Francis H. (Francis Hermann) Bohlen.

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J., observes, every deceit includes a lie, it follows that the repre-
sentation, and promise of defendant are not comprised within the
legal acceptation of that term. The test of a lie is, that the fact
asserted is not true at the time ; which cannot be predicated of the
facts in this case ; for, although the defendant promised with the
intent not to perform, it was not then false, nor could it be. It re-
ferred to an act to be done in future. Until the defendant had
refused to endorse, it could not be said he had violated his purpose.

The case of Thompson v. Bond, (i Campb. 4), was this: the
plaintiff attempted to recover in assumpsit, for services rendered
to a third person. It was not denied that the defendant had solicited
the plaintiff; and promised to see him paid; but it was a collateral
undertaking, and not in writing. It was held, that the action could
not be sustained on this ground. But, as the defendant had made a
representation to the plaintiff, that he had authority from ]Mr.
Sheridan's committee, which turned out to be false, Lord Ellen-
borough observed that an action might be brought for the deceitful
representation. This remark proceeded on the same ground as
Paslcy V. Freeman; that there was a false representation of a fact.

The case of Eyre v. Dnnsford, (i East, 318,) cited by the plain-
tiff's counsel, was decided on the same ground. There was a mate-
rial suppression of the truth ; for which the defendant was held lia-
ble. The case of Haycroft v. Creasy, (2 East, 92,) turned on the
ground that the representation was made bona fide, and with the
belief of its truth. It has no bearing on this cause. In Clifford v.
Brooke, (13 \^es. 131.) the lord chancellor puts the right to recover
for a deceit, expressly on the falsehood of the fact alleged. He ob-,
serves, "there must be knowledge at the time. That is sound prin-
ciple ; that the defendant knowing the person to be dishonest, in-
solvent and unworthy of trust, made the representation ; and that
is the subject of an action, or of a bill in equity." In the case of
Upton V. J'ail, (6 John. 181,) there was also a recommendation
of a person, as good, wdien the defendant knew he was insolven*^.
The doctrine of Pasley v. Freeman was approved, without a sug-



686 SWIFT r. ROUNDS,

gestion that the action could be maintained, when there was not the
knowledge of the falsehood at the time. The cases in 13 John. 224,
325, 395, hold the same doctrine.

I am of the opinion that the defendant is entitled to judgment.

Judgment for the defendant.^



SWIFT V. ROUNDS.
Supreme Court of Rhode Island, 1896. 19 R. I. 527.

Trespass on the case for deceit. Certified from the Common
Pleas Division on demurrer to the declaration.

July 6th, 1896. TiLLiNGHAST, J. This is a trespass on the case
for deceit. The first count in the declaration alleges that the defend-
ant, intending to deceive and defraud the plaintiffs, did buy of them
on credit certain goods and chattels of the value ol.$4pQ, the said de-
fendant not then and there intending to pay for the same, but
intending wickedly and fraudulently to cheat the plaintiffs out of
the value of said goods and chattels, which said sum of $400 the
defendant refuses to pay, to the plaintiffs' damage, &c. The second
count, after setting out the fraudulent conduct aforesaid, alleges that
the defendant thereby then and there represented that he intended to
pay for said goods, but that he did not then and there intend to pay
for the same, but wickedly and fraudulently intended to cheat the
plaintiffs out of the value of said goods and chattels, &c.

To this declaration the defendant has demurred, and for
grounds of demurrer to the first count thereof, he says, (i) that the



