Smith v. Griswold

Equity Jurisdiction — Fraudulent Sales. — Courts of equity will entertain jurisdiction in cases of fraudulent sales where deceit is alleged in a sale, although the plaintiff might maintain an action for deceit. Prooe — No Preponderance oe, when. — When there is an issue of fact, and the plaintiff supports the allegations in his complaint by his deposition and no other testimony, and the defendant in his depositions denies these allegations, there is no preponderance of proof. The court will not reject the testimony of a witness who is not in any way impeached.

Appeal from Multnomah County. Smith was the owner of three claims against the government of the United States, agregating one thousand three hundred' and seventy-five dollars. They were for services as a packer and for the use of a horse in the volunteer service in the Indian war of 1854, nine hundred and sixty dollars; for the use of a mule furnished in the Indian war of 1855-6, two hundred and thirty dollars, and for the value of the mule, lost while in such service, one hundred and eighty-five dollars. In 1873 Smith employed B. F. Dowell to collect these claims from the government, and executed in his favor a separate power of attorney in each case. The complaint alleges, in effect, that in June, 1874, Gris-wold, for the purpose of inducing Smith to sell to him these claims at less than their value and with the intent to defraud him, represented to Smith that no compensation would be allowed him for the loss of the mule, by the government or by the court of claims; that not more than three hundred dollars would be allowed for Smith’s services as packer and for the use of the horse; that Dowell never could collect any of the claims, and that if he did collect them, Smith could not make anything out of him; that Dowell had transferred all his property to his family, and that he was insolvent; that the claims were worth no greater sum than three hundred dollars, and that he, Griswold, would not make anything out of them if he bought them at that figure, and the only reason why he was willing to give so much was that he wanted to “ buck ” against Dowell. The complaint further alleged in effect, that Griswold had been engaged in prosecuting claims against the government, and that Smith was aware of this fact and placed confidence in his statements on account of it; that he was induced by these statements to sell Griswold all the claims for three hundred dollars; that Griswold collected them in full in September, 1874; that the statements of Griswold were false and fraudulent. The complaint prays that the contract of sale be set aside and for judgment for one thousand three hundred and seventy-five dollars, the sum of the claims, less the three hundred dollars received on the contract of sale, and interest. The answer admits the purchase by Griswold of the claims for three hundred dollars, but denies all material allegations in the complaint, which go to charge Griswold with false or fraudulent representations, and alleges that the purchase was in good faith, and that the three hundred dollars in gold was the full market value of the claims when the purchase was made. There was no testimony except that of the parties to the suit, their testimony going to sustain their respective pleadings. The court foimd that the allegations of the complaint were true, and it set aside the sale and rendered judgment in accordance with the prayer of the complaint. A suit can only be maintained when there is not a complete, plain and adequate remedy at law. (G. L. of Or., sec. 376; Milton v. Scammon, 52 N. H. 609; Story’s Eq. Jur., sec. 33, 473; 3 Black. Com. 431; Learned v. Holmes, 49 Miss. 290.) If the plaintiff can recover at all, he has a complete remedy in an action at law for the deceit. (5 Craneh, 439; Grant v. Bontz, 2 Oranch, 184; Shafer v. Slade, 7 Blackf. 178; Milton v. Scammon, 52 N. H. 609.) The alleged false representations are mere statements of opinion, for which no action or suit will lie. {Ellis v. Andrews, 56 N. Y. 85; Van Epps v. Harrison, 5 Hill, 63.) This suit will not lie for a false representation when the plaintiff, by the exercise of common prudence, could have learned the fact. {Slaughter v. Gleason, 13 Wall. 379; Moore v. Subeville, 2 Bibb, 602; SitzanY. Wilson, 4 Iredell, 501.) The plaintiff did not establish his cause of suit by preponderance of evidence. There was no testimony as. to what was said when the bargain was made, except that given by plaintiff and defendant. To say the least, they are entitled to equal credit, and their statements are in direct conflict. In such a case the plaintiff must necessarily fail. Fraud and deceit are always good grounds for equity jurisdiction. The legal and equitable maxim is suggestio falsi or suppressio veri amounts to fraud and will avoid a contract at law, or be a good ground of relief in equity, whenever the plaintiff is deceived by the defendant to his injury. (2 Tucker’s Com. 421; 1 Story’s Eq. Jur. sec. 184.) At common law trespass or trover would lie in all cases by the lien creditor against the debtor or his assignee, and for fraud and deceit the action of deceit would lie. In modern times a special action on the case or bill in equity has superseded, the action of deceit, and for all contracts expressed or implied,' for money, the action of assumpsit has been substituted for the action of deceit or a special action on the case. Courts of equity take jurisdiction in such cases, not on the ground that there is no remedy at law, but on the doctrine that Griswold held the funds in trust for the plaintiff, and