117 Mo. App. 185 | Mo. Ct. App. | 1906
(after stating the facts). — The criticism is that the instructions failed to require the jury to find the scienterThat there must be scienter, either actual or constructive, in order to support an action at law for deceit, is beyond question. The false representation may be made scienter in contemplation of law if the other elements of liability are present in one of three ways.
First. A false representation made with the knowledge of its falsity by the utterer is scienter in law and
In the history of our jurisprudence, many cases arose where frauds had been perpetrated and the rule above stated was insufficient to meet the requirements of complete justice for the reason that in many instances it was impossible to establish by evidence that the utterer knew of the falsity of the representation at the time of making it and therefore the cause would fail for want of proof of the scienter, and the rule was found to be inadequate to reach those ends of perfection sought to be attained by the common law whereby there should be rendered adequate redress for every wrong. As a result of these conditions, the law, in its process of evolution from adjudications on the different shades and kinds of deceit and in order to meet and deal with such cases as arise where a wrong has been perpetrated by the misrepresentation of one person and relied upon by another to his damnification, when the case in itself is incapable of affirmative proof, that the utterer of the representation knew such representation to be false, has supplied us with two further principles having application to the establishment of the scienter in contemplation of law,
Second. When a party makes a representation of a material fact as of his own knowledge when in truth he has no knowledge whatever on the subject either of its truth or its falsity. In such case, inasmuch as the utter er has no knowledge on the subject whatever, it would be impossible to establish a scienter by proof showing that he knew the representation to be false, for the reason that no showing pro or con on the subject could be made. Therefore, the law will constructively supply the scienter because of the reckless conduct of the utterer for the very good reason that a positive statement of fact implies knowledge of such fact, and if the party who makes it has no knowledge upon the subject, he is telling scienter what is untrue; he is affirming his knowledge when in truth he has no knowledge to affirm. [Hamlin v. Abell, 120 Mo. 188, 25 S. W. 516; Caldwell v. Henry, 76 Mo. 254; Dulaney v. Rodgers, 64 Mo. 201; Dunn v. White, 63 Mo. 181; Lovelace v. Suter, 93 Mo. App. 429; Paretti v. Rebenack, 81 Mo. App. 494; Knappen v. Freeman, 47 Minn. 491; Fisher v. Mellan, 103 Mass. 503; Montreal River Lumber Co. v. Mihills, 80 Wis. 540; Joliffe v. Baker, 11 Q. B. Div. 225; Derry v. Peek, L. R. 14 App. Cases 337; Rothchild v. Mack, 115 N. Y. Ct. App. 1; Bennett’s Notes on Benjamin on Sales (6 Ed.), 449; 1 Bigelow on Frauds (1888), 509-513.]
And likewise, there is a second instance in which the law will supply. It is:
Third. The law will raise up or constructively supply scienter when the party, by reason of his peculiar position has “special means of knowledge,” and under such circumstances (the other sufficient elements of
It follows from what has been said, that under the first phase of the scienter where the allegation is that the utterer made the representation false in itself and that he knew it was false, that the burden rests upon the party holding the affirmative of the issue not only to show that the representation was made, but that it was false and that the utterer knew or believed it was false at the time it was made, for it is by proof of the knowledge of or belief in its falsity alone that scienter is established under this phase of the law. And therefore the gravamen of the charge, the issue affirmed on the one side and denied on the other, is the corrupt purpose, the evil intent or design, and it is not enough to show that the utterer had reasonable grounds to believe it was false, but it must be shown that he knew or believed it was false. From this, it essentially follows that in such case, the issue being only the scienter, the evil design, it is competent and proper for the defendant to show, in resisting such charge, that he did not know the representation was false and to this end he is permitted to show that he acted in good faith on reasonable appearances and was
This brings us to a consideration of the second phase of the scienter, when the case is not that the utterer knew the representation to be false, but is when he asserts a material fact as of his own knowledge when in truth he had no knowledge on the subject as to whether the representation was true or false. Under this phase of the matter, the law being satisfied by proof of the party’s reckless or wanton conduct in asserting positively as of his own knowledge a fact concerning which he knew nothing of its truth or falsity, as stated above, raises up and supplies the scienter constructively from this reckless conduct on his part and as it would be impossible to prove that the utterer knew or believed at the time of the utterance that his statement was untrue, inasmuch as the proposition itself predicates upon the hypothesis that the utterer himself did not know whether the statement was true or' false, or had no knowledge on the subject, then the question of the utterer’s good or bad faith in so recklessly representing facts as of his