^Accord: Long v. Woodman, 58 IMaine 49 (1870), property conveyed in
reliance upon promise to reconvev upon repayment of money loaned ; Union
Pacific R. R. v. Barnes, 64 Fed. 80 (C. C. A. 8th Circ. 1894), money paid upon
promise to make good title, in neither of which was it alleged that the de-
fendant did not intend to keep his promise when he made it, Farringfon v. Bul-
lard, 40 Barb. 512-516 (N. Y. 1863), plaintiff promised to pay debt if
suit discontinued, defendant despite promise to do so pressed suit to execu-
tion; Lexow V. Julian, 21 Hun 577 (N. Y. 1880), defendant induced plain-
tiff to settle a dispute by promising not to dispose of his stock exchange
seat without providing for payment of his debt to the plaintiff; People v.
Healey, 128 111. 9 (1889), and Kitson v. Farwell, 132 111. 327 (1890), in which
the defendant's intention not to keep his promise is alleged or proved; and
see IV oiler's Ex. v. Fidelity Trust Company, 7Z N. J. L. 57 (1905), and Smith
'v. Parker, 148 Ind. 127 (1897). In all of these cases the plaintiff was en-
• deavoring to rpcoyer in deceit for the loss sustained by the non-performance
'of a contract itself directly unenforcible ; in the principal case, and in Long
J V. Woodman, 58 IMaine 49 (1870), because not in writing as required by the
statute of frauds, in Union Pacific R. R. v. Barnes, 64 Fed. 80 (C. C. A. 1894),
because a parol warranty of title of land conveyed by a deed containing no
such warranty, in Julian v. Lexoxv, because a parol promise made during ne-
gotiations leading to the execution of a written contract and in Farrington
V. Bullard, 40 Barb. 512-516 (N. Y. 1863), because not based on a valid con-
sideration being given in return for the plaintiff's promise to pay a debt which
he was already bound to pay — or is trying to obtain a procedurnl pdvantage
by suing in tort rather than contract. People v. Healy, 128 111. 9 ("1889), when
plaintiff was seeking to gain the right to arrest the person of defendant.






SWIFT V. ROUNDS. 687

plaintiffs do not allege any false representation by the defendant;
(2) that the plaintiffs do not allege that they have acted upon any
false representation of the defendant; and (3) that the plaintiffs
do not allege any damage suffered by them in acting upon any
false representation of the defendant.

The grounds of demurrer to the second count are, (i) that the
plaintiffs do not allege any false representation by the defendant
as to any fact present or past, but only as to something that would
happen in the future, which, if in the future it proved not to be true,
would not be the subject-matter of a false representation, but simply
a promise broken, and therefore not a ground of an action of deceit ;
(2) that the plaintiffs do not allege that they acted upon any false
representation made by the defendant; and (3) that the plaintiffs
do not allege that they suffered any damage by acting upon any
false representation made by the defendant to the plaintiffs.

We are inclined to the opinion, after some hesitation, that the_
declaration states a case of deceit. Any fraudulent misrepresenta-
tion or device whereby one person deceives another, who has no'
means of detecting the fraud, to his injury and damage, is a sufficient
ground for an action of deceit. Deceit is a species of fraud, anc"
consists of any false representation or contrivance whereby one!
person overreaches and misleads another, to his hurt. And, while \
the fraudulent misrepresentation relied upon usually consists of I
statements made as to material facts, either verbally or in writing, J
yet it may be made by conduct as well. ^

In the case at bar, the declaration alleges that the defendant
bought the goods in question upon credit, fraudulently intending
not to pay for them but to cheat the plaintiff's out of the value
thereof. By the act of buying the goods of the plaintiffs the de-
fendant impliedly promised to pay for the same, which promise was
equally as strong and binding as though it had been made in words,
or even in writing. The plaintiffs had the right to rely on this prom-
ise, and to presume that it was made in good faith. It turns out,
however, according to the allegations aforesaid, that it was not made
in good faith, but, on the contrary, was made for the purpose of de-
ceiving the plaintiffs into the act of parting with their goods, the
defendant intending by the transaction to cheat them out of the value
thereof. The fraud, then, consisted in making of the promise, in the\
manner aforesaid, with intent not to perform it. By the act of pur-
chasing the goods on credit, the defendant impliedly represented that
he intended to pay for them. The })laintiffs relied on this representa-
tion, which was material and fraudulent, and were damaged thereby.
All the necessary elements of fraud or deceit therefore were present
in the transaction. See Upton v. Fa//, 6 Johns. 181 ; Bartholomew' v.
Benilcy, 15 Ohio 666; Bishop Non-Contract Law, pp. 314-318;
Burrili V. Stevens, 73 Maine 400; Barney v. Dezvey, 13 Johns. 226;
Hiibbel V. Meigs, 50 N. Y. 491.

