Lead Opinion
This is аn action to recover damages for fraud. The plaintiff has appealed from an order of the district court vacating the verdict and judgment entered therein in his favor and granting a new trial. The defendant’s motion for a new trial was made -upon the minutes. The granting of the motion is assigned as error. It is essential to- a correct understanding of the questions presented upon -this appeal to set out the material allegations of the complaint and answer, and also the verdict upon which the judgment vacated was based.
The complaint alleges “that on the 30th day of September, 1902, the defendants, with intent to deceive and defraud the plaintiff, then and there falsely and fraudulently pretended and -represented to the plaintiff that they were the -owners and legally entitled to enter into a contract to sell and -convey to the plaintiff the following described real estate [describing 960 acres of land situated in Ransom county], and could give a contract for a good- and perfect title thereto, and would furnish the plaintiff with -an abstract of title, which abstract of title would show that the defendants were the owners of said described land and premises -and had the legal right to enter into a contract to sell and convey the same; that the -plaintiff, relying upon such representations, entered into a сontract to purchase the said described premises and land of the defendants, and paid the defendants thereunder, in- merchandise and cash, the sum of $12,857.33; that the defendants were not the owners of said described lands and premises, and were not legally entitled to enter into a contract to sell and convey the same, and could not and have not furnished the plaintiff an abstract of title
The defendants, in their answer, admit the execution of the written contract referred to in the complaint, and attach a copy of the same to their answer as an exhibit; this being known in the record as “Exhibit A.” They also admit the receipt of a $2,500 cash payment upon the contract, and a further payment by the delivery of the stock of merchandise as alleged in the complaint. But they deny that they stated or represented that they were the owners of the land, and “especially deny that by reason of any of the facts set forth in the complaint plaintiff has been damaged in the sum of $12,857.33, or in any other sum or amount whatever,” and allege “that the defendants have -duly complied with all the terms and conditions of said written contract, and have tendered to the plaintiff an abstract of title to1 said premises, and that they are now ready, able and willing to convey, or cause to be conveyed to the plaintiff, by good and sufficient deeds of conveyance, all the lands in said- contract mentioned, in accordance with the terms and conditions of said contract, and conveying to the plaintiff full title to all of said lands, as therein mentioned, upon the full performance 'by the plaintiff of the other terms and conditions of said contract, and that the defendants herewith tender and offer full and complete performance of the terms and conditions upon their part to be performed.”
The contract was signed by the plaintiff and by the defendants. By the terms of this contract the plaintiff agreed to purchase the lands in question at an agreed price of $25,920. The contract describes the land, and fixes the terms of payment and rate of interest on deferred payments. Under it $2,500 was to be paid upon its execution, and $10,320 was to be paid by the delivery to the defendants of a certain stock of merchandise, located at Ormsby, Minn., at wholesale price, the taking of the inventory to begin on Octobеr 3, 1902. A further payment of $2,500 was to be made on January 1, 1903, when -the deal was to be completed. Plaintiff assumed a mortgage upon the land, and was to' pay the remainder of the purchase price in five equal annual installments. The contract makes no reference to the ownership of the land or
This action was commenced November 26, 1902. The record shows that at the close of the testimony “counsel for the plaintiff, moved the court that the case be submitted to the jury upon a list of special questions covering the issues in the case.” This motion was granted. Before the proposed questions were submitted to the jury counsel for defendants requested that “questions numbered 3 and 4 be answered ‘No/ in order that there may be no confusion arising in the minds of the jury,” and the answers were inserted in accordance with such request. Thereafter the jury returned the following verdict:
“We, the jury impaneled and sworn to try the above-entitled action, do find for the plaintiff.
“Dated May 23, 1903.
“.[Signed] A. H. Barnes, Foreman.
“Question 1. Did the defendants оr either of them, at or before making the contract, ‘Exhibit A/ state to or willfully lead the plaintiff to believe that they or either of them owned the lands which they had agreed to sell him? Answer. Yes.
“Question. 2. If you answer the above question ‘Yes/ did the plaintiff believe and rely upon such statements and representations, and was such belief and reliance one of the inducements that caused him to enter into said contract, and to part with his money and property? Answer. Yes.
“Question 3. Did the defendants or either of them own the lands described in said contract on the 30th day of December, 1902 ? Answer. No.
