Cook v. Gill

Boyd, J.,

delivered the opinion of the Court.

The appellee sued the appellant to recover damages for alleged false, fraudulent and deceitful representations made by the latter to him which induced him to purchase fifty *186 shares of stock of the Campbell Barrel Company at $75 per share, whereby he was cheated and defrauded. The case was tried before the Court without a jury and judgment was rendered in favor of the plaintiff. At the close of the plaintiff’s testimony the defendant offered a prayer that, “ the plaintiff having offered no evidence legally sufficient to sustain the material averments of the declaration, the verdict should be for the defendant.” It was rejected, and the defendant proceeded with his evidence. At the conclusion of the testimony the plaintiff offered one prayer which was granted, and the defendant twelve, the first, second, fourth; fifth, eighth, ninth and twelfth of which were rejected as offered,- but the fifth, eighth and ninth were granted with some modifications.'

The only questions before us are presented by two bills of exception which contain the rulings of the Court on those prayers. The first asked the Court to say that “ the plaintiff has offered no evidence legally sufficient to entitle him to recover under the pleadings in this case and the verdict should be for the defendant.” The' second was similar to the one previously offered, and we will consider the three together. The appellant contends they should have been granted because the plaintiff ’s proof failed to establish either the alleged false representations or that he had relied altogether and exclusively on them, or that the stock was at the time -of the purchase worth less than he had paid for it.

The plaintiff testified that in February, 1893, desiring to purchase some stock in the Crown Cork and Seal Company, he called on a Mr. Morton for that purpose, who directed him to the defendant. He inquired of the latter if he knew of any of that stock for sale. He said he did not, and asked him why he did not buy some of the Barrel Company stock, to which the plaintiff replied he did not want that. Afterwards Mr. Cook called on him, urged him to buy some of the Barrel Company stock, and said, “ I will try to buy it for you as low as I can.” ‘ He called *187 on him several times at his place of business trying to induce him to buy that stock, and afterwards called at his house, and, to use the language of the witness, “ insisted on me buying some of this Barrel Machine Company’s stock ; that it was a dead sure thing, and that he would let me in on the ground floor ; that there was a gentleman who had some of that stock who had a mortgage on his house and he could buy it from him for $80 a share. I told him I didn’t want it. The third time he came to the house 1 said, ‘ I will give you $70 for that if it is so good.’ ” He also testified that Mr. Cook said eighty dollars was the price eveiybody paid for it, and he would see if he could buy it for seventy dollars, but that he did not think he could ; that Mr. Cook told him he would not sell his stock at any price. Afterwards the defendant said he could not buy it at seventy dollars and that he, plaintiff, had better take it at eighty dollars. Finally he told him “all right, tell him I will give him $75 for it.” He said, “ I will go and see him.” The next evening Cook said, “ 1 have thaL stock for you, 50 shares, for $3,750.00.” He further testified that he gave Cook his check for the amount upon the statement made by him that the man required that sum for his stock, that he never heard of the stock until Cook spoke of it, that he had great confidence in Cook, and he had no knowledge of the value of the stock himself except what he got from Cook, who was secretary of the Barrel Company, and induced him to pay seventy-five dollars a share for it. He admitted that he had, at Cook’s request, looked at the machine, and after his inspection of it said, “ I told him that if what Mr. Cook told me was true, it might be a good investment—I did not know—provided I was on the ground floor.” His evidence tended to show that he bought the stock and paid seventy-five dollars a share for it because the defendant, in whom he trusted, represented it as worth eighty dollars, and that he could procure it by reason of the fact that the owner had a mortgage on his house and needed the money to pay it offj *188 •while the fact was the defendant already owned and held twenty-five of the fifty shares of stock sold the plaintiff, for which he had paid Mr. Hoopes thirty dollars per share, and had an option on twenty-five more shares at fifty dollars per share, which he got, and delivered the fifty shares to the plaintiff. Just what he paid for the twenty-five shares on which he had the option is not clearly shown. Mr. Cook said he got “ a slight reduction ” from the price named in the option, but did not remember just what he did pay for it, although Mr. Hoopes testified it was fifty dollars per share. The defendant did not procure the stock from a third person to enable the latter to take up a mortgage on his house, but it belonged to the defendant himself and he made a profit of forty-five dollars per share on twenty-five shares and twenty-five dollars or more per share on the balance. It is true that some shares had been sold as high as eighty dollars, but that was not the price everybody paid for it, as the defendant knew from his dealings with Hoopes, and in point of fact he held one hundred and sixty shares which he had received in “ promoting the company.” Mr. Cam'pbell testified that the defendant, in February, 1893, came into the office of the company and said, “ That is the way to do, or something to that effect. He said, I have just made a couple of thousand dollars and I will call the day off and go home. * * * I said, what was it, and he said he had got stock from Mr. Hoopes for thirty dollars and sold it for seventy or seventy-five dollars, and thought that was doing pretty well, and thought he would shut up and go home. I said, ‘ Who did you sell it to,’ and he said, Mr. Gill, and that Mr. Hoopes had some other stock that he would probably get hold of yet.” The testimony of the plaintiff, which we must assume to be true in considering these prayers, is thus to the effect that the defendant did knowingly make false representations to the plaintiff, with the intent to induce him to buy the stock, and did thereby make the sale which would not have been consummated but for the false representations.

