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while the mere fact of failure or refusal to perform an oral agreement is not sufficient of itself to raise the issue of fraud, yet it is entitled to consideration for this purpose along with such other relevant facts and circumstances as may be shown. 149 And the weight to be attached to the subsequent conduct of the promisor in failing or refusing to perform the promise would appear to depend on the particular cirMfg. Co. (1920; C. C. A. 9th) 264 Fed. 470; Re Harker (1901) 113 Iowa, 584, 85 N. W. 786; Dolph v. Lennon's (1923) 109 Or. 336, 220 Pac. 161; Coleman v. Stevens (1922) 124 S. C. 8, 117 S. E. 305.

It is said in Coleman v. Stevens (S. C.) supra, that, if breach of the promise did not of itself constitute fraud, such breach was not of itself evidence of fraud. But the court apparently regards the breach of the promise as evidence of fraud when considered in connection with other facts tending to establish a conspiracy to defraud, it being held that this contention was safeguarded by an instruction to the effect that a future promise is not fraudulent unless the same was part of a general design or plan existing at the time, made as part of a general scheme to induce one to act to his injury.

149 King v. Wise (1926) 282 S. W. 570.

Tex.

It is held in Manning v. Pippen (1891) 95 Ala. 537, 11 So. 56, that, while nonperformance of the promise is proper for consideration in connection with the other facts of the case tending to show fraud on the part of the promisor, yet that, standing alone, it is not sufficient to establish fraud.

To the effect, also, that mere breach of a promise is not sufficient to show an intention not to perform it, so as to constitute fraud in the inception of a contract, but that the fact of such breach may be considered in connection with other circumstances as sometimes constituting one of the links in a chain of facts going to prove fraud, is Brock v. Brock (1890) 90 Ala. 86, 9 L.R.A. 287, 8 So. 11.

Effort to collect a note, instead of returning it according to the promise. of the payee, was held in Williams v. Hasshagen (1913) 166 Cal. 386, 137 Pac. 9, to be evidence of actual fraud in making the promise without intention of performance.

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It is said in Adams v. Clark (1925) 239 N. Y. 403, 146 N. E. 642, that proof of failure to keep a promise may tend to establish the intent not to keep it, but that common experience teaches us that such proof is not conclusive; that the making of an unkept promise does not imply, of necessity, in all cases, a present intention not to keep the promise.

150 Blackburn v. Morrison (Okla.) note 159, infra; Dowd v. Tucker (Conn.) note 158, infra.

In Guy T. Bisbee Co. v. Granite City Investing Corp. (1924) 159 Minn. 238, 199 N. W. 14, the court, in holding that the circumstances in this instance were such that bad faith in making a promise might be inferred, said that it is always difficult to prove the state of a person's mind at a particular time; that conduct inconsistent with a previous representation cannot always be attributed to a pre-existing intent to deceive; but that, where the period of time between the making of a promissory representation and its repudiation is short, and there is no change in the circumstances, it is unreasonable to suppose that the intention manifested by the subsequent conduct was entertained when the representation was made.

The proposition that the fact that the promisor, immediately after making the promise, acts to the contrary, may be evidence of a deliberate intention at the time of making the promise not to fulfil it, finds support in the conclusion reached in Mutual Reserve L. Ins. Co. v. Seidel (1908) 52 Tex. Civ. App. 278, 113 S. W. 945.

151 The view has been taken that the jury may find that the promisor, at the time he made the promise, had no intention of performance, so as to establish fraud, from the fact that thereafter the promisor did not even make a pretense of complying with the contract. Chicago, T. & M. C. R. Co. v. Titterington (1892) 84 Tex. 218, 31

ground to anticipate performance by another, it seems that this fact may establish a prima facie case that the promise was not made in good faith. 152

A person's intent, within the meaning of the rule relating to fraudulent promises made without intention of performance, is often a difficult matter to determine, and evidence of subsequent conduct and speech on the part of the promisor may be resorted to for the purpose of showing fraudulent intent, which may be shown by such evidence as matter of inference, although there is no direct evidence of a preconceived, secret intention on the part of the promisor at the time of Am. St. Rep. 39, 19 S. W. 472. The case was one where the alleged fraudulent representations consisted in a promise by a railway company, inducing a conveyance of land to it for a right of way, that it would establish a depot on the granted land.

In FOSTER V. DWIRE (reported herewith) ante, 21, the court holds that an intention not to perform a promise may be inferred from the fact that, after performance by the promisee, the promisor does not even make a pretense of carrying out his promise, or evades and refuses to perform it. And it is held that evidence of the promisor's subsequent conduct is admissible to show fraudulent intent and motives for making an alleged fraudulent representation.

