Opinion
No. 33828.
October 16, 1939.
1. FRAUD.
In action for fraud based on alleged fraudulent representations by defendant as to the financial standing of codefendant and a third party, whether alleged representations were made by defendant was for jury under conflicting evidence.
2. FRAUD.
That, shortly after defendant had introduced codefendant to plaintiff and allegedly made representations to plaintiff concerning the financial ability of codefendant and a third party, it was discovered that codefendant had a criminal record, did not absolve defendant from liability for fraud if defendant made the statements as statements of fact and assumed to know, or recklessly disregarded, the truth of the statements.
3. FRAUD.
Scienter was a necessary requirement to recovering damages for fraud and deceit in the making of alleged false representations as to the financial ability of others.
4. FRAUD.
In order to impose liability in an action at law for false representations, it must be shown that defendant made the representations with actual knowledge of their falsity, or without knowing whether they were true or false, or under such circumstances that he ought to have known that they were false, whether he did or not.
5. FRAUD.
Generally, it is not essential to redress for fraud that a representation or concealment should have been the sole cause of action, but it is sufficient if it constituted one of several inducements and exerted a material influence, and, in such case, recovery may be had although the representation was not the predominating inducement to action or the representee's injury was due partly to his own mistake.
6. FRAUD.
Where the representation was a material inducement to action, recovery may be had in an action for fraud although injured party was influenced to some extent by statements of third persons, or by information gained through independent investigation, or relied in part upon other representations of the speaker which were not actionable in themselves, and such rule is applicable to representations concerning financial standing.
7. APPEAL AND ERROR. Fraud.
In action for fraud in allegedly misrepresenting to plaintiff the financial ability of codefendant and a produce company to which plaintiff sold vegetables, instructing for defendant that, unless plaintiff relied solely upon statements of defendant, jury should find for defendant, was not erroneous where plaintiff testified to having sold vegetables to codefendant and third party solely in reliance on defendant's statements and plaintiff's instructions had embodied practically the same language.
8. FRAUD.
In action for fraud in allegedly misrepresenting to plaintiff the financial ability of codefendant and a produce company to which plaintiff sold vegetables, instructing that, if codefendant represented himself to plaintiff as being a representative of a produce company and that codefendant and company were able to pay for vegetables that might be purchased from plaintiff and that on such assurance vegetables were sold by plaintiff to codefendant, jury could not find against defendant, was misleading.
9. FRAUD.
In action for fraud in allegedly misrepresenting to plaintiff financial ability of co-defendant and a produce company to which plaintiff sold vegetables, instructing that if plaintiff sold one car of vegetables to company and, when not paid therefor, found that company was not listed in credit book, plaintiff could not look to defendant for value of vegetables subsequently sold to company or codefendant, was error under testimony.
10. FRAUD.
If defendant, when accompanying codefendant, a purported representative of a produce company, made representations, as of defendant's own knowledge, to plaintiff respecting financial condition of codefendant and company or made such statements recklessly and without regard to their truth and subsequently reassured plaintiff of financial ability of codefendant and company, plaintiff had right to rely upon defendant's statements concerning solvency of codefendant and company.
11. FRAUD.
Contributory negligence was not a defense to an action based on fraud.
12. FRAUD.
If a false statement is made by one who may be fairly assumed to know what he is talking about, it may be accepted as true, without question.
APPEAL from the circuit court of Copiah county; HON. R.E. BENNETT, Judge.
M.S. McNeil and McNeil Zama, all of Hazlehurst, for appellant.
In the case of Vincent v. Corbitt, 94 Miss. 46, 21 L.R.A., (N.S.) 85, the Supreme Court of Mississippi said:
"While due weight must be given to the necessity for alleging and proving that declarations were made with knowledge of their falsity, regard must also be had for the equal well-settled principle that statements recklessly made and statements made as of knowledge when in fact no such knowledge exists are in law considered as the equivalents of conscious misrepresentations. The doctrine is thus aptly put: In actions of deceit, the charge of fraudulent intent is `maintained' by proof of a statement made as of the party's own knowledge, which is false, provided the thing stated is not merely a matter of opinion, estimate, or judgment, but is susceptible of actual knowledge; and in such case it is not necessary to make any further proof of an actual intent to deceive. The fraud consists in stating that the party knows the thing to exist when he does not know it to exist; and, if he does not know it to exist, he must ordinarily be deemed to know that he does not." Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 9 Am. St. Rep. 727, 18 N.E. 168. It is further said in 14 Am.-Eng. Enc. Law, (2 Ed.), p. 99: "To bring a case within the principle above stated, it is not necessary that the party who has made the false statement of fact shall have unqualifiedly declared himself possessed of knowledge, or, in other words, that he shall have asserted in express terms that he knew his statement to be the truth. If a person makes a positive and unqualified false statement of fact which is susceptible of knowledge, an affirmation of knowledge is implied from the positive character of the statement; and, if he has no knowledge, he is guilty of actual fraud."
