Standard Manufacturing Co. v. Slot

98 N.W. 923, 121 Wis. 14, 1904 Wisc. LEXIS 6

• Court: Wisconsin Supreme Court
• Decided: March 22, 1904
• Status: Published

Opinion

Maeshall, T.

The court, against appellant’s objections, permitted evidence to be introduced respecting several transactions claimed to have taken place between its agent and strangers to the litigation, of the kind respondent was charged with. They were entirely independent of the occurrence under investigation. The evidence seems to have been offered to prove guilty intent on the part of appellant in making the alleged false representations which respondent claimed induced him to sign the contract. It was clearly irrelevant, and prejudicially so. It was entirely immaterial to plaintiffs cause of action whether its agent made false representations with specific bad intent or not. If false representations were in fact made, of such a character as to reasonably excuse respondent from reading the contract, and he was thereby induced to sign it without knowing its contents, it was competent for him to' rescind the same if he acted seasonably. If a person knowingly or ignorantly makes a false statement of fact in a business transaction reasonably calculated to deceive another and induce him to do that which he would not do with knowledge of the truth, and which has that effect, the act of such other is attributable to fraud and is not binding upon him unless he subsequently ratifies it with knowledge of the facts or in some other way precludes himself from rescinding it. Miner v. Medbury, 6 Wis. 295; Cotzhausen v. Simon, 47 Wis. 103, 1 N. W. 473; Davis v. Nuzum, 72 Wis. 439, 40 N. W. 497; Montreal R. L. Co. v. Mihills, 80 Wis. 540, 50 N. W. 507; Beetle v. Anderson, 98 Wis. 5, 73 N. W. 560; Hart v. Moulton, 104 Wis. 349, 359, 80 N. W. 599; Krause v. Busacker, 105 Wis. 350, 354, 81 N. W. 406; Zunker v. Kuehn, 113 Wis. 421, 425, 88 N. W. 605.

In Hart v. Moulton the court said:

“Our own decisions are replete with precedents where false representations of material facts, made to induce a sale, relied upon by the seller, were held sufficient to render the sale voidable at the election of the seller, and that, whether the purchaser knew or did not know the representations made by him were false, it being held sufficient if he either knew or ought to have known the truth of his statements before making them.”

Speaking on the same subject in Krause v. Busacker, the court said:

“If the representations were material and false, and the maker thereof either knew or ought to have known that they were false, or if he made them recklessly, with no knowledge on the subject, and the injured party relied upon them as true, without the present means of knowledge of their falsity, and suffered damage thereby, then the fraud is complete.”

The law being so definitely settled, to permit in a case of this kind proof of numerous independent transactions claimed to be similar in kind to the one complained of, but in no way involved in the litigation, thereby throwing the burden upon the party so attacked of meeting a multitude of collateral charges neither suggested by the pleading nor proper to be so suggested, violates some of the fundamental principles of trial evidence, and in a most prejudicial manner. Jones, Ev. § 140. In Baker v. State, 120 Wis. 135, 97 N. W. 566, the court discussed at considerable length the circumstances under which other occurrences than the one charged and forming the subject of the judicial investigation may be given in evidence. An examination of that case will show that the doctrine has no application whatever to a case like this. It is one that applies within very narrow limits, and the danger of exceeding the same is so great that counsel and 'court should be exceedingly careful in entering the field at all.

The court excluded evidence offered by appellant to the effect that its agent, in tbe transaction with respondent, was innocent of any bad intent. The ruling was proper for the-reasons which require the ruling of the court heretofore discussed to be condemned, though we must say the two rulings are not consistent.

Respondent testified that he supposed when the contract was signed that it was a commission agreement and refused to abide thereby upon finding that it was of a different character. For the purpose of testing his credibility in that regard he was ashed by appellant’s counsel these and other questions of a similar character:

“Q. You never thought of the subject of consignment until after the suit was brought, did you ?”

“Q. You never thought of the word ‘commission’ till after this suit was brought, did you ?”

