48 Wash. 348 | Wash. | 1908
The appellant brought an action against the respondent for damages alleged to have been caused by reason
It will be noticed from the complaint that this is a plain action for deceit, the corporations not in any way being involved. But the essence of the complaint is that the respondent, by false representations, induced the appellant to make a trade by which he was damaged; and without discussing any of the preliminary questions discussed by the respondent in relation to the power of the appellant to bring this action, which it is claimed is an action in effect for the benefit of the corporation, we are satisfied that, as between the appellant and respondent, considering them as vendor and vendee, there is no cause of action stated. There is no allegation in the complaint that the property and assets of the Graham-Hickman Company were concealed from plaintiff. There is no allegation that it was impossible or inconvenient for him to have made an examination into the financial standing of the com
Cases of this character are frequently hard to determine, for there are so many independent circumstances surrounding each case that it is difficult sometimes to discern the dividing line between that character of fraud and misrepresentation which justifies the purchaser in relying upon such representations, and those representations’ which are made where the parties are standing on a plane, where the facts which are the subject-m'atter of the representations are ascertainable, and where it is the duty of the purchaser to put on foot such examination as is necessary to determine the facts concerning which the negotiations are made. But notwithstanding these different circumstances, there are certain basic principles upon which the cases must be adjudicated, and the difficulty is not so much to determine the law as to determine whether the particular circumstances bring the cases within the established rules of law. This court, in the case above referred to, said:
“We think the proper and sensible rule was laid down by the United States supreme court in Slaughter’s Adm’r v. Gerson, 13 Wall. 379, where it was held that the misrepresentation which would vitiate a contract of sale and prevent a court of equity from aiding its enforcement, must relate to a material matter constituting an inducement to the contract, and respecting which the complaining party did not possess at hand the means of knowledge.”
“A court of equity will not undertake, any more than a court of law, to relieve a party from the consequences of his own inattention and carelessness. Where the means of knowledge are at hand and equally available to both parties, and the subject of purchase is alike open to their inspection, if the purchaser does not avail himself of these means and opportunities, he will not be heard to say that he has been deceived by the vendor’s misrepresentations. If, having eyes, he will not see matters directly before them, where no concealment is made or attempted, he will not be entitled to consideration when he complains that he has suffered from his own voluntary blindness and been misled by overconfidence in the statements of another.” Slaughter’s Adm’r v. Gerson, 13 Wall. 379, 20 L. Ed. 627.
This doctrine was followed by this court in West Seattle Land & Imp. Co. v. Herren, 16 Wash. 665, 48 Pac. 341; Griffith v. Strand, 19 Wash. 686, 54 Pac. 613; Walsh v. Bushell, 26 Wash. 576, 67 Pac. 216; Samson v. Beale, 27 Wash. 557, 68 Pac. 180; Sherman v. Sweeny, 29 Wash. 321, 69 Pac. 1117.
In some more recent cases, for instance in Mulholland v. Washington Match Co., 35 Wash. 315, 77 Pac. 497, it was said that it could not be the law that a person of ordinary faculties may never rely upon representations made to him even though no fiduciary relations existed and that each case must depend upon its own circumstances. In that case the representations were made with regard to an ingenious device for manufacturing matches, and involved a special, skilled knowledge of the mechanism itself. In addition to that, the machine was not at hand and the court found that it did not in fact exist, but that the facts with reference to the existence of such a machine and the patent thereof, together with the ownership thereof, were peculiarly within the knowledge of the appellant’s officers and agents who made the representations.
But here it will be observed the parties were in the same kind of business, competitors in the printing business in the city of Seattle, both stockholders in the business and stockholders and managers of their respective businesses. It was their knowledge of the business in all its details that prompted them to enter into this consolidation, so that money might be
Nor does this case fall within the rule announced by this court in Northwestern Lumber Co. v. Callendar, 36 Wash. 492, 79 Pac. 30, where the representations which the court decided the vendee had a right to rely upon were representations with reference to a patent and the working of machinery. There the court held that the representation of the vendor familiar with machinery amounted to a warranty when relied upon by purchasers unfamiliar therewith, and they were induced to purchase by such representations. On the examination of this case it will be found that there was an attempt to make an examination by the vendee, but not having the peculiar knowledge necessary, such attempt proved futile.
“It must not be forgotten that the contracting parties were dealing at arm’s length. No fiduciary relations existed between them — nothing to inspire confidence or disarm suspicion — and there was no imbecility of age, weakness or disease. The property in question was at hand, and an inspection of it by the defendants could have been made had they insisted upon it. The representations related solely to quantity, quality and value, the truth or falsity of which could have been determined by an inspection. Under such circumstances, we think it will not do to hold that a party may successfully complain of his own failure to exercise ordinary care, prudence, and caution, when, by the exercise thereof, the injury of which he complains could not have arisen.”
This language may, it seems to us, be appropriately applied to this case. While it is true that in that case it was a stock of goods the value of which was involved, in this case it is the value of the property of the Graham-Hickman Company which consisted of goods, book accounts, and of the good will of the business. The value of the goods and book accounts could have been easily ascertained by an examination of the corporation, and the good will of the concern is a character of property so indefinite that a statement of its value must necessarily be regarded by any man of any business acumen whatever as very largely a matter of opinion.
It was more recently decided by this court in Hulet v. Achey, 39 Wash. 91, 80 Pac. 1105, that a sale of standing timber and sawlogs could not be rescinded by the vendee fox-false representations by the vendor as to quality, where no claim was made that there was no opportunity to make ex
The judgment is affirmed.
Hadley, C. J., Mount, Crow, and Rudkin, JJ., concur.
Fullerton, J., dissents.