Henry v. Dennis, 85 Am. St. Rep. 378.
Defendants' instruction No. 2 requiring the jury to find for Joseph unless Sojourner relied solely on Joseph's representations constitutions prejudicial error.
The suit was filed in the court below and tried on the theory that Sojourner relied on the joint representation of Joseph and of Karam, and that they both participated in the fraud perpetrated on Sojourner.
It is not essential to redress that a representation or concealment should have been the sole cause of action, but it is sufficient if it constituted one of several inducements and exerted a material influence. In such a case recovery may be had, although the representation was not the predominating inducement to action or the representee's injury was due partly to his own mistake. Thus, where the representation was material inducement to action, recovery may be had, although the injured party was influenced to some extent by the statements of their persons or by information gained through independent investigation, or relied in part upon other representations of the speakers which were not actionable in themselves, because true, of a promissory nature, or within the statute of frauds, or where the hearer relied partly upon representations and partly upon a guaranty. The foregoing rule with its accompanying qualifications has been applied to representations concerning financial standing.
26 C.J. 1165; and authorities cited therein.
Where a false statement is relied upon and is a material inducement, it is immaterial that other causes contributed to influence the conduct of the injured party.
Yates v. Jones Nat. Bank, 74 Nebr. 734, 748, 105 N.W. 287; Allen v. Pendarvis, 60 Okla. 216, 217, 159 P. 1117; Safford v. Grout, 120 Mass. 20.
A representation contributing "in any degree" to induce the party to act is sufficient.
Baker v. Matthew, 115 N.W. 15; Kirkendall v. Hartsock, 58 Mo. App. 234; Evans v. MacMicking, 2 Alt. L. 5; 12 R.C.L. 112; Dunbar v. Preston (Pa.), 132 A. 707; Durham v. Wichita Mills (Tex.), 202 S.W. 138; Old Colony Ins. Co. v. Molglein, 205 N.W. 885; Allen v. Pendarvis (Okla.), 159 P. 1117; Hart-Parr Co. v. Krigam, 212 S.W. 835.
Counsels for the defendants were not content with the very emphatic instruction quoted above, but even though this suit was expressly brought upon a joint cause of action, the defendants requested and obtained the following instruction: "The court instructs the jury for the defendant, Albert Joseph, that if you believe from the evidence in this case that Albert Karam represented himself to the plaintiff as being a representative of the Karam Produce Company and that he and the Karam Produce Company were able, to pay for any tomatoes that he may buy and that on this the plaintiffs sold to him tomatoes, then you cannot find a verdict against the defendant, Albert Joseph."
This instruction in reality amounts to a peremptory instruction because both Sojourner and Karam testified that Karam did make the representations recited in the instruction, and the instruction in effect tells the jury that if Joseph misrepresented Karma's integrity and financial condition and business, and Karm likewise made the same misrepresentations that Karam's misrepresentations would relieve Joseph.
Joint liability for fraud is up held in the same manner as joint liability of other tortfeasors.
12 R.C.L. 400; James v. Crosthwait, 97 Ga. 673, 36 L.R.A. 631; Linhart v. Foreman, 77 Va. 540; Rorer Iron Company v. Trout, 83 Va. 379, 5 Am. St. Rep. 285, (292); Stackpole v. Hancock (Fla.), 45 L.R.A. 814, (821); Cabot v. Christie, 42 Vt. 121, 1 Am. Rep. 313, (316); Buchanan v. Burnett, 132 Am. St. Rep. 900, (902), 102 Tex. 492; Hindman v. First National Bank of Louisville (C.C.A.), 112 Fed. 931, 57 L.R.A. 108; Salter v. Aviation Salvage Company, 91 So. 340.
Defendant's Instruction No. 3 to the effect that if Sojourner relied on Karam's statement he could not recover is erroneous.
Defendant's Instruction No. 5 requiring the plaintiff, Sojourner, to make independent investigation and not permitting reliance on representations made is erroneous.
