Sims v. Klein, 1 Ill. 302, 1 Breese 302 (1829)

Dec. 1829 · Illinois Supreme Court

1 Ill. 302, 1 Breese 302

Ignatius R. Sims, Appellant, v. Joseph Klein, Appellee.

APPEAL, FROM MORGAN.

Fraud vitiates every contract, but every false affirmation does not amount to a fraud. ⁽¹⁾

A plea to an action on a note for the payment of money, alleging that “ it was obtained by fraud and circumvention, in this, that the plaintiff represented himself to be the owner of 100 head of hogs, and 54 head of cattle running in the neighborhood of his farm, and that they were worth $300, being the property for which the note was given, when in truth, plaintiff had not that number, nor were they good and valuable as represented,” is bad, inasmuch as it does not allege that plaintiff used any means to deceive or circumvent defendant, and it was in his power by ordinary precaution to have ascertained the value and number. ⁽²⁾

A plea of failure of consideration should allege specially in what the failure consisted, and the extent of it. The statute authorizing pleas to the consideration of a note, enumerates four grounds of defense : 1. Where the bond is entered into without any good or valuable consideration : 2. Where the consideration has wholly failed: 3. Where fraud and circumvention have been used in obtaining it, setting forth the facts which constitute fraud, &c., and 4. Where there has been a partial failure of consideration, setting forth in what it consisted. Precision as to the extent of the failure of the consideration is necessary to enable the court to give judgment for the residue. ⁽³⁾

(1) See note (1) to the case of Bryan et al. v. Primm, ante, p. 59.

(2) Fraud which will vitiate a negotiable instrument in the hands of a bona fide assignee, must be in obtaining the making or execution of the note. A fraud in the consideration will-not be sufficient. Woods v. Hines, 1 Scam., 103. Mulford v. Shepherd, ib., 583. Adams v. Wooldridge, 3 Scam., 256. See note 3, to Mason v. Buckmaster, ante, 27.

(3) See note to Taylor v. Sprinkle, p. 17. Wood et al v. Goss et al., 21 Ill., 604.

Opinion of the Court by

Chief Justice Wilson.

This is an appeal from a judgment of the Morgan circuit court. The action was commenced in the court below, by Klein against Sims, upon a note under seal. The defendant filed two pleas, both of which were demurred to, and the demurrers sustained by the court, and judgment was rendered for the plaintiff upon the note, from which judgment Sims appealed to this court, and now assigns for error the decision of the court, in sustaining the demurrers to the pleas. The first plea alleges that the note upon which the action is brought, was obtained by fraud and circumvention, and charges the fraud and circumvention to consist in the plaintiff’s representing himself to be the owner of a hundred head of hogs and fifty-four head of cattle running in the neighborhood of his farm, and that they were worth 300 dollars, being the property for which the note was given, when in truth the plaintiff had not that number of hogs and cattle, nor were they good and valuable as represented.

The court recognize the principle, that fraud vitiates and renders void every contract by which it is obtained, but every false affirmation does not amount to a fraud. A knowledge of the falsehood of the representation must rest with the party making it, and he must use some means to deceive or circumvent. This plea contains no charge of this kind, it only alleges the number and value of the cattle and hogs to be less than was represented by the plaintiff, Klein. As regards their value, that was clearly a matter of opinion, and by an ordinary degree of precaution the defendant might have ascertained the number. To this plea then, the demurrer was properly sustained. The second plea is of a two-fold character; it commences as a plea of part failure of consideration, which goes to only a portion of the action, and concludes as a plea of fraud, which is a defense to the whole action. It contains two distinct grounds of defense, which, if properlypleaded, though in the same plea, could not for its duplicity be taken advantage of, upon general demurrer. But is it not defective in substance ?

The statute under which this plea is filed ,^* enumerates four grounds of defense to an action upon bonds or other writings, for the payment of money, &c.

1. Where the bond is entered into without any good or valuable consideration.

2. Where the consideration has wholly failed.

3. Where fraud and circumvention have been used in obtaining it; and

4. Where there has been a part failure of the consideration.

These are all separate and distinct grounds of defense, and should be so pleaded. If a bond is given without any good or valuable consideration, that fact may be pleaded generally. If fraud is relied upon, the plea must set forth facts which constitute fraud. If a total failure of consideration is relied on, the manner must be shown, and where a partial failure of consideration is relied on, as is the fact in this case, it is necessary to set forth in what the failure consisted. The plea should be as broad as the evidence, and upon the same principle, the extent of the failure of consideration should be specially alleged.

The plea in this case alleges fraud, but does not specify in what; it also alleges a part failure of consideration, and does partially show in what it consisted, but the extent is not specified ; in this respect the plea is substantially defective. Precision as to the extent of the failure of the consideration, is essential, in order to enable the court to render judgment for the residue. The judgment of the court below is affirmed with costs. ^(a) Judgment affirmed.

Cowles, for appellant.

W. Thomas, for appellee.

* Rev. Laws of 1827, p. 322, sects. 5, 6.

(a) Cases of failure of consideration, &c. Taylor v. Sprinkle, ante, p. 17. Cornelius v. Vanorsdall, ante, p. 23. Poole v. Vanlandingham, ante, p. 47. Bradshaw v. Newman, ante, p. 133.

Where the vendee purchases a chattel on sight which the vendor affirms to be worth much more than its real value, no action lies, there being neither fraud nor warranty. Davis v. Meeker, 5 Johns. Rep., 354.

A mistaken opinion of the value of property if honestly entertained, and stated as opinion merely, unaccompanied by any assertion or statement untrue in fact, can not be considered as a fraudulent misrepresentation. Hepburn et al. v. Dunlop et al., 1 Wheat., 179, 189.