13 N.Y.S. 192 | N.Y. Sup. Ct. | 1891
At the close of the plaintiff’s testimony it was conceded by plaintiff's counsel that all of the evidence offered on this trial was read from the printed case on the last appeal. The opinion of the court of appeals upon that case is found in 112 B\ Y. 454, 20 B. E. Bep. 376. As no additional testimony was given by the plaintiff, the question is presented whether, within that opinion, the plaintiff made out a case for the consideration of the jury. The court of appeals, speaking by Andrews, J., said: “The question in this case turns upon the point whether the evidence proved, or tended to prove, a cause of action against the defendant for false and fraudulent representations, within the rules governing the common-law action for fraud and deceit.” After stating the essential elements of such an action to be “representation, falsity, scienter, deception, and injury, ” and commenting thereon, the court declares: “In view of the settled principles governing the action for fraud and deceit by means of false pretenses, there is, upon the evidence presented in this case, an insuperable difficulty in maintaining the present judgment. There is no evidence that Bonnell, in purchasing the notes, relied upon any representations made by the defendant.” Bow, upon the present trial, without any additional evidence, the jury were permitted to surmount this “insuperable difficulty,” and to find that Bonnell, in purchasing the notes, did rely upon representations made by the defendant. Upon the last as upon the previous trial the plaintiff undertook to show that the defendant and others entered into a conspiracy to form, and did form, the corporation upon the fictitious and fraudulent basis of large capital, resources, and flattering prospects of abundant profits, and in furtherance thereof issued a false prospectus, giving a glowing account of these pretended facts and advantages, and issued a false annual report, with the intent to cheat and defraud whoever should take its obligations. The jury, upon the former trial and upon this, have in substance found that this conspiracy was made. The notes in question, for the amount of which recovery is sought, were given by the Iron Mountains Company of Lake Champlain to the Birmingham Iron Company upon payment for a furnace, and were before maturity transferred by the Birmingham Iron Company to Bonnell, plaintiff’s intestate, in payment for coal, which Bonnell sold to the Birmingham Iron Company. Before Bonn'ell consented to take the notes, he inquired of his customer, the Birmingham Iron Company, whether the notes were good. The Birmingham Iron Company said they were, but referred him to George Ellis, the treasurer of the maker, the Iron Mountains Company of Lake Champlain. Bonnell sent his clerk to Ellis, and Ellis said that “the company was fully responsible, that the notes were good, and would be promptly paid at maturity.” Bonnell, relying upon this representation, took the notes. The court of appeals, in response to the defendants’ contention that the evidence was insufficient to support the finding against the defendants of a conspiracy, or defendants’ participation in it, said: “We deem it unnecessary to consider this contention. But this does not relieve the case of the difficulty that, assuming the facts to be as found, the plaintiff’s case, as proved, fails, upon the ground
The court of appeals said “the case was submitted to the jury upon a false theory.” We understand this to mean that it was false, because as proved there were insuperable difficulties to a recovery, which the trial court did not recognize, and which possibly might be obviated upon a new trial upon further evidence. But the trial court evidently construed this to mean that upon the case “as proved” there might be a recovery upon a true theory. We can discover no ground for supposing that the court of appeals meant that the same facts would support any recovery upon any theory. The theory adopted by the learned trial judge was that, if Ellis was a co-conspirator with the defendant in the fraudulent conspiracy, then his declaration to Bonnell that the company was fully responsible, and that the notes were good, and would be paid at maturity, was the declaration of the defendant. This question was not directly presented to the court of appeals, but that court remarks: “Ellis is not charged [in the complaint meaning] to have been a co-conspirator, and it does not appear that he had any interest as stockholder or otherwise in the Iron Mountains Company.” We have examined the whole testimony, with the view to discover upon what evidence the claim that Ellis was a co-conspirator rests, and we find only this: That after the corporation was organized the board of trustees, neither Ellis nor defendant being present,' appointed Ellis treasurer; that lie, was the cashier of a bank in New York city; that at a subsequent meeting of the executive committee, of which defendant was not a member, Ellis’ salary was fixed at $1,000 per year; that his name as treasurer was printed in the prospectus; that, pursuant to the resolution of the board, he subscribed his name as treasurer to certain obligations of the company. Thus his only interest in the company was as its servant or officer, on the promise of $1,000 solar}7 for his services. There is no evidence whatever of his knowledge of any scheme to defraud, or of his participation in any way in such a scheme, other than can be derived from the fact that he accepted the office of treasurer, and discharged the duties incident to that office. The complaint names the alleged conspirators, but does not name Ellis as one. He is not a party to the action. His representations to Bonnell were not made in any business transaction between the Iron Mountains Company and Bonnell. The complaint states, as the court of appeals take pains to point out and assume as true, “that Bonnell took the notes confiding in the general reputation of the company produced by the representations,” etc., made to the public at large; thus negativing by implication the recent suggestion that Ellis made any representations in furtherance of a conspiracy. The evidence does not tend to show that Ellis was a co-conspirator, and a verdict resting upon that hypothesis cannot be upheld. The evidence of the acts of the trustees, in which Ellis in no way participated, cannot implicate him in their conspiracy, if such there was, in the absence of all evidence tending to show that he ever participated in their acts or acquiesced in any conspiracy. There is no evidence that he had any knowledge whatever of any conspiracy. The theory of the trial court was that a conspiracy between defendant and Ellis, if established, would, notwithstanding the ruling of the court of appeals, make the statement of Ellis to Bonnell’s clerk admissible. There is no evidence to support that theory, and hence the ground upon which the court of appeals based the ruling is unchanged. Ellis’ statement to Bonnell’s clerk was inadmissible. As the judgment rests upon that statement, the case fails. The court should have granted the motion for a nonsuit.