85 A.S.R. 380; Nash Mississippi Valley Motor Company v. Childress, 156 Miss. 157, 125 So. 708; Gannon v. Hausaman, 42 Okla. 41, 52 L.R.A. (N.S.) 519; King v. Livingston Mfg. Co., 60 So. 143; Smith v. Werkheiser (Mich.), 15 L.R.A. (N.S.) 1092; Lahay v. City National Bank (Colo.), 22 Am. St. Rep. 408.
Defendant's Instruction No. 1 is on the weight of the evidence.
Howie, Howie McGowan and Hamilton Todd, all of Jackson, and Hunter Garth, of Hazlehurst, for appellee.
Before proceeding to a discussion of the point in order, as raised in appellant's assignment of errors, we wish to discuss briefly to the court "the legal principles involved," as is contended by the appellant governing this case. So far as the Mississippi law is concerned he bases his right for a recovery upon the case of Vincent v. Corbett, 94 Miss. 46, 47 So. 641. A careful examination of this case does not make an easy case for this appellant. A careful reading of this case along with the cases quoted therein and other cases on the subject, by analysis, indicate to us the following:
1. An admission or proof positive of making the statements at most, make only a prima facie case for the suing plaintiff.
2. Scienter cannot be dispensed with.
In the case of Lundy v. Haslitt, 147 Miss. 808, 112 So. 591, the court held that "a vendor's false representation as to the amount of acreage is actionable though made in good faith." It was his own land concerning which the representations were made. A person should not be permitted to make representations about his own property and plead innocence in the courts.
Alexander v. Meeks, 132 Miss. 298, 96 So. 101; Oldham v. Memphis Stone Gravel Co., 145 Miss. 851, 111 So. 357; Hinds v. Lockhart (Miss.), 105 So. 449; McNeer v. Norfleet, 113 Miss. 611, 74 So. 577, Ann. Cas. 1918D, 436; Estell v. Myers, 54 Miss. 174; Sims v. Eiland, 57 Miss. 83.
It is highly significant that of all the Mississippi cases we can find on this subject practically all of them deal with representations claimed to have been innocently made by the defendants in reference to certain lands or property belonging to the said defendants.
It is, we repeat, most significant that of all the cases we have quoted above, which are most of the cases we find in the Digest on the said subject, only the case of Sims v. Eiland represents a case where the subject matter is not land or property belonging to the defendant. It is to be presumed, of course, that as a matter of fact a person is supposed to know his own property. The defendants in the case of Vincent v. Corbitt, above, could not be heard to say they did not know their own land.
The case of Sims v. Eiland, above, is the only case that we can find where the facts anything like conform or make up a set of circumstances comparable with those involved in the case at bar. In that case the plaintiff was put to the burden of proving that the letter was written with an actual knowledge of the falsity of the recommendations made therein, and this rule of law, as we insist, has not been changed in Mississippi today.
It is elemental that instructions must follow the evidence of the case.
Burnley v. Mullins, 86 Miss. 441, 38 So. 635; Am. Central Ins. Co. v. Antram, 88 Miss. 518, 41 So. 257; Mobile J. K.C.R. Co. v. Jackson, 92 Miss. 517, 46 So. 142; Kneale v. Lopez Ducate, 93 Miss. 201, 46 So. 715; A. V.R.R. Co. v. Baldwin, 96 Miss. 52, 52 So. 358; W.U. Tel. Co. v. Robertson, 109 Miss. 775, 69 So. 680; Davis v. Hicks, 118 Miss. 74, 79 So. 59; Town of Hickory v. Semmes, 123 Miss. 436, 86 So. 273; Natchez S. Ry. Co. v. Gryce, 136 Miss. 307, 101 So. 439.
The plaintiff should certainly not be permitted to make out a different case by instructions of the court than a case he makes out by him own evidence. He must stand upon the case he makes out by his own evidence. It is elemental that he cannot ask for instructions unless the same are sustained by the evidence in the case. The plaintiff stated plainly and simply to the jury that he relied solely upon what Mr. Joseph told him, and especially so for payment of the last eight cars of tomatoes. Appellee's attorneys simply fashioned Instruction No. 2 to conform to the appellant's evidence.
64 C.J., "Trial," sec. 533; 64 C.J., secs. 534 and 534(2); McDonough Motor Express Co. v. Speirs, 180 Miss. 78, 176 So. 723.
The plaintiff must make a case by his evidence, and the instructions must conform thereto. That is clearly what was done in this case in giving the instruction number two. The declaration, it may be admitted, met the technical requirements laid down in Vincent v. Corbitt, supra, but there was no conformity in the evidence and the allegations of the declaration so far as joint representations were concerned. In fact, the testimony is entirely lacking in reference to any representations made by Karam, other than the telephone conversation, and there is no substantial testimony of any representations made by Joseph.
