Opinion ID: 1134187
Heading Depth: 1
Heading Rank: 2

Heading: the allegation of fraudulent inducement

Text: Defendant cites the general rule  the mere making of a promise which the promisor fails to keep is not actionable fraud, Svennungsen v. Svennungsen (1974), 165 Mont. 161, 527 P.2d 640; 37 Am.Jur.2d Fraud and Deceit § 57  to support its contention that the facts of this case do not constitute fraud. However, only one of plaintiffs' allegations involved a matter of futurity. Without question, a warranty that application for an S.I.D. had been made, when in fact it had not, relates to a present or preexisting fact and would be fraudulent. Similarly, concealment of information concerning the adequacy of the water supply, its potability, and the porosity of the land would amount to fraud, if proved. Only plaintiffs' allegation that Carl McAfee repeatedly promised that the water and sewer lines would be installed by Country Kitchen's opening date involved a matter of futurity. Quoting from defendant's source: In some instances, because of the particular fact situation involving the relationship of future events to the false intention of a representor, fraud may be predicated upon false representations involving futurity. The view generally taken is that if the person making the statement as to a future event is guilty of an actual fraudulent intent, and makes the misrepresentation with the intention of deceiving and defrauding the other party, and accomplishes this result to the latter's injury, fraud may, under many circumstances, be predicated thereon, not withstanding the future nature of the representation. This conclusion is reached frequently on the theory that a person's intention or belief is a matter of fact and that, therefore, if a misrepresentation is made with regard to the same, the misrepresentation is one of fact. Where a person fraudulently and positively, as with personal knowledge, states that something is to be done or is to occur when he knows that it is not to be done or to occur, the statement will support an action in fraud. This is not a case of prophecy or predication of something which it is merely hoped or expected will occur in the future, but a specific affirmation of an arrangement under which something is to occur where the party making the affirmation knows perfectly well that no such thing is to occur; such statements and representations, when false, are actionable. False representations as to future events will constitute fraud where these events depend upon the acts of the party making the representations and form the inducement whereby the other party is led into the transaction ... 37 Am.Jur.2d Fraud and Deceit § 59 (Emphasis added.) This qualification of the general rule is consistent with section 13-308, R.C.M. 1947 now section 28-2-405 MCA which provides: 13-308. Actual fraud, acts constituting. Actual fraud, within the meaning of this chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance with intent to deceive another party thereto, or to induce him to enter into the contract: ... 4. A promise made without any intention of performing it; Plaintiffs alleged McAfee continually promised that the water and sewer lines would be installed in time for the restaurant's opening when he knew, in fact, that this was impossible because he had not filed a petition for an S.I.D. Therefore, based on the above-quoted rule, we find that plaintiffs' allegations supported a theory of fraud.