“Question 4. Did the defendants or either of them, own all of the lands described in said contract at the time this action was commenced, to wit, November 26, 1902? Answer. No.
“Question 5. What was the value of the goods and fixtures delivered to the defendants by the plaintiff? Answer. $10,000.
“Question 6. If .plaintiff is entitled to recover, should interest be computed on the damages? Answer. Yes.
“Dated May 23, 1903.
“[Signed] A. H. Barnes, Foreman.”
Thereafter t'he defendants moved, upon the minutes of the court, to vacate and set aside the verdict and judgment and for a new trial. The notice of intention specified the following grounds: “(1) That the verdict and damages are excessive, appearing to- have been given under the influence of passion or prejudice. (2) That the evidence is insufficient to justify -the verdict in the following particulars, viz.: That the undisputed evidence shows that the plaintiff suffered no loss, damage or injury by reason of the alleged fraud, deceit and false representations made by the defendants; that the undisputed testimony shows that, at and prior to the -time of the making of the contracts between plaintiff and defendants, the defendants had agency contracts or other contracts with the owners of the land in question, empowering defendants to purchase said lands or to cause them to be conveyed to others, including the plaintiff; that the undisputed evidence shows that on the 1st day of January, 1903, upon which date the contract between plaintiff and defendants was to be consummated, and long before the trial -of this action, the defendants had obtained title in fee to all of said lands, excepting the so-called 'Frey quarter section/ title to which was vested in the defendants upon January 15, 1903 ; that the undisputed evidence shows that at and prior to the -time of the trial of this action the defendants were clothed with the title to all of said- -lands in fee; that the undisputed evidence shows that -the defendants always intended to comply with all the terms of said- -contract upon their part to -be kept and- performed from the time- s-ai-d contract was made; that they were at -all times from a date -prior to the making of said contract in position- to acquire -title to all said lands; that they did acquire title to said lands prior to the -trial of this action; -and that, if plaintiff suffered any injury owing to said alleged fraudulent -representations, it was a nominal injury only,an-d that he suffered n-o real, substantial injury or damages. (3) That the verdict is against an-d contrary to -the law, in that the
There is no dispute as to the vital facts upon which -the motion for new trial was based. They are substantially as stated in the notice of intention. The defendants made no default in the performance of -their obligations under the contract. The trial judge caused the entry of a judgment against the defendants- for $13,052.52., This he vacated upon the defendants’ motion. The question on this appeal is whether it appears that he abused his discretion in vacating the verdict and- judgment and granting a new trial. We are of the opinion that he -did not, and that the order must therefore be affirmed. “Where -a verdict is vacated and a new trial granted by a -trial court upon the ground of insufficient evidence, the court in so doing is acting within judicial discretion, and such discretion will not be disturbed in a court of review, except in cases of manifest -abuse.” Dinnie v. Johnson,
The action is based upon fraud. The fraud alleged consists of the defendant’s false statements -as to the title and ownership of the land. It seems to have been the theory of plaintiff’s counsel, and one adopted -by the court in ordering judgment for the plaintiff, that, if the defendant in fact falsely stated that they had the legal -title, this statement of itself constituted an actionable wrong, for which the defendants must respond in damages. This is erroneous. It is a well-s.ett-led maxim that fraud without injury is not actionable. “The law takes no cognizance of a fraud which does not in fact work some injury.” People v. Cook,
If one is actually defrauded by a false statement which -induced him -to enter into a contract, lie has 'his remedy for the injury. The -contract thus procured is not void, but voidable. 9 Cyc. 431; 14 Am. & Eng. Enc. Law, 156, and cases cited. He may either
Upon a former -appeal fr-om an or-d-er dissolving an attachment in -this -case, we construed the complaint as stating a cause of action for deceit. Sonnesyn v. Akin,
Sоme -courts have held that a vendor of personal property, -when the sale has been -induced by fraud, may sue -in replevin or trover, without previous notice, tender or -demand, treating the acceptance of the property -by the fraudulent vendee as a tortious taking -and upon the ground- that no title pa-sses. Thurston v. Blanchard (Mass.)
