LYONS BURIAL VAULT CO. v. TAYLOR

Fraudulent Representations. Contract, Evidence of fraud to avoid. Deceit, As matter of defense. Sale, Seller's commendation.

In an action for the alleged breach of an agreement by which the plaintiff sold to the defendant the right to manufacture and sell within certain territory portable cement burial vaults, on which the plaintiff held a patent, and the defendant agreed to manufacture three hundred of the vaults before a day named and agreed to pay to the plaintiff $2 royalty on every vault manufactured under the patent, and also to recover a balance of a cash payment alleged to be due under a lease in writing of certain moulds for making cement burial vaults under the patent, the defense relied upon was that the defendant was induced to execute the contract and lease by false and fraudulent representations on the part of the plaintiff and its agents. There was evidence that the defendant was not only unskilled in the matter but was wholly ignorant of the prices and values of the vaults, that the plaintiff's agent represented to the defendant that the vaults were water tight, that water or moisture could not enter them and that only one barrel of cement was required to make a vault, and that these representations were false and were known to the plaintiff's agent to be false, that the defendant said to the agent that he did not believe that the vaults could be made waterproof and the assurance was repeated, also that the statements of the agent were accompanied by false statements of the great value of the vaults, of the prices at which they could be and were sold and of the extent of the demand for them, the vaults being comparatively new articles not commonly sold in the market. Held, that, although the statements of the value of the articles, however exaggerated, might be mere seller's commendation and insufficient to show actionable fraud, the evidence as to the statements of the plaintiff's agent went much further than this, and there was evidence for the jury that the execution of the instruments sued on was procured by fraud, and that it was for the jury to determine what opportunity the defendant had for investigation and how far he was justified in relying upon the statements of the plaintiff's agent.

SHELDON, J.

We agree with the plaintiff that by the true construction of the principal agreement between these parties the defendants agreed absolutely to manufacture three hundred vaults between the date of the execution of the agreement and the first day of January, 1904, and to pay the fixed royalty upon them. That is the exact language of the second clause of the agreement; and if there were any possible doubt that this was their meaning, it would be removed by the express stipulation of the third clause of the agreement that the defendants would pay this precise sum in the instalments and at the respective dates therein stated, and would also pay a like royalty upon any additional vaults that they might manufacture. The fact that by the fourth clause of the agreement it was only after January 1, 1904, that the defendants were to render sworn statements and pay royalties semi-annually leads to the same conclusion.

The subsidiary agreement whereby moulds were leased and delivered by the plaintiff provided that the $75 named therein was to be paid in cash on the delivery of the moulds. This payment was to be made once for all, and was not to be affected by any subsequent cancellation of the agreement or return of the moulds.

It is equally plain that each one of these agreements was made upon a valuable consideration. The stipulations of each party furnish a full consideration for those of the other. If the agreements were fairly and honestly made, they could not be avoided or rescinded by either party, except in accordance with their own terms.

It follows from what has been said that the judge rightly refused all but the second and third of the defendants' requests for rulings. But we are of opinion that there was evidence tending to show that the defendants were induced to sign these agreements by fraudulent representations made by Lockwood; and so that this issue was for the jury. As to the weight of this evidence we of course express no opinion.

There was evidence that Lockwood, acting for the plaintiff, represented that these vaults were water tight; that water or moisture could not enter them; and that only one barrel of cement was required to make a vault. There was also evidence that these representations were false and were known to Lockwood to be false. True, the evidence was that Taylor said that he did not believe the vaults could be made waterproof; but there was evidence that the assurance was repeated, and Taylor testified that he finally signed the agreements on the faith of the representations made and believing them to be true. These representations, although accompanied as it was contended that they were, by false statements of the great value of the vaults and of the prices at which they could be and were sold and of the extent of the demand for them, being as they were comparatively new articles not commonly sold in the market, might be found to have been more than mere seller's talk. Busiere v. Reilly, 189 Mass. 518. Andrews v. Jackson, 168 Mass. 266. Way v. Ryther, 165 Mass. 226. Brady v. Finn, 162 Mass. 260. Holst v. Stewart, 161 Mass. 516. Teague v. Irwin, 127 Mass. 217. Savage v. Stevens, 126 Mass. 207. Milliken v. Thorndike, 103 Mass. 382. It might be found that the defendants were not only unskilled, but wholly ignorant of the prices and values of these vaults; and the language of Devens, J. in Dawe v. Morris, 149 Mass. 188, at the top of p. 192, would be applicable. It may very well be that mere statements of the values of the articles, however exaggerated, would be insufficient to show actionable fraud; but the defendants' testimony went much farther than this. Morse v. Shaw, 124 Mass. 59. And it was for the jury to determine what opportunity the defendants had for investigation, and how far they were justified in relying on Lockwood's statements. Long v. Athol, 196 Mass. 497. Accordingly this issue should have been submitted to the jury.

Exceptions sustained.