152 Where an owner of a crop of raisin grapes agreed with the agent of a packing company to sell the same to the corporation at a specified price, and, in an action against the seller for breach of the contract, the latter alleged an oral promise by the agent that the company would advance money on the contract to enable the seller to pick and cure the crop, the court in Langley v. Rodriguez (1898) 122 Cal. 580, 68 Am. St. Rep. 70, 55 Pac. 406, said that if, as alleged, the agent at the time he made this promise had no reasonable ground to believe that the company would do so, it was impossible to see how his promise could have been made in good faith; and it was held that evidence should have been admitted to prove such allegation.

153 Holiday v. Tolosano (1918) 39 Cal. App. 151, 178 Pac. 170.

In Braddy v. Elliott (1908) 146 N. C. 578, 16 L.R.A. (N.S.) 1121, 125 Am. St.

making the promise, not to perform it. 153 A wide latitude should be allowed as to the introduction of evidence on the question, 154 but the facts which show the intention not to perform the promises must be clear and unquestioned, and courts of chancery will indulge no presumptions or surmises of fraud. 155 The presumption

is that a person making a representation as to what he expects or hopes is about to take place, in order to induce action on the part of the person to whom it is made, acts honestly, however extravagant such hopes may be, 156 though, in cases of failure to Rep. 523, 60 S. E. 507, it is held that in an action for rescission of a contract for fraud in making promises not. intended to be performed, the subsequent acts and conduct of the promisor may be submitted to the jury as some evidence of the original intent and purpose, when they tend to indicate it.

See also notes 150-152, supra.

154 Where it is sought to rescind a contract for the purchase of lots on the ground of fraud on the part of the seller, it is competent to rebut evidence of a fraudulent purpose or intention on the part of the latter in misrepresenting future improvements, by showing that the promises were made in good faith, and facts which reasonably account for the failure of the enterprises or promises are admissible in evidence; a wide latitude is allowed in introducing evidence on this issue. Nelson v. Shelby Mfg. Co. & Improv. Co. (1892) 96 Ala. 515, 38 Am. St. Rep. 116, 11 So. 695.

155 Scott v. Empire Land Co. (1925; D. C.) 5 F. (2d) 873.

156 Kley v. Healy (1896) 149 N. Y. 346, 44 N. E. 150.

It is held in Burchill v. Hermsmeyer (1919) Tex. Civ. App. —, 212 S. W. 767, later appeal in (1921) - Tex. Civ. App., 230 S. W. 809, that if one undertakes to rescind a contract (in this instance for subscription to stock) on the ground of alleged false and fraudulent representation, invoking the rule that fraud may be predicated on promises made without an intention of performance, the burden is on him to show that, at the time the defendants made the alleged false

provide support, 157 and perhaps in other cases, as in those involving promises which affect the making or failure to make wills, 158 different rules in this regard may apply.

While an allegation of a present intention to deceive is an essential allegation in an action of deceit based upon an unfulfilled promise, yet it has promise, they did not intend to fulfil it.

And in Frost v. Thomas (1922) Tex. Civ. App. —, 238 S. W. 305, it was held that, for the plaintiff to bring himself within the rule that fraud may be predicated on a promise made without intention of performance, the burden of proof is on him to show that, at the time the oral promises and representations were made, the parties making them did not intend to fulfil them. The suit was to cancel an oil and gas lease on the ground of fraudulent representations.

It should be observed that the general question of the burden of proof of fraud is not within the scope of the annotation. See, for example, Rogers v. Harris (1919) 76 Okla. 215, 184 Pac. 459, holding that, in an action to cancel conveyances on the ground of fraudulent representations and promises, the burden is on the plaintiff to prove fraud, and that the proof must sustain the allegations of fraud by a preponderance so great as to overcome all opposing evidence and to repel all opposing presumptions of good faith.

157 See note 57, supra; also cases under VII. 1, supra.

158 See note 60, supra.

In Pollard v. McKenney (1903) 69 Neb. 742, 96 N. W. 679, 101 N. W. 9, the court held that, where a wife prevails upon her husband, who is fatally ill, to convey property to her, by promising to make a certain disposition thereof among his heirs at law, it will be presumed, from her wilful failure to make such disposition, that her promise was made without any intention of performing it, and was, therefore, fraudulent. The court lays stress upon the confidential relations of the parties, but says that, apart from this, a promise is fraudulent if made without intention of performance.