With these principles before us, let us determine
The case coming under the first phase of the scienter, as it does, places the burden on the respondent to establish, by competent proof, that the representation was made, that it was false, and that Mr. Teasdale knew it was false at the time of making it. Upon this being shown, scienter is prima facie- established. In compliance with this principle, respondent’s proof showed affirmatively that Mr. Teasdale represented that he had sold the oranges to the firms named and at the prices mentioned, and then established by the two' firms mentioned that’ they had not purchased the oranges nor had they negotiated with appellant for the same in any manner. This established prima facie the representation and its falsity, and it being a matter within the knowledge of appellant, appellant knew it was false when made and the scienter was thus established prima facie, whereby the burden of proof'shifted and it devolved upon the appellant to show a state of facts from which the jury could infer that the appellant had sold the oranges as represented, or that it had negotiated to> that end at least, sufficiently to show that appellant believed, or had reasonable grounds to believe, that it had sold the or
It remains to examine the question, Did the appellant show such negotiations as were calculated to show a reasonable belief in Mr. Teasdale that the fruit was sold when he said it was? The entire showing in that behalf is that appellant-had received a postal card from Spencer & Company of Oskaloosa, dated ten days before, saying they were in the market for a car of oranges. Appellant did not show that it had answered this card by letter, telegram or otherwise, or that it had ever, in any manner, suggested or made a sale of these or any other oranges to that firm. As to Coyne Brothers of Chicago, the entire showing is that Mr. Fry, a broker and appellant’s correspondent and agent, and not the agent of the alleged purchaser, called appellant over the telephone and advised that Coyne Brothers were desirous of purchasing a car of oranges. It was not shown that appellant ever communicated with or attempted to sell the oranges to that firm. The result of the showing is that appellant had been informed that the two firms, one in Chicago and one in Oskaloosa were desirous of buying oranges, and nothing more. Certainly no reasonable mind could infer from these facts that appellant had reasonable grounds to believe that it had sold the oranges to those firms at the prices mentioned when no attempt to make the sale at those or any other prices-had been made. It therefore appears upon the uncontradicted proof and the admitted facts of the case, that appellant made the representation, that it was false, that the appellant knew it was false when it was made, and Mr. Teasdale had no grounds, reasonable or otherwise, for that matter, upon which to predicate a belief in the truth of the representation made by him in order
Upon this uncontroverted showing, the scienter was conclusively established by proof and no sufficient showing was made contra thereto to raise an inference in the minds of the jury to the effect that appellant made that representation as a result of honest error or innocent mistake, or otherwise in good faith, and we are of the •opinion that it was not error for the court to treat tbe scienter as an established fact in the case. In truth, it was an uncontro-verted fact and no longer an issue on which it was necessary to require an affirmative finding by the jury. This is especially true in view of the case of Hamlin v. Abell, 120 Mo. 188, decided by our Supreme Court, in which an instruction quite as silent on the matter of scienter as the one here involved, was approved, in a case where the essential facts stood uncontradicted, very much as in the record before-us. That decision, under our Constitution, is conclusive on us and it is abundant authority on this propositen. . The respondent’s first instruction, even though it omitted to notice the essential scienter, will not be condemned as error under that authority and the peculiar facts of this case.
The first instruction requested by. appellant and refused by the court, sought to submit to the jury the question of appellant’s good faith in making the representation, etc. It was properly refused, for the reason that there was no evidence from which the jury could infer that appellant believed or had reasonable grounds to believe that he had sold the oranges.
The second instruction requested by appellant and refused by the court stated correct principles of law, and it might have been given without error, but inasmuch as it required the jury to find the scienter, which was conclusively established by the proof introduced as well by appellant as respondent, which rendered it no longer an issue in the case, its refusal was not error.
It is unnecessary to notice separately the several other assignments of error. They will all be overruled.
The judgment is manifestly for the right party and will be affirmed. It is so ordered.