| Wis. | Jan 10, 1922
The following opinion was filed November 15, 1921:
The foregoing statement of facts is an outline statement only and does not purport to embody detailed facts. It does, however, contain the main facts around which the evidentiary facts cluster. The complaint alleged a fraudulent conspiracy and the proof properly took a wide range, perhaps in a number of instances on behalf of plaintiff wider^ than the rules of evidence permit even in such cases. It is therefore not practical in a judicial opinion to set forth the detailed evidence, especially in a case such as this, where the controlling questions passed upon by the court below are
A careful study of the case has been made by each member of the court with the result that it is its best judgment that no cause of action exists in favor of plaintiff against the appealing defendants or against any of them.
It is the settled law of both England and America that a buyer is required to notice such qualities of the goods purchased as are reasonably within his observation, and this is especially true as to value, which is largely a matter of judgment, and hence though value be puffed by the vendor such puffing does not render him legally liable where the purchaser has an opportunity to examine the subject of the sale. 2 Kent, Comm. (14th ed.) 478; Story, Sales (3d ed.) § 348; 1 Bouv. Law Diet. 438.
It will be noticed that the special verdict did not submit to the jury the issue as to whether or not plaintiff in fact relied upon the representations made by the defendants or whether it was justified in relying upon them, though such issue was tendered by the pleadings and was requested by the defendants to be submitted to the jury. Where the trial court’s attention is properly called to an issue and it is not submitted to the jury it can make no finding thereon either by virtue of sec. 2858m, Stats., or otherwise, and the judgment rendered cannot be sustained by the presumption that findings supporting the judgment were made. Habhegger v. King, 149 Wis. 1" court="Wis." date_filed="1912-03-12" href="https://app.midpage.ai/document/habhegger-v-king-8190517?utm_source=webapp" opinion_id="8190517">149 Wis. 1, 135 N. W. 166; Murray v. Paine L. Co.
In cases where the evidence as to the issue thus omitted is conflicting or susceptible of different conclusions, the case will be reversed and remanded with directions to submit such issue to the jury. But where the facts are undisputed, or it is clear that only one proper conclusion thereon can be reached by reasonable men, this court will determine such issue and dispose of the case accordingly.
It is our conclusion that the question whether the plaintiff had a right to rely upon the representations made by the defendants as to the value of the plant must be answered in the negative upon practically undisputed testimony.
It appears that at the directors’ meeting of May 4, 1914, one of the directors, Mr. Brown, expressed the view that the price asked was too high and that an appraisal be had. Mr. Boyd consented to a new appraisal provided the price fixed by the appraisers should be the purchase price. The directors did not desire an appraisal but voted unanimously to accept Boyd’s written proposition. At the June meeting when the plant was finally bought, the question of price became a subject of such heated debate that one of the directors, Mr. BossKard, resigned and left the meeting. The same offer as to an appraisal was again made by Boyd but rejected. The directors had before them the appraisals mentioned in the statement of facts; they had the report of a number of committees who had previously examined the plant, but above all they had the plant before them; that is, it was near by, open to their inspection, and a number of them had inspected it. Under such, circumstances they had no right to rely upon the written offer as to value. It is claimed, but not proven, that the book value given in Exhibit 10 was too great. Concede that it was. The plant was there, had been inspected, and no claim is made that Boyd
“It is elementary that mere representations as to value, where the purchaser is presumed competent to judge thereof and has full opportunity to, and does,' examine the property to be purchased, do not .constitute false representations entitling the purchaser to rescind on that ground, even though relied upon by him. Such representations as to value constitute nothing more than the mere opinion of the seller,” citing a large number of Wisconsin cases. See, also, J. H. Clark Co. v. Rice, 127 Wis. 451" court="Wis." date_filed="1906-03-20" href="https://app.midpage.ai/document/j-h-clark-co-v-rice-8188444?utm_source=webapp" opinion_id="8188444">127 Wis. 451, 106 N. W. 231; Morgan v. Hodge, 145 Wis. 143" court="Wis." date_filed="1911-02-21" href="https://app.midpage.ai/document/morgan-v-hodge-8190130?utm_source=webapp" opinion_id="8190130">145 Wis. 143, 129 N. W. 1083; Miranovitz v. Gee, 163 Wis. 246" court="Wis." date_filed="1916-05-02" href="https://app.midpage.ai/document/miranovitz-v-gee-8192062?utm_source=webapp" opinion_id="8192062">163 Wis. 246, 157 N. W. 790; Karls v. Drake, 168 Wis. 372" court="Wis." date_filed="1919-01-07" href="https://app.midpage.ai/document/karls-v-drake-8192720?utm_source=webapp" opinion_id="8192720">168 Wis. 372, 170 N. W. 248; Swoboda v. Rubin, 169 Wis. 162" court="Wis." date_filed="1919-04-29" href="https://app.midpage.ai/document/swoboda-v-rubin-8192795?utm_source=webapp" opinion_id="8192795">169 Wis. 162, 170 N. W. 955.
