Holbrook v. Burt

39 Mass. 546

Opinion

Wilde J.

drew up the opinion of the Court. Several exceptions were taken to the decisions of the Chief Justice, who presided at the trial of this case, and to his instructions to the jury. These exceptions have been examined by the Court with the careful attention which the importance of the case required, and we are all of opinion that they cannot be sustained.

The first objection made at the trial was to the admission of oral testimony to prove representations made before the written contract. This objection, however, was not much urged at the argument. If the evidence had been offered to prove a warranty, the objection would have been maintainable ; „but it was admitted, as tending to prove fraud and deception, and in that aspect it was undoubtedly admissible evidence.

But the plaintiffs’ counsel contend, that if this evidence were admissible, the jury should have been instructed, that it would be immaterial, unless they should be of opinion from the evidence, that the defendants relied on the plaintiffs’ representations. Instructions to that effect, would undoubtedly have been given, if the Court had been requested to instruct the jury on that point. But a party cannot except to the omission of the Court to instruct the jury on a question of law, unless it be raised at the trial, and the Court be requested to instruct the jury on the question. It does not appear that the law involved in the exception was questioned at the trial; nor does it appear from the report of the evidence, that any instruction as to the law on this point was required. The presumption undoubtedly is, that the defendants did rely on the representations made, and there was no evidence to rebut this presumption. It is, however, a sufficient answer to the exception, that the Court was not requested to instruct the jury as to the point now made.

Then it was objected by the plaintiffs’ counsel, that if the representations were fraudulent and were sufficient to avoid the bond as to the nominal plaintiffs, yet, as the bond had been assigned for a valuable consideration and bona fide to one Amos Davis, who is the real plaintiff in interest, the defendants cannot avail themselves of the same defence, as against Davis; nor can they rescind the contract on that ground, because they did not give him seasonable notice of the fraud after they had discovered the same. The instructions to the jury on this point were, “ that the rights of Davis, the assignee, in this case, were in all respects the same as if the action had been commenced and prosecuted by the obligees, and they were the holders of the bond, and that the defendants might set up any defence, as against him, which they could have done against the obligees themselves ; with this exception and limitation, that they could not avail themselves of any payment made to the nominal plaintiffs, or any release made, or other act done by them, after notice of the assignment of the bond.” And we are of opinion, that there is no foundation for any doubt of the correctness of the law as thus laid down. The assignment of a chose in action, negotiable securities excepted, is not by the common law a valid transfer of the title. But courts of lav for a long time have taken notice of such assignments, so far is to allow the assignee to maintain an action in the name of the assignor, and to protect him against any collusion between the debtor and the assignor, or any other fraudulent practices to defeat the action.

But the counsel for the plaintiffs have argued, that such an a¡ signment is valid if assented to by the debtor, and they rely o.i a passage in Story on Equity, 305. “ At law,” the learned author remarks, “ with the exception of negotiable instruments and some few other securities, this ” (that choses in action could not be transferred by assignment) “ continues to be the general rule, unless the debtor assents to the transfer ; for if he does, then the right of the assignee is cotnplete at law.” This passage is liable to misconstruction ; but the cases cited in support of it show clearly, that it was not intended to assert that the mere assent of the debtor would make an assignment of a chose in action a valid legal transfer, a proposition which cannot be maintained, but that the word “ assent ” was used in a qualified sense, and is limited to such an assent as would amount to a promise to pay the assignee. The cases cited are mostly of this description, in which the actions were brought in the names of the assignees, and were founiied on the promises to them. And, no doubt, such a promise is valid the assignment being a sufficient consideration therefor. 1 H. Bl. 239 ; 1 Bos. & Pull. 447 ; 14 East, 582; 9 Bingh. 372 ; 3 Barn. & Cressw. 842. This question, however, is not material in the present case ; for there is no evidence, that the assignment was made with the assent of the defendants. Al* that appears is, that they had knowledge of the assignment after it had been made. If it had been proved, that the bond had been assigned with the assent of Burt, the principal defendant, and that he knew it had been obtained from him by fraud and did not communicate his knowledge to the assignee, that, we think, would be a fraudulent concealment on his part, and would preclude him from setting up the fraud of the nominal plaintiffs to defeat the action. But no such assent was proved, nor does it appear that at the time the assignment was made the defendants had any knowledge of the fraud. But the plaintiffs’ counsel contend, that when the principal defendant did discover the fraud, he was bound to give notice of it to the assignee; and that he had unreasonably neglected so to do. The fact relied upon to prove, that the defendants had knowledge of the fraud as early as July, 1836, was, that one Lombard, a witness, was then employed to ascertain the quantity of lumber on the township, and that he reported to the defendants, that there were only six million feet on the west half of the township. But this did not prove, that the deficiency might not be made up from the other half of the township; and if the defendants had good reason then to believe that there would be a deficiency, still that was no proof that the representations of the plaintiffs were fraudulently made. To establish that fact, the defendants must prove, that the plaintiffs knew or had good reason to believe, that there was a deficiency, when they made the representations. The defendants denied that they had knowledge of the fraud, until long after July, 1836, and some time after this action had been pending ; and there was no proof to the contrary. The defendants therefore had good right to rescind the contract, if the offer of the defendants to reconvey the land would vest in the plaintiffs their original title to the land, so that substantially they would be in the same situation and condition in which they were before the conveyance. The right of Burt, the principal defendant, was a mere right of redemption, and it was entirely worthless. The land was mortgaged to the plaintiffs as security for the defendants’ notes and securities greatly exceeding the value of the land, so that if the equity of redemption should be sold by the attaching creditors of Burt, it could never avail them to any beneficial purpose, or to any prejudice of the plaintiffs. For this, as well as for other reasons appearing in the report, we think the defendants had a right to rescind the contract, and that the offer so to do was made within a reasonable time after the fraud was discovered by the defendants. It is contended by the plaintiffs’ counsel, that whether the offer was made within a reasonable time or not, was a question for the jury to decide; and this is unquestionably true, if there was any fact in dispute on that point. But it does not appear, that there was any fact in dispute material to the question. The only evidence of the time when the fraud was discovered, was the admission made by the defendants at the trial. No fact therefore was assumed by the Court ; for the knowledge of the defendants, that there was a deficiency, was no proof of fraud. There being then no material fact in dispute as to this question, it was for the Court to decide whether the offer to rescind was made within a reasonable time.

The last exception to the instructions to the jury relates to the guaranty of Wheelock and Wentworth, as to the amount of lumber on the township. The plaintiffs’ counsel contended, at the trial, as they do now, that the defendants’ only remedy for any deficiency, was on the guaranty. The jury were instructed, that if the defendants had such a remedy, they might nevertheless rescind the contract with the plaintiffs, on. the ground of fraud. And this instruction also we think correct. If the guaranty had been made by the plaintiffs, the question would be different. The contract with Wheelock and Went-worth has no connexion with the subsequent contract between the present parties, except that it may perhaps tend to prove, .hat it was made for the purpose of inducing the defendants more readily to credit the plaintiffs’ misrepresentations.

Judgment on the verdict.