Grauel v. Wolfe

Practice, O. P. — Referee's findings of fact. The findings of fact of a master or referee based upon his belief as to the credibility of witnesses and the effect to be given to their testimony are entitled to the same consideration as the verdict of a jury, and should not be set aside except for manifest error; but when the facts found are mere deductions from undisputed testimony, or from other facts found from the testimony, they are entitled to no greater weight than his findings of law. In an action of trespass to recover damages for alleged wrongful misrepresentations as to the condition and profits of a business sold by the defendant to the plaintiff, a referee’s findings of fact in favor of the plaintiff will be reversed by the Supreme Court where the uncontradicted evidence shows that the plaintiff was thoroughly familiar with the same kind of business and was as capable of determining the value of his purchase as the defendant; that the books of the business were offered to him for inspection, but that he refused them, and conducted a private examination of his own, upon the strength of which he bought the business; and that the misrepresentations, if any, were confined to only a part of the business, the profits of the whole being greater than the amount represented.

Appeal, No. 186, Jan. T., 1897, by plaintiffs, from order of C. P. No. 3, Phila. Co., Dee. T., 1888, No. 732, sustaining exceptions to referee’s report. Trespass for deceit to recover damages for alleged false and fraudulent representations made in the sale of the stock, fixtures and good will of a coffee roasting establishment by the defendant to the plaintiff. The referee, Frank L. Lyle, Esq., found the facts to be as follows: 1. Jacob S. Wolfe, the defendant, owned and carried on the coffee roasting business at No. 2239 Wright street, Philadelphia. In January, 1888, he agreed to sell the business to the plaintiff for $3,500, which sum was afterwards reduced to $3,300, the difference representing the value of a horse which was not to be included in the sale. This agreement of sale was subsequently varied as to the purchase' money and on July 7, 1888, in pursuance of the prior negotiations, defendant transferred to the plaintiff the stock, good will and fixtures of said business, including the horse omitted in the first agreement of sale of January, 1888, above referred to, for $3,850, of which sum $2,550 were paid in cash, and the balance secured by a bill of sale from the plaintiff of the personal property transferred. 2. The negotiations for the sale of the business from the defendant to the plaintiff, commencing in January, 1888, and consummated upon July 7, 1888, constituted one transaction. 3. Defendant represented to the plaintiff that he had roasted for customers an average of from six to eight thousand pounds of coffee per week at one half cent per pound and toll (which consisted of three pounds of roasted coffee from every hundredweight sent to be roasted)', and that he had sold each week in his business one thousand to twelve hundred pounds of coffee. These representations were made for the purpose of establishing in the plaintiff’s mind the value of the defendant’s business; and said representations were material and were relied upon by the purchaser. 4. The books of the defendant show that the roasting for customers done by him for seventy-eight weeks prior to the sale of July 7,1888, averaged four thousand, nine hundred and nine pounds per week, and for the year 1887, immediately preceding the time the representations were first made, averaged four thousand six hundred and six pounds roasted per week, 5. The averages of roasting shown by defendant’s books for thirty-four weeks ending July 7, 1888, are two hundred and fifteen pounds per week in excess of the copy of the roasting book, exhibit No. 22, said exhibit being a copy of the book delivered to plaintiff by defendant as one of the books of the business, which shows a larger number of customers for whom work was done, but less roasting in the aggregate than appears by the books of the defendant. 6. For each thousand pounds of coffee roasted for customers at the time of the sale, the receipts amounted to $12.50, including the toll. The difference, therefore, between the actual roasting and that represented by the defendant was a most material variance in the extent of the business and in the value of the good will. This difference was known to the defendant and was concealed by him to deceive the plaintiff. 7. The defendant’s sales were substantially as represented by him. 8. Plaintiff continued the business for four weeks at a loss each week. He soon discovered that the representations of defendant were not true, and tried to have the contract rescinded, but the defendant refused to do so. He then applied to counsel, who on August 1,1888, communicated with defendant concerning the representations and had an interview with him. On August 8, 1888, plaintiff sold the business and all the personal property received from defendant to Messrs. Dilahay and Coppes for $1,000 in cash and a release from the bill of sale given defendant to secure $1,300 of the original purchase money. This sale was made with the full knowledge and approval of the defendant, and no testimony was offered to show that the full market price had not been obtained. The purchasers were employees of defendant who had been retained by plaintiff, and $750 of the $1,000 consideration paid to plaintiff was loaned to the purchasers by defendant, who took title to the personal property and secured himself by a contract of bailment with the purchasers. 9. Prior to the sale to plaintiff, defendant offered to show him his sales and roasting books so that he could ascertain for himself the business done. This plaintiff declined to do, stating that it was not necessary to look at the books, that he would trust the defendant, and that he believed to be true that which the defendant represented. 10. The representations made by defendant as to the roasting done in his business were false, and were known to him to be false. They were material and were relied upon by the plaintiff, and he was deceived thereby. The referee reported that judgment be entered against defendant for 12,181.70. Exceptions to the referee’s report were sustained by McMichael, J. Errors assigned were in sustaining exceptions to referee’s-report.