Court Opinion

ID: 6695506
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:49:15.791639+00
Date Added: 2024-06-11T16:01:13.321795
License: Public Domain

WaleeR, J.
There have recently been several cases of this kind before the Court, and we have held that while expressions of opinion by a seller, amounting to nothing more than mere commendation of his goods — puffing his wares, as it is sometimes called — or extravagant statements as to value or quality or prospects, are not, as a rule, to be regarded as fraudulent in law, yet “when assurances of value are seriously made, and are intended and accepted and reasonably relied upon as statements of fact, inducing a contract, they may be so considered in determining whether there has been a fraud perpetrated; and though the declarations may be clothed in the form of opinions or estimates, when there is doubt as to whether they were intended and received as mere expressions of opinion or as statements of facts to be regarded as material, the question must be submitted to the jury.” 14 A. & E., page 35; 20 Cyc., page 124; Morse et al. v. Shaw, 124 Mass., 59; Whitehurst v. Insurance Co., 149 N. C., 273; Cash Register Co. v. Townsend, 137 N. C., 652. We also held in the Whitehurst case, approving what is said upon the subject in Pollock on Torts (7 Ed.), 276, that to create a right of action for deceit, there must be a statement made by the defendant, or for which he is answerable as principal, and with regard to that statement all the following conditions must concur: (a) It is untrue in fact, (b) The person making the statement, or the person responsible for it, either knows it to be untrue or is culpably ignorant (that is, recklessly and consciously ignorant) whether it be true or not. (c) It is made with the intent that the plaintiff shall act upon it, or in a manner apparently fitted to induce him to act upon it. (d) The *67plaintiff does act in reliance on the statement in the manner contemplated or manifestly probable, and thereby suffers damage. What is still more to the point,Iwe further held that the false representation of a fact which materially affects the value of the contract and which is peculiarly within the knowledge of the person making it, and in respect to which the other party, in the exercise of proper vigilance, had not an equal opportunity of ascertaining the truth, is fraudulent. J Thus false and misleading representations made by a vendor to a purchaser of matters within his own peculiar knowledge, whereby the purchaser is injured, are a fraud which is actionable, where facts are not equally known to both sides, a statement of opinion by one "who knows the facts best involves very often a statement of a material fact, for he, impliedly, states that he knows facts which justify his opinion, j Smith on the Law of Fraud, sec. 3; Modlin v. R. R., 145 N. C., 218; Ramsey v. Wallace, 100 N. C., 75; Cooper v. Schlesinger, 111 U. S., 148; Kerr on Fraud and Mistake, p. 68. The principles relating to this question are so fully and clearly stated by Justice Hoke in Whitehurst v. Insurance Company, supra, and so applicable to the facts of this case in its every phase, that no other authority would seem necessary to sustain the ruling of the Court upon the question of fraud. It appears in this case that the false statements were made by the inventor of the machine, who must be supposed to have been fully informed as to its good and bad qualities and who must, therefore, have made the representations knowing them to be false. It was so expressly held in Peebles v. Guano Co., 77 N. C., 233. The plaintiff in this ease is a corporation and the manufacturer of the machine, and therefore what is said in the Peebles case is clearly pertinent to the facts as presented in the record: “It is said that the jury have not found that the representations were fraudulent, but only that they were false, and without fraud, the action cannot be maintained. If we consider the action as for the deceit, this objection would be unanswerable if the defendant was the seller only, and not also the manufacturer of the article. It is difficult to conceive how a manufacturer of guano can make a representation concerning the substances of which it is composed, which is false, and not also *68fraudulent, in. tbe sense that it was knowingly false. If bis servants employed in tbe manufacture, on any occasion by negligence, or wilfully, omitted to put in tbe valuable ingredients without tbe knowledge or connivance of tbe manufacturer, it would free bis false representation from immorality, but be must in law be beld equally liable for tbe acts of bis servants, and be cannot be beld innocent of a moral fraud, if after being informed of the omission he seeks to take advantage of it by demanding for a spurious and worthless article tbe price of tbe genuine one. We think that on tbe facts found by tbe jury tbe plaintiff was entitled to damages.” Tbe representation which Lombard, plaintiff’s agent, made to defendants was of such a nature as to mislead them and induce them to purchase a worthless machine instead of tbe improved and perfect one they bad tie right to think was being sold to them. It was well adapted to accomplish tbe purpose for which it was made, namely, to deceive tbe defendants as to tbe true quality of tbe machine. He lauded its merits, if it bad any, but wilfully concealed its demerits, and having no knowledge or means of acquiring knowledge themselves, they were easily duped, as any intelligent and careful man would have been, and were practically at bis mercy. Tbe representation was substantially like that made in Audit Co. v. Taylor, 152 N. C., 272, which we beld to be sufficient as tbe basis for a charge of deceit. Tbe representation in our case was as to tbe mechanical construction of tbe typesetter, and it proved by actual use to be mechanically defective. It was not a mere expression of opinion or commendation, but tbe false statement of a bidden or concealed fact, which was material because it was tbe main inducement to tbe purchase. Machine Co. v. Feezer, 152 N. C., 516; Savings Bank v. Chase, 151 N. C., 108.
The plaintiff contends that the evidence tended to vary or contradict tbe written contract of sale, and relies upon Etheridge v. Palin, 72 N. C., 216, but tbe case does not apply here. It was attempted in Etheridge v. Palin to vary tbe contract by adding a warranty, but that is very different from an attack upon tbe contract as having no validity because induced by fraud. It does not change tbe contract, but nullifies it, and is competent *69for that purpose, as we beld in Tyson v. Jones, 150 N. C., 181; Whitehurst v. Insurance Co., supra.
The exception that there was no evidence of the agency of Lombard other than his own acts and declarations, is not meritorious. He was sent out by the plaintiffs to make the contract and install the machine, and there was other competent and sufficient evidence of his agency. The declarations were made by him dum fervet opus, and his principle must be considered as bound by them, as much so as if it could have made them and had made them itself. Qui facit per aliurn facit per se. In this connection we may revert to the case of Peebles v. Guano Co., supra, where it is said: “There is no reason that occurs to us why a different rule should be applicable to cases of deceit from what applies to other torts. A corporation can only act through its agents, and must be responsible for their acts. It is of the greatest public importance that it should be so. If a manufacturing and trading corporation is not responsible for the false and fraudulent representations of its agents, those who deal with it will be practically without redress and the corporation can commit fraud with impunity.” In Manufacturing Co. v. Davis, 147 N. C., 267, the present Chief Justice says: “The plaintiff company is liable for the fraudulent representations of its salesman and agent, which were made to defendant to his injury. This would be so whether the agency of Guy were general or special. Hunter v. Matthias, 90 N. C., 105; Peebles v. Patapsco Co., 77 N. C., 233; 1 A. & E. Enc. (2d Ed.), 1143.” See also Pavings Bank v. Ghase, supra.
Whether the machine was in fact defective, as alleged by the defendants, was a question for the jury, and so were the other matters involved in the issues. We think the delay of defendants in discovering the defect and the fraud, and in asserting their rights in respect of it, is sufficiently explained by the proof. There was evidence to support the verdict of the jury, and we are not privileged to review their findings. The judgment thereon was correct. McClennahan v. Cotten, 83 N. C., 333.
Upon a careful review of the whole case, no error has been discovered. No error.
AlleN, J., did not sit.