In 12 Ruling Case Law, p. 361, the rule, is expressed as follows;
“Where a party to whom representations are made is put upon inquiry by his knowledge of the facts and undertakes to make an investigation of his own, and the other party does nothing to prevent this investigation from being as full as the investigator chooses to make it, the investigator will not usually be heard to say that he had the right to rely on such representations.”
Here the plaintiff had convenient opportunity for. full examination as to condition and value of the plant. It is only where there is no opportunity for adequate examination that the purchaser may rely upon representations made. Ohrmundt v. Spiegelhoff, ante, p. 214, 184 N.W. 692" court="Wis." date_filed="1921-10-18" href="https://app.midpage.ai/document/ohrmundt-v-spiegelhoff-8193476?utm_source=webapp" opinion_id="8193476">184 N. W. 692. Thus,
The opinion might well end here, for the legal ground upon which the decision of this court is based is as stated. But in view of the gravity of the charges made by plaintiff against the defendants we deem it proper to state that we are also of the view that no conspiracy was shown in which. any oj the answering defendants participated. In coming to such conclusion the court has not been unmindful of the weight that should be given to the verdict — especially when approved by the trial court. Nor has it ignored the fact that fraud and conspiracy is usually proved by circumstántial evidence and that it may be satisfactorily shown by a combination of circumstances none of which alone has much probative force. Our conclusion has been reached not so much because of the weakness of disputed evidentiary facts which, but for other undisputed evidence, the jury might well resolve in favor of the plaintiff, but because of the positive evidence that the organization of .the plaintiff was instituted by the farmers themselves for the purpose of building or purchasing a co-operative packing plant, notwith
The substance of the claim of plaintiff is this: The defendants^ for the purpose of securing a grossly excessive price for the Packing Company plant whereby the owners and the creditors would be fully reimbursed for their investment, conceived the scheme of forming a co-operative corporation under the laws of Wisconsin and selling the plant to them for such grossly excessive price. As evidence of such scheme the activities of Boyd, Chryst, Carnahan, Ma-honey, and of the appellant defendants in the creation of the plaintiff corporation is relied upon. That Boyd, Chryst, Car-nahan, and Mahoney were active in the formation of the plaintiff corporation is well established. But of these Chryst is the only appellant. Mahoney and Carnahan as well as
The testimony as to the value of the Packing Company took a wide range. By some witnesses it was placed less than the value found by the jury and by some as high as the price paid. It must therefore be aásumed as a verity that the value found by the jury has support in the evidence and cannot be disturbed. But the very fact that there was such great difference in opinion as to value by presumably competent and disinterested witnesses has a very direct bearing upon the question of fraud, for where competent honest men may differ, fraud cannot be so unerringly inferred from a purchase made within the limits of the testimony. The apprais
But as before stated, the basis of our decision lies in the fact that plaintiff through committees of its own had several times inspected the plant for the purpose of ascertaining its value before the second directors’ meeting when the purchase was finally decided upon; that at such meeting the value of the plant became a subject of sharp controversy; that the plant was close at hand and open to inspection before purchase; that.the directors, notwithstanding the fact they had their attention called to the price, the adverse interest of Boyd and Johnson, nevertheless were satisfied to go on and complete the purchase relying upon inspections already made by its committees and upon appraisals before them. Under such circumstances, in the absence of any false representations made by the defendants — and there are none except perhaps as to the book value of the plant, — plaintiff must be held to have acted upon its own judgment, and if it erred it must bear the consequences. It will not do to say that plaintiff’s directors were ignorant as to the value of packing plants. They had it within their power, and it was their duty to the stockholders, to inform themselves before making a purchase. They had informed themselves and they made further investigations that day by waiting for the appraisals mentioned before acting. Boyd’s offer to- have a new appraisal to determine the price was twice repeated. The fact that he asked a high price for the plant, in the absence of false representations, and with-full opportunity to inspect, does not constitute fraud. Neither is a creditor guilty of fraud because he knows his debtor is endeavoring to sell his property at a high price where the creditor makes no representations of his own in regard to the matter.
