Moon v. Benton

THOMAS, J.

The complaint consisted of two counts —one of the common count for money had and received, and the other a special count in case for deceit, which alleged, in substance, as we interpret the meaning of its averments, that on or about the 4th day of October, 1909, the plaintiff was the owner of a certain lot of real estate in Jefferson county, Ala. (describing it), and the defendant Moon was the owner of a certain other lot of real estate in Jefferson county, Ala. (describing it); that on some date prior to said 4th day of October, 1909, the defendant Moon executed to the codefendant, Cook, a certain mortgage on the said lot so owned by him, the said Moon, for the purpose of securing the payment of a certain promissory note which he had executed to said Cook in the sum of $675, bearing interest at 8 per cent, from the date of its execution to its maturity, to wit, June 1, 1910; that the consideration of said note was not a real or bona fide indebtedness, but a simulated one, and that its execution and acceptance was part of a scheme originated by the defendants, Moon and Cook, to injure and defraud the plaintiff, in pursuance of which they besought plaintiff to' trade his, plaintiff’s, afore-described lot, which was worth $425, to the defendant Cook, in return for the transfer to plaintiff of the said note and mortgage for $675, given by said Moon to said Cook on said aforedescribed Moon lot, representing to plaintiff, as a matter of fact, at the time, that the Moon lot was worth far in excess of the amount of the mortgage, to wit, that it was worth $5,000, and that it was located in or near Mountain Terrace, a fashionable and valuable addition to the city of Birmingham, Ala.; that the plaintiff, ignorant of the true location and value of said lot, and relying upon the said representations of the defendants with respect thereto, was, on said October 4, 1909, induced by them to sell and convey his own lot, as before described and of value as aforesaid, to the said defendant Cook in consideration of the transfer to him, the plaintiff, by said Cook of the aforementioned note and mortgage against said defendant Moon and on said Moon’s aforementioned lot; that the said Moon lot, instead of being worth $5,000 as had been represented to plaintiff by the defendants, was of value not exceeding $50, far less than the amount of the said mortgage upon it for $675, the assignment of which plaintiff had accepted as the consideration for the conveyance to Cook of his own lot, worth $425; that instead of the said Moon lot being located in or near Mountain Terrace, as had been represented to plaintiff by defendants, it was located four or five miles from Birmingham, in Shade’s Valley; that defendants knew, at the time they made said representations as to the value and location of said Moon lot, that such representations were false, and that the defendants made the same for the purpose and with the intent to- injure and defraud the plaintiff; and that the plaintiff, being ignorant at the time of their falsity, was induced by defendants to rely, and did rely, npon their truth, and as a consequence parted with the title to his own lot, which was worth $425, as said, in return for the transfer of the said note and mortgage for $675 on the Moon lot, which was worth not exceeding $50 to plaintiff’s damage in the sum of $1,000, as claimed.

(1) Ordinarily the proper measure of damages in an action of deceit, predicated upon a fraud which induces a party to purchase securities in the way of a note, bond, or mortgage, is the same as where he is induced to purchase real or personal property, and is, as a general rule, subject to some exceptions which do not appear to obtain here, the difference between the actual value of the security at the time of the sale and what would have been its value if the representations made with respect to it had been true.—14 Am. & Eng. Ency. Law (2d Ed.) 184; Kilby Locomotive & Machine Works v. Lacy, 12 Ala. App. 464, 67 South. 754.

This suit was brought on May 2, 1912, nearly two years, as appears from the averments of the complaint, after the alleged note and mortgage was due, and for aught appearing from the averments of' the complaint, the mortgage had been paid in full before the suit was brought. If so, it does not appear from the allegations of the complaint how the plaintiff could have sustained any damage as the result of the false representations alleged to have been made with respect to the value of the property embraced in the mortgage; for, if, notwithstanding the fraud, the plaintiff realized in full on the mortgage debt, he got all he contracted for and could not Complain.—8 Ency. Pl. & Pr. 908; 14 Am. & Eng. Ency. Law (2d Ed), 142, 193. Fraud without damage gives no cause of action.—3 Mayf. Dig. 823, § 17. It would seem to the writer, therefore, but not to the majority of the court, that the complaint should have negatived the payment of the mortgage debt, since it showed the debt to be past due when the suit was brought.