We have hesitated somewhat in arriving at the conclusion that
an action of deceit will lie, u])on the facts set out in the declaration,
for the reason that, amongst the numerous cases of fraud and de-



/



688 SWIFT z: rounds.

ceit to be found in the books, we have not been referred to any, nor
have we been able to firid any, where the action of deceit was based
simply on the act of buying goods on credit, intending not to pay for
them.' In Lyons v. Briggs, 14 R. I. 224, which was an action of
deceit, Durfee, C. J., intimates, however, that deceit would lie in a
case like the one before us, by the use of the following language:
''It is not alleged that the buyer did not intend to pay when he
bought, but only that he falsely and fraudulently asserted that he
could be safely trusted." But the authorities are overwhelming to
the effect that it is fraud to purchase goods intending not to pay
for them, and that the vendor, upon discovering the fraud, may re-
pudiate the sale and reclaim the property, or may sue in trover, or
in some other action of tort, for the damages sustained by the f raud.^
And this being so, we fail to see why an action of deceit, which is an
action of tort, based on fraud, may not lie as well.^ For to obtain
goods on credit, intending not to pay for them, is as much a trick
or device as it would be falsely to represent in words any material
fact whereby the vendor should be induced to part therewith.

But the defendant's counsel contends that the alleged repre-
sentation was not as to any fact present or past, but merely as to
what the defendant would do in the future with reference to paying
for the goods, and that to say what one intends to do is identical to
saying what one will do in the future, which amounts simply to a
promise ; and, furthermore, that a representation of wdiat will hap-
pen in the future, even if not realized, is not such a representation
as will support this action. We do not assent to this method of rea-
soning. The state of a man's mind at a given time is as much a
fact as is the state of his digestion. Intention is a_ fact ; Clift v.
White, 12 N. Y. 538; hence a witness may be asked with what intent
he did a given act. Seymour v. Wilson, 14 N. Y. 567. A man who
buys and obtains possession of goods on credit, intending not to pay
for them, is then and there guilty of fraud. The w^ong is fully
completed and no longer exists in intention merely, and a cause of
action instantly accrues thereon in favor of the vendor to recover



^Burrillv. Stevens, IZ Maine 395 (1882); Syracuse Knitting Co. v.
Blanchard, 69 N. H. 447 (1898)— and cases cited therein.

Contra: Smith v. Smith, Murphy & Co., 21 Pa. St. 367 (1853) ; but in
Bughman v. Central Bank, 159 Pa. St. 94 (1893), it is held even the slightest
additional circumstances which tend to show artifice or false representation is
sufficient to take the case out of the rule.

See the curious case of Bennett v. Mclntire, 121 Ind. 231 (1889), in which
it is held that misstatement of object of plaintiff's visit to defendant's premises
did not avoid a license to enter.

'See, however, Devens, J., in Dawe v. Morris, 149 Mass. 188 (1889), p.
193. "There is an obvious difference between the case where a contract is
rescinded, and thus ceases to exist, and one in which the injury results from
the non-performance of that which it is the duty of the defendant to per-
form, and where there is- no other wrong than such_ non-performance. To
term this a "tort" would be to confound a cause of action in contract with one
in tort, and would violate the policy of the statute of frauds by relieving a
party from the necessity of observing those statutory formalities which are
necessary to the validity of certain executory contracts."



BENTOX V. J. & \V. PRATT. 689

for the wrong and injury sustained. It is true the purchaser may
afterwards repent of the wrong and pay for the goods, and the
vendor may never know of the wrongful intent. But this does not
alter the case at all as to the original wrong and the liability incurred
thereby. Of course a mere intention to commit a crime or to do a
wrong is no offense. But when the intention is coupled with the
doing or accomplishment of the act intended, that moment the wrong
is perpetrated and the corresponding liability incurred. See Osivcgo
Starch Factory v. Lcndrum, 57 Iowa 573.

Demurrer overruled, and case remitted to the Common Pleas
Division for further proceedings.^



BENTON V. J. & W. PRATT.

Supreme Court of Judicature of New York, 1829. 2 Wend. 385.

This was an action on the case.

In August, 1824, Seagraves and Wilson, of Allentown, in the
state of Pennsylvania, by a verbal arrangement, agreed to purchase
of the plaintiff" 200 hogs and pay him the market price, provided he
delivered them within three or four weeks and they had not been
previously supplied. About the time for the delivery of the hogs,
the plaintiff' was proceeding with a drove of upwards of 500 to Al-
lentown, and was overtaken on the road about 70 miles from Allen-
town by W. Pratt, one of the defendants, who also had a drove of

^Accord: McCready v. Phillips, 56 Nebr. 446 (1898) ; Cerny v. Paxton
& Gallagher Co., 78 Nebr. 134 (1907). in which it was, however, held that "if
the promise be unenforcible under the statute of frauds, it will not sustain
an action of fraud and deceit" even if the promisor intends not to perform it.
If this rule applies to promises unenforcible as contracts. Sir Frederick Pol-
lock is clearly right in saying, "Whether in such case (when the promisor
intends not to perform his promise) an action of deceit will lie is a merely
speculative question, as if rescission is impossible and the fraudulent vendor
is worth suing, the obviously better course is to sue on the contract for the
price." Pollock on Torts, 8th Ed., p. 284, note o.

