond the reach of the plaintiff or of the court for his relief. In such case, the money received by him as the proceeds of the sale will be subjected in his hands to the same trust that the land itself would have been subject to if the title had remained in him. It has been held that where a fraudulent grantee of lands which would have been subject to a trust in his hands has sold the lands and converted them into money, the proceeds of the sale will be considered in equity as a substitute for the original property, and be subjected to the same trust—Bean v. Smith, 2 Mas. R. 252.
The same principle may be applied to this case. It goes upon the doctrine of conversion It does not rest upon any trust arising by agreement or intention of the parties, but upon a breach of trust in selling property which was subject to a trust in the hands of the vendor, and upon so much benefit received; and for this purpose the money is to be considered as the same identical property as the land sold and converted—Adams’ Eq. 143. He must give a recompense in account to the extent of that value of the land.—Earl of Oxford’s case (1 Ch. R. 13; 1 Jac. 1), 2 Lead. Cas. in Eq. by W. & T. 504.
It results from this, that the plaintiff would be entitled to relief upon this ground to the extent of the balance remaining of the sum received by the defendant from the sale of the property (which appears to have been ten thousand five hundred dollars), after deducting therefrom the full amount of the notes held by him, and interest thereon up to the date of the sale and conversion ; and the plaintiff would be entitled to judgment for that balance, with interest from that date. The defendant must be
It appears that the court below refused to allow the defendant, against the demand of the plaintiff, the excess of interest above six per cent., as usurious. An instruction was given to this effect, and the interest notes, as such, were not taken into the calculation. It was decided in Ransom v. Hays (39 Mo. 445) that a party who has once paid unlawful interest upon an usurious contract cannot recover it back. Even where the statute makes an usurious contract void, equity will aid the borrower only upon condition of his paying what is Iona fide and really due, on the maxim that he who asks equity must do equity. The statute here does not make the contract void, nor does it exempt the borrower from paying the usurious interest. So far as it was illegal, the plaintiff is in the situation of a wrong-doer as well as the defendant, and equity will not relieve him—1 Story Eq. Jur. § 64 and §301. Here the. usury is to be considered as having actually been paid. The defendant had the right to pay himself in full out of the money received, and the plaintiff can have no deduction or allowance on account of the usurious interest so paid. In this respect the judgment was erroneous.
The relief administered in this judgment did not proceed upon the equity established as above, but upon the ground that compensation or damages was to be estimated as for the injury and loss sustained by the plaintiff by reason of the defendant’s fraud and deceit. An instruction was given to this effect. Evidence was heard as to the value of the farm, and that value as found upon the evidence was taken as the basis of the account and as a measure of damages. This was a total departure from the principles of both jurisdiction and relief, on which the case depended. If there were no other ground of relief, and no other kind of relief to be administered than the payment of money by way of compensation or damages for the injury suffered by the plaintiff, for
The compensation so given is founded not upon an injury or loss suffered by the plaintiff, but upon an account of what the defendant has received, or is, under a special equity, bound to make good, the amount being definitely ascertainable before a master. In Copper v. Wells (Saxton R. 17) it was held that mere damages for an injury or a broach of contract must be assessed by a jury at law, but a compensation for beneficial and lasting improvements or profits made may be safely ascertained before a master, or upon an issue directed, at discretion. The case must be one admitting of definite compensation, and not a mere matter of arbitrary damages or a compensation to be estimated in damages—Adams Eq. 91, 109. Where there is an equity for relief, and an account may properly be taken, though the court cannot decree the plaintiff a recompense or damages for his loss, it may substitute an account of the defendant’s profits—Adams’ Eq. 219; 2 Story Eq. Jur. § 794, a; White v. Cuddon, 8 Cl. & Fin. 787-795.
Damages will not be awarded upon a breach of trust merely,
It appears by the record that the cause was submitted to the court, sitting as a jury, for a trial of the issue. No particular issues were directed or made up for trial by jury. Such submission of a case in equity can be regarded only as a hearing before the court, upon the pleadings and evidence in the cause. The case is to be considered here in like manner, upon the pleadings and evidence. The instructions are important only as indicating the principles upon which the court acted in giving judgment. We have said that the question of fact -whether any agreement, or any expressions amounting to a distinct understanding, to suspend a sale for any given time, was made and acted upon to the injury
After much deliberation we have not been able to find any ground of principle or authority on which the judgment as rendered can be sustained; nor do we see our way clear for rendering such judgment here as should have been given in the court below. We thinlc the ends of justice will be better answered by remanding the cause for a new hearing, in accordance with the principles indicated in this opinion.
Reversed and remanded.