Court Opinion

ID: 3648018
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:03:35.657515+00
Date Added: 2024-06-11T12:10:01.465658
License: Public Domain

This action was brought by the plaintiffs against the defendant for an alleged fraud and deceit practiced on the plaintiffs by the defendant in the procurement (455) of certain subscriptions, in money and notes, for the purpose of buying machinery to be used by a corporation thereafter to be formed, and to consist of the subscribers, the defendant, and others. The corporation, The Silver Springs Cordage Company, and one McCanless, were also made defendants, but nonsuits have been taken as to them. The defendant, in his answer, denied all the allegations of fraud and deceit alleged in the complaint. Upon the reading of the pleadings the defendant moved to dismiss the complaint because it did not state a cause of action, for that "(1) The complaint does not show that the representations made by the defendant bound the corporation; (2) that the complaint does not allege that upon the discovery of the fraud alleged the plaintiffs immediately disaffirmed the contract; (3) that from the admissions in the pleadings and the plea in avoidance, not denied, shows an affirmation and ratification of the contract; (4) that the complaint does not allege that the plaintiffs made any effort to get redress within the corporation, or requested any action taken; (5) because the corporation and the stockholders are not made parties to the action." The motion was not acted on at the time, but at the close of the evidence his Honor adjudged that "upon an examination of the record and the pleadings in the case, and upon the motion of the defendant to nonsuit plaintiff at the close of the testimony, the said motion be allowed."
The corporation was in no way involved in the matter of which the plaintiffs complain of the defendant. It was alleged in the complaint that before the corporation was formed the plaintiffs were induced to pay money and to subscribe for stock in the corporation by the false statements of the defendant — the statements alleged to have been known to be false when made. If such was the fact, the defendant was liable, and the *Page 315 
corporation had no connection with the matter. Cooley    (456) Torts, p. 504. And the same reason the plaintiffs were not put to their election between the remedy they chose to seek and any other. The matter set up in the answer in avoidance does not profess to relieve the defendant in the matter of which the plaintiffs complain, and, besides, did not exist when the action was commenced, but occurred afterwards. The correctness of his Honor's ruling depends, then, on whether there was any evidence which ought to have been submitted to the jury on the issues joined between the parties. It seems that a majority of the plaintiffs (in number and in value of stock) testified on the trial that they had not been injured by the representations (made in a public address) of the defendant, for they had paid nothing, and several of the largest said that they claim no damages. And several said that the defendant himself expressed disappointment at the machinery when it arrived, declaring it was not such as it was represented to him to be. The plaintiffs Palmer and Carmon, testified that Will Ivey induced them to subscribe, and it appeared that Ivey was employed about the machinery, after it was put in place, at $1.75 per day, but that he could not run it, and another person was employed in his place. Certainly the evidence of the last named witness, and that of his father, both of whom testified that they subscribed in money and notes to the stock of the corporation, and upon the representations of the defendant, was more than a scintilla and the jury should have had it, with all the competent evidence in the case, submitted to them upon the issues between the parties, with proper instructions from his Honor.
New trial.
(457)