All of such questions were ruled out on objections by respondent’s counsel. We cannot approve thereof. Respondent's case depended upon whether he was deceived into signing a contract different from the one made verbally between him and the agent. Within all reasonable limits, cross-examination of respondent respecting circumstances calculated in any appreciable degree to throw light on that subject should have been permitted. The right of cross-examination is of great importance in discovering the truth in a judicial investigation, and should be liberally allowed so long as anything of value is called for thereby. McMahon v. Eau Claire W. W. Co. 95 Wis. 640, 70 N. W. 829. It seems that the-court plainly unduly limited appellant’s right in that regard.

The most important complaint made by appellant’s counsel is because the court failed to direct a verdict in its favor and failed to render judgment in its behalf notwithstanding-the verdict, because the evidence was insufficient to warrant a finding that appellant was defrauded into signing the con- ' tract. The evidence and circumstances respecting that question are in the main as follows: The contract was made-June 4, 1902, and was plain. It expressly provided that goods were not to be furnished thereunder to be sold on commission. All its features were those of a sale, not a commission, contract. In two lines immediately above where respondent signed the paper were these words addressed to appellant :

“Please ship the goods herein described, on the terms and conditions herein stated, all of which we have carefully read and find complete and satisfactory. We understand that agreements to be binding must be noted hereon.”

Immediately above the signature of appellant occurred this language:

“The amount of this order is payable in four equal payments due in two, four, six and eight months from date of invoice,” etc.

Under respondent’s signature and in close connection therewith, in a conspicuous way, was this language, plainly intended to fonn a part of the contract:

"The Standard Mfg. Co. to send a bond to the Commercial & Savings Bank of Racine, Wis., guaranteeing a profit of at least $86.50 for one year or to repurchase any goods on hand at purchase price as above provided.”

Respondent testified thus:

I did not read the contract because I hadn’t the time. That is my only excuse. I didn’t have the time to read the two lines over my name. I didn’t take the time. My business Was urgent. I did not know what the amount of the contract was. I knew I was buying some extracts and toilet articles, but how much wasn’t stated. I understood I had the goods on commission. There was no rate of commission, only we were to have $86.50, which was supposed to be our profit. The agent furnished me the contract after I signed it. No one prevented me from reading it. I put it on my desk. He said I didn’t have to pay for the goods till they were sold. Relying on that I consented to trade. He asked me to sign my name. I asked him if the paper contained what we had talked about and he said yes. I relied on that. He asked me to read it I said I Rad no time. I asked Rim if Re Rad made the contract witR otRers wRo Rad read tRe paper. He answered, “Yes, lots of them.” I am sure Re asked me to-read tRe paper before I signed it. I cannot say tRe word “commission” or word “consignment” was nsed. I understood I was not to pay for goods not sold. TRe agent said that. I did not ask Rim to read tRe contract It is not customary for any of us to read sucR contracts. He asked me to read it someway. I asked Rim wRetRer it contained wRat we tallied about, and wRat Re said I do not know. I really could not say for sure. He asked me 'to read it, but in wRat way Re expressed Rimself I do not know. I never read tRe paper Re left witR me.

TRat fails to show witR any degree of definiteness that appellant’s agent made any representations to respondent tbat tRe paper was written according to tRe verbal understanding. At tRe end of respondent’s cross-examination, as will be seen, Re said Re was not sure wRetRer sucR representations were made or wRat was said. TRe only thing Re seems to Rave-been sure of is that Re was requested to read tRe paper before signing it, and that tRe only reasons wRy Re did not do so were because Re was too busy and because Re did not usually read sucR papers before signing them. True, after respondent confessed that Re could not say “for sure” wRetRer any representations were made to Rim as to tRe paper being written according to tRe verbal agreement, a direct question was put by tRe cross-examiner, evidently for tRe purpose of showing Row- readily respondent would return to Ris first story when Ris attention was drawn directly to the necessity therefor, as follows: “You asked Rim if it contained just wRat you and Re talked ?” to which Re answered: “He said yes, Re knew I was busy.” Under the circumstances that hardly weakened Ris confession that Re could not say whether the agent made any representations to Rim or not, as regards whether the paper was drawn according to the verbal understanding. True, Re said on Ris direct examination that Re was induced to sign the paper by the representations made by the agent, but he also said, as we have seen, that the sole reason why he did not read the paper was that he was too busy; that he was requested to read it, and was not pre- • vented by any person from doing so, and that it was customary to sign such papers without reading them.