See also, Butler v. IVatkins, 13 Wall. 456 (1871), in which it was held
that negotiations for the purchase of patent rights carried on with no inten-
tion of buying but merely for the purpose of keeping the plaintiff's competing
product out of the market constituted actionable fraud, and Rogers v. J'ir-
ginia-CaroHna Chemical Co., 149 Fed. 1 (C. C. A. 3rd Circ. 1906), where a
declaration in deceit was held good which set fortli that the plaintiffs had »
options on valuable phosphate lands and that the defendants induced them to
enter into the contract, giving it an exclusive right to purchase the options
having no intention of purchasing but solely for the purpose of preventing
their sale so that they might lapse and the defendant might buy the land from
the original owner. At first glance these cases appear to support the principal
case, but in neither is the plaintiff seeking to enforce the contract nor to re-
cover damages for its breach.



690 BENTON t: J. & \V. PRATT.

hogs, about 200 in number. Pratt said he was going to Easton,
and learnt from the plaintiff that he was taking his hogs to Allen-
town. By an arrangement between the parties, Pratt was permitted
by the plaintiff to start with his drove from a place where they had
both stopped for the night, and instead of going to Easton, drove
his hogs to Allentown and off'ered them for sale to Seagraves and
Wilson, who at first declined to purchase on account of their con-
tract with the plaintiff' ; but on being told by a person who attended
Pratt's drove, in the presence of Pratt, that the plaintiff was going
to Easton with his hogs to fulfil some contract, and after making
some further inquiries, and not learning the plaintiff's approach to
Allentown, they purchased Pratt's drove. On the next day the
plaintiff arrived with his drove, and Seagraves and Wilson declined
to purchase having then as large a supply as they wanted. Seagraves
and Wilson purchased of Pratt under the impression that what they
had been told of the plaintiff's going to Easton was true. Had they
known that the plaintiff was coming to Allentown, they would not
have purchased of Pratt at any rate until the plaintiff's arrival ; and
if the plaintiff had arrived previous to their purchase of Pratt, and
had offered his hogs at the same price, they would have purchased
of him. It was proved that J. Pratt, the other defendant, had
directed W. Pratt to hurry on to Allentown if he killed half his
drove, and fulfil the plaintiff's contract ; and after the sale, boasted
of the advantageous sale he had made, and that he was now even
with the plaintiff for buying a lot of hogs which he had bargained
for. In consequence of losing the sale to Seagraves and Wilson,
the plaintiff was obliged to go further to procure a market, spent
much time, and incurred considerable expense.

The defendants pleaded the general issue. The jury found a
verdict to the plaintiff for $316 damages.

Sutherland, J. If the allegations in either of the counts in
the declaration are true,^ the plaintiff has clearly sustained an essen
tial injury from the act of the defendants, which he alleges was
done fraudulently and with intent to injure him; and, upon prin-
ciple, the law ought to afford him redress.

In Gallayar and Mason v. Brunei (6 Cowen, 346), all the cases
applicable to this subject are considered, and the principles estab-
lished in Parley v. Freeman are fully recognized. The action in

^The declaration which contained four counts set forth substantially the
facts as they appeared at the trial, except that in all but the third count it
averred that the defendant had asserted that the plaintiff had given up his
contract to the defendants to fulfil and take the benefit of ; that the first and
second counts averred that the defendants had promised not to interfere with
the plaintiff's contract with Seagraves and Wilson and had thereby induced
the plaintiff to allow the defendants' drove of hogs to pass his; and that in
each count it was alleged that the defendants had expressly declared and
asserted to Seagraves and Wilson that the plaintiff had abandoned the idea
and intention of fulfilling his contract.