(2) However, no' ground of the demurrer raises this point, and we refrain from a decision upon it, and we mention it merely as a preliminary to saying that we are not of opinion that the complaint should have negatived the solvency of Moon, the alleged maker, or of Cook, the alleged transferror, of the note and mortgage; for even if it be assumed that each was wholly solvent, and that each was personally liable to the plaintiff on the note, such fact would not, like payment, defeat the latter’s right of action for the fraud, but would at most only reduce the damages recoverable. In such event the plaintiff would be entitled at least to nominal damages for the fraud.—Baker v. Maxwell, 99 Ala. 558, 14 South. 468.

(3) However, we may add, par parenthesis, that the facts of this case, as subsequently developed on the trial, show that the solvency of said parties could not even reduce the damages recoverable, since it appeared without dispute that the said note contained an express provision, embodied in and as a part of it, to the effect that no other property of the maker should be subject to the debt, except said lot upon which the mortgage was given. The note, therefore, imposed no personal liability on the maker, Moon, and, it not having done so, its transfer, even by indorsement, could not impose any personal liability on the transferror, Cook, because a transferror merely guarantees that the maker will pay the instrument according to its tenor and effect. Consequently the solvency or insolvency of the maker and indorser in this case was immaterial from every standpoint, as their solvency could add nothing' to the value of the paper, and the plaintiff’s damages would therefore be the difference between the face of the note and the value of the lot which secured its payment.

(4) Another ground of the demurrer upon which stress is laid in appellant’s brief is, in substance, that: “For aught appearing from the complaint the alleged simulation of the indebtedness from Moon to Cook was immaterial because, SO' far as appears from the allegations, of the complaint, the obligation was binding in plaintiff’s favor upon the defendant, Moon, as the payor, and the codefendant, Cook, as transferror, of the instrument, whether the debt stated therein was simulated or not.”

It is probably true that each, Moon, and Cook, would by their alleged representations be estopped, as against plaintiff, from asserting any want of consideration in the note and mortgage, but the fact of the simulation of its consideration was not immaterial to the fraud here charged, since the pretense to plaintiff that Cook had taken from Moon a mortgage on Moon’s lot to secure an indebtedness of $675, when in fact there was no indebtedness was a circumstance tending tec connect both of the defendants with the alleged fraud, and one which enabled them to better impose on plaintiff’s credulity in their false representations as to the value of the lot because a belief by plaintiff of the truth of the pretense that Cook had taken a bona fide mortgage on the lot for $675 was calculated to strengthen plaintiff’s belief in the false representation as to the value of the lot, which is the gravamen of the complaint, and to' impress him that he was getting in return for his own lot, worth about $425, something more valuable, a mortgage for $675 on property fully worth that and more, whereas it turned out to be worth only $50.

(5) Properly, however, the averment as to the simulation of the indebtedness should have been omitted from the complaint, and might have been stricken on motion, as it was the averment of a mere circumstance, admissible as evidence without averment and tending to support the averment that plaintiff was deceived by the false representations as to the value and location of the property, and tending to show the connection of both defendants with the fraud.

(6) Mere matters of evidence should not be alleged, but the presence of such an allegation does not render a complaint otherwise sufficient demurrable.'

(7) Another ground of the demurrer, insisted upon, is to the effect that “the alleged representation as to the value of the Moon lot was, for aught that appears to the contrary, the mere expression of an opinion.” Expressions of opinion will support an action for deceit when knowingly false and made with the intent to deceive, ■ and are so acted upon that they do deceive.—Tuscaloosa v. Foster, 132 Ala. 393, 31 South. 587.

