Court Opinion

ID: 7117911
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:34:45.359608+00
Date Added: 2024-06-11T16:13:59.434029
License: Public Domain

Salinger, J.
(dissenting). The defendant does allege that, though plaintiff knew defendant had no such knowledge, plaintiff said he knew the value of certain lots, their condition and surroundings; that he told this falsehood with intent to cheat defendant; that plaintiff knew, when he so affirmed, of his personal knowledge, that defendant had no knowledge of the value of the lots, and relied on plaintiff; that plaintiff made the false statement to -induce defendant to give him the notes he here sues on, and so did induce defendant to give them; and that the lots were not what plaintiff had, of claimed personal knowledge, affirmed them to be, but, on the contrary, were of practically no value.
I -agree there is a conflict over whether plaintiff made these representations; that the jury has resolved this conflict in favor of the defendant; and that with this finding we cannot interfere. But that settles nothing except that plaintiff told defendant he had personal knowledge of the value of the lots, though he knew he had no such knowledge; that this induced the giving of the notes; and that the lots were, *144in fact, greatly less valuable than plaintiff represented them to be. Concede that this will sustain some actions for deceit, will it sustain the action here brought — an action which is bottomed on Imowing that the lots were not as represented, and not on deceit by recklessly claiming personal knowledge of value when representer knew he had no personal knowledge? I am not denying that one who, with intent to cheat, represents he has seen ore in paying quantities taken from a mine, which he has, in truth, never seen, may commit as great a fraud as if he said there was ore in such quantities when he knew there was no ore. One who fraudulently, abuses the faith which believes that his persona] knowledge is a guaranty, commits as great a wrong, and may do as much harm, as if he lied about what he had, in fact, seen. Though this is so, it should not abrogate the requirement that proof must correspond to plea. Though one false pretense may be as injurious as another, the charging one is not sustained by proving the other. And so, a claim that one was cheated by a representation that lots had certain attributes, made by one who knew they did not have these attributes, is not sustained, though the jury finds, upon conflict, that the representation made was that he had personal knowledge of these attributes, though he knew he had no such knowledge. That is this case; and one vital objection that I have to the opinion is its holding that the two acts are, in law, equivalent; that a plea of representing a thing has a certain quality, knowing that it has not, and which plea is not based on cheating by a false claim of personal knowledge, is sustained by proof, not that the representer knew he lied about the quality, but about knowing the quality.
Now, while lying about having personal knowledge of the quality of a thing is not the equivalent of lying about the quality of that thing, showing that one has deliberately falsified concerning having knowledge of the quality, and that the quality is, in fact, not what he so affirms it to be, *145may raise an inference of fact that he knew the quality was not what he represented it to he. And if all we had was that defendant had falsely claimed personal knowledge, and that the thing spoken to was, in fact, not what he said it was,it might well be claimed that the jury could find that defendant knew the lots were greatly less valuable than he had said they were. But while such an inference was raised, it has, in my opinion, been conclusively rebutted; and when all was said, there was nothing from which the jury could find the charged and essential intent to defraud. Grant that, where one says he knows the quality of a thing when he does not know it, and the quality is, in truth, not as good as he says it is, a presumption arises that he knew the quality is not what he said it was, yet such presumption is not stronger than is the presumption of death from long-continued disappearance. Suppose there be testimony that a person had disappeared and not been heard of for many years; also, testimony that said person had frequently been heard from, and within a year. Here is sharp conflict. If that is all there is, a verdict which finds that the insured is dead would be sustained. But if, after these witnesses had conflicted, a man appeared in court, and the party asserting death should concede he was the alleged dead man, would we sustain a .verdict against the insurer because the record exhibited a conflict? Of course, we would refuse to do so, because of the well-settled doctrine that, when a naked presumption of fact is conclusively negatived, there remains no conflict.
The presumption that a deed found with the grantee has been duly delivered, or that statements in a pleading filed by a duly authorized attorney are admissions 'of his client, is as strong as the inference of scienter of which I have spoken. Both the presumption of delivery -and of admissions were present in Schaeffer v. Anchor Mut. F. Ins. Co., 113 Iowa 652, at 656; same case, 133 Iowa 205, at 209. *146As to one, the grantee testified that the deed reached her after the grantor had died. As to the other, both client and lawyer testified that the statement was not authorized by the client, and put in by the attorney in ignorance that what was admitted was not so. The claim was made that these presumptions and this testimony made a conflict for a jury. But we held against the claim, and that, as matter of law, such testimony overcame these presumptions. The majority has simply failed to grasp that all conflict in this case has become utterly immaterial, because resolving the conflict in favor of the defendant merely raised a presumption that plaintiff was guilty of fraud, and that this presumption was conclusively overcome; wherefore, despite this conflict, there ceased to be a case for a jury.
