25 Barb. 578 | N.Y. Sup. Ct. | 1857
Lead Opinion
There are three counts in the complaint. The first count shows. that the Parker Vein Coal
By the decision in the court of appeals, the company is not liable for the stock thus over issued ; this count is not, therefore, liable to the objection that the company should sue for the wrong.
The count does not show what the plaintiff paid for the stock; whether par, or so small a sum that his damages must be nominal, if they are to be limited to the deterioration in value which arose after he became the purchaser, as is most probably the true rule; but it shows that, by the acts of the defendants the stock has become valueless to the plaintiff. This, objection, therefore, is one not to be taken by demurrer, but on a motion to make the complaint more definite. Then it results that, by the fraudulent acts of the defendants, they have made the stock of the plaintiff valueless to him, and have put in their pockets the value in money of which they have deprived him. This is an injury which is peculiar to this plaintiff, as regards the stock owned by him. He could not join the other stockholders with him, because they do not own the shares of their stock jointly, but separately. Each owns his. own shares separately, and each sustains his separate loss on his own stock.
The second count states the ownership of the stock as before, and that at the times of the purchase of the stock, the defendants made false representations respecting the character and value of the stock and the then-position of the company; representing that the affairs of the company were in a good and prosperous condition, and wholly withholding and concealing from the plaintiff the fact that they had theretofore made and were then making the over issues of stock ; that the defendants made such false statements for the purpose of inducing various parties, and particularly the plaintiff, to purchase largely of the stock ; that the plaintiff was influenced thereby in making the purchases and did not know of the over issue; that by such over issue, the shares of the stock have become valueless to the plaintiff.
This is a count for a false representation, made not (as is common) to the seller of goods, but to the buyer of property. To sustain it, the same facts must concur as in an action for a false representation of the credit of a buyer. The representation must be false in fact, and so known to th6 defendant; must have been made with the intent to deceive the plaintiff, and must have produced that effect, and have caused loss to the plaintiff; and the pleading must state what the false representation was. It is not essential that the representation should be addressed directly to the plaintiff; if it ay ere made with the intent of its influencing every one to Avhom it might be communicated, or who might read or hear of it, the latter class of persons would be in the same position as those to whom it was directly communicated; but they must have come to a knowledge of it before their purchase. If the defendant alleged as true, of his
This count appears to be good on demurrer; but, it is so in 1 definite that it should be amended. It should clearly show whether it depends on any false representation, except that resulting from the concealment; also in what manner that representation was made, as whether orally or in writing; and distinctly allege that the representation came to the plaintiff’s knowledge before his purchase, in whole or in part; and how it came to his knowledge; and when it was made; and what amount of stock he bought after that time. It should be borne in memory that this court places concealment and falsehood in these cases on the same level; the count should therefore, especially avoid the holding back of any fact, or any distinct and full statement, connected with the cause of action, which, if fairly disclosed, would show that no cause of action really existed.
The third count alleges the purchases of stock by the plaintiff,
This loss is clearly individual to the plaintiff. It is said that he does not allege that he bought of the defendants, and that he has his remedy against the seller of the stock. At common law a tort feasor, when sued, could not plead the non-joinder of his co-tort feasors. It was said that the tort was joint and several ; but the principle of the rule lay deeper: it was, that the wrongdoer is not entitled to the aid of a court to call on others to contribute and bear a part of the penalty, for which he also was liable for his "wrong doing. Much less can he say, when sued, that there is another party, who is entirely innocent, but whom he has deceived, and "who, in consequence of his deception has innocently transferred what he supposed to be of value to the plaintiff; and that the plaintiff must, therefore, have recourse to that person and not to the wrongdoer himself.
It is also said that the defendants, if guilty, are liable to the 'person to whom they sold the property; and that a cause of action for a tort cannot be assigned. To this there are several answers. The first purchaser may have passed the stock away for its full value, and so have suffered no loss : he assigns, then, not the tort, but the stock to the present plaintiff; and the present plaintiff is the first person who suffers any loss by the fraud. The spurious certificates were the acts of the defendants; (in this unlike the defendants in the Hew Haven Bail Boad case,) by the certificates the defendants (not the company) represented to every person who received them, that they were genuine ;• and this representation they made as much to the plaintiff as to the original purchaser.
Again; these certificates pass by a power of attorney, in blank as to the name of the purchaser: the defendants so passing them authorized the insertion of the name of the plaintiff as the imme
This count, therefore, is also good.
The action is well brought against the defendants. They could all join in every act alleged against them: the representations made by them may have been in writing and in print, and signed by each; the certificates of stock may have been signed by all, or by two and issued by the third in common with the others. As the causes of action are all founded in tort, the several counts are properly joined.
The demurrers must be overruled, with leave to the defendants to answer without payment of costs, unless the plaintiffs elect to amend, and make their complaint more definite in the matters above stated; but with like leave on payment of costs of the demurrer, on his making such amendment.
Dissenting Opinion
The first ground of demurrer to this complaint is, that neither of the counts states facts sufficient to constitute a cause of action.
As to the first count, the difficulty in deciding on its merits arises quite as much from the surplusage it contains as from any other feature of it; but with an abundance of irrelevant matter there are points in which it is meagre, and the matters indispensable to a recovery are very scantily given.
