52 Wash. 115 | Wash. | 1909
On the 15th day of May, 1905, the defendant The Home Security Savings Bank was the owner
On the 30th day of June, 1905, the plaintiff contemplated entering into a logging contract with the American Mill & Timber Company to log off the lands described in its contract of purchase. The plaintiff was not acquainted with the officers of the company and knew nothing of its financial affairs or standing. He therefore asked the president of the American Mill & Timber Company for a reference as to the company’s standing and its ability to carry out its contract. The plaintiff was referred to the defendant Cissna, and informed him that he was about to enter into a logging contract with the American Mill & Timber Company and had been referred to him to ascertain how the company stood financially. Cissna informed the plaintiff that the company
A series of motions was interposed against the complaint, to strike certain portions, and to make other portions more definite and certain. These several motions were in a large part denied, and the rulings of the court are assigned as error. Motions of this kind are addressed to the sound discretion of the trial court, and we see nothing in the complaint or in the subsequent proceedings at the trial to indicate that this discretion was abused, or that the appellants were injured or prejudiced in the slightest degree by any of the rulings complained of. Error is assigned in the overruling of a demurrer to the complaint, in the denial of a motion for nonsuit at the close of the respondent’s case, and in the denial of a motion for a directed verdict -or judgment at the close of all the testimony. These several rulings involve the same general question and may be considered together. It seems to us that the complaint contains all the essential elements of a cause of action. It sets forth the representations made; that they related to existing material
The contention that representations as to solvency relate to mere matters of opinion and are not actionable is untenable.
“A representation as to a third person’s solvency and credit must be an assertion implying knowledge, not a mere expression of opinion, although an intentionally false opinion may be actionable. But the question whether a representation as to a third person’s financial ability is a statement of fact or an expression of opinion is recognized as being one of peculiar difficulty, and as its solution depends upon the circumstances as well as upon the nature of the statement and the meaning of the language used, it is in the first instance to be determined by the jury. In the earlier cases the courts construed as mere expressions of opinion statements which the court now would doubtless regard as representations of fact.” 20 Cyc. T5.
This is especially true of this case where the appellant Cissna was familiar with the affairs of the American Mill & Timber Company down to the smallest detail.
The further contention that the respondent was guilty of negligence in relying upon the representations made, and that he should have ascertained the financial condition of the American Mill & Timber Company from other sources or upon independent investigation, is equally unsound.
“The rule imposing upon a purchaser the duty to investigate as to the truth of his vendor’s statements concerning the property to be sold has no application to representations made by a third person as to the credit, solvency, etc., of another. In cases of this character the position of the parties is not antagonistic but somewhat confidential. Therefore if defendant’s representation was of such a character,*120 and was made under such circumstances as to justify its belief by a reasonably prudent man, plaintiff being ignorant of the truth and acting upon the representation to his injury, a recovery may be had, although plaintiff might, by the exercise of diligence, have ascertained the insolvency of the person recommended; and defendant will not be heard to say that he is a person on whose word plaintiff had no right to rely.” 20 Cyc. 77.
We are also of the opinion that the testimony was sufficient to sustain the verdict and judgment as against the appellant Cissna. It tended to sustain every material allegation of the complaint. The sufficiency of the proof on the question of insolvency is challenged, but the testimony showed the financial standing of the American Mill & Timber Company to be far different from, what it was represented. At the time the representations were made the company’s assets consisted of the optional agreement to purchase the mill property and timber lands, under which only $5,000 of the total purchase price of $18,000 had been paid. The agreement was subject to forfeiture unless the mill was operated and $500 per month paid on the purchase price. The stockholders were insolvent and could make no further payments on their stock subscriptions. Such a corporation is not necessarily solvent, is not good for one hundred cents on the dollar, and has not a mill and timber lands and $20,000 at its back.
As to the appellant bank, the motion for a nonsuit and for a directed verdict or judgment should have been granted. The respondent was referred to the appellant Cissna and not the bank; he went to the appellant Cissna and not to the bank, and the representations were made by the appellant Cissna and not by the bank. The only attempt the respondent makes to sustain his judgment against the bank is by a reference to the amended complaint, which alleged that at all the times therein mentioned the appellant Cissna was acting for the bank in his official capacity, coupled with the statement that this allegation was. not denied. In this
The appellants assign error in the giving of the following instruction on the measure of damages:
“I called you back, gentlemen of the jury, for the purpose of emphasizing, or, rather, for the purpose of repeating and possibly correcting an instruction I gave you with reference to the measure of damages. If you find for the plaintiff you will find for such an amount or sum as was earned under the contract by the plaintiff for the logs which he delivered, which were taken off the land which was purchased from the Home Security Savings Bank. Also for such amount as was reasonably expended in the construction and erection of skid roads upon the land, and also for the necessary moving of the donkey engines; all these amounts will be based upon testimony which was offered and admitted.”
In support of this assignment the appellants contend that the measure of damages in this class of actions is the actual loss sustained by the plaintiff, which would of necessity exclude any claim for profits. The respondent contends that the instruction complained of is in harmony with that rule, inasmuch as the contract price for hauling and delivering logs was presumptively the reasonable value of the services performed in that connection. Whatever may be said of this latter contention as one of general application, it cannot prevail in this case, for obvious reasons. The $4 and $4.50 per thousand for hauling and delivering logs included all incidental expenses, su'ch as building and repairing skid roads, moving donkey engines, etc. Had the respondent fully performed his contract and received payment for all logs delivered at the contract rate, he would likewise have received payment for building and repairing skid roads, moving donkey engines, and all other expenses incident to
The court charged the jury, in effect, that the true test of solvency is the ability to pay one’s debts as they fall due in the ordinary course of business. The appellants contend that the true test is the one prescribed by the National Bankruptcy Act; namely, a person is solvent when his assets are equal to or in excess of his liabilities. In determining the question of solvency or insolvency we are not prepared to say that the same criterion should apply in every case. The tramp who walks the streets, without a cent and without a debt, without a home and without a care, is perfectly solvent, within the purview of the National Bankruptcy Act, but manifestly such a state of solvency does not meet the requirements of this case. The respondent was about to enter into a contract with the American Mill & Timber Company of considerable magnitude, and he applied to the ap
The court further instructed the jury that the fact that the American Mill & Timber Company was insolvent in the latter part of October or the first part of November, 1905, was not of itself a presumption of insolvency on the 30th day of June, 1905, but that it was an element which the jury might take into consideration in determining the solvency or insolvency on the 30th day of June, 1905, in considering all the evidence in the case, but not to be considered as a presumption which must follow. This instruction is assigned as error. Whether in an ordinary action proof of insolvency at one date may be considered in determining the question of insolvency at an earlier date we will not inquire, for in this particular case the status of the American Mill & Timber Company on the 30th day of June, 1905, was shown in every detail, and we do not think its successes or reverses in business during the following months had anything to do with the question at issue, and the instruction should not have been given.
There are a great many other errors assigned in the rulings of the court in the admission and exclusion of testimony, and in giving and refusing instructions, but these questions may not arise on a retrial and are not of sufficient importance to call for special consideration at this time. We might say, however, in view of a retrial, that too much importance seems to have been given during the trial to matters that transpired long after the representations complained of were made. The representations were false when
The judgment of the court below is reversed, with directions to dismiss the action as to the appellant bank, and to award a new trial as to the appellant Cissna.
Fullerton, Crow, Dunbar, and Mount, JJ., concur.
Gose and Chadwick, JJ., took no part.