PEEK V. DERRY. 69I

that case was held not to He, because the false representation which
was alleged to have been made did not amount to an assertion of a
fact or facts as existing at the time. The declaration alleged that
the defendant, intending to injure and defraud the plaintiffs, and to
induce them to sell certain goods to C. & H., falsely represented that
he was willing to endorse the note of C. & H. It was held that the
gravamen of this case was nothing more than that the defendant
encouraged the plaintiffs to sell their goods to C. & H., and, as
surety promised to endorse their notes, and that the intention of the
defendant not to fulfil his engagement was not among the fraudu-
lent acts which will render a party liable to an action; that it was
an attempt to make him responsible as for a tort, upon a promise
which was void by the statute of frauds. In the case at bar there
are no such difficulties; there is the assertion, on the part of the
defendant, of an unqualified falsehood, with a fraudulent intent as
to a present or existing fact, and a direct, positive and material
injury resulting therefrom to the plaintiff. This is sufficient to sus-
tain the action.

It is not material whether the contract of the plaintiff with Sea-
graves and Wilson was binding ujx^n them or not; the evidence
established beyond all question that they would have fulfilled but
for the false and fraudulent representations of the defendants.

As to the fact of the defendants having made the false repre-
sentations alleged in the declaration, it was for the jury to determine
upon the evidence given. We must intend that they were properly
instructed upon that point by the court ; and I think the verdict is
fully warranted.

Motion in arrest and for new trial denied.



SECTION 4.
Defendant's Want of Belief in the Truth of the Fact Asserted.



ip"



VTryVPEEK z: DERRY.

House of Lords, 1889. 14 Appeal Cases. 337.

This action on the case was brought by Sir Henry William Peek
against William Derry. chairman, and Messrs. W^akefield, Moore,
Pethick and Wilde, four directors of the Plymouth, Devonport and
District Tramways Company, for the fraudulent misrepresentations
of the defendant; whereby the plaintiff was induced to take shares
in the company.^



' The statement of facts is somewhat abridged, the effect of the elaborate
opinion of Stirling, J., is briefly stated: the opinions of Cotton, Hannen and
Lopes, L. L. J., in the Court of Appeal (L. R. 37 Ch. Div. 541) and of Lords



692 PEEK r. DERRY.

The company was incorporated under a special Act of Par-
liament in the year 1882 ; by this Act (45 & 46 Vict. c. clix.) the com-
pany was authorized to make and maintain tramways in Plymouth,
Devonport and Stonehouse.

By Section 34 of the Tramways Act, 1870, which section was
incorporated in the special Act, "all carriages used on any tramway
shall be moved by the power prescribed by the special Act, and
where no such power is prescribed, by animal power only."

By Section 35, of the special Act the carriages used on the
tramways might be moved by animal power and, with the consent
of the Board of Trade, by steam or any mechanical power for a
period of seven years, and with like consent during further periods
not exceeding seven years, subject to the regulations set forth in
Schedule A, and to any regulations thereafter added or substituted
by any order of the Board of Trade, provided also that the company
shall not use steam or any other mechanical power unless and until
they have obtained the previous consent in writing of the corpora-
tions of Plymouth and Devonport, and then under such terms only,
subject to such conditions as the company may from time to time
prescribe.

By Section 64 of the special Act it was also provided that the
company should not open any of the tramways for traffic without the
consent of the corporations.

The company issued two prospectuses. In the first, issued in
October, 1882, and which it did not appear the plaintiff had ever seen,
the directors stated that the act gave them the power to use either
animal, steam or mechanical means of locomotion, and that they
would use that means of power which experience should demon-
strate to be at once the most economical and effective. The second
prospectus was issued the first of February, 1883. The heading,
which was in large type, was as follows : "Incorporated by special
Act of Parliament authorizing the use of steam or mechanical motive
power." It also contained the following paragraph : "One great fea-
ture of this undertaking to which considera^ importance should
be attached, is, that by the special Act of Parlament obtained, the
company has the right to use steam or mechanical motive power,
instead of horses, and it is fully expected that by means of this a
considerable saving will result in the working expenses of the line as
compared with other tramways worked by horses," and there were
other paragraphs further setting forth the advantages to be derived
from steam as compared with horse power.

Soon after the issuing of the prospectus, a copy of which the
plaintiff received, he applied for and was allotted shares in the
company relying, as he alleged, upon the representations of this
paragraph, believing the company had an absolute right to use steam
and other mechanical power.

The company proceeded to construct its tramways, but the



Eramwell and Halsburv, L. C. in the House of Lords, are omitted, as is the
greater part of the opinion of Lord Fitzgerald and a portion of the opinion
of Lord Herschell.



PEEK V. DERRY. 693

Board of Trade refused to consent to the use of steam or mechanical
power except on certain portions of the tramway, and the corpora-