its remedy is more adequate than the remedy at law. In cases like those described in this complaint, it would have the assignors and Griswold both before the court, and if equity demanded it at the hearing, it would decree for each of the assignors and Griswold to pay the plaintiff, and also render a decree over in favor of Griswold; or annul the contract, and compel Griswold, on account of his fraud, to pay the whole amount he received, less the amount he paid to each of his assignors. (1 Story’s Eq. Jur. sec. 451; 2 Id. sec. 1226.) The action of assumpsit and a bill in equity are frequently concurrent remedies. (1 Story’s Eq. Jur. sec. 60.) Where Stewart had a mail contract, and he assigned it to Bradley, and afterwards Stewart gave an order on the postmaster-general for six hundred and twenty-five dollars, to one Boot, who collected the money, it was held that Boot was liable to Bradley for the amount he collected on the order. (Bradley v. Boot, 5 Paige, 632.) Mr. Meigs, one of the ablest attorneys that ever practiced law in Tennessee, truly says: “Many dicta are to be found in the books confining this action for money had and received to cases where they say there has been privity of contract, as between payee and maker of a note, payee and acceptor of a bill, indorsee and immediate indorser; and this doctrine being advanced at Nisi Prius, 1 Camp. 175, has been introduced into the text of some editions of ‘ Chitty on Bills.’ But it is nonsupported by the decided cases, as may be seen from Grant v. Vaughan, 3 Burrow, 1525-9; Fatlock v. Harris, 3 T. B. 174; Báborg v. Peyton, 2 Wlieaton, 885; Pierce v. Crafts, 12 Johnson’s R. 90; Dichson v. Cunningham, M. and Y. 221.” (Meigs’Digest, p. 93, sec. 9.) In the case of Baborg v. Peyton, Judge Story says: “ The old doctrine upon this subject has been very considerably shaken in modern times. An indebitatus assumpsit will now lie in favor of the payee against the acceptor; and it is generally true that where such an action lies, debt will lie.” We see no inconvenience in adopting a rule more consonant to the just rights of the parties, as recognized in modern times. In so doing we apply the well-settled docttine that debt lies in every case where the common law creates a duty for the payment of money, and in every case where there is an express contract for the payment of money. (4 Wheat. 175.) In the case of Diclcson v. Cunningham, reported in Martin Yerger’s Report, 221, Judge Catron says: “It is objected by counsel, that there is no privity of contract between the parties; and several authorities .were cited to show that indebitatus assumpsit will not lie, except between privies. To this objection there are two answers — first, there is a legal • privity of contract between the parties in this ease; secondly, it is not true that the action for money had and received can only be grounded on privity of contract. It is the proper remedy to recover money obtained by fraud or deceit.” This case was a very complicated, fraudulent transaction. It nearly equaled Griswold. The Reporter makes this syllabus of the case: “Where the defendant was indebted to A., who was indebted to B., who was indebted to plaintiff — and they all met together and defendant aided and assisted A. in successfully assigning to the plaintiff a debt, which belonged to neither; and by this means, A. paid his debt to B., and B. paid his debt to the plaintiff, and A. credited defendant, held, that plaintiff might disaffirm the contract and maintain an action for money had and received against the defendant.”1 (M. and Y., p. 203.) Judge Grabb, in delivering the opinion of the court, tries to sum up the fraud in a few words: “That Dickson did have and receive money, which, by law, was for the use of Cunningham. By aiding Garner in successfully assigning to Cunningham a suit which belonged to neither, Dickson contributed towards Cunningham’s giving a credit to Bhea in account, in other words paying money to Bhea; and Bhea giving Garner a credit, in other words, paying money to Garner; and Garner giving Dickson a credit, in other words, paying money to Dickson. It was no strained inference, then, but one believed to be authorized by the decided cases, that Cunningham’s money went to Dickson. The whole transaction being disaffirmed, as grounded in mala fide, Dickson was the man who had the money; he was the proper person for Cunningham to sue.” (Id. 220.) There is more privity between the plaintiff and Griswold in these actions than there was between Cunningham and Dickson. Judge Tucker says: “This action lies to recover back money embezzled, or which any person has been defrauded of, by cheating or otherwise.” (2 Tucker’s Com., 132.) The action of assumpsit is an equitable action and it will lie at common law, whenever a man has received money, which, equitably, belongs to the plaintiff. {Thallheimer v. Brinlcerhoff, 3 Cow. 624; Mier v. Bchenck, 3 Hill, 228; Story on Agency, sec. 397.) The case of Upton v. Vail, 6 Johns. 181, was an action on the case, and Chief Justice Kent, after reviewing the authorities, says: “ I place my opinion upon the broad doctrine that fraud and damage coupled together will sustain an action.” Or a suit in equity could be sustained on the lien for an account and for the fraud. (Story’s Eq. Jur., sec. 506.) Inadequacy of price is a badge of fraud. (1 Bae. Abridg. 161; 1 Story’s Eq., secs. 246; Bump on E. C., 43; Sheton v. Church, 38 Conn. 416; 39 111. 264; Johns. Ch. 35.) Misrepresentations make acts void. (1 Story’s Eq. Jur., see. 191; Smith’s Man. of Com. Law, 67; Chitty on Cont. 753; 2 Parsons on Cont. 774.)