Case ID: miss_21/html/0363-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Sharkey", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

R. M. Clopton et al. vs. William M. Cozart et al.
    Several persons signed the following statement, viz.: “ We have personal and intimate acquaintance with G.; have known him a number of years; and we can with pleasure testify to his strict adherence to truth, punctuality in contracts, perseverance in business; that he is an unexceptionable member of the Baptist church; in a word, we look upon him as an honest and responsible man, and worthy of all credit;” and delivered it to G., to enable him to purchase goods in a neighboring city, though it was addressed to no particular person ; upon the faith of it, G. bought a quantity of goods at different intervals from C., and left the country without paying for them ; Held, the signers were liable to C., in an action of deceit upon this instrument, for the value of the goods sold G. and not paid for by him, on proof that G. was not, when the instrument was written, a “ responsible ” man, i. e. one able to discharge his obligations, and that that fact was known to the signers.
    It seems, however, that the liability of the signers would not extend to transactions between C. and G. after the former had discovered the fact of G.’s irresponsibility; in such case, C. would not be deceived, for he, would know the representation to be false.
    
      In error from the circuit court of Macon county; Hon. A. B. Dawson, judge.
    William M. Cozart and William H. Shelton sued R. M. Clop-ton and others for the damages suffered by them in the sale of goods to one Jacob F. George, to which they were induced by a written certificate in behalf of George, executed by the defendants, and which is set out in the opinion of the court; and which was alleged to have been false, and so known to be, by the signers, when executed. The other facts are sufficiently set forth in the opinion. The jury below found for the plaintiffs, and the defendants sued out this writ of error.
    
      Guión an<j Baine, for plaintiff in error,
    Argued the law and facts of the case, and cited Pasley v. Freeman, 3 Term R. 61; Russell v. Clark, 7 Cranch. 69.
    
      Gray and Jarnagan, on the same side,
    Cited, in addition, Haycraft v. Creasy, 2 East, 92; Clifford v. Brooke, 13 Ves. 131; 2 Stark. Ev. 470; Tryon v. Whitmarsh, 1 Met. R. 1; 5 Barn. & Aid. S05 ; 17 Mass. 184; 2 Wend. 385; 6 Cow. 352; 19 Eng. Com. Law, 113; 20 lb. 64; 23 lb. 41; 18 Pick. 109; 4 Met. 155; De Greaves v. Smith, 2 Camp. 533; 14 Mees. & Welsh. 650.
    
      Harris and Harrison, for defendants in error,
    Reviewed the facts and authorities, and contended that all the cases on the subject of actions for deceit in the representations by one of another might be arranged under three heads, as follows, viz. :
    1. It was established that a false affirmation, made by the defendant with intent to defraud the plaintiff, whereby the plaintiff receives damage, is the ground of an action, &c. See the following ca'ses: Pasley v. Freeman, 3 D. & E. 61, decided in 1789; Scott v. Lara, Peakes, R. 226, in 1794; Haycraft v. Creasy, 2 East, R. 92, in 1801; Eyre v. Dunsford, 1 lb. 328-9, in 1801; Tapp et al. v. Lee, 3 Bos. & Pull. 367, in 1803; Hawes v. Alexander, 5 lb. 240, in 1806.
    
      We have been unable to find that the above doctrine was ever adopted in this country, except in New York, in the following cases: Ward v. Center, 3 Johns. R. 271, decided in 1808; Upton v. Vail, 6 lb. 181, in 1810; Young et al. v. Coveil, 8 lb. 23, in 1811; Gallager v. Brunei, 6 Cow. R. 350; Allen v. Adding-ton, 7 Wend. 10, in 1S31: and in Connecticut, in the case of Hart v. Talmadge, 2 Day’s R. 381, in 1806: and by the supreme court of the U. S., (Judge Marshall,) citing and relying solely on the case of Haycraft v. Creasy, 2 East, 91; Russell v. Clark’s Ex’rs, 2 Cond. R. S. Ct. U. S. 417, in 1812.
    2. About the year 1830, the doctrine was modified in England, and the modification subsequently adopted in this country, as follows: “ That a party, making statements which he knows to be false, is liable therefor, although it be not shown that .the recommendation was given with any malicious intent.” This doctrine had been distinctly intimated by some of the judges in the cases before cited, and so held by Lord Kenyon and the other judges in Burton v. Loyd, 3 Espinasse, R. 207, decided in 1799; Foster et al. v. Charles, 19 Eng. Com. L. R. 113; lb. 20; lb. 64, in 1830; Pothellv. Walter, 23 lb. 41, in 1832: and the same modification is distinctly admitted in Williams v. Wood, 14 Wend. 126, decided in N. Y. 1835; Whitaker v. Sumner, 7 Pick. 556, in Mass., 1829. In the above cases, the intent was a conclusion of law, necessarily resulting from the known falsity of the _ representations; and to the same effect is the case of Try on et al. v. Whitmarsh, 1 Met. R. 1, decided in Mass., 1840, drawing the distinction between mere expression of opinion and representation as of knowledge.
    3. The third class of cases is but the direct result of the principles established in the second, viz.: that the affirmation of what one does not know to be true, as true of his own knowledge, upon the faith of which third persons are expected to act, and do act, and, by reason of the falsity of the affirmation, sustain loss, having all the elements, will draw to it all the consequences, of a fraudulent transaction.
    In the following cases, the above principle is asserted, and the distinction between a mere expression of opinion and the representation of facts as within the party’s knowledge, is farther illustrated and established : Hazard v. Irwin, 18 Pick. R. 109, in 1836 ; Lobdell v. Baker, 1 Met. R. 193, decided in 1840; Stone v. Denny, 4 lb. 155, in 1842; Ainslie v Medlycott, 9 Ves. Jr. 21, in 1803; Parham et al. v. Randolph et al., 4 How. 451, (January Term,) in 1840; Davidson v. Moss, 5 lb. 684, in 1841; Hall v. Thompson, 1 S. & M. 485; Jazan et al. v. Toulmin, 9 Ala. R. 684, in 1846.
    
