Summary
determining whether defendant's fraudulent misrepresentation was "the proximate cause of the [plaintiff's] loss"
Summary of this case from Vining v. Comerica Bank (In re M.T.G., Inc.)Opinion
Docket No. 103, Calendar No. 37,002.
Submitted January 11, 1933.
Decided April 4, 1933.
Appeal from Wayne; Richter (Theodore J.), J. Submitted January 11, 1933. (Docket No. 103, Calendar No. 37,002.) Decided April 4, 1933.
Action by David Rosenblatt and another against John F. Ivory Storage Company, Inc., a Michigan corporation, for fraudulent representations made to induce execution of contract relating to storage of household goods. Judgment non obstante veredicto for defendant. Plaintiffs appeal. Reversed, and judgment ordered on verdict.
Francis Fitzgerald and S. Reymont Paul, for plaintiffs.
Pear Beattie ( Donald K. Tyler, of counsel), for defendant.
This suit is brought to recover damages for loss by fire of household goods which plaintiffs had stored in defendant's warehouse.
A count of the declaration is in fraud, that defendant falsely represented the warehouse to be fireproof, and in reliance thereon plaintiff's entered into a contract of storage. The averments were supported by testimony.
The defense is a denial of such representation, and that obligations and rights were fixed by the warehouse receipt, the contract, which recited that there would be no liability for loss or damage by fire. The plaintiffs were advised by postcard that defendant did not insure goods in storage, and to procure insurance. The warehouse was not fireproof.
Plaintiffs had verdict, and on decision of a reserved motion to direct, judgment was ordered and entered for defendant. Plaintiffs' appeal challenges such order. Clearly the question of fraud was an issue of fact for the jury, and there is no evidence sufficient to raise question of waiver of the fraud. If it be conceded that the written contract was complete, and that oral testimony was not admissible to vary it, we have not touched the issue here, which is, that plaintiffs were induced to enter into the contract by defendant's fraud, on which issue plaintiffs' evidence of false representation was admissible. Of such evidence it was said in a like case, Fox v. John F. Ivory Storage Co., Inc., 261 Mich. 358:
"It was offered to show that plaintiff was induced to enter into the written contract because of the defendant's fraud in falsely representing that the warehouse was of fireproof construction. Believing that it was fireproof, he was willing to consent to all of the terms of the written contract and to take the risk of loss by fire."
Whether plaintiffs had fire insurance or not is of no importance here. Liability of defendant would not have been affected if plaintiffs had insured the property. Right of action for the loss would nevertheless be in plaintiffs or their assignees. As was said in the Fox Case, plaintiffs, relying on the representation, might take the risk of loss by fire. 17 C. J. p. 929.
The fraud, it is urged, was not the proximate cause of the loss, rather the fire, which was not occasioned by any fault of defendant, citing McLane, Swift Co. v. Botsford Elevator Co., 136 Mich. 664. In that case, oats were shipped by plaintiff to defendant to be clipped at its elevator and reshipped on the original bills of lading. While the oats were in defendant's elevator they were accidentally destroyed by fire. Assuming delay in reshipping, it was held that fire was the remote, not the proximate, cause of the loss.
But the case at bar has an important and distinguishing element — the loss grew out of the very subject-matter of the fraud, the misrepresentation that the building was fireproof. It was recognized by the parties that fire is an ordinary and frequent agency of destruction, and safety as against it was within the contemplation of the parties. Because of this element, we think the cited case not controlling. Two cases illustrate the point:
In Mortimer v. Otto, 206 N.Y. 89 ( 99 N.E. 189, Ann. Cas. 1914A, 1121), defendants agreed to store household goods in a designated building, but in violation of that agreement stored the articles in another building which, with the articles, was destroyed by fire. In a holding favoring plaintiffs it was said:
"The plaintiff and her assignor were depositing their property with the defendants and a regard for its safety and security while in the keeping of the defendants was obviously within their contemplation and, it may justly be assumed, known to the defendants. For the purpose of making effective that regard, they, with the permission and concurrence of the defendants, selected the precise place of storing. Fire is an ordinary and frequent agency of destruction or injury, and safety as against it was in the contemplation of the parties when they agreed that the property should be stored in the specified room. Had the property been there stored, the plaintiff and her assignor would have assumed all the risks of injury to it except those ordinarily imposed by law upon the defendants as bailees. When, however, the property was burned in the building in which the defendants in fact placed it, the consequent loss and damage was that which the parties apprehended and sought to avoid through the agreement that the property should not be there, and the defendants must indemnify the plaintiff therefor."
In The Normannia, 62 Fed. 469, a passenger had purchased passage on defendant's ship, but had determined to forfeit it on subsequent outbreak of cholera, and was induced to take the passage on false representation of defendant's agents that no steerage passengers would be carried. It was held he could recover damages resulting from the ship being in quarantine at destination because of cholera on board, and the court said:
"I do not think the mere circumstance that he would 'not have been on board' but for the false representations, would be sufficient to make the defendant liable for whatsoever might happen to the libelant's injury while on the ship on which the representations had induced him to embark, if the injury was not proximately related to, and did not naturally grow out of, the subject-matter of the misrepresentations. Had the libelant, in this instance, suffered no detention through cholera, or quarantine, but had been injured through a collision with another ship, or by some accident on the Normannia itself, in no way connected with the presence of steerage passengers, it surely would not have been claimed that the defendant, if not otherwise in fault, would have been responsible to the libelant for such damages, merely because steerage passengers were on board, and because the libelant would not have embarked on the Normannia had he known of their presence; since neither the cause of the injury nor the damage would, in the case supposed, have had any connection with the presence or the absence of steerage passengers."
The damages occasioned by the fire are proximately connected with and flowing from the fraud, were within the contemplation of the parties and a natural consequence of the wrongful act.
Reversed, with costs, and remanded for judgment on verdict.
McDONALD, C.J., and POTTER, SHARPE, NORTH, FEAD, WREST, and BUTZEL, JJ., concurred.