Court Opinion

ID: 6694287
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:45:43.532845+00
Date Added: 2024-06-11T16:01:11.763942
License: Public Domain

Douglas, J.,
concurring.
I can not concur in the contention of the: defendant, that because two men are at ami’s *484length, as all men generally ara, unless they occupy some fiduciary relation to' each other, one can safely perpetrate a fraud upon the other. This rather novel doctrine seems to be based upon the idea of contributory negligence on the part of the plaintiff, which, concurring with that of the defendant, becomes tire procsimate cause of the fraudulent result. This -application of tire doctrine of contributory negligence is new to me; but even if it were admissible, it could not be a defence in tire present action, because actual .fraud is always wilful. Even in actions sounding in damages tire defense of contributory negligence is never available against wilful injury. Then why should it be a defence against wilful fraud ? I will readily admit that if tire negligence of tire plaintiff hiad enabled tire defendant to perpetrate a fraud upon a third party who was himself innocent of fraud or negligence, he could not recover from such innocent party. Such a case is far different from tire one presented to us in the opinion of tire Court.
A man might be negligent in walking in the middle- of the street on a -dark night, 'and such negligence might excuse the driver of a wagon for unintentionally running into him, but it wiould be no excuse- for robbery. The doctrine that mere negligence puts a man beyond tire pale of tire law, can never receive nry assent.
The- defendant relies upon the case- of Dellinger v. Gillespie, 118 N. C., 737, tire essential point in which was- the fact that tire defendant discovered, the alleged fraud before the work was commenced, and yet permitted tire plaintiff to proceed and put up the lightning rods without objection. The Court said that such conduct wias a waiver of tire alleged fraud if it ever' existed; and that equity would not permit a man to accept work performed after he lrlad full knowledge of -all 'the facts, and then refuse to- pay for it.
It is true in that case tire Court also said that the defendant *485was guilty of negligence, ancl cited Boyden v. Clark, 109 N. C. 664, 669, a case which, I respectfully submit, furnishes no foundation whatever for Ih© contention of the defendant in 'the case ait bar. Some- isolated sentences in the opinion, considered without regard to the ess-e-nitiial facts of tli© ciase, might offer some show of authority; but the case itself, taken as a whole, fails to do so-. The defendant, Clarke, bought the equitable interest- of one Sherrill, who- held a bond for title from Janies Harper. Olarke subsequently paid Harper the remainder of the- purchase-money, and took a deed from him. The plaintiff, Boyden, who- had bought an adjoining tract, sought to hold Clarke- responsible for alleged representations of Sherrill, although C'l-arke was an innocent purchaser, for a valuable cionsider-altion, without notice, and held title- under Harp-e-r, and not under Sherrill. The Court says (109 N. O., page 667) : “It w-ould be giving very great latitude- to the doctrine of estoppel in pais if the .mistaken or fraudulent statements of a vendee, occupying land under a contract of sale, were allowed to- have the effect of establishing -title by estoppel, as against .the original vendor and the assignee of the original vendee, after the vendor had performed his contract b-y conveying to 'the assignee, both grantor and grantee being ignorant of the fact that any misrepresentation had been made."
That case as- thus stated in the opinion itself furnishes no authority for the doctrine- now contended for by the- defendant, that, as between the- original parties, mere neg’li-genc is a defense for wilful fraud.
To tlile- contrary may be cited a practically unbroken line of authorities. Eetter on Equity, s-ele. 87, page 136, says: “But no obligation rests on him to investigate- or- verify the representations, to the truth of which the other party to the- contract, with full means of knowledge, has deliberately pledged Ms faith. In a Court of Equity no- miau can complain that *486another ha» too implicitly relied on the truth of what he himself has stated.”