In view of the well-settled principle that he who alleges fraud as a ground for relief in a judicial proceeding, to succeed, must establish the charge by a preponderance of the evidence, which also must be clear and satisfactory (Rice v. Jerenson, 54 Wis. 248, 11 N. W. 549; F. Dohmen Co. v. Niagara F. Ins. Co. 96 Wis. 38, 11 N. W. 69), and that other principle that he who signs or accepts a written contract, in the absence of fraud or mistake is conclusively presumed to know its contents and to assent thereto (Wilcox v. Continental Ins. Co. 85 Wis. 193, 197, 55 N. W. 188), it is extremely difficult to perceive how the verdict in this case can be justified by the evidence. There is no positive, consistent evidence that any false representations were made by appellant’s agent respecting the contract, and certainly none which, under the circumstances, can fairly be said to excuse .respondent for not knowing the character of the paper which he signed.

The law applicable to the aspect of this ease last suggested has been so recently discussed that it seems hardly necessary to go over the subject again. Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246; Kaiser v. Nummerdor, 120 Wis. 234, 97 N. W. 932. It is there emphatically laid down that a person is bound to know the contents of a paper which he signs, no act of the adverse party or circumstance for which he is responsible occurring reasonably calculated under the circumstances to divert such person’s attention therefrom, and which does so effectually. The fact that a false representation is made in respect to the paper is not necessarily sufficient to excuse’ such person for affixing his signature thereto in ignorance of its contents, unless under all tbe circumstances, in view of bis duty to give reasonable attention to tbe protection of bis own interests, tbe false representation was still reasonably calculated to and did induce bim not to make tbe investigation wbicb be otherwise would bave made. A person cannot sign a paper in ignorance of its contents and thereafter excuse such ignorance by tbe mere plea that be was busy or that be is habitually neglectful in such circumstances, and throw upon tbe courts tbe burden of protecting bim from tbe consequences of bis imprudence. Tbe policy of tbe law is fixed to tbe effect that be who will not reasonably guard bis own interests when be has reasonable opportunity to do so, and there is no circumstance reasonably calculated to deter bim from improving such opportunity, must take the consequences. Courts do not exist for tbe purpose of protecting persons who fail in that regard. Where there is such inattention upon tbe one side and fraud upon tbe other, and but for tbe former feature tbe latter would not be effective, and loss occurs to tbe inexcusably negligent one, be is remediless; not because tbe wrongdoer can plead bis own wrongdoing as an excuse for not making reparation, but, first, because tbe consequences are attributable to inexcusable inattention of tbe injured party; and second, because tbe court will not protect those who, with full opportunity to do so,’will not protect themselves. Much difficulty has been experienced at times in not appreciating that there may be fraud upon one side, concurring with inexcusable ignorance upon tbe other, resulting in an injury, when but for tbe latter fault it would not bave occurred, and there be no judicial remedy. That comes largely from paying more attention to eloquent passages in some judicial opinions condemning tbe wrongdoer — and not too severely — and condemning bis attitude of confessing tbe wrong, so to speak, and shielding himself from tbe consequences, or attempting to do so, by tbe ignorance of bis victim, than to tbe decision rendered and tbe real philosophy thereof, wbicb will be found, as a general rule, to be that the ignorance was in the particular case excusable, testing the conduct of the wronged party by the duty of every one to pay reasonable attention to his own interests. That difficulty is also largely attributable to the tendency of some authors to select such eloquent passages for their text instead of carefully deducing from the decision the rule of law applied in the case. A good illustration of that is the quotation relied upon by respondent’s •counsel from 1 Bigelow, Fraud, § 523:

“If the representation were of a character to induce action, •and did induce it, that is enough. It matters not, it has well been declared, that a person misled may be said, in some loose •sense, to have been negligent (in reality negligence is beside the case where the representation was calculated to mislead' and did mislead) ; for it is not just that a man who has deceived another should be permitted to say to him, ‘You ought not to have believed or trusted me/ or ‘You were yourself .guilty of negligence.’ ”

