Court Opinion

ID: 8264810
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:59:43.60124+00
Date Added: 2024-06-11T16:43:18.503563
License: Public Domain

GOODE, J.
(after stating facts). — The point is urged that a judgment non obstante veredicto can be given only when the answer states no defense, and even then must be given after verdict and before judgment; hence that as the present record shows judgment went for defendant on the return of the verdict, to give a second judgment later, notwithstanding the verdict, was error. But the record shows the motion for judgment non obstante was filed before the court had pronounced judgment. The misprision of the clerk in including a judgment entry in the entry of the verdict could be corrected by directing the lower court to set aside the two judgment entries and then enter judgment non obstante.
The main question is, was plaintiff entitled to judgment non obstante? This depends on whether defendant stated and offered proof of a defense. As regards the. testimony offered to prove the books did not come up to the representation of the agent in respect of historical and geographical accuracy, we find no reason to complain of the ruling of the court. The answer does not say what representation was made as to those matters, or that any was fraudulently made, and neither does it allege a warranty. The position seriously maintained is that a valid defense was averred in respect of fraud in procuring the execution of the contract. In stating this defense the answer alleges the facts connected with the signing of the contract. In effect it says the agent of the company pretended to read to defendant what purported to be a writing expressive of the agreement between them, which agreement, as made and as read, was *280that one volume of the “Americana” should he sent for defendant’s inspection and should he paid for if satisfactory; if not, returned;' that defendant believed the agent read the memorandum as it was written, and so believing signed the paper shoved over to him; that the paper signed was either the one the agent pretended to read, hut read falsely, or another substituted in lieu of it. No testimony Avas offered of a fraudulent substitution, the offer made conducing to prove only a misreading of the paper and that defendant, instead of reading* it himself, relied on the veracity of the agent’s reading. Plaintiff’s counsel contends the answer states no defense, as it does not say defendant was unable to read, and that the testimony offered would not establish a defense, as it included no evidence of such inability. In other words, granting the truth of what was pleaded and of the~proof offered, defendant is bound by the contract because of his negligence in signing without reading. In dealing with this question it is to be remembered the suit on the instrument is by a plaintiff who neither has of claims a* better standing* than the original promisee would have, and not by an innocent third party who acquired the contract for value. It is to be. remembered, too, that whatever fraud occurred in procuring the execution of the instrument, was perpetrated by the agent of the company and therefore the latter, and plaintiff as its assignee, is affected by the fraud. [1 Paige, Contracts, sec. 66; Martindale v. Harris, 26 Ohio St. 379.] The proposition on which plaintiff’s counsel relies is that conceding these facts, the negligence of the defendant precludes him from challenging the contract on the ground that the memorandum was misread and he was thereby deceived regarding its effect. The doctrine that a party who fraudulently induces the signing* of an instrument and then sues on a contract contained in it, can overcome a defense based on the fraud by proving the signer Avas careless in permitting himself to be *281deceived, is anomalous in that it punishes negligence instead of dishonesty. [1 Paige, Contracts, sec. 64.] But under certain circumstances it is accepted by some courts for reasons of public policy; i. e., to.uphold the validity of obligatory writings. In Johnston v. Insurance Co., 93 Mo. App. 580, the majority of the court held the plaintiff bound by the terms of a written contract he had signed without reading and in reliance on the statements of the agent of the insurance company as to the contents of the writing. The point in decision was that a false statement of the contents or effect of a writing (not a false reading of it) whereby a party is led to sign, is not such fraud as will nullify the instrument. Magee v. Verity, 97 Mo. App. 468, 71 S. W. 472, is to the same effect; and see 1 Paige, Contracts, sec. 64 and cases cited in note 12. The argument for this doctrine is very cogent when the instrument has passed into the hands of an innocent purchaser for value, and especially when it is negotiable paper; for business is hampered if such written obligations may be impugned because of fraud in their inception. When the first promisee, or a transferee standing in no better light, seeks to enforce the contract shown by the writing, the argument is less impressive. Yet even, in those instances something may be said against allowing the plea of non est factum. and in favor of the