In Dowd v. Tucker (1874) 41 Conn. 197, where the sole beneficiary under a will induced the testatrix not to sign a codicil giving a part of the property

been held that it is not indispensable that there should be a direct allegation of an intention to deceive or not to perform the promise, but that it is sufficient if, from the facts stated, construed in their ordinary acceptation, such an intent may be reasonably implied or inferred. 159 But it has been held, also, that it is insufficient, in to another relative, on the ground that in her weak condition she should not trouble herself about the matter and the same result would be accomplished by his giving the property to such relative, which promise he refused subsequently to perform, the court, in holding that a sufficient case of fraud was shown in making the promise without an intention of performance, said that it was a presumption of law that a party intended to do what in fact he did; that the fact appearing in the case that, after the property came into the hands of the promisor, he at all times refused to convey it (in accordance with the promise), it must be that, during some period of time previous to his first refusal, he must have so intended; that, since there was nothing in the case showing a different intention at any previous time, it was reasonable to presume that this intention existed during the short period of time intervening after the promise was made, and existed at the time it was made; from which it followed that the promise was made in bad faith, with the dishonest intention to do what the promisor subsequently did.

159 Sallies v. Johnson (1911) 85 Conn. 77, 81 Atl. 974, Ann. Cas. 1913A, 386. It was held that an inference that the defendant did not intend to fulfil the promise at the time of making it sufficiently appeared from allegations that the defendant falsely and fraudulently represented to the plaintiff, with the intent to deceive him, that he was about to and would abandon a certain business (the barber business), which he sold to the plaintiff.

And it is held in Smith v. Vosika (1925) 163 Minn. 12, 203 N. W. 428, not necessary that there should be a direct allegation of an intention not to perform, but it is sufficient if such fact is fairly implied or inferable from the complaint.

In Schaeffer v. Rush (1912) 118 Minn. 174, 136 N. W. 754, allegations that the defendant knowingly, falsely,

charging fraud, to allege merely that a contracting party did not intend to carry out the contract, without the statement of any facts whatever establishing such an intent, except the ultimate failure to perform the agreement, 160 and that a mere allegation

and fraudulently represented to the plaintiff that he (the defendant) intended forthwith to organize or cause to be organized a corporation with a certain capital stock, for the purpose of taking over and continuing a specified business, were held sufficient to admit evidence to show that the defendant intended to lead the plaintiff to believe that it was then his intention to form such a corporation, thus bringing the case within the rule that fraud may be predicated on promises made with an intention of nonperform

ance.

The rule that a specific averment of fraudulent intent is not required if the facts alleged are such that the existence of such intent can be clearly inferred therefrom was applied in Blackburn v. Morrison (1911) 29 Okla. 510, 118 Pac. 402, Ann. Cas. 1913A, 523, to an action to cancel a deed alleged to have been procured by false and fraudulent promises on the part of the grantee to pay the consideration money on the following day after he had received the deed. The court said: "Defendant negotiated with plaintiffs for a purchase of their land upon the representation and promise that the consideration to be paid would be cash. With such understanding, an agreement of sale was reached, the deed was executed and delivered to defendant, whereupon defendant stated that he did not have the cash in hand to pay the purchase price, but that the same would be paid the next morning; but it was not paid on the next day, and has never been paid. The deed was placed upon record, and, when payment was demanded by plaintiffs, it was refused, and a reconveyance of the property was refused. Defendant now holds plaintiffs' property without having paid any consideration therefor. Mere failure to pay the purchase price of property promised to be paid in the future is not, alone, sufficient to make the incipiency of the transaction fraudulent; but the understanding between the parties in this case was that the purchase price should be cash, and,

that certain statements and representations "were false" is insufficient as an averment of an existing intention on the part of the promisor, when he made the alleged promissory representations, not to perform them, so as to serve as a basis for fraud; 161 because there was a brief time agreed upon for the grantee to pay over the cash did not change the character of the transaction from a cash sale to a credit transaction. It would be an unreasonable presumption to presume that defendant's refusal without explanation within so brief a time to pay over the consideration agreed upon did not flow from an intent not to do so at the time of the delivery of the deed." 160 Re Harker (1901) 113 Iowa, 584, 85 N. W. 786.

In Dibrell v. Central Nat. Bank (1927) Tex. Civ. App. —, 293 S. W. 874, the court said: "The rule seems to be well settled in this state that equitable relief, such as rescission or cancelation, might be had because of a fraudulent promise made as an inducement to a contract with no intention to perform; still it is as well settled that no recovery of damages may be had where the petition merely alleges that the promise was made with no intention to perform, and where the only other fact alleged in connection therewith is the mere failure to perform. The reason for the rule is that a promise to do something in the future cannot be both true and false at the time when it is made, and that the failure to make it good is merely a breach of contract, which should be enforced as a contract, if at all." See case in note 102, supra.

