165 P. 601 | Mont. | 1917
delivered the opinion of the court.
The plaintiffs, A. J. and J. M. Buhler, are father and son. On October 14, 1913, the latter executed and delivered to the defendant W. J. Loftus, a resident of Chicago, Illinois, his promissory note, negotiable in form, for the sum of $2,000, due and payable three years after date with interest at eight per cent
The company, though named as defendant, was not served with summons and did not appear in the action. The answer of the defendants Loftus denies all the allegations of the complaint charging fraud or misrepresentation by W. J. Loftus, and alleges that after the 100 shares of stock were sold to A. J. Buhler he authorized the company to transfer thirty-three shares to F. H. MeDermont. In a pleading designated as a reply the plaintiffs allege in effect that the note and mortgage are void for the reason that neither W. J. Loftus nor the company had complied with the laws of Montana (Chapter 85, Laws 1913, p. 367), relating to investment companies and stock brokers, enacted for the protection of investors, etc. The court called a jury to aid in ascertaining the facts, and submitted special interrogatories. Some of their findings the court adopted. It made formal findings on all the issues in favor of plaintiffs, and decreed to them the relief demanded. The defendants have appealed.
It would extend this opinion beyond any reasonable limits were we to give special notice to all the assignments made and argued by counsel. Many of them are not of sufficient merit to deserve even passing notice. We shall discuss only those which counsel seem to deem of controlling importance.
In support of this statement the author cites, among other cases, Piggott v. Stratton, 1 De Gex, F. & J. 33, 49, and Hutton v. Rossiter, 7 De Gex, M. & G. 9, 22, 23. To these may be added Pickard v. Sears, 6 Ad. & E. 469, Fall River Nat. Bank v. Buffinton, 97 Mass. 498, and Chouteau v. Goddin, 39 Mo. 229, 90 Am. Dec. 462. In the first of these cases Lord Chancellor Campbell said: “I apprehend that the injunction is to be supported on the well-established doctrine that if A makes a deliberate assertion to B, intending it to be acted upon by B, A is estopped from saying it was not true. If it turns out to be false, A is answerable for the damage which may have accrued to B from having acted upon, and B is entitled, in respect of anything done in the belief that it was true, to object to any denial of it by A.” In the note to the text of Mr. Pomeroy, supra, this remark is made referring to the cases cited: “Some of these eases may be referred to the doctrine of equitable estoppel; but it is plain that, where the representation is that of a fact in the future, and not a mere promise, and it is relied upon, and turns out to be false, the rights and remedies of the injured party are the same as those which arise from the fraudulent representation of an existing fact.” Under this rule, the representation,
If the representation had been in the form of a promise merely that the company would furnish A. J. Buhler money within two months of the date of appointment, it being able at the time and intending to do so, its failure to keep the promise would have been a breach of the contract. The plaintiffs, however, understood — and it was the intention of Loftus that they should understand — that the company had then approached a condition of readiness such as to enable it within two months to engage in the business which it was organized to conduct. This was tantamount to an affirmation of a matter in the future as a fact existing at the time the contract was made, and was the inducement upon which he effected the sale of the stock and the execution and delivery of the note and mortgage. It amounted to the suggestion as a fact of that which was not true, by Loftus, who did not believe it to be true, and was therefore a fraud, within the meaning of subdivision 1 of section 4978 of the Revised Codes. In any event, his statements amounted to an “ act fitted to deceive.” {Id., subd. 5.)
Other rulings upon the admissibility of evidence are also assigned as error. None of these require special notice, save those which had reference to the means of proof of the unwritten law of the state of Illinois relating to the nature of the right acquired by the assignee of a trust deed or mortgage and the note secured by it. We shall notice these later when we come to inquire whether John H. Loftus became the owner of the note and mortgage free from equities in favor of plaintiffs.
The next assignment we will consider is that the evidence is insufficient to justify the findings. Since the appeal is from the judgment only upon a bill of exceptions, the question presented by the assignment is, not whether the trial court abused its discretion in denying defendants a new trial, but whether there is any substantial evidence to support the findings as made. "We shall not undertake to state and discuss the evidence with reference to the different findings in detail. It is sufficient to say that, with the exception of the finding of the specific date at which the receiver was appointed, and the finding that neither W. J. Loftus nor the company had been .licensed to do business in Montana, to which reference will be made later, the findings are responsive to the general scope and meaning of the allegations of the complaint, and are supported by substantial evidence. It is true that it is alleged in the complaint that the note was that of A. J. Buhler, and that it was signed and indorsed by J. M. Buhler, and that the evidence shows that it was signed by J. M. Buhler only; and not indorsed by him. This is not a material variance, as counsel contend. The note and mortgage were given by J.' M. Buhler to secure the appointment of A. J. Buhler as the exclusive agent of the company, and to enable the latter, as between the two, to have an interest in the commissions earned in the business. It appears incidentally, also, that it was the intention of A. J. Buhler that one-third of the shares of stock, when issued, should belong to F. H. MeDermont, one of counsel for plaintiffs, who, as between him and the Buhlers, was to have a one-third interest in the commissions
It is insisted that there is no evidence tending to show that the stock is of no value. While, as we have said, the evidence introduced by plaintiffs, heretofore referred to as tending to establish the fact that the company was insolvent and that the stock was worthless, was incompetent, the defendant W. J. Loftus during the giving of his testimony admitted, in effect, that when the contract with A. J. Buhler was made, and he secured the note and mortgage, the company was in a condition of insolvency. According to his testimony, the company was organized and commenced selling stock in the spring of 1912. Though at the time the contract was made it had been engaged for more than a year in the attempt to accumulate sufficient cash from stock subscriptions to begin business, and had nominal assets to the amount of $175,000, it had accumulated but a small amount of cash; the great bulk of its assets consisting of subscription notes payable on the condition that all the stock had been subscribed for. The officers of the company were making every effort to get the stock disposed of, but had failed to do so, and he attributed this condition to a stringency in the money market. He admitted, however, that the company had gone into the hands of a receiver in May, 1914, at the suit of Narregang, one of the largest creditors. Taking the testimony as a whole, it furnishes some basis for the inference that the stock was not worth $20 per share, nor any other amount. Aside from this, however, the main purpose of the transaction was to secure for A. J. Buhler the appointment as exclusive agent of the company
The judgment is affirmed.
Affirmed.