absolute liability of the promisor, if he signed the paper relying on the reading of the promisee, though he might have read it himself. The point of difficulty is as to how far the law ought to go in prescribing what acts of imprudence on the part of the signer shall exclude the defense of fraud — exclude it, not-out of deference to the knave, but because of the impolicy of permitting contractual writings to be impeached except on the most flagrant grounds; like forgery, duress or the incapacity of the signer. The tendency is for all defenses going to the genuineness of such writings, to degenerate finally into proving by oral evidence, agreements *282. the parties attempted to relieve from the uncertainty of that kind of proof. But greater harm might arise from refusing the defense of fraud in every case where such carelessness is to be imputed to the signer, because even men of business prudence cannot be prevented, from sometimes trusting parties with whom they deal. The general rule is, at least in actions between parties to a contract or transferees similarly situated, that fraud in inducing the signing of a memorandum or agreement which fails to state correctly the terms stipulated, will be a defense. [1 Paige, Contracts, sec. 63.] As to what will amount to fraud in, this regard, the adjudications are not harmonious. Considered in its practical aspect, the question might be put in this form: When will the law deem it important to make the negligence of the signer the decisive fact, rather than the fraud of the promisee? This question touches the law of negligence as well as that of contracts, and is to be tested, in some measure, by the eriterions applied in negligence cases. In the present case the defense of fraud cannot be rejected, unless the inference is irresistible that defendant failed to observe ordinary care to learn the cop-tents of the paper in controversy before signing it. Even if this can be conceded (and in our opinion it cannot be) if we pronounce defendant liable, we must suffer the agent’s fraud to prove effectual, lest, perchance, too great latitude will be afforded for challenging the validity of contractual instruments. We think to condone the fraud would be of more injurious tendency than to condone such negligence, if any, as marked defendant’s conduct. We know of no case in which it was ruled that the actual misreading of a paper purporting to contain a contract, thereby inducing the signing of it was not a fraud which the signer might set up in defense, even though he could have read the paper himself. Such a betrayal of confidence is revolting and so infrequent that it is not likely to be anticipated. It perhaps *283may be distinguished from a mere misrepresentation of the contents of a paper, because a statement of the contents is apt to be condensed so as to misinterpret the meaning of the original or be misunderstood by the hearer. The case of Crim v. Crim, 162 Mo. 544, 63 S. W. 489, is greatly relied on by plaintiff; but the broad remarks contained in the opinion must be interpreted in the light of the facts before the court. It was an action on a note given by the defendant to the plaintiff, and authorizing any attorney at law to confess judgment for the amount of the note. The defense was that when the note was signed the signer was ignorant of the cognovit; but the evidence proved he had executed many such notes, that several judgments had been rendered against him under cognovits, and that no representations were made to Mm about the character of the note when he signed it and there was no attempt to conceal its character from him. On those facts it was held no fraud, trick, or misrepresentation was used to procure the signature, and if the defendant did not read the paper before signing, he had full opportunity to do so and was presumed to know its -contents. It is true the opinion in that case disapproved this remark in the opinion in Wright v. McPike (70 Mo. 175) :
“As between the original parties, if one has procured the signature of the other to a written agreement,. whether by fraud or not, which does not contain the contract made by the parties, but a different one, he cannot be permitted to avail himself of that contract, but must stand by the one which was in fact entered into by both parties.”
We do not suppose the Supreme Court meant to say it is never ground for rescission, or relief in equity, in a suit between the original parties, that a contract was induced by material misrepresentations not amounting to fraud. [1 Wharton, Contracts, sec. 214; 1 Paige, Contracts, sec. 69; Bispham, Equity (6 Ed.), *284p. 305.] However, we are not concerned with this question because, in the present case, fraud is the essence of the defense; and Crim v. Crim, is no authority for the proposition that this defense cannot be established by proving the signature of a party was procured to an instrument by the opposite party misreading it to him. That this is an act of deception which will invalidate an instrument was stated in George v. Tate, 102 U. S. 564, in a passage approved by our Supreme Court in Och v. Railroad, 130 Mo. 27, 43, 31 S. W. 962.
The judgment is reversed and the cause remanded.
All concur.