*189 As to whether or not the stock was at the time of sale worth less than he paid for it, the plaintiff testified in answer to the question “ Did you try to dispose of the stock?” “ Of course, I was trying to sell it all the time, but I couldn’t sell it at any price. A few months after that I ■would have been glad to have taken twenty-five dollars a share for it.” Sometime afterwards Mr. Rosenthal sold his stock to the plaintiff, the defendant and’ others at seventeen dollars per share. But at the very time the sale was made by the defendant to the plaintiff the former bought of Hoopes twenty-five shares at "a slight reduction” from fifty dollars per share, and had previously bought the other twenty-five shares at thirty dollars. Hoopes was superintendent and manager, and the defendant was secretary of the company, and both were familiar with its affairs. That was certainly some evidence that the stock was not worth seventy-five dollars per share. It is true that the plaintiff did in July, 1893, sell twenty-five shares to Mr. Morton, who was president of the company. The plaintiff said that he transferred it in part payment of some Crown Cork and Seal Company stock, and that no value was agreed upon— that he was anxious to get rid of the Campbell Barrel Company’s stock, and he added he did not want any more Crown Cork and Seal Company stock, but he thought he had better take that than nothing. Mr. Morton, on the other hand, testified that they did agree upon the value and that he took in that deal twenty-two shares of the Campbell Company stock at seventy-five dollars and afterwards got three shares at seventy-three dollars. That was evidence proper to be considered by the Court, sitting as a jury, reflecting on the value of the twenty-five shares still held by the plaintiff, but it did not exclude the other evidence. By the tenth prayer the Court held that there could be no recovery for the stock sold to Morton-, but as to the twenty-five shares still held by the plaintiff there was evidence tending to prove that they were at the time of the purchase worth less than he paid for them, and no stronger *190 evidence of that could be well produced than the fact that the defendant, the secretary of the company, purchased from the superintendent and manager of the company the very stock sold to plaintiff at prices greatly below that exacted of him. We think, therefore, there was legally sufficient evidence on that question.

Nor do we think there is any difficulty as to the question whether there was e'vidence that the plaintiff “relied altogether and exclusively,” as alleged in the declaration, on the representation of the defendant as to the value of his stock. The plaintiff’s own testimony is to that effect. It is true that he went with the defendant to see the machine, although according to his statement it was not in operation, but he was not buying machines, he was buying stock in this company. If it be conceded that the machine itself was all its owners could wish, that could not control the value of the stock of the company. Did eveiybody pay eighty dollars per share, as the plaintiff said the defendant told him, did the defendant and others receive blocks -of it “ in promoting the company? was there some holder of the stock who was compelled to sell by reason of having a mortgage on his house, from which the natural inference to be drawn was that it could be obtained at less than its real value ? did the stock truly represent the value of the company’s franchises and assets including the machines, the patents on them, etc., and other similar inquiries were relevant to the transaction, and not whether the machine was properly constructed or an improvement on others for the manufacture of barrels, even if a person who knew nothing about such machinery or business could form any intelligent opinion of the machine by looking at it. If, then, the plaintiff's version of what transpired between him and the defendant was correct, there was some evidence that he relied altogether and exclusively upon the representations of the defendant and, without discussing at- this point whether that was necessary, we think these prayers, as well as the thirteenth, were therefore properly rejected, and there was no error in granting the one offered by plaintiff.