Finally it is contended that, even if the theory upon which the plaintiff recovered was erroneous, the error could not be corrected upon defendants’ motion. This conclusion is based upon the claim that the instructions given by the judge to the jury .authorized the recovery which the plaintiff now seeks to sustain, and that the instructions were not excepted to by the defendants. The point urged is that the jury were authorized to 'apply an erroneous rule ■of law, Which was not excepted to, and that under this erroneous rule the evidence is sufficient to sustain the verdict, and that the recovery must therefore stand. This contention cannot be sustained. The rule thus invoked has no application to this case, and for the reason that the jury did not return a general verdict. It will be seen, by reference to the statements of .the proceedings above set out, that the law of the case was not applied by the jury, but by the trial judge. The damage and (the amount thereof were awarded, not by the jury, but by the trial judge, after the jury was discharged and after a review of the special findings. Upon this state of facts the trial court “is free to consider and should consider what the -law is, and is not bound by its instructions previously given to the jury. It is true a jury must take instructions as to the law, whether right or wrong; * * * but the court does not -instruct itself and does not bind itself.” Baird v. C., R. I. & P. Ry. Co.,
It is also equally essential that the jury shall assess the damages in a special verdict. “A special verdict should leave to the decision of -the court only questions of law.” Mоrrison v. Lee, 13 N. D. —,
Aside from the merits, the order must be affirmed for another reason. The record presents -a case of -mistrial. The jury did not return a general verdict, and the special findings do not cover all of the issues so that they -can be treated as a special verdict. The jury found -that the defendants made a false statement, that the plaintiff relied upon it as one of the inducements to enter into the
The order appealed from should be affirmed, and it is so ordered.
Concurrence Opinion
I am unable to concur in the foregoing
opinion. It seems to me that the same is the result of a misapplication of well-settled legal principles. I do not question the soundness of most of the propositions advanced in said opinion. They are well settled, and no one can question their soundness. These propositions are, briefly stated, as follows: (1) Fraud -without injury is not actionаble, and hence damages must be shown in order to sustain an action for deceit. (2) A court of equity will not rescind a contract induced by fraudulent representations, in the absence of a showing of damage or injury. (3) A contract procured by fraud is not void, but merely voidable. (4) A person defrauded has an election to disaffirm or rescind the contract and recover bade what he has parted with or its value, or he may affirm the contract, take such benefits as are obtainable under it, and re
I disagree with the majority opinion as to the nature and1 effect of this action, and also as to how, under the facts, plaintiff could assert his election to affirm or disaffirm the contract. The facts as disclosed by -the evidence and as settled by the jury, or alleged in the complaint and admitted in the answer, are, briefly: That on September 30, 1902, the plaintiff entered into a written contract with the defendants, whereby the plaintiff made application to purchase certain real property described in the complaint for the consideration of $25,920; $500 was paid in- cash, $2,000 was paid on October 1th, and on October 8th a stock of merchandise was turned over to defendants in part payment for said land. Such sale was to be consummated on January 1st following by the payment of the balance of the consideration and the delivery of title deeds to the plaintiff. In the negotiations leading up to and preceding the making of this contract defendants falsely and fraudulently represented to' plaintiff that they were the owners of the land and legally entitled to enter into a contract to convey the same to plaintiff; that such representations were made to deceive and defraud him; that, relying thereon, he was induced to make the contract and the payments aforesaid, which payments in the aggregate, including the merchandise, amounted to $12,851.33; that defendants did not own said land, and had no right or authority to make the contract aforesaid. Subsequently plaintiff learned that said representations were unqualifiedly false, and he immediately, and on November 26, 1902, without notifying defendants of his intention to rescind, and without demanding a return of the money and personal property, commenced this action, and caused a writ of attachment to be issued therein and levied upon the personal property of the defendants. The com
The majority opinion proceeds upon the theory that this is an action to recover damages for deceit, and therefore an affirmance of the contract. The complete answer to this contention is the fact that no such cause of action existed on -the date this action was commenced. The contract was not to be fully performed until the following January, and hence, in the nature of things, no 'damage 'had aсcrued for deceit at the date this action was commenced, and none would accrue until performance was due under the contract. There was no way of determining at that time whether or not defendants, on January 1st thereafter, would be able to make good their agreement to transfer title to the land, and hence no way of determining any damages on the theory that it is an action for fraud and deceit. If such theory is correct, the plaintiff is in the ridiculous attitude of asking for relief which, under the very facts alleged in the complaint, he is not entitled to, for the very apparent reason that no damage 'had accrued prior to the commencement of this action, and none
