Sellar v. Clelland

2 Colo. 532

• Court: Supreme Court of Colorado
• Decided: February 15, 1875
• Status: Published

Opinion

Beleord, J.

A misrepresentation to be material must be in respect of an ascertainable fact, as distinguished from a mere matter of opinion. To be binding, it must not only be material, but it must be a determining ground of the transaction; both facts must concur, there must be false and material representations, and the party'seeking relief should have acted upon the faith and credit of such representations. It is not, however, necessary that the representation should have been the sole cause of the transaction. It is enough that it may have constituted a material inducement.

An intention to deceive being a necessary element or ingredient of fraud, a false representation does not amount to a fraud at law, unless it be with a fraudulent intent. If a man says what is false within his knowledge, or what he has no reasonable ground for believing to be true, and makes the representation with the view to induce another to act upon it, who does so accordingly to his prejudice, the law imputes to him a fraudulent intent, although he may not have been instigated by a morally bad motive. Kerr on Fraud and Mistakes, 54, 56. It is averred in the declaration, that to induce the appellees to enter into the contract for the conveyance of freight for the appellants, from Fort Harker, in the State of Kansas, to Fort Arbuckle, in the Indian territory, the appellants did falsely, fraudulently, and deceitfully represent that the road, sometimes called the Chisholm trail, leading from Fort Harker to Fort Arbuckle, and over which freight from one place to the other would naturally pass, was not a road over which “ Texas cattle,” or diseased cattle of any kind, had ever passed or been driven, and that the road was entirely free from all infectious disease to cattle, and was a good and safe road to the lives and health of cattle to travel upon, and transport freight upon, with ox teams. Whereas, in truth and fact, it was not so, etc. It is further averred, that the appellants, when making these representations, knew them to be false. That the appellees were ignorant, and had no means of ascertaining the fact, but relied wholly upon such representations, etc., whereby the damage complained of, occurred, etc.

The record shows that the facts represented to be as above set forth were claimed to be within the actual knowledge of the party making such representations. It is strenuously insisted upon, by the counsel for the appellant, that it is necessary to a recovery that the appellees should show that the defendants, when making the representations, knew them to be false, or in other words, that an intent to deceive must be established by positive proof.

In regard to representations generally, I conceive it to be necessary for the party relying on the representations to show not only that they are false, but that the party making the same knew them to be false. But when one has made a representation positively, or professing to speak as of his own knowledge on the subject, the intentional falsehood is disclosed, and the intention to deceive is also inferred, or at all events, this is so when the matters falsely represented are peculiarly within the knowledge of the party making them, and are not known to the party to whom they are made. In such a case, the proof would seem to be complete when it was shown that the defendants made the representations ; that they were made to induce plaintiffs to enter into the contract; that, relying upon the same, they did enter into the contract; that the representations were false ; that the plaintiffs sustained damage, and that such damage was occasioned by reason of the falsity of such representations. Shark v. Mayer, etc., 40 Barb. 256; Hilliard on Rem. Torts, 289; Bennett v. Judson, 21 N. Y. 238; Marsh v. Falker, 40 id. 562; Meyer v. Amidon, 45 id. 169; Craig v. Ward, 36 Barb. 378; Hazard v. Irwin, 18 Pick. 108; Hammet v. Emerson, 27 Me. 326; Stone v. Dery, 4 Metc. 156; Lobdell v. Baker, 1 id., 200.

It is further insisted that, by proper diligence, the appellees could have ascertained the truth or falsity of the representations, before entering upon the contract. When the means of knowledge are at hand, and equally available to both parties, and the subject about which the representations are made is open to their inspection, if the party to whom the representations are made does not avail himself of these means and opportunities, he will not be heard to say that he has been deceived by the misrepresentations. If, having eyes, he will not see matters directly before them, he will not be entitled to favorable consideration when he complains that he has suffered from his own voluntary blindness, and been misled by over confidence in the statements of another. But we do not think the case at bar is of such a character. The record shows that the representations were made at Sheridan, and that the Chisholm trail was a very considerable distance therefrom. Inspection of this road was not possible without a long journey being made for that purpose, and certainly the law would not devolve such a duty. Besides, this trail was through a wild and uninhabited tract. If the subject is a road not in the country where the representations are made, and such representations are made as within the knowledge of the party making them, such person should not be heard to say that another might have known the truth by proper inquiry, and under such circumstances, the argument is the stronger that reliance has been placed on the representations.