161 Field V. Seubert Bearing Co. (1917) 179 App. Div. 780, 167 N. Y. Supp. 294.

It was held in Gauthier v. Atchison, T. & S. F. R. Co. (1922) 176 Wis. 245, 186 N. W. 619, that mere promises to pay or settle a claim in the future, although broken, are not fraudulent, although they may be so designated in the complaint, so as to serve as a basis for fraud. The complaint, which was construed as alleging merely failure to comply with a promise or representation as to a future event, and so not to state a case of actionable fraud, alleged that the defendant railway company, through its claim agent, falsely and fraudulently represented and stated to the plaintiff that the defend

also, that a general allegation of fraud and misrepresentation in the making of a promise is not the equivalent of an allegation that, at the time of making the promise, the promisor had no intention of fulfilling it, within the rule that fraud may be predicated on an unperformed promise made without the intention of performance. 162 So, general allegations that, from all the facts which the plaintiff has learned about the organization of a company (the case being one of alleged fraudulent representation inducing purchase of stock), the extent, character, and value of its investments, its failure to sell all its shares of stock, and to carry out its guaranties and agreements, the transactions entered into by it for an exant would pay the plaintiff and settle with him for injuries received on the railway, inducing him to fail to bring an action within the required time.

In Legler v. Tyler (1924) 184 Wis. 238, 199 N. W. 149, where the allegations were that the defendant "falsely and fraudulently, and with intent to deceive and defraud" the plaintiff, made certain representations, the complaint was held insufficient to support a cause of action for fraud.

And that general allegations in the complaint, of a fraudulent intent on the part of the promisor, are insufficient, is held, also, in Krouskup v. Krouskup (1897) 95 Wis. 296, 70 N. W. 475.

Cancelation of a deed is not authorized merely on allegations of fraudulent intent on the part of the grantee. Farrar v. Bridges (1842) 3 Humph. (Tenn.) 565.

In La Grange Grocery Co. v. Young & G. Coffee Co. (1923) 30 Ga. App. 303, 117 S. E. 673, in an action to recover the purchase price of personal property, the court held that it was not error to strike out an amendment by which the defendant sought to set up a rescission of the contract sued on, on account of fraud of the seller, in that he did not intend to perform his promises and agreements, the reason for the decision being that the amendment did not set forth specific acts constituting the alleged fraud.

162 Wagner v. J. B. Colt Co. (1921) Tex. Civ. App. —, 234 S. W. 934.

Also, in Hickman v. Johnson (1918) 36 Cal. App. 342, 178 Pac. 145, it is

change of stock for property were entered into in bad faith, with the intent and purpose of deceiving the purchaser of the stock, are insufficient to show an actual or constructive intent to defraud. 163 And the same conclusion has been reached as to allegations that the corporation knew, or had good reason to know, that it could not meet its obligations, although it represented that its stock would shortly become very valuable, and that a stated dividend would be paid to stockholders. 164

Whether a promise or representation was made without the intention of performance, so that it may serve as a basis for fraud, is a question to be determined by the jury, if there is any sufficient evidence in this regard, 165 and nonperformance of the held that allegations that the promise was false and fraudulent are not the equivalent of allegations that it was made with the intention of deceiving or misleading the promisee.

163 Kimmel v. Eastern Coal & Min. Co. (1924) 97 W. Va. 154, 124 S. E. 661.

164 Kimmel v. Eastern Coal & Min. Co. (W. Va.) supra.

165 Nelson v. Shelby Mfg. & Improv. Co. (1892) 96 Ala. 515, 38 Am. St. Rep. 116, 11 So. 695; Holiday v. Tolosano (1918) 39 Cal. App. 151, 178 Pac. 170; Bechtold v. Coney (1919) 42 Cal. App. 563, 183 Pac. 841; City Nat. Bank v. Mason (1922) 192 Iowa, 1048, 186 N. W. 30; Ciarlo v. Ciarlo (1923) 244 Mass. 453, 139 N. E. 344; Chicago, T. & M. C. R. Co. v. Titterington (1892) 84 Tex. 218, 31 Am. St. Rep. 39, 19 S. W. 472; Tatum v. Orange & N. W. R. Co. (1922) - Tex. —, 245 S. W. 231, later appeal in (1924) Tex. Civ. App. 261 S. W. 421.

In Nelson v. Shelby Mfg. & Improv. Co. (Ala.) supra, it was said that it was not for the court to declare that there was no evidence which authorized the jury to infer that there were fraudulent representations or promises as to future improvements made with intent to deceive and without purpose of performance; that, however unsatisfactory the court might have considered the evidence on this phase of the case, it was for the jury to determine the bona fides of the representations and promises of mutual performance, if any, from all of the evidence.

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