Instructions though correct as propositions of law are properly refused on absence of evidence on which said instructions can be based.
Henry v. Allen, 93 Ala. 197, 9 So. 579; Mayor v. Wilkins, 37 Fla. 244, 19 So. 632; Bacon v. Green, 36 Fla. 325, 18 So. 870; Tischler v. Curez, 35 Fla. 323, 17 So. 661.
It is error to instruct hypothetically on a state of facts where there is no evidence to establish it.
L. N.R.R. Co. v. Cowherd, 120 Ala. 51, 23 So. 793; Chastang v. Chastang, 141 Ala. 451, 37 So. 799; Robinson v. Spears (Miss.), 21 So. 554.
Instructions given to the jury must be predicated upon evidence in the cause.
Ala. G. A. Ry. Co. v. Cox, 73 Ala. 629, 55 So. 909; So. Ry. Co. v. Morgan, 178 Ala. 590, 59 So. 432; Fla. East Coast Ry. Co. v. Smith, 61 Fla. 218, 55 So. 871; Fla. East Coast Ry. Co. v. Carter, 67 Fla. 335, 65 So. 254.
The appellant says that the giving of instruction number three to the effect that if Sojourner relied on Karam's statement he could not recover is erroneous. Under the evidence in this case there is positively no error in this instruction.
This record discloses no evidence that the credit was extended on joint representations other than the testimony of Karam himself, which appears in the record. This testimony, of course, is utterly unworthy of any consideration. It should be expunged from the record, Karem being no more than a notorious criminal and perjurer.
Appellant complains of Instruction Number Five for the defendant and urgently insists that the giving of the same was error under the general legal theory that caveat emptor does not apply in this type of case, and that the representee is not burdened with the legal obligations of making further investigation than the statements made by the representor. This is a correct statement of the abstract principles of law, but as it happens it in no wise fits the case at bar.
The appellee respectfully submits that there is no error in this record and no error in these instructions, and that he should not be put to the trouble and expense of defending any other jury trial on this issue. This case was fairly and impartially tried and was fairly and lawfully presented to the jury by the instructions.
It is the settled practice of this court that cases will not be reversed for errors in instructions unless the instructions are plainly and without any doubt erroneous and harmful, and that the harmful error is the direct cause of the verdict rendered. And further it must appear to the court that on a new trial a different verdict would result.
H.D. Sojourner Company, a partnership composed of H.D. and H.F. Sojourner, brought an action of fraud and deceit against Albert Joseph and Albert Karam. The action was based on alleged fraudulent representations made by Appellant Joseph to Sojourner as to the financial standing of Karam and the Karam Produce Company. An issue being made up, the case was presented to the jury, and a verdict returned in favor of the defendant Joseph, and the Sojourners prosecute an appeal here.
We shall only state such evidence as we deem material to an understanding of the case. Sojourner and Company were merchants at Hopewell, in Copiah County, Mississippi, dealing in and shipping carload lots of vegetables and in selling goods.
On Sunday afternoon, June 6, 1937, Albert Joseph, with some of his female relatives, accompanied Albert Karam from Jackson, Mississippi, to Hopewell, driving in what was supposed to be Karam's Lincoln Zephyr Automobile. They stopped at Sojourner's place of business, where Joseph introduced Karam to Sojourner; and according to Sojourner, this occurred and was said: A. "Well, he introduced me to Karam and said he was representing Karam Produce Company of Chicago, Illinois. That they were all right and that Karam Produce Company was all right and perfectly solvent." Joseph further said to Sojourner in Karam's presence that the latter "was going to buy Mississippi tomatoes;" and he wanted Karam "to buy them from the Sojourner boys." Sojourner had full confidence in Joseph's honesty, integrity, and financial standing; had been buying merchandise from Joseph for about five years, and knew Joseph had a splendid financial rating.