No man should be allowed to complain that another has relied too implicitly on the truth of what he himself stated. Kerr on Fraud and Mistakes, 79, 80, 81; Boyce’s Ex’r v. Grundy, 3 Pet. 218; Reynell v. Sprye, 1 D., M. & G. 660. Indeed, it is laid down in all of the above authorities, that a man to whom a particular and distinct representation has been made is entitled to rely on the representation, and need not make any further inquiry. He is not bound to inquire, unless something has happened to excite suspicion, or unless there is something in the case, or in the terms of the representation, to put him on inquiry. Mr. Justice Johnson, in delivering the opinion of the supreme court in the case above cited, says : “ It is said that it ought to have put him on inquiry, but he was in possession of Mr. Boyce’s positive assurance to the contrary, and had a right to rely upon that assurance, without inquiry.” ' And Mr. Kerr, speaking to the same point, says : “However negligent the party may have been to whom the incorrect statement has been made, yet that is a matter affording no ground of defense to the other.” See Reynell v. Sprye, supra.

The court allowed the plaintiff to introduce in evidence the conversation which accompanied the making of the contract, and this is assigned for error. When the gravamen of an action is fraud in inducing the plaintiff to enter into a contract, the rule does not apply that anterior and accompanying stipulations and representations are merged in the contract; but they may be proved by parol evidence. Hilliard on Remedy for Torts, 490; Koop v. Horsley, 41 Barb. 454; Bank v. Kennedy, 17 Wall. 24; Eastman v. Bennett, 6 Wis. 232. Objection is also taken to the admission of parol evidence to prove the contents of the written contract pertaining to the transportation of the freight. It appears that this contract was destroyed by the consent of Clelland and Kellog. It was a destruction effected by their joint labors.

It is insisted that a party seeking to make secondary proof of the contents of writing which he has voluntarily destroyed, or to the destruction of which he has assented, or in which he has participated, must first, by legal evidence, repel all inference of fraudulent purpose. Such, indeed, is the rule. We think, however, that the evidence repels such inference. While the rule is a salutary one, yet it should be so applied as to promote the ends of justice. When no suspicion attaches that the paper has been fraudulently destroyed, and the paper is of that description that no doubt can arise as to the proof of its contents, there can be no danger in admitting secondary evidence. The reasons which Lord Coke assigns for requiring the production of the original are—

1. To enable the court to give a right construction to it jfrom the words.

2. To see that there are no material erasures or interlineations.

3. That any condition, limitation or power of revocation 'may be seen. Renner v. Bank, etc., 9 Wheat. 597; Blake v. Flash, 44 Ill. 304. It is not the written contract to transport the freight which is the gist or gravamen of the action, but the representation as to the character of the road. Mr. Kerr, page 69 of the work above cited, says:

“A representation is not a part of the written instrument, but is collateral to it and entirely independent of it.” It would, therefore, seem to me that, when the action rests on the false representation, the same strictures should not apply to the proof of the written contract as when the written contract is itself the foundation of the action. Be this as it may, we think the court, under the proof adduced as to the circumstances attending the destruction of the written instrument, committed no error in receiving parol evidence as to its contents. Clelland positively denies that any bad faith was used in procuring the destruction of the instrument, and Kellog discloses none. During the progress of tbe trial the plaintiffs were permitted by the court to file an amended declaration. The original declaration charged that John P. Sellar, Edward F. Kellog, Manuel Otero, Charles E. Morehead, Eugene B. Allen, David W. Powers, James Powers, David B. Powers, Henry L. Newman and Percival Gf. Lowe, were partners, and that Kellog, on behalf of them as well as of himself, made the representations complained of. The amended declaration omitted the names of all the defendants except Sellar and Kellog. The cause of action in the amended declaration was the same as that set forth in the original. The appellants insist that the court erred in permitting the amendment, and that, upon the failure to show that all the defendants named in the original declaration were partners, it should have sustained tbe motion made for a nonsuit. Our statute on the subject of variances and amendments is taken from the statutes of Indiana, and I have carefully examined the decisions of that court to ascertain what construction they have placed upon it, and with the following result: The granting of leave to amend the pleadings while a cause is on trial is a matter within the sound discretion of the court, and unless it appears that the discretion has been improperly exercised, the supreme court will not notice the ruling. Volty v. Newfert, 17 Ind. 187. Amendments may be made in the complaint with the leave of the court after trial begun, if the amendment does not add a new cause of action so as to injure the defendants. Landig’s Adm’r v. Durham, 21 Ind. 232. An amendment of a complaint by leave of the court, pending a trial, if the amendment added nothing to the material averments of the complaint, could not be a fatal error, nor in such case could the failure to reswear the jury after such amendment. Crassen v. Sworeland, 22 Ind. 427.