Recklessness is not fraud. It is, at most, evidence which raises a fact presumption — makes an argument for claiming —-that there was an intent to deceive. It is absolutely immaterial that such recklessness is,' so to speak, a badge of an intent to deceive, if it must be found that, notwithstanding, there was no intent to deceive. Whatever may constitute evidence of such intent, no actionable fraud is made out unless, when that evidence is given due weight, it can in reason be believed therefrom there was a purpose to defraud. Suppose one declare that he knows a farmt he is selling contains 200 acres, when he has no knowledge whatever of what its size is, and after it is sold, it transpires that, when sold, it contained 300 acres, which, the day after the sale, shrunk to 100 acres, because a river cut off 200 acres. Here is your case of recklessly false affirmation, and of ultimate, loss. Here is, also, conclusive proof that there was no fraudulent intent: This illustration leads to the crux. Whatever conflict there is here, there is none over the intent of the plaintiff, the person charged with fraud. The evidence of his good faith utterly demolishes every presumption of fraud that could be raised upon resolving the conflict against him. *147That is so unless one can intend to cheat another by doing what he knows must injure him as much or more than the other. That is what must be held to sustain the majority. It concedes that the plaintiff and the defendant agreed to buy the lots; that the paper of defendant was not desired by the seller, though he was willing to take that of the plaintiff; that plaintiff gave his notes for what both he and defendant bought; that lie took the notes of defendant for the half bought by defendant. It appears without dispute that plaintiff paid the notes he gave for the total purchase, and that defendant repaid this advance, to a small extent. He is released from repaying the balance, and gets back all he has paid. Why? Because plaintiff “defrauded” him into giving non-bankable notes to cover a loan by plaintiff, made to enable defendant to buy half the lots. Defrauded, how? Plaintiff 'bought half the lots, defendant the other half; plaintiff paid for both halves, and took non-bankable notes for his cash. The “fraud” was that a sane man desired to cheat another by buying as many worthless lots as the defrauded one did, and acting as banker for both, without profit; that he defrauded himself to the same extent, but, in addition, took chances of losing twice as much as his “victim.” If this plaintiff was actuated by a desire to cheat, he should be relieved from the consequences, for being insane.
And I am not ignoring that it is no defense to fraud that the perpetrator profits nothing. If there be fraud perpetrated, one who knows he can gain nothing has not even the sorry excuse that gain tempted him. But, while lack of gain does not justify fraud, that the alleged perpetrator knows there can be no profit, and that he actually will suffer the greater loss if what he says is false, is most vital evidence on whether a fraud was intended. The underlying reasoning has been fully gone into in another connection. If one admitted having wilfully killed another, it would effect nothing *148that he loved the man whom he had murdered, and had everything to lose by his death. But if there was no evidence of the killing, save that he had opportunity to commit it, then undisputed evidence of such affection and lack of motive would be decisive for innocence.
The majority makes a jury question out of whether one who did what he knew must injure himself mo|e than the other, intended to defraud that other.
I do not agree that the.abstract rule that credibility is for the jury controls here. This rule does not authorize the rejection of undisputed testimony, when nothing can reasonably be said to affect credibility. Of course, if the jury could find that a material claim of the plaintiff’s had no support save witnesses who were not credible, my premise fails. In that case, the inference of fraud has not been overcome, because of the' character of the testimony by which it is met. The plaintiff is not impeached because he may have been a co-conspirator — a “capper,”— nor because Harley may have returned to plaintiff all he paid — -plaintiff may have done murder. The trouble is there is as much evidence of one as of the other; that is, none, of either. There is none, unless it be the testimony of plaintiff that he had no arrangement with Harley for a rebate in price, none for a commission, and that he had received neither. He is not impeached because he was reckless enough to make a false assertion as to which he must have known that, if believed and acted upon, he would be injured most of all. Such assertion proves he is a reckless optimist, but not that he is a liar. That he was taking the greater risk in dealing with one who had married the sister of his wife, is no impeachment. There is no presumption that men deal crookedly, because the deal is with a brother-in-law. All that is material in this relationship is that it made it more reasonable for defendant to rely upon what plaintiff said. That is all that is effected by the fact that defendant had no knowledge of the value of the lots. *149That one of the notes given by plaintiff was sold by Harley to a tenant of the plaintiff’s does not impeach plaintiff. Neither is he discredited because the jury was authorized to reject the testimony of Harley. But, at all events, impeachment is of no avail if what the discredited witness speaks to is admitted to be true. That is this case. If every witness for plaintiff were unworthy of belief, the facts upon which his innocence depends are admitted. He did give his own notes for the total purchase, he did pay them, and all he ever got were the non-bankable notes which the majority cancels.
I think we should reverse, on the ground that the evidence shows conclusively plaintiff did nothing with fraudulent intent — did not commit the fraud charged. Defendant may not be without remedy, but he should not recover in this suit.