Baker v. Mathew

• Decision Date: 17 February 1908
• Citation: 137 Iowa 410,115 N.W. 15
• Parties: BAKER v. MATHEW.
• Court: Iowa Supreme Court

137 Iowa 410

115 N.W. 15

BAKER

v.MATHEW.

Supreme Court of Iowa.

Feb. 17, 1908.

Appeal from District Court, Iowa County; O. A. Byington, Judge.

Action at law to recover damages for false and fraudulent representations made by defendant with reference to certain bank stock held by him in a sale or exchange to plaintiff. Verdict and judgment for plaintiff, and defendant appeals. Affirmed.Popham & Havner, for appellant.

E. J. Sullivan, Wade, Dutcher & Davis, and Thos. Stapleton, for appellee.

DEEMER, J.

Pursuant to negotiations between plaintiff and defendant they entered into a written contract of sale or exchange, the material parts of which read as follows: “Article of agreement by and between J. C. Baker, party of the first part, and J. M. Mathew, party of the second part. The party of the first part, in consideration of the promises and agreements hereinafter made by the party of the second part, hereby bargains and sells, transfers and conveys unto the party of the second part all of his stock of shoes and fixtures now located in what is known as the Mina Burgy store building in Marengo, Iowa. All of said stock of shoes which are good salable stock to be invoiced and taken at their actual cost to the party of the first part. The balance of said stock of shoes which are not good salable stock, to be taken at a price to be agreed upon between the parties to this contract, and if said parties cannot agree as to the price that shall be made upon the part of the stock of shoes which are not good salable stock, then said parties agree to allow A. M. Lyon to fix the price of said goods which are not good salable stock and if said parties shall disagree between themselves as to the part of said stock of goods that are good salable goods and those that are not good salable goods, then said matter shall be determined by the said A. M. Lyon, and both of said parties hereby agree to be bound as to both of said last named matters by the decision of the said A. M. Lyon. All fixtures in said store building to be taken at what they are now actually worth and if said parties to this contract cannot agree upon what said fixtures are worth, then said price shall be fixed by the said A. M. Lyon. The invoice of said stock of goods to be commenced on December 26th and completed as soon thereafter as possible, and, as soon as completed, said stock of goods and fixtures shall be turned over to the same J. M. Mathew. In consideration of the foregoing promises on the part of the said party of the first part, the party of the second part hereby transfers, sells and sets over unto the party of the first part twenty (20) shares of stock in the Marengo Savings Bank, Iowa, ten (10) shares of stock in the Independent Mutual Telephone Company, of Shenandoah, Iowa, and ten (10) shares of stock in the Marengo Telephone Company of Marengo, Iowa, and five (5) shares of stock in the Long Distance Copper Telephone Co. whose headquarters are at Marshalltown, Iowa. Said stock to be accepted by the party of the first part at fifty-five hundred dollars ($5,500.00). The balance of the purchase price of said stock of goods to be paid as follows: One thousand ($1,000.00) dollars cash at the time the invoice of said stock of goods is completed. The balance of said purchase price to be paid by a good bankable note of the party of the second part with interest at 6 per cent. Said note to be executed by the party of the second part at the time the invoice of said stock of goods is completed and said note shall be payable one year from date of the completion of said invoice with interest at 6 per cent.” Plaintiff claims that defendant, who was the vice president and a director of the Marengo Savings Bank, falsely and fraudulently represented that the shares of stock in that bank which plaintiff was to receive in payment or exchange for his shoe stock and fixtures were worth $150 per share, whereas in truth and in fact they were not worth to exceed $50 per share; that he was induced by these representations to make the trade, and as a result thereof was damaged to the amount of $2,000. Defendant denied that he made any representations to plaintiff regarding the worth or value of the shares, admitted that they were worth but $50 per share, pleaded that plaintiff relied upon his own investigations regarding the value of the stock, and averred that in no event was plaintiff damaged because his stock of shoes was not worth to exceed 50 cents on the dollar of the invoice price. On these issues the case was tried to a jury, resulting in a general verdict for plaintiff in the sum of $2,000. The jury also found specially that defendant made the representations as claimed, and that he knew when he made them that the stock was not worth to exceed $50 per share. Upon every material issue of the fact there was a conflict in the evidence, and the questions arising upon this appeal are almost wholly of law, and these are not seriously in dispute save as to their applications to the facts.

Certain rulings on evidence are complained of, to which we shall first give attention. Plaintiff was asked upon cross-examination as to why he made inquiries of others (as he did) if he relied upon the statements made by the defendant regarding the value of the stock. This was objected to as incompetent and not cross-examination. The objection was sustained, and the ruling is complained of. The extent, subject-matter, and manner of cross-examination is a matter within the discretion of the trial court, and this discretion will not be interfered with on appeal save in exceptional instances. While the objection as made may not have been good, the court itself had the power to exclude the testimony upon any legal and tenable ground, although the objection itself might not be broad enough to suggest the real point. Other testimony disclosed the fact that plaintiff made his inquiries of other persons before he personally saw or had any negotiations with the defendant, and, of course, such outside inquiries might have been made and yet full dependence have been placed upon defendant's representations. It could not, of course, have been surmised that defendant would make any representations regarding the stock, and plaintiff, in making inquiries before seeing defendant, did not thereby indicate that he would not rely upon defendant's representations. For this reason the court might in its discretion very well have sustained the objection. The trial court instructed, as we shall see, that plaintiff must have relied upon defendant's representations, and it was a matter of argument as to whether he did or did not, in view of his previous inquiries. It was not for plaintiff to show that he relied wholly upon defendant's representations. He may have inquired of others and yet have done so. It is not necessary that the representations should be the sole, or even the principal, inducement to the sale or trade; for it is enough to show that he relied to some extent thereon and but for them would not have made the deal.

One Henderson, the cashier of the savings bank, was a witness for plaintiff, and testified that various matters affecting the value of the bank stock were before the board of directors of the bank. On cross-examination he was asked regarding the situation of these various matters of account, and as to how the loans came to be made. This was objected to as not proper cross-examination, and the objection was sustained. Of this complaint is made. What is heretofore said regarding the matter of cross-examination applies...