The great object of a trial is to secure justice to the parties engaged in the suit. Substantial rights should never be sacrificed to mere forms, and amendments should at all times be liberally allowed when they do not lead to surprise and injury. It is no uncommon thing in actions of tort to charge numerous persons with the commission of a wrong and then take judgment against one, or during the trial to enter a nolle prosequi as to some and proceed against the rest. The only substantial change made by the amended declaration is in the number of parties. The cause of action remains the same. In the original declaration Kellog is charged with having made the representations, and it is so charged in the amended declaration. The plea of not guilty, the only plea to the action, was filed, and it was not necessary to file it again. There it stood for the defendants’ benefit, under which they could give any conceivable matter of defense, and which the record shows they did. Eames v. Morgan, 37 Ill. 272.

There is no pretense that the amendment in any manner prevented the defendant from making his defense, and when it appears that he suffered no injury, he should not be heard to complain. It is a well-settled rule in equity practice that when a suit has been instituted for the purpose of setting aside a transaction on the ground of fraud, the bill will not be suffered to fail because the complainant has incorrectly and untimely alleged a third person to have been a participator and joint actor in the fraud. Kerr on Frauds, etc., p. 382; Reynell v. Sprye, supra. The same just principle should find a lodgment and recognition in a court of law, especially when we have statutes so broad as those on the subject of amendments and practice. See acts of 1872, p. 118 and 99.

We are, therefore, of the opinion that the court committed no error in allowing the amendment.

It is claimed by the appellants that, had the appellees exercised reasonable care when they found that Texas cattle were traveling the Chisholm trail, the injury would not.have happened; that it was the duty of the appellees to retrace tbeir steps, etc.

Even when false representations have been made, the party to whom they are made is not justified in continuing his reliance upon them when the evidence of their falsity stares him in the face, unless it should appear that to retract is as dangerous as to advance. When it became known to appellees that the representations made by Kellog were false, they were fully one-third of the way on their journey to Fort Arbuckle. The distance from Fort Harker, the place of starting, to the Arkansas river, is one hundred miles. The Texas cattle were met while crossing this river, and at this point Clelland gained his knowledge that Kellog had misrepresented the fact, and misstated the true condition of the road. He was then in the midst of the peril, and in the exercise of due prudence he had a right to weigh the prob: able danger of moving forward or backward. He may have been at fault in his judgment when he concluded to go forward, but if he acted as an ordinary prudent man would act under such circumstances, his conduct must be regarded as blameless. The question was fairly left to the jury, by instructions which are not open to censure, and the jury having resolved the points against the appellants, we must abide their finding.

A more difficult question is presented on the subject of the true rule of damages in such cases. No uniform test or rigid rule fixes the extent of compensation in actions in the nature, either of trespass or case for injuries to property. Different measures of redress may be obtained for the same injury, under different circumstances. What is compensation to the defendant; what would make his loss good to him under the situation, under which he was placed at the time the injury occurred ? is the inquiry ; and in determining it, all material and relevant circumstances should be considered. Sedg. on Damages, 6th ed., n. 2, p. 553.

