Brackett v. Griswold

• Decision Date: 06 October 1891
• Citation: 28 N.E. 365,128 N.Y. 644
• Parties: BRACKETT v. GRISWOLD.
• Court: New York Court of Appeals Court of Appeals

128 N.Y. 644

28 N.E. 365

BRACKETT

v.GRISWOLD.

Court of Appeals of New York.

Oct. 6, 1891.

Appeal from supreme court, general term, third department.

Action by Eugene Brackett, executor of Samuel Bonnell, deceased, against Chester Griswold, for fraudulent representations. From a judgment of the general term, reversing a judgment of the special term, and dismissing the complaint, plaintiff appeals. Affirmed.

Code Civil Proc. N. Y. § 1317, provides that on an appeal the court, or the general term to which the appeal is taken, may reverse or affirm, wholly or partly, or may modify, the judgment or order appealed from, and it may, if necessary or proper, grant a new trial or hearing.

Richard L. Hand, for appellant.

Wm. C. Holbrook, for respondent.

ANDREWS, J.

The third count in the complaint, upon which alone the case was submitted to the jury, alleges a conspiracy between the original defendants in the action, including the defendant Chester Griswold, to organize a sham corporation, the Iron Mountain Company of Lake Champlain, with a nominal capital of $2,000,000, to defraud the public who might deal with it and give it credit; and that, in pursuance of the conspiracy, they, among other things, falsely represented that the stock had been fully paid in, and resorted to other fraudulent devices, specifically set forth in the complaint, to give credit to the company; and that the plaintiff's intestate, relying upon and being deceived by the false representations and pretenses of the defendants, purchased the notes, believing the company to be solvent and responsible, whereas it was at all times insolvent, and had no property available for the payment of its debts. On the fifth trial of the action a verdict was rendered for the plaintiff on the third count, which was subsequently reversed by this court, (112 N. Y. 454, 20 N. E. Rep. 376,) on the ground that, assuming the existence of the conspiracy alleged, and that the defendant Chester Griswold was a party to it, yet, as the plaintiffs' intestate had no knowledge of and did not rely upon any acts or representations of the alleged conspirators in purchasing the notes of the company, he was not defrauded thereby, and the action could not be maintained. Pursuant to the order of the court, the case went back for a new trial. The court on the next trial again submitted the case to the jury on a view not taken on any former trial, viz., that if the jury should find that Ellis, the treasurer of the company, was a co-conspirator with the persons originally named as conspirators, his representations made to Tuthill, the agent of Bonnell, (plaintiffs' intestate,) and reported to him, on the strength of which Bonnell purchased the notes, that ‘the company was fully responsible; that the notes were good, and would be promptly paid at maturity,’-were in law the representations of all the conspirators; and that the defendant Chester Griswold was responsible therefor to the same extent as if it had been made by him personally. The jury, upon this new view of the case, found again for the plaintiff. Their verdict has substantially esablished two facts: First, the original conspiracy as alleged; and, second, that Ellis was a co-conspirator, and in aid of the conspiracy made the false representations to Tuthill that the company was solvent and responsible. The general term reversed the judgment entered on the verdict, on the ground that there was no evidence authorizing the submission to the jury of the question whether Ellis was a co-conspirator in the scheme alleged in the complaint, and that there was no ground upon which the defendant could be held bound by the representations made by Ellis to Tuthill. We concur with the opinion of the general term.

The conclusion of the jury that the defendant Chester Griswold was a party to any conspiracy to defraud the public through the organization of the Iron Mountain Company is, to say the least, founded upon vague and unsatisfactory evidence. But, assuming that upon the evidence this was a question for the jury, we think the evidence was wholly insufficient to justify a finding that Ellis was a party to the conspiracy, and it is only on the assumption of this fact that there can be any pretense that his...