Case ID: ny-st-rep_15/html/0820-02.html
Source: Caselaw Access Project
Author: {"author": "Barnarnd, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William R. Vines, Resp’t, v. Alexander R. Chisolm, App’lt.
    
      (Supreme Court, General Term, Second Department,
    
    
      Filed May 14, 1888.)
    
    Damages—Measure of—Sale of stock—Tender to seller—Effect of.
    The defendant, by misrepresentations, induced the plaintiff to purchase certain shares of mining stock. Evidence was admitted, of a tender of the stock by the plaintiff to the defendant. Held, a tender of the stock by plaintiff to the defendant was properly admitted. It was part of the plaintiff’s case. If there was fraud in the sale a tender of the stock entitled the plaintiff to the money paid. If there was no tender the measure of damages would be base'd upon the injury resulting to the plaintiff, on the basis of a retention of the stock by the plaintiff.
    Appeal from a judgment in favor of the plaintiff entered upon the verdict of the jury and from an order denying the motion for a new trial upon the judge’s minutes. The case was tried at the Kings county circuit before Mr. Justice Cullen and a jury.
    
      Earle & Turner, for resp’t; Geo. Putnam Smith, for app’lt.
   Barnarnd, P. J.

—Under the proof as given to the jury, this action was a plain one. The defendants were the brokers and agents of the plaintiffs, who lived in New Zealand.

The defendants represented to the plaintiff that they had secured contracts of a mining company known as the Bellevue Company, in Idaho. That the stock was selling at fifty cents per share; that the defendants had sent out one, Horton, to see that the money was properly expended, and that he had made an “unexpected strike,” and the company refused thereupon to sell for less than one dollar a share; that by an arrangement had with the company they could demand a certain amount of the stock at the fifty cent price; that they wanted the plaintiff to have the advantage of this lower price and offered him 6,000 shares for $3,000;

The plaintiff relied on these representations and bought. The defendants never had the contract of the Bellevue mine. The stock had never had any value. The defendants had no arrangement to demand any shares at fifty cents a share, but the defendants had received the shares in question, for selling other shares for the Bellevue Company, and the stock was in point of fact worthless and without any market price.

The narrative is so common as to be almost invariable in its uniformity in cases where money is to be obtained by falsely exciting hopes of gain in the purchaser. The great difficulty is why it is believed.

Such narratives are believed and money is parted with on the strength of them, and the jury have found that the plaintiff is one of these credulous persons who overlook experience, prudence and business experience. Assuming the facts to be true, the law does not permit the agent to keep the money as if it were honestly acquired. It was obtained by falsehood and constitutes what is denominated fraud. The only material question, therefore, on this appeal is whether improper evidence was either received or excluded to the defendants’ prejudice.

The plaintiff’s evidence was taken by commission and by interrogatory put to him. He was asked to state the representations made in respect to the stock, and whether, in his faith in their truth, he purchased. The answer stated the representations as made by letter from defendants to him, and the letter was annexed to the commission. He also stated that he believed in the statements and bought on them. These answers were admissible. The letter was not denied by the defendants, and the answer was not evasive. It is always permissible, and, for that reason, necessary to show that the purchase was made upon a reliance that the representation was true. It was proper to exclude an announcement by Horton to the witness Johnson of sales of the stock at a dollar a share. If Horton did tell him so, the fact was of no importance upon the issue to be tried. It was not proper to prove the insolvency of the company by its books. A tender of the stock by plaintiff to the defendant was properly admitted. It was part of the plaintiff’s case. If there was fraud in the sale a tender of the stock entitled the plaintiff to the money paid. If there was no tender the measure of damages would be based upon the injury resulting to plaintiff on the basis of a retention of the stock by plaintiff.

As the stock was proven worthless, and there was no testimony to the contrary, it was not an important question whether the verdict was based upon one theory or the other. The defendant published a paper called the Money Record. Mr. Horton made statements to a local journal in Idaho which were copied in "the Money Record. These statements were read to the jury. A question put to the printing superintendent that the extracts were copies of the local paper was answered in the affirmative, and the answer stricken out. The true enquiry was as stated by the court.

Did the plaintiff believe the reports? He had already answered that he did.

There are, therefore, no exceptions which are of sufficient weight to call for a reversal of the judgment.

Judgment affirmed, with costs.

Pratt and Dykman, JJ., concur.