At the point where the cattle died, there was no market, and their value at that point could not be determined. Fort Sill, distant some seventy miles, was the nearest point, but it does not appear that there was any market for American cattle at that point. Ellsworth was distant two hundred and twenty-five miles from the point the cattle died, and it appears, from the evidence, that no American cattle were being sold there in August. Some were sold in October. Salina is twenty miles east of Ellsworth, and this appears to be the only point where there was a market at the time the cattle died. The court allowed evidence as to the value of American cattle at this latter point, and this is complained of. We think the admission of this evidence was correct, and fully within the rule laid down in Gregory v. McDorrell, 8 Wend. 435; Dana v. Felder, 2 Kern. 40; Berry v. Dwinal, 44 Me. 267; Dubois v. Gloub, 52 Penn. St. 238; Savercool v. Farwell, 17 Mich. 308.

In Durst v. Burton, 47 N. Y. 175, it is held that a reasonable range of time is allowed, in which to average the price (3 Hill, 333), so the price at other places may be shown, under some circumstances, for the purpose of proving the value at the designated place. 22 Barb. 154. “And to some extent,” the court says: “ This class of evidence is within the discretion of the court.”

The price at Salina was necessarily some guide to a determination of the value at the point where the cattle died, and, therefore, receivable; so also, the price of cattle at Ells-worth in October and November.

On the subject of damages, the court gave the jury the following instruction: “If the plaintiffs’ cattle sickened and died, and their sickness and death are attributable to the former presence of Texas cattle upon the same trail, you may allow to the plaintiffs the reasonable value of such cattle, at the time of the loss. If plaintiffs were, from the same cause, delayed and hindered in their journey, and so were put to expense in employing and boarding of their servants, which they would not otherwise have incurred, you may allow them for this. If, also, they expended money, or transferred and exchanged other property for cattle in the Indian nation, with which to continue their journey, and owing to the sparsity of settlements there, or the absence of a market, the plaintiffs were under the necessity to pay for the cattle so bought, more than the same were worth, and if a man of ordinary prudence would have acted as plaintiffs did, if placed in the like circumstances, then you may allow the plaintiffs for the difference between the amount so necessarily expended in the purchase of cattle, and the reasonable value of such cattle at the time of the purchase thereof.”

The recovery of consequential damages in actions for torts is not subject to the same limitations that are applied to actions of contract. In the former class of cases the question is, not whether the damage entered into the consideration of the parties in advance, but simply whether it is fairly and directly the result of the injurious act. The plaintiff would not only be entitled to recover the reasonable value of the cattle that died, but also the value of his care, attention, and expense in attempting to preserve them. If, in order to remove his wagons and freight from the place they were left, by reason of the death of the cattle, to Fort Arbuckle, the point of destination, or to Fort Harker, the point of starting, it was necessary to buy other cattle, and if, owing to the absence of a market, he was compelled to pay a higher price than would have been necessary at a marketable point, and these results sprung from the original illegal acts of the defendants, then the difference in value would seem to be a legitimate subject of damage. To lay down any other rule would deprive the plaintiffs of that measure of indemnity and compensation which the law constantly attempts to afford the injured. Wentz v. Morrison, 17 Tex. 372.

It would, therefore, seem that the instruction is not open to objection. After the defendants had closed their case, the court permitted the plaintiffs to introduce witnesses to establish the value of the cattle lost by the plaintiffs, and this is assigned for error. The objection is one as to time, and not as to pertinency. The evidence would have been admissible if offered before plaintiffs closed their case. Its introduction afterward was a matter of discretion, and is not assignable for error. It is a practice, however, that should not be greatly encouraged. The defendants asked the court to instruct the jury that if, after the plaintiffs’ return from Fort Arbuckle, the contract mentioned in the declaration was destroyed, and the plaintiffs released from its further fulfillment, and that such destruction of said contract and release therefrom was so made in consideration of the losses sustained by the plaintiff, then the jury should find for the defendants.

This instruction the court declined to give. We have carefully examined the evidence on this subject of release, and find nothing on which this instruction could rest. A question has suggested itself to us, as to the joint liability of the defendants, but inasmuch as it was not raised in the court below, nor included in the assignment of errors in this court, nor mentioned in the argument of appellants’ counsel, we have declined to consider it. Moril v. Derby, 34 Vt. 449, 450; Harris v. Plant & Co., 31 Ala. 644.

It appearing that the case has been fairly tried on its merits, that the law was fairly applied, and no cause appearing why the judgment should be disturbed, it is accordingly

Affirmed.