This count on the whole is intended to state as a cause of action, that the defendants, by issuing pretended stock of the company, have rendered the stock of the plaintiff unsalable, valueless and lost to him ; and it proceeds on the idea not that the company is a loser in any manner; nor on the idea that the stock of the plaintiff is diminished in its value intrinsically as representing an interest in property of less value; nor on the idea that the stock of the company was increased in amount or number of shares, so that the plaintiff’s 800 shares represented a less proportion of the whole amount and therefore a smaller amount of the property of the company; but on the idea that by the creation of false and fictitious stock the market and salable value of the plaintiff’s stock was diminished and destroyed.
The second count is not less eccentric than the first, and with this as with the first, the great difficulty is to ascertain the intention of the pleader. The plaintiff bought some stock. At the time, the defendants falsely represented the value of it and the position of the company, stating that the affairs of the com■pany were prosperous; and concealed from him the fact that they had issued and were issuing pretended stock beyond the amount authorized by law ; that the representations were made for the purpose of inducing other persons, and particularly the plaintiff, to purchase largely of the stock, and that the plaintiff was influenced thereby in making the purchases; that by the fraudulent over issue, the shares have become valueless, and he has sustained damages thereby, and by reason of the false representations of the defendants, to $50,000. In this count the wrongful acts averred against the defendants are, misrepresentations and concealments, while damages are claimed not only for those, but also for issuing spurious stock. The misrepresentations and concealment are averred, and the former are called false and fraudulent representations, and the latter is called
But the purchase by the plaintiff was not made from or through the defendants, and the misrepresentations were not made to him. Ho relations are shown to have existed between the plaintiff and the defendants which made the disclosure of facts as to the stock the duty of the defendants ; and for aught that appears, the withholding and concealment complained of was proper, and constituted no breach of any duty to the plaintiff. The concealment is said to have been from him, but the representations were not to him,'though both are said to have been for the purpose of influencing and inducing him, among others, to purchase, and it is said he was influenced thereby in the making of the purchases.
When it is considered that the existence of the facts represented is not negatived, nor the existence of the one said to have been concealed affirmed, the intent to defraud and deceive -should at least be required to be fully stated, and the fact that the plaintiff was misled thereby should also be stated; and it
For aught that is stated here the affairs of the company were as represented, good and prosperous, and if they were not, there is no allegation of an intent to deceive and defraud the plaintiff, or that he was deceived or defrauded by the misrepresentations.
As to the concealment, there is nothing to show that the fact alleged to have been concealed existed; and if it did, there is nothing to show that it was the duty of the defendants to disclose it; and if both appeared, there is nothing to show that the plaintiff was misled or deceived by the concealment to do any act from which he sustained damage.
The third count, divested of irrelevant matter, states as a cause of action, that the defendants issued fraudulent certificates of the shares of said company which they sold. That the certificates in appearance were identical with those of the genuine stock. That the plaintiff believing them to be certificates of true stock, bought what purported to be 800 shares op the stock op the company, which was transferred to the plaintiff, and which was found to be spurious and fraudulently issued. There is great difficulty in saying that any person to whom spurious stock may go may maintain an action against the original author of the stock. He defrauded the party to whom he sold or passed it; and it may be said gave him the means of defrauding others. The plaintiff certainly may have an action against the party from whom he received it, and so may each person who has received it have an action against his vendor. This action, however, in the absence of guilty knowledge in the vendor, would be on contract, on the warranty, express or implied. A recovery by one against the party issuing it would certainly be a bar to an action by any other subsequently receiving it. The cases cited by the plaintiff were not directly in point to sustain this principle, and I think leave it in doubt. Thomas v. Winchester, (2 Selden, 397,) seems to resemble this case as nearly as any, and tends strongly to show that an action will lie by the
The case of the Farm. and Mech. Bank of Kent Co. Md. v. The Butchers' and Drovers' Bank, just decided by the court of appeals, does seem to touch this case. There the question was, whether the principal was liable for the acts of the agent. Here it is whether the agent himself is liable to this plaintiff for his own acts. That the principal (the corporation) was hot bound in this case is assumed as a part of the basis of this action, and the effect of the acts of the agent as to himself. What responsibility as to himself follows from this unauthorized act, is the question here; and no question of agency concerning the liability of his principal is involved in this inquiry.
In this case, however, there are defects in the count which are fatal to it. There. is no averment that the defendants intended to deceive and defraud thejffaintiff or any one else, and
If an action for this cause will lie at all by this plaintiff, it must be in substance an action for deceit, and in that action the averment of this intent was always essential.
Again; it is not averred that the stock purchased by the plaintiff was that issued by the defendants, or even that it was embraced in the certificates made by them and said to be spurious. The whole statement of the case is unlike an .action for deceit. If the plaintiff was deceived by the certificates, and by them, induced to believe that A. B. owned 800 shares of the stock of said company, and under the influence of, and relying upon, the false and fraudulent pretense and representation contained therein, made by the defendants with intent to defraud, &c. <fec. was induced to buy of said A. B. and did contract to buy of him 800 shares of said stock and paid him a certain number of dollars therefor, he may,perhaps on stating such a cause of action in a complaint, be able to recover the damages he has sustained; but he states no such case; and on this count, I think, cannot recover.
There is no misjoinder of causes of action in this case, as claimed by the defendants. All the causes are for torts, and directly by the plaintiff in his own right, against the defendants, for their own acts. The action is properly brought by the plaintiff if at all. If it will lie at all it will be at his suit. It will surely not lie at the suit of the company, who have no rights impaired, and cannot bring it. Nor is the company, as claimed by the defendants, a necessary party to this suit, in any aspect of it.
The judgment below should be reversed, and judgment entered for the defendants.
Order appealed from, affirmed.
Mitchell, Clerke and Peabody, Justices.]