(8) While statements as to the value of real estate, made for the purpose of inducing another to buy or to accept a lien upon it, may be, and generally are, regarded as the mere expressions of opinion, yet they are not always so regarded, and especially not when coupled either with misrepresentations as to material extrinsic facts, or a concealment of facts, or when artifice is used to prevent inquiry or examination, or when intended and understood as the statement of a fact and not of an opinion.—14 Am. & Eng. Ency. Law (2d Ed.) 37, 38, 42; Lockwood v. Fitts, 90 Ala. 150, 7 South. 467; Maxwell v. Baker, supra; Ansley v. Piedmont Bank, 113 Ala. 467, 21 South. 59, 59 Am. St. Rep. 122; Camp v. Camp, 2 Ala. 632, 36 Am. Dec. 423; Bullock v. Tuttle, 90 Ala. 435, 8 South. 69.

(9) The allegation of the complaint here is that the alleged statement as to the value was made as a statement of fact, and was coupled with a positive and material misrepresentation as to the location of the property, affecting its value, and, we think, sufficiently meets-the criticism of the demurrer, in this particular. Authorities last cited.

The other grounds of the demurrer are, in our opinion, equally without merit. Authorities last cited; Code, § 2469; Burroughs v. Pacific Guano Co., 81 Ala. 258, 1 South. 212; Hockensmith v. Winton, 11 Ala. App. 670, 66 South. 955; McCoy v. Prince, 11 Ala. App. 388, 66 South. 950; 18 Ency. Pl. & Pr. 899 et seq. Some of them are mere general grounds not specifying any defects (Code, § 5340), and some others were cured by an amendment of the complaint. Besides, it appears that they were all refiled to the complaint as amended, and as so refiled were addressed to the complaint as a whole, and not to the separate counts thereof, one of which, as before stated, was the common count for money had and received, which certainly was not subject to any ground of the demurrer. There was no' demurrer on the ground of misjoinder of counts. Furthermore, since the adoption of the Code of 1907, counts ex contractu and ex delicto, when appropriate, may be joined in the same complaint, when arising out of the same transaction or relating to the same subject-matter. — Code 1907, § 5329. We are not to be understood as holding, however, that a count for money had and received is appropriate or would lie for the wrong here complained of, where the contract induced by the fraud is not rescinded, but is affirmed and damages are sought for the fraud practiced in inducing it.—8 Ency. Pl. & Pr. 887, 892.

(10) The evidence for the plaintiff tended to support the material averments of the special count, and it was a question for the jury as to whether the representations as to value made by defendant were merely the expressions of an opinion, or.were intended as a statement of fact for the purpose of deceiving and as to whether plaintiff was in fact deceived thereby. — 14 Am. & Eng. Ency. Law (2d Ed.) 206.

Refused charges 1 and 2 were the affirmative charges, and properly refused for reasons shown.

(11-14) Refused charges 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, and 15 may each be condemned as either being argumentative or singling out and giving undue prominence to parts of the evidence, or being misleading, or being incorrect statements of the law as applied to the facts.

(15, 16) Refused charge 4 was the affirmative charge as to count 2, which was the common count mentioned for money had and received, and if the charge had been requested as to both defendants, instead of being limited, as it was, solely to the defendant Moon, it should have, for reasons hereinbefore stated, been given, because the facts developed in the evidence disclosed no basis whatever for recovery against either defendant under that count. However, the facts did disclose, as before said, a basis for recovery against both defendants under the first count. Under these circumstances, if the court had given the affirmative charge under the second count for the defendant Moon alone (the shape in which the charge was asked), it would likely have misled and confused the jury into believing there was a difference in the evidence as to his liability and that of the other defendant, authorizing a general verdict in his favor; but not in favor of the other defendant.

We find no error in any of the assignments urged, and the judgment is affirmed.

Affirmed.