Court Opinion

ID: 6123320
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:12:18.600199+00
Date Added: 2024-06-11T08:24:20.207479
License: Public Domain

MulliN, P. J. :
Unless the plaintiff’s intestate was induced to enter into the settlement or adjustment of the claims of the defendant Budlong against her by fraud, this judgment cannot be sustained. Mrs. Morris was the sister of Budlong, and, in the absence of evidence of any difficulty between them, it must be assumed that they entertained for each other that measure of affection which exists between those standing in that relation to each other.
It is true that there is evidence that the families of .Budlong and Mrs. Morris were not for a time on visiting terms; but it does not appear that the feud extended to Budlong and Mrs. Morris. Indeed, the readiness with which she applied to him for assistance in her trouble, and with which ho consented to aid her, justifies the inference that personally they were on friendly terms. Budlong’s purchase of the farm for her, and the payment of the liens upon it, were acts of the greatest kindness, and evidence of sincere affection on his part for his sister. It was natural, in view of these acts and the relationship between them, that Mrs. Morris should repose the greatest confidence in Budlong’s regard for her, and she would have been very ungrateful had she doubted his good faith in his dealings with her. Her husband, as I understand the evidence, was in jail when Budlong agreed to bid in the *574farm and pay the judgments that were liens upon it. There was no one to aid her, who had the pecuniary ability, except Budlong. Her sons, I infer, were young, and wholly without means. She could not do otherwise than trust to him. When, therefore, they met at Richardson’s office, in Utica, in March, 1866, and Budlong neglected and refused to give her a statement of the amounts advanced by him, and of the sums for which Mrs. Morris was entitled to credit, but he stated the gross amount which was owing him by Mrs. Monis, she might well place confidence in the accuracy of the statement of the amount due, and assume that he had arrived at the balance after giving her credit for all sums, to credit for which she was entitled. The non-disclosure of the fact that he had not given her credit for the board of his men, and for the services of her sons, or for the personal property appropriated by him, was as to her a fraudulent concealment of facts of which she was entitled to be informed, and of which he was in duty bound to disclose. In short, it was a fraud upon her, which entitles her to relief, unless Budlong has some good and sufficient excuse for thus acting.
. The appellant’s counsel insists in his points, and in his argument that plaintiff is not entitled to relief, on the ground of fraud, because fraud is not charged in the complaint nor found by the referee. It is true that fraud is not charged in the complaint; but facts are alleged from which fraud may legitimately be inferred. It would have been better pleading to have charged the defendant with having procured the mortgages by fraud, and with fraudulently concealing from plaintiff this fact, that he had not given her credit for divers sums, to credit for which she was equitably entitled. Fraud was proved, and' although the referee, in his findings, alleges that plaintiff was induced to concede the amount claimed by defendant to be due on the settlement, by fraud, or through mistake on her part; and the proof sustaining the finding, the parties should not be subjected to the expense of another trial, when the error can be corrected by amendment, if deemed necessary. It is the duty of the court, under the circumstances, to treat the pleading as amended, and affirm or reverse the judgment as justice shall require. The statement in the finding that the adjustment made at Mr. Richardson’s office was entered into by *575plaintiff through a mistake of facts is in a certain sense correct; but it is the mistake that is made by every person who is induced by fraud to do an act which is injurious to his interests. But the causa causans is fraud, and the plaintiff’s right of action has its origin in the fraud of Budlong.
In the first Story’s Equity Jurisprudence (§ 309), the learned author says the courts of equity do not sit to enforce what has, not inaptly been called, a technical morality. If confidence is reposed it must be faithfully acted upon and preserved from any intermixture of imposition. If influence is acquired it must be kept free from the taint of selfish interests and cunning and overreaching bargains.. Courts of equity will not therefore arrest or set aside an act or contract merely because a man of honor would not have entered into it. There must be some relation between the parties which compels the one to make a full discovery to the other or to abstain from all selfish projects. But when such a relation does exist, courts of equity acting upon this superinduced ground, in aid of general morals, will not suffer one party, standing in a situation of which he can avail himself against the other, to derive advantage from that circumstance, for it is founded in a breach of confidence. The general principle which governs in all cases of this sort is that, if a confidence is reposed and that confidence is abused, courts of equity will grant relief.
, That Mrs. Morris placed implicit confidence in Budlong cannot be questioned. That she kept no account of the money paid or property delivered to him, or of the services rendered by her to him, is found by the referee.
It was the duty of Budlong' to keep an account of his dealings with Mrs. Morris so that a fair and just settlement of their dealings might be had. This he did not do. All the information ho would give her, as to his transactions with her and on her behalf, was his verbal statement that a gross sum was due him from her. From the relationship between them she might well believe that the balance claimed was actually and honestly duo to Budlong, after deducting all payments made by her to him and all property received by him to apply on his advances. But it is found by the referee that nothing whatever was allowed by Budlong to her, for divers advances made by her to him, to apply in *576reduction of his demands against her. ’ Budlong knew the state of the accounts between himself and Mrs. Morris, and he knew that she did not know it, he stood in the attitude of taking-advantage not only of his superior knowledge but of her confidence in him to deceive and defraud her. It is no answer to this charge to say it was the duty of Mrs. Morris to ascertain whether all proper allowances has been made her, before she admitted her liability to pay the balance claimed by Budlong and secured it by the mortgage to Ferguson, and had she been vigilant she might have ascertained that Budlong claimed too much as due to him.
. The same may be said in almost every case of fraud. The party defrauded might by diligence ascertain the truth, detect the fraud and defeat it. But it does not he with the party guilty of the fraud to impute want of vigilance in the party defrauded, unless the transaction is such as to put the other party' on inquiry and that inquiry, if made, would have resulted in a discovery of the fraud.
The appellant’s counsel insists that Mrs. Morris ought not to maintain the action because she could not enforce the performance of the agreement between her and Budlong as to the purchase of the farm on the foreclosure by Budlong, and the conveyance of it by him on payment of his advances therefor.
"When that arrangement was made the title to the farm was in Morris, but the sale on foreclosure divested his title and it passed to Budlong.
If it be true that Mrs. Morris had not such an interest at the time the title was conveyed to Budlong as would enable her to compel him to convey it to her on payment of his advances, yet when he accepted payment from her, and treated her as the person entitled to a conveyance, he cannot shield himself from the consequences of fraudulently exacting from her a greater amount than was honestly due him, upon a fair settlement of the accounts between them.
After he had consented to accept payment of his advances from Mrs. Morris, an accounting became indispensable, and into that accounting must enter all sums which Budlong had received to apply on his advances, and this entitled Mrs. Morris to a full and accurate statement of all sums received by him, which should go in reduction of his claim.
*577A court of equity only can set- aside the mortgages given by-Mrs. Morris to Ferguson, and by Ferguson to Budlong, and the conveyances following the foreclosure of the Ferguson mortgage. In such case the statute of limitations does not bar the right of recovery until the expiration of six years from the discovery of the fraud. (Code of Civil Procedure, § 89, subsec. 6.) .
The referee finds that plaintiff did not discover the fraud until August, 1872. The action was commenced in July, 1874, so that the statute is not a bar.
The judgment should be affirmed, with costs.
Present — Mullin, P. J., Talcott and Smith, JJ„
Judgment affirmed, with costs.