Beach on Mod. Eq. Jur., sec. 95, says: “A false representation of one of the parties to a contract does not put the other on inquiry as to ite truth. Every contracting party has an absolute right to rely on the express statement of an existing fact, the tiruJth of which is known to the opposite party and unknown to Mm, as the basis of a mutual agreement ; and he is under no obligation to investigate and verify statements to the trulth of which the other party to the contract, with full metas of knowledge, has deliberately pledged his faith.”
Story’s Eq. Jur., sec. 154, says: “The danger of setting aside the solemn engagements of parties when reduced to writing, by the introduction of parol evidence, substituting other material terms 'and stipulations, is sufficiently obvious. But what shall be said where those terms and stipulations are suppressed or Omitted by fraud or imposition ? Shall the guilty party be allowed to avail himself of such a triumph over innocence and credulity to' accomplish his own base designs? That would be to' allow a rule introduced to suppress fraud to be the most effectual promotion and encouragement of it. Anid hence courts of equity blave niot hesitated to entertain jurisdiction to reform. all contracts where a fraudulent suppression, omission, or insertion of a material stipulation exis'te, notwithstanding to' some extent it breaks in upon the uniformity of the rule as to the exclusion of parol evidence to vary or control contracts; wisely deeming such cases to he a proper exception to the rule, and proving ite general soundness.”
Bisphlam Prin. Eq., sec. 202, says: “There is, indeed, a distinction between deeds and oitber instruments which a man intends to execute, though his intention may be brought about by fraudulent means, and those which he 'has no intent ton to *487execute, but executes under the impression tfoalt tOue instrument is of a different character from what it actually is, or, in other words, executes the wrong paper. In the latter case the instrument is absolutely void, and the law above stated in relation -to voidable instrumente would, in general, not apply.”
Again the learned author says, in section 207: “A man who is dealing with another has a right to. rest upon an assertion of a fad made by the latter; but he has no right to rely upon the latter’s opinion, unless, indeed, he is an expert, in which case the parties do- not deal upon equal terms, an'd the ordinary rule does not apply.”
Neither space nOr time will permit an examination of the numerous authorities cited by these different authors. I will quote but two:
In Redgrave v. Hurd, 20 Ch. Div. 1, the celebrated Sir George Jessel, Master of the Rollsj says: “Nothing ciato be plainer, I take it, on 'the authorities in equity, thlan that the effect of false representation is not got rid of on the ground that the person bo whom, it was mad© was guilty of negligence.”
In Sutton v. Morgan, 158 Pa. St., 204, 218; 38 Am. St. Rep., 841, 844, tire Court says: “It is said, that Williams should have inquired for ‘himself, and that his opportunities of obtaining information were just as good as those of Morgan. This may he. Prudence should have led him and hi’s 'financial mían’ -Sutton bo ¡test the truth of the glowing statements made by Morgan 'and Gloss, but it did not. They fell easily into the- trap which was set., with some skill and some effrontery, for them; but their neglect, or w!ant of prudence, cam. not justify the falsehood or fraud of those who practiced upon their credulity. The doctrine of contributory negligence can molt be invoked by the defendants- to save them from liability for misleading their victim. They must stand or *488fall on 'title truth, and good faith, of the representations that led to tlie sale.” This opinion is particularly striking' on account of its conclusion. While granting the prayer of the plaintiff for the rescission of the contract, the return of the money paid amd the cancellation of the mortgage, if concludes as follows: “For his gross carelessness the plaintiff ought to lose his costs. No bill of costs will be taxed for the plaintiff.”
There is an essential difference between aottíal misrepresentation and the mere concealment of material facts of which both parties had equal opportunities of information; but the latter principle I am not now discussing. A common instance of correcting a written instrument which bcth parties might have read, is where a deed absolute in form is construed to be a mortgage.
It seems to me that every principle of equity that would grant relief from fraud in the treaty, would apply with even greater force tot fraud the factum.
Whether there was sufficient evidence of fraud, in the case at bar to go- to the jury, is an entirely different question; but even on that I concur with the Court.