Court Opinion

ID: 5470970
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:38:00.010551+00
Date Added: 2024-06-11T08:33:18.642325
License: Public Domain

Mullin, P.J.
The plaintiff having been nonsuited solely on the ground that the release was a bar to the action we shall not consider any other of the questions relating to the merits presented by the counsel for the appellant; we can properly review only the legal propositions actually decided by the court below.
The execution and delivery of the release were admitted upon the trial, and unless the plaintiff has by his evidence relieved himself from the operation of them he was rightly nonsuited.
The ground relied upon to relieve the plaintiff from the . operation of the release is, that it was obtained by false and fraudulent representations.
Fraud vitiates all transactions into which it enters (Chitty on Contracts [11th Am. ed.], 1035).
*512It defeats a release as effectually as any other contract (1 Chitty's Pl., 613).
It being competent, then, for the plaintiff to assail the release as fraudulent we are next to inquire whether there was sufficient evidence of fraud given by the plaintiff to require the submission of that to the jury.
The officers of the bank had the means of ascertaining whether the plaintiff’s bonds had been replaced. The vault was under their control, and it was the proper place to deposit the bonds if they had been returned. It was not pretended that any search was ever made by any officer of the bank. When they told the plaintiff that the bonds had been returned they stated that which they did not know to be true, and of which they had no knowledge except what they derived from Starin.
Starin’s testimony on the trial shows that if he told the other officers of the bank that plaintiff’s bonds had been returned he told them an untruth, they had not been and he knew it.
The bank cannot escape the consequences of a false representation made to a person dealing with it, and who by relying upon it is injured, by proving that its officers, or some of them, were told the falsehood by some other agent or officer of the corporation.
The party has the right to rely upon the representation as being a matter within the personal knowledge of the person making it, unless the channel through which the information was received was disclosed to him before he entered into the contract or assumed the liability.
The plaintiff had the right to assume that the officers making the representation as to the return of his bonds had personal knowledge of the fact, and especially had he the right to assume they were not making it upon the faith of the statement alone of the cashier.
This was especially true as to the president. He was employed to watch over the interests and business of the *513bank, to see that neither the cashier or other officers stole or ■squandered its property or wronged those doing business with it.
It was solely his duty to see that the bonds of the plaintiff were returned. The amount was large. The bank was liable if they were not returned as was he himself. The plaintiff could not hesitate to believe his statement, earnestly and repeatedly made, that the bonds had been returned. He was speaking as the chief financial officer of the- bank, and his statement was the statement of the bank.
The counsel of the plaintiff knew, if he did not, that the bank was not liable for the bonds if they had been returned to the bank and thereafter unlawfully appropriated by Starin or any other person.
If he believed the officers of the bank it was not liable, and his-only recourse was against Starin; to him must he look for whatever indemnity he should obtain for the wrong done him.
Starin was unable to do more than make good a small part of the loss, and as he was largely indebted to other, persons and to the bank itself a compromise became a matter of the highest necessity and importance.
That the representation influenced the plaintiff in agreeing to the compromise and consequent release cannot, it seems to me, be doubted, but if the evidence did not establish the fact to the satisfaction of the court and jury the plaintiff’s counsel offered to prove by the plaintiff that in all his negotiations as to the compromise he acted upon the basis of the fact that all the bonds had been returned and afterwards taken away by the cashier.
This evidence the court rejected, and it seems to me improperly. If not necessary to prove the fact offered the evidence was quite material, establishing the fact, as it would tend to do, that the plaintiff relied upon the representation, and was influenced by it, in entering into the compromise.
It is- essential, in order to establish a fraudulent representa*514tion, that it was made with intent to deceive the person to whom it was made (Kerr on Fraud, 55).
This intent is established when it is shown that the representation is false within the knowledge of the person making it, or that he had no reasonable ground for believing it to be true, and makes -it with the view to induce another to act upon it who does so accordingly to his prejudice though he may not have been instigated by a morally bad motive (Kerr, 55, 56).
The representations of Starin came directly within the principle above laid down by Kerr. He was the second highest officer in the bank, had full knowledge of the falsity of the statement and the bank was bound by it. It was made while the cashier was performing the duties of his office and in reference to the business of the bank, and was made with intent to deceive the plaintiff.
If the jury had found these facts as it might have been done the plaintiff was entitled to recover. A case was made for avoiding the release, and that out of the way the right to recover was complete.
It is proper I should say that in preparing the statement of facts that precedes the opinion I made it solely from the evidence of the plaintiff’s witnesses without any reference to the evidence on the part of the defense, because the case not being submitted to the jury the plaintiff had the right to require the case to be reviewed on the assumption, by the court, that the jury might have believed the version of the transaction between the parties given by his witnesses.
In view of the legal questions which are put forth in this opinion they are, upon the same assumption, that the evidence of the plaintiff’s witnesses is the correct-version of the acts and dealings of the parties without any reference to the case as presented by the' defendants’ witnesses.
The defendants’ counsel suggests, as an answer to the alleged fraud in the release, that if the fraud was proved and found by the jury that the plaintiff could not recover as he *515has not returned the property received hy him as the consideration of the release.
I do not find that this point was suggested on the trial, and it may be that the plaintiff has an answer to it had it been made. Unless there is an answer to it, it is probably fatal to the plaintiff’s action.
If the fact is, as alleged by the plaintiff’s counsel, that the bank paid nothing as the consideration for the release it would be void and neither the bank nor Beardsley could require any thing to be returned to them.
These questions will come up on another trial and can be disposed of in view of the whole evidence in the case.
The nonsuit is set aside and a new trial granted, costs to abide the event.
Taxcott, J., concurring.
Smith, J., does not sit.