Bacon v. Frisbie , 22 N.Y. Sup. Ct. 26 ( 1878 )

Leakned, P. 3.:

Kennedy was an attorney-at-law, and before and since the time of the conversation he had done business for Ratnour professionally. He also kept a liquor store, and the conversation was in that store. He had no general retainer from Ratnour, and he never ivas engaged by him in regard to this suit. He testifies that he did not consider that Ratnour was advising with him as counsel, for the reason that Ratnour did not inform him what the transaction was, until just as he ivas going out of the door.

The conversation to which Kennedy ivas allowed to testify, against defendant's objection, 'was as follows: Ratnour said to him, supposing two men were trading land, and there was a fraud in the transaction, and a third party was interested, would he be liable ? Kennedy said he would. Kennedy asked what the fraud was. Ratnour said: Suppose a man should induce another to take a mortgage on a farm, and should tell him there was a $5,000 mortgage on it ahead of his, and it should turn out to bo a $6,000 mortgage, would he be liable ? Then he wanted to know if a third pai-ty made the representations, would the third party be liable. Kennedy told him he would. After a little more talk, Kennedy said: “ Was it this Bacon trade over here ?” And Ratnour said: “ I guess it is.” Kennedy said: “ Where is the farm ?” and Ratnour said: “ You know Avhore it is.” Kennedy replied that he remembered now, because he (Ratnour) Avanted him to take an inventory of the hotel property.

. Now, this evidence Avas given by the plaintiff, in order to sIioav that Ratnour Avas a party to the fraud. Ratnour’s question was not- merely hypothetical. OtherAvise the evidence Avould have been immaterial. The very force of the evidence consisted in the fact that Kennedy asked if the case, which Avas at first stated hypothetically, Avas not, in fact, the bargain which is uoav in question, and that Ratnour ■ acknowledged that it was. • Ratnour did not say explicitly that he Avas the third party, but that was what was meant by the evidence.

It is plain, then, that Ratnour Avished to obtain legal advice; that is, advice on a question of law. To obtain this, he stated to a lawyer the facts of this present case, as they are claimed to be by the plaintiff; that is, in substance, that there had been fraud in a trade of land, and that a third party made the fraudulent representation. Ho was himself the third party. And the statement which he thus made to a lawyer, in order to obtain advice, the lawyer is allowed to testify to in court against Ratnour.

I think this was wrong. All communications made by a client to his counsel, for the purpose of professional advice or assistance, are privileged, whether such advice relates to a suit * * * or to any other matter proper for such advice or aid.” (Britton v. Lorenz, 45 N. Y., at p. 57.) It is unnecessary to cite other authorities. That case extends the rule farther than it was stated in the opinion in Whiting v. Barney (30 N. Y., 330).

Ratnour’s statement was for the purpose of professional advice. He wished to know whether a third party would be legally liable for the fraud in the Bacon sale. And he was, as the plaintiff claims, the third party. His communication, then, was privileged. And this was his privilege, not his attorney’s. Ratnour could not be deprived of it by Kennedy’s saying he did hot consider his advice as counsel. It was, in fact, legal advice, whatever Kennedy considered it.

The object of the rule is evidently to enable persons to obtain legal advice on a free and full statement of facts, without the risk that the statement will be made evidence against them. And to effect that object, it is necessary that every statement should be privileged which is made to an attorney or counsellor for the purpose, on the part of the client, of getting advice as to the law on the facts stated. The motive of the party who makes the statement, and the character of the party who hears it, make it privileged.

For these reasons, I cannot agree' with the opinion of Judge Boardman on this point, and think the judgment and order should be reversed as to Ratnour, and a new trial granted, costs to abide event.

Boardman, J.:

Upon the evidence contained in the case, we do not think the judgment should be disturbed. There is much of conflict, but no such preponderance in the evidence in favor of the defendant as to justify our interference. The fact is patent that the plaintiff has suffered serious loss by reason of the arrangement and sale made by him. It is equally certain that he had little or no knowledge of the Frisbie farm, except what he derived from the defendants; that he relied upon the information derived from them; that he would not have made the arrangement if he had not believed the mortgage taken by him was good and well secured. These facts being apparent, the character of the representations made by the defendants was submitted to the jury, and it has found such representations false and fraudulent on the part of each defendant. That decision, upon the facts, must bo conclusive, unless there were errors committed upon the trial compelling us to grant a new trial.

Very many exceptions have been urged upon us. Wo will consider such of them as seem to be of importance.

The plaintiff was permitted to prove the value per acre of Frisbic’s farm. Evidence was given tending to show that Frisbie said he had been offered $13,500 for his farm of 151 acres, and that the land was worth $80 to $100 per acre. At the time of this transaction, there was a mortgage of about $6,000 upon such farm. As a result of the negotiations, the plaintiff took a further mortgage of $5,000 upon the same premises. While opinions of value are not ordinarily, though false, recognized as evidence of fraud, it is not always so. We think the learned justice, in his memorandum denying a now trial in this case, expressed the true rule, as laid down by late authorities. He says: “ If the defendants knowingly made false representations as to the market value of the farm, knowing the plaintiff had not seen it, and induced him not to examine it for himself, and to rely upon their representations, it would be fraud.” This is quite as strongly put as in Simar v. Canaday (53 N. Y., 298, 306). At the page last cited, the learned judge says statements of value of property “ may be, imder certain circumstances, affirmations of fact. When known to the utterer to be untrue, if made with the intention of misleading the vendee, if he does rely upon them and is misled to his injury, they avoid the contract,” citing Stebbins v. Eddy (4 Mason, 414, 423). The case of Simar v. Canaday would seem to be analogous, in most respects, to the one under consideration. The precise representations made and-proof offered by way of showing them to be false are not given in the ropoi’t.

An equally strong ease to the same effect is that of McClellan v. Scott (24 Wisc., 81). The court there held that, when property was stated to bo worth three times its actual value, it must bo treated not as a more matter of opinion, but.as a fraudulent misrepresentation. (Medbury v. Watson, 6 Metc., 246.)

Judge Folger, in Simar v. Canaday [ante), further says.: “ Whether a representation of value is merely an expression of opinion or belief, or an affirmation of a fact to be relied upon, is a question for the jury.” It was so treated by the court in this ease, and was fairly submitted to the jury. Hence, there was no error in the submission of this matter to the jury, nor in the manner it was done.

For the reason already given, the various motions for a nonsuit, as to one or both defendants, were properly denied.

It is claimed the charge to the jury was erroneous in several particulars. It is a sufficient answer that no exceptions were taken.

It is proved, under the defendants’ exception, that defendant Ratnour, during the negotiations, said to plaintiff: “I will loan you $1,000 on the mortgage (the $5,000 to be taken by plaintiff* of Frisbie), and I don’t want you to sell it, for I- want to buy it.” This was admissible, as part of the res gestae, and for the further purpose hereafter, stated. In like manner it was proved that Ratnour afterwards, on application, refused to perform his promise. This was admissible in two respects — first,. as a declaration of the party, and secondly, .as evidence that Ratnour had acted in bad faith in his representations made to the plaintiff.

But my brethren think the evidence of Kennedy was inadmissible, for the reasons stated in opinion of Learned, P. J., and hence the judgment must be reversed and a new trial granted, costs to abide the event.,

Present — Learned, P. J., Boardman and Taepa-n, . JJ.

Judgment and order reversed as to Ratnour, and now trial granted, costs to abide event.