On Tuesday, June 8th, thereafter, Karam appeared at the Sojourners' place of business and wanted a carload of tomatoes. Sojourner did not have them. On Wednesday, the 9th, he (Karam) again appeared and wanted a carload of tomatoes which Sojourner sold to him and shipped, Karam promising (Sojourner) to have the money in a certain bank to pay therefor on the follow morning. On Thursday morning, on being informed that the money for the tomatoes was not in bank, Sojourner testified that he called Albert Joseph over the telephone and said over the telephone to him: "`Mr. Joseph I have already sold Karam a car of tomatoes yesterday and he promised us he would wire the money this morning and he has not done it.' I says, `. . . — where can I find him rated in the Rating Agency? I don't want to get mixed up with this fellow.' He said, `Yes, sir, he is and Karam Produce Company are all right, perfectly solvent, can buy anything they want to,' and he taken the telephone away from his ear and said `just a minute' and he talked, I think he was talking to Karam at that time . . .' `And he (Joseph) come back and said "he wants a couple cars today" and asked if I would have them . . . and I told him I would let him (Karam) have them.'" After this conversation, between the 10th and 14th of June, Sojourner sold to Karam six cars of tomatoes. Sojourner began an investigation which developed that there was no Karam Produce Company in Chicago, Illinois, and that Karam was a criminal. He recouped his loss on his tomato transactions to some extent, and sued Joseph on the above representations for slightly in excess of $4,000.
Sojourner testified several times, as setforth in the the record, that he made these sales of tomatoes solely on the representations made by Joseph. There was some corroboration of Sojourner's view of the representations, Joseph denied making any representations, and denied that he talked at all with Sojourner on that date over the telephone, and was corroborated. In rebuttal, several witnesses testified to a substantial admission by Joseph of the telephone conversation.
On appeal here, the errors complained of are the following instructions granted by the court to Joseph:
"No. 1. That in weighing the testimony of any witness or witnesses who have testified in this case, you may take into consideration the previous criminal record of such witness, or witnesses."
"No. 2. That unless you believe from a preponderance of the evidence in this case that the plaintiffs relied solely upon the statement of A. Joseph as to the financial condition of Karam, or the Karam Produce Company, and that except for such statement by A. Joseph, the Plaintiff's would not have made sales of tomatoes to Karam, or the Karam Produce Company, then you shall find for the defendant, A. Joseph."
"No. 3. That if you believe from the evidence in this case that Albert Karam represented himself to the plaintiff as being a representative of the Karam Produce Company, and that he and the Karam Produce Company, were able to pay for any tomatoes that he might buy, and that on this the plaintiffs sold to him tomatoes, then you cannot find a verdict against the defendant, Albert Joseph."
"No. 5. If you believe from the evidence that Sojourner sold one car of tomatoes to Karam Produce Company and Karam failed to pay for same as agreed upon, and that then the plaintiffs looked up the rating of Karm Produce Company and found that they were not listed in the credit book and had no credit standing, according to their Blue Book, then in that case the plaintiffs had no right to look to Joseph for the balance of any tomatoes thereafter sold to Karam Produce Company, or Albert Karam, then it was their duty in order to protect themselves to have been diligent and used every reasonable care to have ascertained the true financial condition of Karam Produce Company and Albert Karam before making any further sales on credit, and if they failed to do this, then you must find for the defendant, A. Joseph, as to any car after the first car."
Appellee, Joseph, insists that he was entitled to a peremptory instruction and therefore errors, if any, in the instructions granted to him, should not be considered. We are of the opinion that there is no merit in this contention, as to whether the representations were made or not, was in sharp conflict, and was a question for the jury.
The fact that it was developed shortly after these transactions that Karam was a criminal, largely engaged in criminal operations in fifteen states, and had been arrested about one hundred times, and had been sentenced by the courts of two states to serve a term in the penitentiary, does not absolve Joseph from the introduction of Karam to Sojourner as being a representative of the Karam Produce Company, and as being financially able to pay for all the tomatoes he would buy; but was a statement made by Joseph of fact which he, Joseph, represented to Sojourner that he knew, when in truth and in fact he knew nothing of Karam, and had not met him until the day or day before he introduced Karam. He (Joseph) recklessly, on Sojourner's version, assumed the attitude of knowing the financial condition and standing of Karam; and if he made the statement under the circumstances we have detailed, there is no question of liability.
(1) It is true that scienter is a necessary requisite and a condition precedent to a recovery on such false representations as is here involved, but what amounts to proof of scienter was clearly settled in the case of Vincent v. Corbett, 94 Miss. 46, 47 So. 641, 643, 21 L.R.A. (N.S.) 85, in the following approved language from another court: "To make a party liable in an action at law for false representations, it must be shown that he made the representations with actual knowledge of their falsity, or without knowing whether they were true or false, or under such circumstances that he ought to have known that they were false, whether he did or not." The jury could have well found in this case, if it had adopted Sojourner's version of the facts, that Joseph made the statements, recklessly, and without regard to their truth or falsity; or that the statements were made by Joseph as of his own knowledge, when he was without knowledge; or, when in consideration of its position, he should have known of its truth or falsity, before he spoke as one having knowledge.