The majority opinion cites the case of Farwell v. Hanchett and Doane v. Lockwood, supra, as holding that a rescission is essential before the defrauded vendor can institute an action to reclaim the property; but I do not so understand these decisions. Both of said cases hold that, where the vendor has received the consideration for tire sale, it is necessary, in orddr to effect a rescission, to restore the same to the fraudulent vendee, and that until such rescission is effected the title is in the fraudulent vendee. Where, however, nothing is necessary to be done by the vendor in order to place the fraudulent vendee in statu quo, the bringing of the suit is sufficient rescission. In the case of Oswego Starch Co. v. Lendrum (Iowa)
It is stated in the -majority opinion that the doctrine announced in Thurston v. Blanchard and similar cases d-oes -not apply to the facts in this case for the reason that those were -cases brought by the vendor of personal property, while it is stated that this involves the rights of a vendee of real property. I can- discover no difference on principle. In -both cases .the plaintiff has been defrauded out of personal property, and it cannot possibly make any -difference in the rule how such fraud was perpetrated. The defendants are in the position of fraudulent vendees of plaintiff’s property. Whether they are vendees or not is -wholly immaterial. The fact remains that they came into possession of plaintiff’s property tortiously, and this is the essential basis -upon which rests the said doctrine as announced in the foregoing authorities. If defendants,
The plaintiff’s theory clearly is that it was an action- to recover damages as for a conversion of the property pаrted with by him on account of the fraud, and with full knowledge of this theory the defendants fried the case to a finish in seeming acceptance of it, and the trial court instructed the jury in harmony with such theory, and I contend that after verdict rendered it is too late to challenge the correctness of such theory, even if the same was wrong, which I most emphatically denjc The plaintiff proved that the lands he contracted to purchase were not owned by the defendant at the time the -contract was made. He also proved the other facts alleged in the complaint, and the value of the stock of merchandise transferred to -defendants. The trial court fully instructed the jury upon plaintiff’s theory of recovery, and, among -other instructions, the jury were told: “If you find from the evidence that the defendants, -or either of them, stated to the plaintiff -that they were the owners of the land described in the -contract, and the plaintiff believed and relied upon such statements, and was thereby induced to make the -contract and to pay the money -and- deliver the goods, and you further find that such statements as to this title were false, then the pl-aintiff is entitled to a verdict.” Also: “If you find that
The position taken in the majority opinion that the plaintiff did not by some affirmative a-ct, other than -bringing this action, rescind the contract -prior to commencing the action, i-t seems to me, is enron-eo-us. If plaintiff had received - anything under the contract which it was -his duty to return in order to place the -defendants in s-tatu quo-, then such position would- be sound; but he had received nothing under the -contract, and therefore no -duty rested upon him to do any act prior -to commencing -his action. The -complaint sets forth sufficient facts -to entitle -plaintiff to- recover -the money and the value -of the property obtained from him through the fraud and unlawfully -converted by defendants to their -own use, without the averment of facts showing a rescission, and without any allegation of a -demand or refusal for the money and -property before suit. The failure to set forth these facts did not render the -complaint •bad, in view of the fact that opposing counsel made no point as to the form of the action -or the sufficiency of the complaint, -but tried the -case to a verdict upon the theory that the contract had been rescinded for the fra-ud, providing -the false representations were in fact made, and that plaintiff’s right was to recover what he had- parted with through the fraud. In fact, the answer of
Defendants centered their defense upon a denial of the representations alleged and in an endeavor to show that on January 1st and on the date of the trial they were able to furnish title to plaintiff of the land in question. Their testimony -upon the latter question was wholly immaterial. The contract was null and void on account of plaintiff’s election to treat it so by bringing the action, and- nothing which defendants could or did do thereafter towards getting title could be of any concern to' plaintiff. It cannot be doubted that the representations as to defendants’ ownership
