21 N.J. Eq. 123 | New York Court of Chancery | 1870
The defendant, Maryott, in February, 1867, applied to the complainant to borrow $6000 on the note of one Jacobs to him. The complainant agreed to take the noto, and advance $5000 in cash, and transfer six hundred and twenty-five shares of a mining company, if Maryott would take them for $1000, the price which he stated that he had paid for them. He required Maryott to endorse the note, and to give a mortgage as security for its payment. The note was endorsed by Maryott and one Edwin Boss, and a mortgage given to secure the payment of it. This is one of the mortgages sought to be foreclosed in this suit. Maryott alleges that Benton represented to him that this mining stock was worth $2 284, and that he, Benton, would take it back at $1000, and that it is worthless; and asks that the amount
Renton denies that he made any statement as to the value of the stock, but only said that he paid $1000 for it, which he testifies was the fact, and denies that he ever agreed to take it back. Edwin Ross, who was present at the agreement and its consummation, confirms Renton, and says that he made no representation of its value, and no agreement to take it back.
The burden of proof to show fraud or misrepresentation is upon the defendant. He alone testifies to the representations ; he is contradicted by Renton and Ross, and is not .supported by any circumstances. That the stock was of little or no value, cannot effect the validity of the mortgage, or create an equity, to have a deduction from the amount for which it was given. The rule of caveat emptor applies .as well to the sale of stocks as of chattels. The vendor can only be made liable for misrepresentation or fraud. ■ Here, .although the stock was worthless, there is not sufficient proof of any representation of its value, or any act that would amount to fraud, either at law or in equity. The ■complainant is entitled to the full amount secured by the first mortgage, with interest; and on the second mortgage for $9000, to the amount actually advanced, with interest.