(2) It is complained of instruction no. 2 that the jury were informed that if they did not rely solely upon the statement of Joseph, the defendant was entitled to a verdict.
It is true that the general rule on this subject is clearly stated in 26 C.J. 1165, 1166, as follows: "It is not essential to redress that a representation or concealment should have been the sole cause of action, but it is sufficient if it constituted one of several inducements and exerted a material influence. In such a case recovery may be had, although the representation was not the predominating inducement to action or the representee's injury was due partly to his own mistake. Thus, where the representation was a material inducement to action, recovery may be had, although the injured party was influenced to some extent by the statements of third persons or by information gained through independent investigation, or relied in part upon other representations of the speaker which were not actionable in themselves, because true, of a promissory nature, or within the statute of frauds, or where the hearer relied partly upon representations and partly upon a guaranty. The foregoing rule with its accompanying qualifications has been applied to representations concerning financial standing." However, there are two obvious answers: (a) In about three places in the record, Sojourner positively testified that he made the sale of tomatoes solely, wholly, or entirely upon his reliance of Joseph's statements or representations. This instruction was justified by Sojourner's evidence. (b) The appellant, in its instruction, number 4 in the record, used practically the same language with reference to the liability of Joseph, so that, in the state of the proof, the instruction was not erroneous.
It is very probable that what Karam said, after Joseph's splendid commendation of his financial ability, made some impression on Sojourner. It is also probable that had not Joseph made these representations, he would have ignored any statements made by Karam. However, the statements, as quoted, under the circumstances, appear to be a moving material inducement in bringing about the transactions between Karam and Sojourner.
(3) We think that instruction no. 3 was calculated to mislead the jury, in that it advised the jury that if Karam had represented himself to be the agent of the Karam Produce Company, and that it (the produce company) was able to pay for tomatoes, and that on this assurance the tomatoes were sold, then a verdict could not be found against Joseph. This statement should have been qualified on the verbiage of the instruction by the words: "Provided, Sojourner did not rely upon the original statements made to him by Joseph." What the words, "and on this," in this instruction meant is subject to considerable doubt. The instruction might have meant that if he relied solely on the statement of Karam, then, Joseph was not liable. The instruction was not clear and was calculated to mislead the jury.
(4) As to instruction no. 5, we are of opinion that it cannot be justified on the record in this case, and that it was tantamount to a peremptory instruction for Joseph. Sojourner's version of the telephone conversation between him and Joseph was the strongest representation in the record. It allayed any suspicion aroused in Sojourner's mind as to the solvency of Karam. Not only did that conversation allay his suspicion as to the past sale, but negotiations for future sales were instituted by Joseph, according to Sojourner's view of it. Sojourner was looking for further information. He did not find Karam Company listed in the blue book. He therefore inquired of the man who knew Karam, as to his company's and his financial standing; and, if the jury believed that this telephone conversation occurred, certainly, Sojourner had a right to rely upon it. His further investigation, when his tomatoes had not been paid for as promised, was made and completed, and that telephone representation as to Karam's solvency relieved Sojourner from further investigation. Of course, the representations made by Joseph, if they were made to Sojourner, did not make Joseph an insurer of Karam's solvency, but, under the circumstances, Sojourner had a right to rely upon Joseph's statement as of his own knowledge of the solvency of the party about whom he was inquiring. As was said in the case of Nash Mississippi Valley Motor Company v. Childress, 156 Miss. 157, 125 So. 708, 709: "Contributory negligence is not a defense to an action based on fraud. If a false statement is made by one who may be fairly assumed to know what he is talking about, it may be accepted as true, without question and without inquiry, although the means of correct information are in reach."
(5) It is said that instruction no. 5 is error as being upon the weight of the evidence; and that Karam was a witness in the case. Karam appeared as a witness in his own behalf, and conducted his own case. He was not proffered as a witness by either Sojourner or Joseph, but he did corroborate Sojourner. He admitted his criminal record, partly detailed by us under the statement of facts, that he had been sentenced to serve a penitentiary term in two states, and had been paroled therefrom. The instruction was perhaps erroneous, but we would not reverse the case because the parties to this litigation now before us, and Karam as well, all admitted the criminality of Karam.
The granting of instruction no. 5, procured by the defendant, was fatal error to the verdict in this case.
Reversed and remanded.