Opinion
No. 3137.
Decided April 15, 1940.
In an action for deceit the applicable law is that of the state wherein the deceit was practiced.
By the law of Massachusetts a state of mind may be an existing material fact, and dishonest statements made to another respecting a mental state may create liability if inducing action or non-action in reliance thereon.
By Massachusetts law a false statement of intention to perform an oral promise required to be in writing by the statute of frauds is actionable.
Upon a motion for a nonsuit on an opening statement, which sets forth all the material facts to be presented, the statement is to be treated as though the evidence had been presented, and reasonable inferences deducible from the evidence as stated are to be given the same effect as if the evidence had been introduced.
While a purpose not to keep a promise cannot be inferred from the mere fact of the non-observance of the promise yet the non-observance may with other evidence of the defendant's conduct justify the inference of a purpose not to perform.
DECEIT. At the trial the opening statement for the plaintiff outlined the evidence of the material facts claimed, and to an order of nonsuit thereon made, she excepted. The offer of evidence contained in the opening statement is sufficiently set forth in the following summary of it.
The alleged deceit related to a proposed purchase of real estate by the defendant oil company, herein called the defendant, from the plaintiff. The negotiations were oral and continued over a period of four or five months, at the end of which the plaintiff lost her equity in the property by a foreclosure sale under a mortgage.
A highway ran through the property and the plaintiff had a filling station each side of it. She sold the defendant's products at one side, and those of one of its competitors at the other. This other one was destroyed by fire. Thereupon she informed the defendant's agent of the difficult financial situation in which she stood and of her purpose to sell the property expeditiously, mentioning that another competitor of the defendant was one of a number interested to buy the site of the burned station. The agent then entered into an oral agreement with her for its purchase of the site where its products were sold at a stated price, she to sell its products at the other site and the agreement to be subject to approval by the agent's superiors. It is the plaintiff's claim that she was deceived by the defendant's false statements then and later made to the effect that it intended to perform the agreement.
When the agreement was made the defendant's agent asked the plaintiff to produce her abstract of title for the purpose of its examination by the defendant's attorney. This she did, and she was later assured that approval of the agreement had been obtained. Thereafter she was pressed for payment of the mortgage lien upon the property and foreclosure proceedings were at length instituted. She made repeated and frequent calls on the agent and he continued to assure her that the agreement to buy would be consummated, explaining that the delay was due to the attorney's delay in passing on the title. The attorney had at some time previously informed her that it would take no more than ten days to examine the title. On the eve of the foreclosure sale she went to him and he then told her that he had at no time received instructions to examine and pass upon the title and accordingly had done nothing about it.
On different occasions when she called upon the agent she spoke of selling to other interested parties if the defendant did not intend to buy, and the agent dissuaded her from negotiating with them. He also requested a party interested to buy not to approach the plaintiff, promising him a position with the defendant upon its purchase of the property. Not long prior to the foreclosure sale the agent informed the plaintiff and her attorney that he had a check for the price to be paid and that the report of the title was the only reason for waiting to carry out the agreement. After the sale he denied the existence and his possession of the check. Also, it was charged that the agent had arranged with the mortgagee for the sale of the defendant's products on the property in the event that the mortgagee bought the property at the foreclosure sale and became its owner.
Transferred by Young, J.
Wason, Guertin Leahy and Allen A. Backer (Mr. Guertin orally), for the plaintiff.
Hamblett Hamblett and Robert F. Griffith (Mr. Robert B. Hamblett orally), for the defendants.
When a motion for a nonsuit is made upon an opening statement which sets forth all the material facts of which evidence is to be presented, the statement is to be treated as though the evidence offered had been introduced. The inquiry then is whether upon that evidence there is a case for submission. The reasonable inferences deducible from the evidence offered are to be given effect to the same extent and in the same manner as upon evidence which has been introduced. In Hughes v. Railroad, 71 N.H. 279, 284, it is said: "The ruling granting the nonsuit was, in effect, that the facts stated were insufficient to authorize the inference that" the plaintiff was entitled to recover. This view was followed in Cavanaugh McCaffrey v. Barnard, 83 N.H. 370, 373. So here the inquiry is not whether the outline of the evidence stated in terms all the elements of deceit, but is whether from it all the elements might be found. It is not a case of presenting new issues after the trial, but is one where the evidence offered is claimed to be sufficient to prove deceit, including all of its required factors.
The alleged deceit transpired in Massachusetts. By the law of that state as understood and therefore found, false representations necessary as an element of the action of deceit must be of existing material facts. Forman v. Hamilburg, (Mass.) 14 N.E. Rep., (2d), 137, 139. "A statement promissory in nature `is not properly a representation, but a contract'" (Carlson Co. v. Company, 269 Mass. 272), and "False statements of opinion, of conditions to exist in the future, or of matters promissory in nature, ordinarily are not actionable" (Coe v. Ware, (Mass.) 171 N.E. Rep. 732, 734). But a misrepresentation as to a matter of fact may "include a belief or an intention." Alpine v. Company, 244 Mass. 164, 167. As declared in Feldman v. Witmark, 254 Mass. 480, 481: "Present intention as to future act is a fact. It is susceptible of proof. When such intention does not exist, and the maker of the representation knows it does not exist, it is a misrepresentation of a material fact."
It is suggested that this case is in effect overruled by that of Carlson Co. v. Company, supra, but in the Carlson case the representations were held to be essentially promissory in nature, and the opinion states that the case in its facts is distinguishable from the Feldman case, which was also inferentially confirmed in Loughery v. Company, 258 Mass. 172, 178.
A false statement of intention to perform an oral promise required to be in writing by the statute of frauds may be actionable. Ciarlo v. Ciarlo, 244 Mass. 453. This application of the action of deceit was employed in the case of Hazleton v. Lewis, 267 Mass. 533, in which the court said: "There is nothing to show that she [the defendant] led the plaintiff to rely upon her promise intending later on to refuse to perform it. The refusal to carry out an oral promise to convey land, standing by itself, is not a fraud." And it is said in McCusker v. Geiger, 195 Mass. 46, 54, without qualifying language that when property is obtained with a fraudulent purpose not to pay for it, the fraud is actionable. It thus appears that a state of mind may be an existing material fact and dishonest statements of it may give rise to liability, even when they are made to induce reliance on an unenforceable promise.
Applying the foregoing tests to the offer of evidence, while a purpose not to observe a promise may not be inferred from the mere fact of the non-observance of the promise, yet the non-observance with other evidence suffices and is ample for the inference of the purpose not to perform. The assurance to the plaintiff that the delay in concluding the transaction was due to the attorney's delay in passing on the title when he had not been engaged therefor, the agent's statement of having funds ready to be paid for the property when the statement was false, and the undenied charge that the defendant had made an arrangement with the mortgagee dependent upon his purchase of the property at the foreclosure sale, may be mentioned as particular items bearing on the issue of intention not to perform the promise to buy from the plaintiff. In addition, the course of conduct throughout the period from the making of the promise to the foreclosure sale, in repeated assurances that the defendant would buy, in quieting the plaintiff's apprehensions over the delays, and in persuading her not to do business with others, if not of themselves sufficient to manifest the purpose not to buy, have evidential value to strengthen the inference deducible from the statements made to her which were findably false, its conduct in inducing others not to negotiate with her, and its arrangement with the mortgagee.
In short, the opening statement was an offer of evidence tending to show that the defendant dishonestly induced the plaintiff to rely on a promise which it intended not to keep and to take no steps to obtain from others such value as the equity in the property had.
New trial.
All concurred.