Court Opinion

ID: 3505161
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:15:14.2196+00
Date Added: 2024-06-11T09:36:04.173830
License: Public Domain

I dissent. The verdict of the jury established that the promise had been made and that it was later broken. True, that is not enough to sustain a claim of fraud. I cannot agree with the statement in the majority opinion that the record makes no showing that when the promise was made there was no intention of performing it, and hence no fraud. The evidence and the reasonable inferences to be drawn therefrom, to my mind, are much stronger in favor of the verdict on that point than against it. The majority opinion fails to take into consideration the circumstances of the parties and the significance of Davey's representations to plaintiff, first, that because of action taken by the directors of the company plaintiff at that time could not have cash; second, that the company was hard pressed for funds, when in fact it had, as stated in Davey's deposition, an "ample supply of money on deposit in the banks, and in addition had an extended line of credit [$600,000] at the banks." Davey could have had but one purpose in mind in making those statements, and that was to induce plaintiff to accept stock instead of the money that he was then entitled to. The *Page 496 
representation which finally persuaded plaintiff to accept stock, the actual sale value of which he did not know, was that at a later time when the company would have ample funds it would give him the money and take the stock back. It is also significant that the amount Davey promised for the return of the stock was the sum then due plaintiff and not what the stock might be worth at the time of its return. The representation as to the then financial condition of the company proved false. There was then no reason why the directors should have taken the action as represented by Davey; the jury had a right to believe that such representation was also false. The promise to do something in the future having been made and acceptance thereof induced upon false representations as to the existing facts, the jury had a right to believe that the promise was made with a fraudulent intent of not performing it and that plaintiff had a right to and did rely thereon. The trial court was of the same mind and, in a well considered memorandum, so expressed itself. The plaintiff twice sent back the stock to defendant and demanded the payment to him of the promised money. The letters of the defendant to plaintiff in which payment was refused strongly indicate that there never was any intention on its part to carry out the promise that the jury found had been made. Davey's testimonial denial of making the promise is also a circumstance properly to be considered in determining whether there was an intention to perform. A promise having been made, Davey's denial of having made it is inconsistent with an intention of performing it. In Woods-Faulkner  Co. v. Michelson (C.C.A.) 63 F.2d 569, plaintiff alleged that he was induced to purchase certain shares of stock by false and fraudulent representations made by the defendant to the effect that it would repurchase the stock at the same price. The court stated [63 F.2d 573]:
"It is observed, too, that defendant, by its answer, denied having made this representation [in the instant case denial was made by Davey in his deposition], and it likewise denied having authorized any such representation to be made by its agents. These denials would seem to imply a denial of an intention to make good such *Page 497 
representation. Defendant could not consistently claim both that it did not make the representation, yet that it intended to carry out or make good such a representation." (Citing cases.)
See also, Tatum v. Orange  N.W. Ry. Co. (Tex.Com.App.)245 S.W. 231; Texas Employers Ins. Assn. v. Knouff (Tex.Civ.App.) 297 S.W. 799.
The facts here bring this case within the rule adopted and applied in Nelson v. Berkner, 139 Minn. 301, 307,166 N.W. 347, 349, a general statement from which is quoted in the majority opinion but which was not applied to the facts in that case. The rule there applied is:
"Promissory statements may be made in terms which imply that a certain condition of things exists at the time, and form the basis of the future things. When they are of this description, if they are intentionally false, they are fraudulent, and form the basis of a right of rescission."
In that case plaintiff sued to recover money paid on a contract for the purchase of a farm on the ground of misrepresentations, among others, that there were a certain number of acres under cultivation; that the land was as good for general farming as that of other farms in the county; and that, in case plaintiff could not make a success of farming the land the first year, the $3,000 paid, with interest, should be refunded, which was contrary to the terms of the contract. Defendant denied making the representations and recited what he claimed was actually said and done. The jury believed plaintiff, and the court said [139 Minn. 308]:
"The jury could find that there was a fraudulent promise predicated upon misrepresentations concerning the productiveness and cultivated acreage of the farm."
It is further my opinion that the evidence and circumstances in this case more strongly support the verdict than those in Roman v. Lorence, 162 Minn. 198, 202 N.W. 707, in which this court, although conceding that the evidence would have sustained a contrary finding on the issue of fraud, affirmed the trial court's order denying *Page 498 
the motion of defendant for judgment notwithstanding or for a new trial.