5 Ala. 596 | Ala. | 1843
The principal questions presented by this record, are believed to arise out of the bill of exceptions ; because .that -sets forth the facts of the case, upon which, with the principles •here to be laid down, the fate of the cause must ultimately be de-cided. Hence, although embraced by the last-assignment of-errors, they will be first considered.
2. Tbe next question arising on the bill of exceptions is, whether the court erred in charging the jury upon the facts as stated ? The charge was, that if the jury believed, from the evidence, that Preston was the agent of the plaintiffs, to secure the notes due them by Marshall; and took the note sued on, with the defendant .as security, at the time, having a mortgage on the effects of Marshall to secure himself personally, and did not inform the defendant of the existence of that mortgage ; and that defendant at the time he signed the note for Marshall was not in any manner notified of said mortgage; that, then, it was a concealment, which amounted to a fraud on the defendant, and they must find in his favor.
The broad principle assumed in this charge is, in a few words, that when a man Is taking a note, or obligation with security, and happens to know circumstances unfavorable to the credit, solvency, or responsibility of the principal, which are unknown to the person becoming security, and does not communicate, or make them known to him, that the omission to make them known is a fraud; which vitiates and destroys the binding efficacy of the contract.' This would be carrying the doctrine very far, and before it is adopted as the law of the land, ought to be well understood in its practical results, as well as sustained by authority. Is such a principle recognized, or acted upon, generally, by men of the most scrupulous honor and honesty ? Why does one man
But, the question is, would such concealment, as that disclosed by the evidence 'amount to a fraud, in legal contemplation. It is true, fraud, in its general acceptation may be defined the misrepresentation or concealment of a material fact. But, “ it is extremely difficult to advance any general principle, or elementary .doctrine on this subject. Cases of fraud depend peculiarly on the particular facts which have occurred, the relative situation of the parties, and their means of information.” [See Chitty on Con. 3d Am. ed. 223.) It may be laid down, that to constitute fraud, there mpst be a misrepresentation, or concealment of a
The concealment, or non-disclosure of facts, which amount to a fraud, must be “ of those frets and circumstances, which one party is under some legal, or moral obligation to communicate to the other; and which the latter has a right, not merely in foro conscientiae, but juris et dejure, to know.” [1 Story’s Com. on Eq. P. 216, § 207.] In treating further on the subject, the same learned author, remarks, “ for many most material facts may be unknown to one party, and known to the other, and not equally accessible, or, at the moment, within the reach of both; and yet contracts, founded on such ignorance on one side, and knowledge on the other, may be completely obligatory. Thus, if one party has actual knowledge of an event or fact, from private sources, not then known to the other party, from whom he purchases goods, and which knowledge would materially enhance the price of the goods, or change the intention of the party, as to the sale; the contract of sale of the goods will nevertheless be valid.” [Id. 217, 218.]
In the case of Laidlaw v. Organ, [2 Wheat. 195,] where this question substantially came up, Chief Justice Marshall, in delivering the opinion of the court, said: « The question in this case is, whether the intelligence of extrinsic circumstance^!, which might influence the price of the commodity, and which was exclusively within the knowledge of the vendee, ought to have been comrAunicated by him to the vendor? The court is of opinion, that he was not bound to communicate it. It would be .difficult to circumscribe the doctrine within proper limits, when the means of intelligence are equally accessible to both parties. But, at the same time, each party must take care not to say, or do any thing tending to impose on the other.”
It may be further remarked, that to constitute a fraud, an omission to communicate, or a concealment of facts in such cases, should at least be attended by evidence of some trust, or confidence, reposed by one party in the other. The contrary doctrine, to that here laid down, would be extremely inconvenient, and would open an interminable field of litigation. In a large portion
These views result in the conclusion, that the charge of the court below to the jury, was erroneous.
3. The application of the principles laid down to the second and fifth pleas, relied on by the defendant, will shew that they were both defective. Neither of them sets forth such facts, as amount to fraud. Consequently, the court erred in overruling the demurrers to those picas.
4. But the third pica sets forth, in substance, that the plaintiffs knew the property of said Marshall to be encumbered, and frau; dulently represented to the defendant, that Marshall was to have the privilege of discharging the note sued upon, by the proceeds of the property then in his possession; and that tho plaintiffs did not give said Marshall the privilege of so discharging said note; but that their agent has appropriated said property, then in said Marshall’s possession, to the payment of other debts, and that said Marshall is now insolvent. Here is an allegation of a misrepresentation, knowingly made by the plaintiffs to the defendant, calculated to mislead and deceive the latter; a misrepresentation “ calculated to lull the suspicions of a careful man, and induce him to forego, enquiry_into the matter,” and constitutes a legal fraud. We, therefore, conclude, the court below did not err in overruling the demurrer to the third plea.
But, for the errors arising upon the bill of exceptions, and in overruling the demurrers to the second and fifth pleas; let the judgment be reversed, and tho cause remanded.
I differed with my brothers in Rails and Caldwell v. Gaither, in what I considered a departure from the ancient and strict rule, which requires proof by the attesting witness, of the execution of the deed, where his evidencq is attainable. That case determines that an agent is competent to prove that a writing was executed by him, under authority from, and on behalf of his principal. Why the evidence of the agent should be admissible, and the principal incompetent in a case in which