126 Misc. 845 | City of New York Municipal Court | 1926
This is an action to recover $980 for fraud and deceit inducing plaintiff to purchase a $1,000 bond of the National Oil Company, a New Jersey corporation. The nature of plaintiff’s cause of action is indorsed on the summons: “ For damages for fraud and deceit on the sale of ‘ One First Lien Seven per cent. Serial Gold Bond of the National Oil Company of New Jersey.’ ” The bill of particulars contains allegations charging defendants with having induced him to buy the bond by fraudulent representations made orally by a bond salesman and issuance of a printed circular in the form of a prospectus. Defendants have nterposed the answer, “ A general denial.” A recital of the substance of the proof is in order. Plaintiff is a dealer in hay and grain. Defendant A. B. Leach & Co., Inc., is a corporation organized under the laws of the State of New York, dealing in investment securities. Defendant Arthur B. Leach is its president and one of its directors. Defendant Wilfred E. Fulcher, also one of its officers and directors, was not served with process and does not appear in the action. The relationship that existed between the National Oil Company and the corporate defendant, A. B. Leach & Co., Inc., began in September, 1919. On September 27,1919, the National Oil Company sent a communication addressed to the individual defendant Arthur B. Leach marked “ Personal, and confidential.” It contained a lengthy detailed statement of the National Oil Company’s extensive property holdings in Mexico, Texas and Louisiana, consisting of high producing oil wells, operating equipment, refineries, terminals, pumping stations and pipe lines. Of its being in control and operation of well going and prosperous shipyard, with a considerable number of ships built and others in course of construction, nearing completion, for use in the transportation of oil. It contained a glowing recital of its main assets, to wit, oil tank ships, valued at nearly $5,000,000, property in Mexico, Texas and Louisiana valued at over $8,000,000, cash on hand $3,000,000. In addition it gave a very wholesome recital of its past earnings and those anticipated. This communication was sent pursuant to a verbal request made by the defendant Arthur B. Leach, in connection with the National Oil Company’s proposed $5,000,000 bond issue, .to be secured by a deed in trust in such form as to constitute them a first lien by mortgage or pledge on the property it then had, as well as on