146 Minn. 397 | Minn. | 1920
Defendant was president of the company. Charles N. Gramling was its secretary. Plaintiff was well acquainted with both and had on several occasions loaned defendant money on his unsecured note. Plaintiff’s evidence tends to prove the following:
On November 4, 1914, Gramling wrote plaintiff the following letter:
“The writer, knowing that our company is personally familiar to you, I am taking the liberty of addressing this letter to ,you. A further reason for so doing is that the writer is aware of your personal acquaintance with the majority of our directors.
“Owing to certain stringent financial conditions, I am authoritatively informed that one of our stockholders will shortly endeavor to dispose of between one hundred and two hundred shares of capital stock in our company.
“Inasmuch as our board is endeavoring to secure representative citizens as stockholders of our company, the writer thought that possibly you would care to avail yourself of an opportunity to secure a portion of 'this*399 stock. Should you be interested, kindly arrange to see me Friday afternoon next at the office of the Northwestern Marble & Tile Company, at 27th street and 27th Avenue South.”
The stock referred to was' defendant’s stock. Plaintiff called upon Gramling and was told that the price of the stock was $115 a share. He was ignorant of the ownership of the stock and at once called on defendant and asked his advice. Defendant asked: “What is it offered to you for?” Plaintiff told him $115 a share. Defendant said: “I will"tell you this, my stock you can’t buy for less than a hundred and twenty.” He further said: “I know the party that has this stock * * * he has given it as security in the bank, and the bank don’t like to carry it any longer.” Plaintiff asked if it was “a good dividend paying stock.” Defendant said: “This stock pays dividends. We have not up to date paid any dividends yet, but we put all the money * * * that we clear, into our surplus fund, and we now have a surplus fund of about seventy thousand dollars and maybe more.” He said that course wasn’t necessary any more under the circumstances, “and it would be now a dividend paying proposition.” “From now on this stock is going to pay dividends.” He said further: “We have made clear this year a little over $33,000. We have outstanding common stock $200,000; we have no preferred stock; so you can well see that we can pay 10 per cent or more if we wanted to.” Plaintiff then talked to Gramling again. He received from Gramling a financial statement of the company, but it is not certain that he fully understood it. On November 11 Gramling wrote him this letter:
“The writer has just ’phoned the party in question with reference to the matter discussed this afternoon. After considerable persuasion the party in question has agreed to sell -forty shares for the amount of money mentioned by you this afternoon. Am prepared to make the transfer for you either tomorrow afternoon or Friday afternoon. Please ’phone me in advance so that I can arrange the proper transfer of the papers.”
Following this and on December 4 plaintiff purchased the stock.
The writing of these letters by Gramling is -admitted. Defendant denies that he ever saw the letters, and not only denies making the representations charged, but denies that plaintiff ever called on him. The
There was deception as to the ownership of the stock and as to the financial pressure which it was said impelled the owner to sell. Perhaps this did not give rise to a cause of action. These matters, are, however, of undoubted importance taken in connection with the representation as to the accumulated surplus, the earnings and the value and dividend paying qualities of the stock. They show the confidence and reliance which defendant permitted plaintiff to repose in him in a matter in which defendant had an adverse interest.
According to plaintiff’s evidence, defendant made a positive representation that the corporation had accumulated a surplus fund of about $70,000 “and maybe more.” His testimony is not, in our opinion, susceptible of a construction, as defendant contends, that defendant merely said the corporation had that amount of cash on hand. In fact the surplus was about $47,000. The representation if made was untrue, and was actionable.
In this connection the alleged statement that the stock “would be now a dividend paying proposition” is material although not treated as a separate ground of recovery by the trial court. In connection with the statements as to the earnings, the former policy of accumulation and the adequate surplus accumulated, this statement too was essentially a statement of fact. The jury might find the statement untrue, for no dividend was subsequently declared, and none paid except one declared years before.
The court submitted to the jury the question whether plaintiff disaf-firmed his contract with reasonable promptness. By their verdict they found this issue in plaintiff’s favor. Defendant contends that the evidence does not sustain their verdict. It is not always easy to determine what is reasonable promptness in disaffirming a contract for fraud. Much depends on the circumstances of the case. An affirmative act of
The question whether a plaintiff disaffirmed with reasonable promptness is usually one of fact. We think it was in this case.
Defendant contends that he was too much restricted in his cross-examination of plaintiff. We are mindful of the rule that, in an action based on fraud, alleged to have been perpetrated in conversation when only plaintiff and defendant were present, and where the evidence consists largely of assertions by plaintiff and denials by defendant, great latitude should be allowed in cross-examination of plaintiff, to the end that any facts having legitimate bearing on the truthfulness of his story may be placed before the jury. Riddell v. Munro, 49 Minn. 532, 52 N. W. 141; Nicolay v. Mallery, 62 Minn. 119, 64 N. W. 108; Cohen v. Goldberg, 65 Minn. 473, 67 N. W. 1149. We have examined the record in this case with much care, and we do not see that defendant’s interests were prejudiced by adverse rulings of this character. The cross-examination of plaintiff was very extended, several times longer than his direct examination, and it was thorough, and was permitted, as we think, with fairness. We cannot go into these numerous exceptions in detail, but, as an
Another class of exceptions relates to the rejection of evidence of defendant’s own witnesses as to facts and circumstances having an indirect bearing on the issues. Eor example, evidence was excluded of conversation between Tetzlaff and Gramlin and between Tetzlaff and the general manager of the Marble company leading up to the negotiation of the sale of defendant’s stock. We cannot see the importance of such testimony. We think the court committed no reversible error in excluding the testimony offered.
Exception is taken to the remarks of the court which counsel says “certainly did us no good.” Our examination of the record discloses no remarks by the court which we consider prejudicial.
Order affirmed.