In the majority opinion numerous cases are collated upon the proposition that no relief can be had for fraud in the absence of proof of damage or injury. I do not challenge the correctness of this doctrine, but I do assert that no court has gone to the extent of denying the right of rescission under the facts in this case. None of the authorities hold that it is necessary -to show actual pecuniary damage. In 14 Am. & Eng. Enc. Law, pp. 139, 140, the correct rule is asserted as follows: “A suit cannot be maintained*for equitable relief by way of rescission or canсellation of a contract on the ground of fraud, unless it is shown that damage or prejudice has resulted therefrom. If any damage or prejudice is shown, however slight, the party is entitled to relief. Pecuniary damage is not necessary to entitle a person to relief by way of rescission; but it is enough for him to show that he has been induced by material false and fraudulent representations to enter into a contract which he would not have entered into but for such representations.” In McLaren v. Cochran,
Plaintiff -did not -discover that defendants were not the owners of the land until just before ‘the commencement of this action on November 26th. As I s-aid before, plaintiff had nothing to restore to defendants in- order to place them in statu quo. He -did not attempt a rescission of the -contract by consent, an-d, from plaintiff’s standpoint, he coul-d not be expected to d-o so. Defendants had failed to furnis-h him the abstracts of title as stipulated- in the contract, although assured when he made the -contract that Akin had them at home and it would take only a few days to have them ready. Plaintiff at the time of transmitting the $2,000 cash payment, on October 7th, asked for hi-s abstracts, an-d- again- he wrote, before October 19th, requesting them. No answer was made to these lеtters. On October 20th 'he demanded to know why they had not been -delivered-, -and was told that Akin had -them at home.
The majority opinion is based upon the theory that this action is for deceit, and hence is an affirmance of the -contract, instead of a disaffirmance thereof. I -contend th-a-t, even so, the verdict cannot be disturbed, and -for the very apparent reason that said verdict was arrived at under a rule for measuring damages laid down by the trial -court and acquiesced in -by defendants’ counsel, and. whether right or w-rong, is immaterial, as the correсtness of such rule was -not and is not challenged, and it -became the law of the -case, the same as though the parties had expressly stipulated .thereto. Evidence was introduced upon this theory of the measure of damage, and upon none other, and I insist that after verdict rendered it is too late for -defendants to challenge the correstness of su-ch rule of damage. Even if defendants had laid a ■proper foundation f-o-r attacking the correctness of such rule, by excepting to the instruction embodying the same, still it would not avail them, as they cannot, after verdict rendered, change -the theory pursued by all during the trial without objection. But defendants are not attacking the correctness of the rule by which the jury was bound in fixing the damages, but th-ey attack the verdict for insufficiency of the evidence, and I maintain that under this ground- defendants cannot be heard to say that the rule of law by which the verdict was determined was erroneous. They cannot do indirectly -what they could not do- directly. In determining whether the evidence is sufficient to sustain the verdict, the evidence will be considered in the light of the instructions actually given, and not in the light of instructions w-hi-ch should have -been given. In other words, the instructions given must, when- not at
It is not contended that the evidence is not аmply sufficient to sustain the verdict, when tested in the light of the rule of -damage announced in the instructions to the jury; but it is asserted' in thfe majority opinion that the rule thus invoked has no application to this case, for the reason that the jury did not return a general verdict. Said opinion states that the damage and the amount thereof were awarded, not by the jury, but by the trial judge, and that therefore the court -is free tO' consider, and should consider, what the law is, and is not bound by its instructions previously given to the jury; and, finall)'-, it is- asserted in the majority opinion that -the record presents a case of mistrial on account of the defective verdict. This holding is, I think, based ..upon an erroneous premise. The verdict, while irregular, was not a nullity, and it responded to all the issues. It is not a special verdict, but a general oiie with special findings, and-, while the general verdict is irregular in not assessing the damage, it is clearly, in my opinion, sufficient when aided by the special findings. It was admitted in
The rule invoked in the majority opinion that, where a verdict is vacated and a new trial granted by the trial court upon the ground1 of 'insufficient evidence, the court in so doing is acting within its judicial discretion, and such discretion will not be disturbed, except in case of manifest abuse, has no application in this case. The order granting a new trial was not based upon this ground, and, furthermore, the evidence upon the theory upon which the case was tried, the correctness of which theory was not challenged, is concededly amply sufficient to sustain the verdict.
For the foregoing reasons, I firmly believe that the order appealed from should be reversed.