126 Wash. 687 | Wash. | 1923
— This action was brought by the Community State Bank of Mabton to recover on a promissory note of $1,000, dated January 10,1921, due January 10, 1922, made and delivered to it by the defendant. The answer was that the note had been procured by false representations on the part of the plaintiff, it knowing them to be false when made; that they were made wdth the intent to deceive; that the defendant believed them and relying thereon executed and delivered the note: Verdict and judgment were for the defendant, from which the plaintiff has appealed.
The note was given for ten shares, at par value of $100 each, of the capital stock of the Mabton Alfalfa Meal Company (hereinafter spoken of as the meal company), which was organized and commenced business about May, 1920. The cashier of the appellant bank became a stockholder and director of the meal company upon its organization, and continued to be such at all times thereafter. Commencing in the latter part of the year 1920, the meal company got into necessitous circumstances, and continued to grow more so until all of its property was sold in May, 1922, upon foreclosure of a mortgage for $5,000, given shortly
In its principal aspect, the case is not unusual in that the evidence supporting the allegations of false representations was disputed and denied. Upon all of it, however, we think the case was one for the jury. On behalf of the respondent, it was shown, substantially, that, shortly before the note was given, the manager of the meal company importuned the respondent to buy of the capital stock. Not being satisfied, however, the respondent went to the cashier of the bank to get the facts about the meal company’s business. The cashier took him into his private office and talked the matter over with him. The respondent told the cashier that the manager of the meal company had been after him for some time to buy stock, but that he was afraid to do so because “there was so much of this promoted stock and it was nothing but a hot air scheme,” “so I come in there to find out the condition of that mill.” The cashier told him the meal company was a good paying proposition, that it was a good going concern, and that it would be a better concern another year than it was at that time. The respondent further testified that he believed and relied upon those statements, and in a few days purchased the stock, giving the meal company his note therefor. The note was taken to the bank for negotiation and refused by the cashier, who, as he testified, told the manager of the meal company his refusal of it was because the
There is no merit in appellant’s contention that it. is not responsible for the misrepresentations of its cashier, assuming any were made. The note in suit
In the course of his considering the purchase of the stock, the respondent was shown somewhat of the books of the company by the manager, and it is insisted by the appellant that he cannot justly complain if he failed to pursue the means thus made available to him to the extent of ascertaining the full and true conditions of the affairs of the meal company. In this regard, the respondent was asked on cross-examination “You had access to the books all the time, didn’t you?”, to which he answered, “Well, I didn’t know nothing about them. It would have taken an expert to know anything about them.” This, together with other facts and circumstances, was sufficient to justify the jury in believing that the respondent could not fully acquaint himself with conditions by this means, and that the manager who showed him the books knew it. Upon such exhibition of the books he was shown some of the indebtedness, but not the principal one of $5,000- covering all of the property. He did go to the cashier of the bank for information that he would rely on, and received that which he satisfied the jury was false and misleading. As lately as the case of Boehme v. Broadway Theater Co., 91 Wash. 104, 157 Pac. 218, we said:
*692 “The financial condition of the company, the volume of its business, the amount of its income and expenses, and what these had been in the past, were all matters peculiarly within the knowledge of the appellants and not easily ascertainable by respondent.”
Again in the same case we said:
“The governing principle as sustained by the trend of modern authority and by all of the more recent decisions of this court is tersely stated in Christiansen v. Koch, 85 Wash. 472, 148 Pac. 585, as follows:
“ ‘ Ordinary prudence does not require a person to test the truthfulness of representations made to him by another as of his own knowledge with the intent that they shall be believed and acted upon, even though the party to whom such representations are made may have an opportunity to ascertain the truth for himself.’ ”
To the same effect see Gilluly v. Hosford, 45 Wash. 594, 88 Pac. 1027.
In 26 C. J. 1152, on the subject of fraud, it is said:
“The right to rely upon representations, is generally conceded where the hearer lacks equal facilities for ascertaining the truth, as where the facts are peculiarly within the knowledge of the speaker and are difficult for the hearer to ascertain, ’ ’
Instances of which, the author says, are:
“. . . where because of the hearer’s ignorance and inexperience it would be necessary for him to employ a third person to make an examination in order to learn the truth, where the employment of an expert would be required, etc.”
Objections are made by the appellant to certain instructions given, and the refusal of the court to give certain requested instructions. What has been said as to the rules of law governing this kind of case is sufficient answer to these assignments. The instructions given were proper and fully covered the case on behalf of both sides.
Some considerable contention is made of an attempt, partly successful, on the part of the respondent and others some months after the note in suit was given, and at a time when the respondent had become fully aware of the existing insolvency of the meal company, to purchase meal company stock at fifty per cent and less of its par value. It was clearly shown, however, that efforts in that respect were for the avowed purpose of saving something if possible out of the impending wreck and was in no way inconsistent with his charge of actionable fraud against the appellant in procuring the note upon which this suit rests.
Upon the whole record, we think the trial was a fair one, and that the motion for a new trial was properly denied. Judgment affirmed.
Main, O. J., Mackintosh, Holcomb, and Bridges, JJ., concur.