Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-05-13
SUPREME COURT.
DECISIONS. ETc.. FILED SATURDAY.

SUPREME COURT.
DECISIONS. ETC.. FILED SATURDAY.
Hugh Cochrane and Carson N. Cosgroye, Re-
spondents, VS.. Anthony z. Halsey, Appel
liant.
OPINION.
The report of the referee was made and fled
and judgment was entered thereon immediate
II on the 18th of October, 1876, without any
notice to the party adversely affected by It. The
first notice or knowledge-the respondents at
torney had of the report Or judgment was
about November 9th following He thereupon
forthwith took TIE necessary steps for obtain
ing Q new trial for insuficiency in the evidence
and errors at lawoccurring at the trial. case
was made and served, and also amendments,
both under stipulations granting time, and
upon its settlement a motion pursuant to mo-
tlce was made thereon and upon the record and
files in the action, and an affidavit of the fore
going facts for an order OF the district
court vacating the report and judgment, and
granting new trial of the issues upon the
grounds specified in the notice of motion.
At the hearing, the preliminary objection was
made that the court could not entertain the
motion, because the errors complained OF all
occurred prior to the entry of judgment, after
which, it is claimed, no motion for new trial
on such grounds can be made and heard. For
causes like those upon which the respondent
herein bases his application for new trial, the
statute expressly authorizes the vacation Of the
report of q referee and the granting of new
trial on motion to be made upon settled case,
showing the errors complained Of. Gen. Stats,
ch. 20.
That it was the intention of the statute to
give to every aggrieved party the right to make
such an application, and to be heard thereon
hay lvy Ho
fore, through no fault of his, party has had no
opportunity to exercise this right before judg-
ment, by reason of it's immediate entry upon
a report of which he has no notice or knowl-
edge, he may do so afterwards if guilty of no
reasonable delay, or laches in procuring set
Element of his case and making his motion.
Conklin vs.. Kinds, is Mimi. 457;
Schuck IS. Hayer not yet reported. If upon
the hearing Of the motion, the court becomes
satisfied that the report ought to be vacated, it
may also set aside the judgment to give effec-
tiveness to its decision.
Minnesota Valley railroad company
Doran, Is Mimi. $40.
The facts of respondents case bring it
clearly within this rule, and the court below
committed no error in entertaining his motion
for a new trial.
The issues which the referee was called upon
to determine, related to certain false represent
tations which alleged to have been fraudulent
~ made by the plaintiffs with the intent of
deceiying the defendant, whereby the latter
was induced to enter into the con-
tract of co-partnership which he
now seeks for that reason to have declared
void 'ab initio.' In order to sustain the report
and it's findings, therefore, it must appear that
they are substantially responsive othese issues
for proofs without pr0per and corresponding
allegations in the pleadings for their support
can never be made the foundation Of q judg-
ment against an objection properly taken and
info Einlv 011irk
200. Under this rule where an action is found
ed upon actual fraud, party will not be per-
mitted to recover upon proof merely of con-
structive fraud. Is How. AZ. For the same
reason no recovery can be had in an action for
false representations fraudulently made in re
spect to the existence of material facts upon
.roof of fraudulent concealnents in reference
to other facts which ought to have been dis
closed
The grounds of defendants cause of action
| as stated in the counter-claim contained in his
answer are the alleged false representations,
first, that the plaintiffs had been Heretofore,
and were then doing good, prosperous and prof.
table business as general traders. Second, that
they were entirely solvent and able to pay all
their debts and obligations Of every nature and
kind in full; and third, that the sum of &8,-
OlS.21 which the defendant was to pay for a
one-third interest in the firm was more than
sufficient to pay and discharge all their debts
and obligations in FULL Believing and rely
ing upon the truth of these representations it
| is ALLEGED that the defendant was induced to
and did enter into the partnership. The maxi
| ing Of the last two Of these representations is
expressly negatived by the findings in which it
is found that prior to the formation of the CO.
partnership, neither of the plain
tiffs made any statements what
ever to the defendant concerning
| their Indebtedness, liabilities, financial stand
ing, condition or solvency, or the sutficiency of
&c 60 &c
their debts and obligations, and that the de-
PENDANT made no inquiries in regard to any Of
such matters, nor did he ask to see their books
of account, nor did the plaintiffs offer them for
inspection. In respect to the first of said al
legged representations, the finding is in accord
plaintiffs represented, simply that they were
sentation was true or false does not appear
from any specified finding upon the point al
though perhaps an inference may be drawn in
reference to it from the twenty-second finding
which relates to another matter. Conccding the
fact of plaintiffs insolvency as found, it is
difficult to see how upon these findings the
cause Of action set out in the pleadings can be
sustained. 1t rests alone upon the facts that
plaintiffs were insolvent, and that they repre-
sented to defendant that they were doing a
good business.
The falsity of this statement is not estab-
lished, nor is the fact found that it was made
| for any fraudulent purpose. Clearly these
were insufficient grounds upon which to void
| the contract.
In addition to the admittal representation
that plaintiffs were doing good business,
the referee finds that in making the PROPOSE
ton to the defendant in response to his re-
quest, they stated that their said business was
worth bonus, and that he (Halsey) ought to
pay bonus OF four or five Thousand dollars
for the privilege Of purchasing one-third in
terest therein" that these representations
created confidence in Halsey, 80 their
financial standing and condition and that
! relying on said Representations and upon
| their silence as to their financial standing, the
defendant accepted said proposition and en-.
tered into the agreement OF co-partnership. II
8 also found that said business was not worth q
bonus of four or five thousand dollars, or any
ton was untrue as plaintiffs knew" That
| they were actually insolyent and did not dis
close their Insolvency to defendant who was
! ignorant of the fact, and that he made no in.
quiries concerning it. As conclusions Of law
from these facts, the referee finds that it was
the duty Of plaintiffs to have disclosed to de-
] PENDANT their insolvency, and that their omis-
sion Sc to do was fraud in law upon defend
anti that their silence as to the financial condi-
ton of their firm was tantamount in law to
| an affirmation of their solvency and their state
ments that the business was worth bonus,
1 de-, created confidence in Halsey which
imposed upon them the obligation OF
real facts in regard to their financial
standing, and their omission to do SO OPP
| Grated as fraud upon the defendant Upon
i these grounds the referee adjudged
the contract to be void from the beginning.
I It will be observed that in none of these find
that the defendant believed in the plaintiffs
| 6olvency or that he acted upon such belief in