That was taken from tire opinion of Justice Dickey in Linington v. Strong, 107 Ill. 295. The point presented for decision was whether the court erred in giving the following instruction:

“The law requires every person to exercise reasonable prudence in business affairs, and before relieving a party from the obligations of a contract upon the ground of fraud, it must appear that he exercised reasonable care and prudence to learn the nature of the contract before executing it; if the •defendant could read and had an opportunity to read the contract before signing,, it was his duty to do so, unless induced not so to do by wilfully false statements of the plaintiffs, or one of them, as to its being a copy of the original; and if the defendant had full opportunity to read the contract before signing it, and was not induced to sign it by false statements made by plaintiffs, or either of them, the defendant would not be permitted to deny knowledge of the contents thereof.”

The instruction was approved. It will very clearly be seen that it states the law quite differently from what might be gathered from the quotation incorporated into the text by Mr. Bigelow.

We should say in passing that it is immaterial in such a case whether the statements were wilfully false or not, ox* whether the party making the false statements at the time thereof had any specific intent to deceive. In that respect the quoted instruction was open to sei'ious ciiticism. The language of the learned judge in the opinion, which influenced the framing of the text we have taken the'libei’ty to criticise, was evidently used forgetting for the moment the well known maxim, "Vigilcmtibus, et non dormientibus sue-currunt jura” (ike law assists the vigilant, not the careless). That under some circumstances the law leaves a party where-it finds him, and that one of such circumstances is where-one appeals for redress who is guilty of an inexcusable fault in falling into the difficulty complained of, is well settled.

Applying the foregoing to this case, admitting for the pui’-poses thereof that tkei*e is some evidence tending to show false representations, it seems that l'espondent, upon his own testimony, was inexcusably ignorant of the contents of the-paper he signed. He testified, in effect, that his eyesight was good, and the evidence shows that he was a business man of average intelligence and of considerable experience. A casual glance by such a person at the few lines in close connection-with the signature would have acquainted him with the fact that he was not making a commission contract. A casual observation of the two lines immediately above his signature would have di*awn to his attention the fact'that he was signing a stipulation that he had read the contract and knew its contents and was satisfied thei'ewith. Failure to observe-those features, txnder the circumstances, leads to the conclusion that respondent in effect closed his eyes to what was •plainly before him. . He admitted over and over again that he was requested to read the paper; that the reason why he did not was because he was busy; and he said, as befoi’e-shown, that no one prevented bim from reading it. There-was' nothing about the relations between him and the agent-to lull him into security. They were entire strangers to each other, and respondent and appellant were likewise strangers. The evidence shows that he was pressed to make the deal to such a degree as should have suggested the advisability of taking time to learn what was contained in the paper before-affixing his signature thereto. To sign it as he did, after being requested to read it, when a mere glance at that portion immediately connected with where his pen rested on the paper would have informed him of the nature thereof upon-, the vital point, and the laying of the paper away and not' looking at it when he had opportunity to do so, shows inexcusable inattention to his own interests in a high degree. His excuse that it was not customary for him in signing such-papers to read them, instead of tending to show that his conduct was consistent with proper care, rather indicates habitual negligence. If under the circumstances stated appellant saw fit to shut his eyes not only when he signed the-paper, merely because he was busy and it was customary for him to take that course, but thereafter when there was no reason of that kind to deter him from reading the instrument, relying upon .the statement of a mere stranger acting; in an adversary capacity as to what it contained, he cannot well complain if the courts have not time to open their doors to afford him relief.

The judgment must be reversed and a new trial ordered. If counsel for appellant had moved the court below to change-the answers to the special questions so as to conform to the-evidence on the subject of respondent’s negligence, the case might go back for judgment in appellant’s favor. Under the established practice a mere motion for judgment notwithstanding the verdict is no more than a motion for a directed verdict or a motion for a nonsuit, or a motion to set the verdict aside and grant a new trial, as regards a final disposition of tbe ease without a new trial, upon tbe judgment entered adverse to sucb motion being reversed upon appeal.

By the Court. — Tbe judgment appealed from is reversed, .and tbe cause remanded for a new trial.