      Geo. W. L. Smith, on same side.
    The court, at its January term, 1849, delivered an opinion, reversing the judgment of the court below, on the ground that the verdict should have been limited to the first purchase made by George, inasmuch as his want of punctuality was known to Cozart and Shelton at the dates of the subsequent sales.
    Upon application, a reargument was granted, and the cause argued again by
    
      Guión and Baine, and A. W. Dabney, for plaintiffs in error, and by
    
      Harris and Harrison, and Geo. L. Potter, for defendants in error.
   Mr. Chief Justice Sharkey

delivered .this opinion.

On a former occasion this case received a careful examination, but a reargument was applied for and assented to by the opposing counsel.

The action was brought by the defendants in error for deceit in representing one George as worthy of credit, on the strength of which representation the defendants in error gave him credit. The letter or certificate given by the plaintiffs in error is in the following words: “June 25th, 1845. This is to certify that we, the undersigned, citizens of Noxubee county, state of Mississippi, have personal and intimate acquaintance with Mr. Jacob F. George; the majority of us have known Mr. George for a number of years; and we can with pleasure testify to his strict adherence to truth, punctuality in contracts, perseverence in business, and that he is an exemplary member of the Baptist church; in a word, we look upon Mr. George as an honest and responsible man, and worthy of all credit.” This letter was not addressed to any particular individual, though it was in proof that it was given to George to enable him to purchase goods in Columbus, the place of residence of the defendants in error. The letter was presented by George to the defendants in error, from whom he proposed to purchase goods on the strength of it. As they did not know the signers, they made inquiry concerning them, and on being informed of their character and ability, sold goods to George on a credit on the strength of the certificate, and continued to do so from the first of July until November, 1845, as George required them, to carry on the business of peddling. The witness, Moss, states positively that they would not have credited George but for the certificate. For each parcel or bill of goods sold to him, they took a note, payable one day after date. It was in proof by one of the witnesses that one of the signers admitted that he had gone too far in the certificate, as George was inclined to be slothful, though he would do for a pedler.

The defendants below proved, by a number of witnesses, that George had previously maintained a good character for honesty, though he was destitute of means or property, and it was known to all of the signers of the certificate that he was destitute of property or money with which to pay any considerable debt. Notwithstanding his previous good character, George left the country without paying the debts contracted for the goods.

On this evidence the jury found a verdict for the plaintiffs below for eleven hundred and ninety-five dollars. A motion was made for a new trial, because the verdict was contrary to law and evidenpe, and the only question presented is, Was the motion improperly overruled 1

The question of liability growing out of representations made concerning a third person, is one which has been very much discussed. The decisions on it are very numerous, and somewhat conflicting. We need not attempt a review of them. ^The true principle we believe to be this, that if one make false representations concerning a third person, with" a view of obtaining credit for him, and credit is given on the faith of such representations, the person who made them is liable in an action of deceit. Some diversity of opinion has existed as to the intent with which, the representation is made; the earlier cases held that it must have been made to commit a fraud. The ingredient of fraud, either actual or constructive, is necessary. But if the representation be known to be false, and made with a view to obtain credit, it is fraudulent. This certificate was given that George might be enabled to purchase goods; if it was false, it was prima facie fraudulent. It was false in one important particular; it stated that George was a “ responsible man.” There seems to be no room for doubt as to the meaning of the parties in the use of this word “ responsible.” The object of the instrument explains what was meant. George wished to buy on a credit, and “ responsible,” in that connection, must have been intended to mean capability to discharge an obligation. It conveyed the idea that he possessed the means of making payment.

But it is insisted that this certificate did not amount to a positive affirmation, but was the mere expression of an opinion. We do not think so. It professes to be given on a thorough knowledge of George. The parties say they have a personal and intimate acquaintance with him. Several of them had. known him for many years. They rvere explicit in bearing testimony to his strict adherence to truth, and to his punctuality. They say, “in a word,” that is, to sum up, “we look upon him as an honest and responsible man.” These were undoubtedly the important questions with the creditor. From this language, it is next to impossible to conclude, that the parties only intended to express a matter of opinion, especially as to the matter of responsibility, for that was a question of fact susceptible of positive knowledge, and that knowledge they professed to possess from a long’and intimate acquaintance. The truth or falsehood of the representations was a question for the jury. If the statements were false, the law was for the plaintiff below. That George was not responsible is fully shown, and it is also clear that the plaintiffs in error knew this fact. We cannot say that the verdict was contrary to law or to the evidence.

Under a different state of case, it might be material to inquire whether a recovery could be had for all the various dealings of the parties. If the plaintiffs below had become acquainted with the responsibility of George, and had given him credit after being informed of his inability to pay, the loss would have fallen on them; for the action for deceit from false representations will not lie if the party giving credit know them to be false. In such case there is no deceit. Now, although the dealing continued between July and November, there is no proof that the plaintiffs below knew any thing of the condition of George, otherwise than from the certificate. Indeed, Moss says all the sales were made on the faith of the certificate. They had some reason to question his punctuality, for he failed to pay the notes. But the credit seems to have been given on the faith of his responsibility as well as on his punctuality, and on that subject no knowledge is shown to have been possessed by them. We may add, also, that we have no means of applying this principle to the verdict. The declaration claims $ 1500, and the verdict is for a' sum considerably less. The bill of particulars referred to by the witness, as showing the amount of the several sales, is not before us. We cannot know whether the jury found for more or less than the whole price of the goods.

Judgment affirmed.