Case Name: Marie A. Bevan, Respondent, v. John J. Roach, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-01-31
Citations: 142 A.D. 541
Docket Number: 
Parties: Marie A. Bevan, Respondent, v. John J. Roach, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 142
Pages: 541–543

Head Matter:
Marie A. Bevan, Respondent, v. John J. Roach, Appellant.
Second Department,
January 31, 1911.
Fraud—sale of stock induced by misrepresentations — proof necessary to recovery — evidence — transactions with deceased agent — information upon which alleged false statements were based.
The plaintiff in an action for fraud whereby she was induced to buy stock is under the burden of showing (1) that the defendant made material representations to induce the purchase of the stock; (2) that the defendant knew that they were . untrue; (3) that plaintiff relied thereon in making the purchase, and (4) that she was damaged thereby.
Where the plaintiff purchased the stock through her husband as her agent and she has been permitted to show, what was said to her and to her witnesses by the defendant, it is error to exclude evidence of conversations between the defendant and the plaintiff’s husband, although he is dead.
So, too, the defendant, being accused of making false statements respecting the value of the stock, should' be permitted to testify as to his information respecting the stock obtained before the sale in order to justify his statements.
Appeal by the defendant, John J. Boach, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 18th day of February, 1910, upon the verdict of a jury for $1,150, and also from an order entered in said clerk’s office on the 15th day of February, 1910, denying the defendant’s motion for a new trial made upon the minutes.
John P. East, for the appellant.
John Larkin [R. S. IIull with him on the brief], for the respondent.

Opinion:
Per Curiam :
The plaintiff alleges that defendant made false and fraudulent representations to induce her to buy certain stock, and that, relying thereon, she purchased the same. The burden was with the plaintiff to show (1) that defendant made material representations to induce the purchase of the stock; (2) that defendant knew that they were untrue; (3) that plaintiff relied thereon in making the purchase ; and (4) that she was damaged thereby.
The false representations charged in the complaint are that certain prominent persons controlled the corporation, the stock of which was sold, who had or would obtain advantageous contracts; that one of them was defendant's close friend, and that from him he had specific information, and that such persons were about to advance the price in the market and that defendant could procure for the plaintiff a small quantity of the, stock, which was difficult to secure ; that defendant had purchased $15,000 worth of the stock, which he intended to hold for an increase in the market value, and that he had " special inside information as to the operations of said company which he was not at liberty to disclose to said plaintiff, but that the said-stock would be worth by May 1st, 1908, more than ten times its value at that time, and further offered in case the plaintiff would purchase any of said stock that he, the. said defendant, would repurchase the same at the price paid therefor by the plaintiff at any time that he might be requested by'her so to do.". The negotiations for the purchase of this stock were conducted largely, and as defendant claims, altogether, by plaintiff's husband, who is deceased, although the plaintiff states that she participated in the matter, and that representations were made to her. Indeed the court charged : " Her husband did the whole business. One can do by another what they can do by themselves. Does the evidence in the case make out the purchase by her, her husband attending to it for her ? " . Although the plaintiff and her witnesses were afforded full opportunity to state what was said to her and them, the defendant was not permitted to testify to his conversations with the husband, who was conceded by the plaintiff to be her agent in the matter of the purchase. Indeed, a vital issue is whether the husband was not the purchaser himself, and the court ruled that such was the case as to 1,000 shares of the stock.- The defendant was entitled to give hi's version of the transaction, and was not limited merely to interviews with the plaintiff- of such witness as she saw fit to call to narrate conversations with the defendant. It is chai'ged in' the complaint that defendant stated that he had special inside information, and that the stock would greatly increase in value; and plaintiff testified to statements by the defendant as to her extreme good fortune in possessing the stock*, and that she would be a very wealthy woman by the 1st of May, 1908. One Dunn testified to conversations with the defendant in reference to the wealth that would accrue to plaintiff, and as to the future value of the stock; one Morrissey, plaintiff's brother, testified to a conversation with defendant wherein he made certain statements, among others what he, defendant, had said to Mr. Sevan as to the advance in price of the stock, and as to the prospects of the company. Notwithstanding this the defendant, accused of false statements, was not. permitted to testify, as to his information respecting the stock, some of which was obtained by letter before the sale of the stock, nor was he suffered to state what he told Mr. Bévan. respecting it. So, perchance, the defendant was found guilty of making a fraudulent statement without opportunity to show that he had information j nstifying it. So the plaintiff was allowed to produce evidence of statements to her and others, while the defendant was denied the opportunity to state conversations with Mr. Bevan, which, as he would contend, could be adopted by the jury for his vindication.
For such errors it is considered that the judgment and order should be reversed and á new trial granted, costs to abide the event.
Jenks, P. J., Burr, Thomas, Carr and Rich, JJ., concurred.
Judgment and order reversed and new trial granted, costs to abide the event.