Lebby v. Ahrens

26 S.C. 275 | S.C. | 1887

The opinion of the court was delivered by

Mr. Justice McIver.

The details of the transactions between these parties, which led to the present controversy, are so fully and clearly set forth in the report of the master, that it seems unnecessary to repeat them here. It may be stated in brief that the defendant desiring to establish a newspaper in the town of Summerville, called “The Summerville Herald,” two numbers of which had been issued, as the business manager of said paper entered into a written agreement with the plaintiff on April 22, 1884, a copy of which will be found in the record, whereby the plaintiff agreed “to contribute four hundred dollars to the common stock of ‘The Summerville Herald,’ as a shareholder thereof,” in consideration whereof the defendant, as such business manager, agreed to pay to the plaintiff “semi-annually, or annually, one-fifth of the actual profits derived by the Summerville Publishing Company, in the conduct of The Summerville Herald,” under which agreement the said sum of four hundred dollars was then paid by the plaintiff to the defendant. At the time of this transaction, as appears from the report of the master, the entire cost of the outfit for the paper was between $250 and $300. Soon after this, however, another printing press, called a cylinder press, was purchased, and the defendant representing to the plaintiff that he was in want of funds for the paper, induced the plaintiff to loan him the further sum of $300, for which the defendant gave to the plaintiff his own note secured by a mortgage of the cylinder press.

The allegation on the part of the plaintiff is that he was induced by the false and fraudulent representations, set forth in the complaint, to contribute the said sum of $400 to the stock of the Publishing Company, and the object of the action is to recover back the said sum of money, as well as the sum loaned on the mortgage of the cylinder press, and pending the action that a receiver be appointed. The motion for the appointment of a receiver wras refused, upon what ground is not stated, but we presume it was because the defendant had offered in his answer to give to the plaintiff a mortgage on the entire property to secure him ; for we find that the defendant did give such mortgage to the clerk of the court to secure the payment to the plaintiff of such sum as he should, by the final decree in this cause, be entitled to receive.

The master, to whom the issues ■ in the action were referred, found, as matters of fact: “1st. That the defendant urged the plaintiff, on April 20, 1884, to pay over to him $400, which would entitle him to one-fifth of the capital of the Publishing Company, thus representing said capital as worth $2,000, and that Stanland was one of the company. 2nd. That the Summer-ville Publishing Company was a myth, that no such joint stock company existed at the time or at any time since. 3rd. That relying upon these representations the plaintiff agreed to purchase one-fifth of said stock for $100, and paid that sum to Ahrens. 4th. That these representations were untrue, and known to the defendant at the time to be untrue; that the whole cost of the plant of the paper, at the time, did not exceed $300, and that Mr. Stanland had not contributed any money to this plant. 5th. That the whole amount paid in by Lebby, viz., $700, more than covered the entire cost of everything connected with the paper, and that $300 of this was procured from him on the representation that it was to be used for the paper, whereas it was used to pay Stanland for what he had advanced for the cylinder press, which press Ahrens took in his own name and claims as his individual property.” And as his conclusions of law he found “that Lebby has a right to annul the said agreement between himself and Ahrens as procured in fraud; also to the mortgage for $300.” He therefore recommended that the whole property of The Summerville Herald office be sold, and the proceeds be applied first to the payment of the costs of these proceedings and the balance to the payment of the $700, advanced by Lebby, and that Ahrens be adjudged to pay any deficiency.

The ease came before Judge Pressley upon exceptions to this report, who overruled the exceptions and confirmed the report, rendering judgment for the plaintiff' as recommended by the master. From this judgment the defendant appeals upon several grounds, which, however, raise substantially only two questions, to wit: 1st. Whether there were any* false and fraudulent representations made by the defendant to the plaintiff as an inducement for him to enter into the contract ? 2nd. Whether, if so, such representations were of such a character as would entitle the plaintiff to recover ?

The first is a pure question of fact, and under the well settled rule of this court the finding below must be sustained, inasmuch as it is perfectly manifest that there is testimony, which, if believed, would be sufficient to sustain it, although there may be conflicting testimony. When the testimony is so conflicting as to present a question of credibility, this court would rarely, if ever, feel at liberty to interfere with the finding of fact by a master or referee, concurred in by the Circuit Judge. Gary v. Burnett, 16 S. C., 632; Dawson v. Niver, 19 Id., 606.

As to the second question. While it may be true that false representations as to the value of the thing sold, being, as they usually are, mere expressions of opinion, will not, as a general rule, be sufficient to sustain an action, yet where there is a false representation of any material fact, which,'if true, would be calculated to induce, and did actually induce, the purchaser to make the purchase, such false representation will be sufficient to sustain the action. Nor is it necessary that such false representations should be the sole inducement to the contract, as seems to be contended for by the counsel for appellant. In addition to the cases 'cited by respondent’s counsel, see 2 Pars. Cont., *773 (6th edit.); American notes to Pasley v. Freeman, 2 Sm. Lead. Cas., 114; Chisolm v. Gadsden, 1 Strob., at page 223. These authorities recognize the doctrine, that if the false representation, either in whole or in part, induced the plaintiff to enter into the contract, that will be sufficient; the material inquiry being, not so much whether the false representations were the sole inducement to the making of the contract, but whether they so contributed to induce the purchase, as without them the purchase would not have been made.

Testing this case by these principles, it is quite clear that the false representations which the master found as matter of fact induced the plaintiff to make the contract, were amply sufficient to sustain the action. These representations were not merely expressions of opinion or estimates as to the value of “an ascertained specific chattel already existing, and which the buyer has inspected,” but, on the contrary, were representations of the existence of certain distinct facts, to wit, that there was a joint stock publishing company, the capital stock of which was $2,000, and that Mr. Stanland, who was understood to be a person of means and character, was a member of such company, all of which was known to the defendant to be untrue. That -these facts were material, and that the plaintiff was thereby induced to invest his money in a mythical joint stock company for the benefit of the defendant, cannot well be doubted under the findings of fact below.

W.e do not understand that the plaintiff’s claim for $300, secured by the mortgage of the cylinder press, is contested, and hence nothing need be said as to that.

The judgment of this court is, that the judgment of the Circuit Court be affirmed.