*191 The fourth prayer is a copy of the fifteenth granted by the Court below in the case of McAleer v. Horsey, 35 Md. 439 . It was not discussed by the Court of Appeals in that case, having been granted at the instance of the defendant, who took the appeal. All that was said aboht it was, that six prayers of the defendant, including the fifteenth, were granted, “ and in connection with the two granted at the instance of the plaintiff, the law of the case seems to have been fairly presented the jury. It is clear that there has been no error committed in this respect to the prejudice of the defendant.” The intimation is that in some of the prayers the defendant possibly got more than he was entitled to. But however that may be, we do not see the application of that prayer to the facts in this case. There is no question raised by the evidence as to whether the defendant made the representations charged in the declaration or certain other false representations. The defendant denies that he made those relied on by the plaintiff, but he does not admit that he made some other false statements. Of course it was necessary for the Judge below to hold that he could not find for the plaintiff if he found that in point of fact the defendant did not make in substance and legal effect the representations charged in the declaration, although the plaintiff thought he did. The plaintiff swore that the defendant did make the material representations charged in the declaration and the defendant denied that such was the case. In Weaver v. Shriver, 79 Md. 541 , the defendant denied that he made the representations and the plaintiff claimed he did, yet this Court held that this same prayer was properly rejected because there was no evidence legally sufficiant to sustain it, and it was not required to prove the exact language used in the representations and set out in the declaration, but proof of it in substance and legal effect was sufficient. In this case no injury could have been done the defendant in rejecting the prayer, as it was not applicable to the facts in the case, especially as by the ninth prayer the Court, declared that to entitle the plaintiff to *192 recover it was necessary to believe from the evidence the defendant made to the plaintiff the representations as set forth in the declaration, etc., thereby practically covering the material parts of this prayer, if it had any application. ¿' .

The record does not show any admission or statement by the plaintiff that his evidence before the grand jury was at variance or inconsistent with his testimony as given in this case, and the most the defendant could ask was to have the fact passed on by the Court. That was done by the modification of the fifth prayer. The change in the ninth by inserting the word “ substantially” we think was correct, and sustained by the cases of Weaver v. Shriver and McAleer v. Horsey .

The only remaining question is presented by the eighth prayer. By it the Court was asked to say that if it, sitting as a jury, found that the plaintiff in making the purchase of the stock did not rely and confide altogether and exclusively upon the faith and truth of the statements of the defendant, the verdict should be for the defendant. The Court modified it by striking out “ altogether and exclusively ” and substituting therefor '‘mainly and substantially.” That the prayer as modified properly presented the law as an abstract proposition can admit of no question. In McAleer v. Horsey the Court said : “ If, however, the plaintiff mainly and substantially relied upon the fraudulent representations he will have his action .for damages though he were in part influenced by other causes.” The contention of the appellant is, however, that inasmuch as the declaration alleged that the plaintiff relied “altogether and exclusively upon the faith and truth of these statements and not upon any other cause' or inducement whatever,” there was a fatal variance between allegata and probata. We have already said that we thought there was evidence tending to prove that the. plaintiff did altogether and exclusively rely on the truth of the statements, and if the evidence offered had been objected to or there had been a motion or prayer *193 asking the Court to strike it out on the ground of variance, we think the Court would have properly admitted it and let it remain in. The strict rule that once prevailed has been very much relaxed for the purposes of justice, even in actions ex contractu, where the rule is more rigidly enforced than in actions ex delicto, and although the pi'obata must still conform to the allegata, it is sufficient if the substance of the issues be proved, and therefore, if it be conceded that this question was so raised by this prayer as to require us to determine whether evidence that the plaintiff mainly and substantially relied on the faith and truth of the statements of the defendant, was admissible and sufficient to justify a recovery under this declaration, we think there is no difficulty about it. In actions ex contractu the terms of the contract sued on must be at least substantially proven as alleged, so as not to take the defendant by surprise, and also to protect him from another suit on the same cause of action, and even in a case of this character, if there be any substantial variance between the allegations and proof of the false representations, the defendant would have cause to complain. But the plaintiff did offer evidence tending to prove in substance the allegations as to what the false statements were, and he alleged more than the law required him to allege or prove as to his confidence and reliance on the statements. The prayer as modified declared that the verdict must be for the defendant unless the evidence showed that the plaintiff did rely and confide upon the faith and truth of the statements to the extent that the law requires that to be done—that is to say mainly and substantially. The defendant could not have been taken by surprise or have been sued again on this cause of action, and therefore could not possibly have been injured by such a modification of the prayer.

■Of course, in what we have said’ above we do not mean to express any opinion as to whether in fact the false representations were made, as that was for another tribunal to determine, but only that there was legally sufficient evi *194 dence of it. Finding no error in the rulings of the Court the judgment must be affirmed.

(Decided March 25th, 1896).

Judgment affirmed with costs.