But it is claimed by plaintiff that the fact that the directors of the bank subscribed for stock in the plaintiff com
Courts should deal with practical matters in a practical way. La Crosse was a city of about 30,000 people. A large co-operative farmers’ packing plant was to be established. A drive was made for that purpose, meetings were held. Newspapers were full of the enterprise. The defendants referred to, Burton, Hixon, Funke, Gund, and Michel, were old and prominent business men of the city, which depended for its prosperity largely upon the farmers. Let one of the witnesses, not a defendant, tell why subscriptions were made by the business men of La Crosse. Mr. Doerflinger, president of the board of trade, testified as follows:
“I subscribed for $1,000 stock in that enterprise because I was solicited. Naturally, I thought it a good thing; and as president of the board of trade and as a merchant here, we are always looking for things that are going .to help the town. I did believe it was going to benefit the city, because when Mr. Chryst was here he gave us very good explanations; told us the places where they made big successes, the organizations of that kind. I did think and believe today that if it had been well managed it would have been a good thing for the city of La Crosse; we thought that if this was well managed it would prove a big thing for La Crosse. Mr. Brayton solicited my subscription. Mr. Brayton was editor of the Tribune. This is how he solicited my subscription: The thing didn’t take a start very easy, so Mr. Brayton called me up. He says: ‘Mr. Doerflinger, you will have to get on this list and start the thing moving.’ He says, ‘You are president of the board of trade, and of course the first thing people ask, “What is Doerflinger doing; he is hollering his head off about this thing, now what is he doing?” ’ Well of course, I put myself down for a thousand dollars.”
Who can doubt the truth of Mr. Doerflinger’s statements ?
The defendants gave substantially the same reasons for their subscriptions, namely, that they thought it would be a good thing for the town; that they were expected to subscribe and did so. Later they sold their stock, but that was
As before stated, Clvryst was president of the American Society of Equity, Carnahan was president of the Wisconsin Union and chairman of the packing-plant committee of both organizations. D. O. Mahoney was county judge of Vernon county and for six or seven years president of the Wisconsin Union of the American Society of Equity. All these men were eager for a co-operative packing plant and worked zealously for it' without remuneration, except that Clvryst received a few shares of stock from Boyd, who wanted to reimburse-him in part for his time and services. That such men should betray their trust to the organization that had honored them with the highest offices at their command is not very credible; that they should do it without any substantial compensation is highly incredible. It may have been a case where their zeal outran their judgment. Tha!t often happens to the best of men. Certain it is that during the period mentioned there was great activity among the farmers in the formation of their co-operative enterprises.
That the officers of the bank should have joined in a conspiracy to defraud the farming community upon whose prosperity their bank ultimately depended does not seem plausible unless a very strong motive is shown. The motive claimed is that in that way the bank could secure the pay
By the Court. — Judgment reversed, and cause remanded with directions to enter judgment dismissing the complaint upon the merits.
A motion for a rehearing was denied, with $25 costs, on January 10, 1922.