Clark v. Giacomini

• Court: Colorado Supreme Court
• Writing for the Court: DENISON, J. DENISON, J.
• Citation: Clark v. Giacomini, 78 Colo. 551, 243 P. 620 (Colo. 1926)
• Decision Date: 25 January 1926
• Docket Number: 11200.
• Parties: CLARK v. GIACOMINI.

243 P. 620

78 Colo. 551

CLARK v. GIACOMINI.

No. 11200.

Supreme Court of Colorado

January 25, 1926

Rehearing Denied Feb. 15, 1926.

Department 2.

Error to District Court, Logan County; L. C. Stephenson, Judge.

Action by Thomas R. Giacomini against Charles W. Clark. From a judgment for plaintiff, defendant brings error.

Reversed and new trial granted.

Danforth & Kananagh, of Denver, for plaintiff in error.

Allen Webster & Drath, of Denver, and Lawrence Giacomini, of Sterling, for defendant in error.

DENISON J.

Giacomini was plaintiff below and had verdict and judgment against Clark in an action for deceit, with a special finding of fraud and willful deceit and an order for capias.

The alleged deceit was false statements which induced the purchase by plaintiff of 900 shares of stock in the Industrial Sugar Company. The complaint alleged, and the evidence tended to show various false representations, but the instructions submitted to the jury but two, which are the only ones necessary for us to consider, viz That defendant stated that one J. P. Dillon had purchased $20,000 of such stock and one Scalva $5,000 thereof; and that he stated that he (Clark) 'had obtained authority from' the company's 'officials in Denver to the effect that the $9,000 in notes of the plaintiff (given in payment for the stock) could be paid out of dividends accruing on the 900 shares of stock purchased by plaintiff.' Dillon and Scalva had actually purchased much less than was represented.

The representation concerning the amounts purchased we think was a material representation. They were shown to be men of some repute as wise and successful business men. One of the things an ordinary investor usually relies on is the judgment of those whom he thinks wiser than himself, especially if they have the standing of successful business men. It is an important factor to him in his consideration of the investment. It may be, and often is, the turning of the scale in favor of his purchase, and is made to that end; it is therefore material. And a statement that they had purchased a large amount is more persuasive than a smaller, and therefore is also material. There is some evidence that the plaintiff did not rely on defendant on this point, but made separate inquiry of Dillon and perhaps others (26 C.J. 1162, § 75), but we do not notice this matter, because the case is reversed on other grounds.

The representation of authority to agree to payment of the notes out of dividends, however, was not a ground of action. It was immaterial unless there was such an agreement in other respects valid; but such an agreement is both against public policy, and cannot, as against the notes, be proved by parol. Faris v. Beck, 222 P. 652, 74 Colo. 480, 483; Barnard v. Sweet, 221 P. 1093, 74 Colo. 302, 307. There was no attempt to prove such agreement by writing; there is therefore no proof of such a contract. This point was raised by requests for instructions which were refused and by objection to the evidence. Since it was left to the jury, and may have been the basis of the verdict, the case must be reversed. It may be noted that the stock was subscribed for by plaintiff, not purchased as treasury stock.

The complaint, though it contains much unnecessary matter, is sufficient as to facts. There was, as shown above, at least one material statement which, it is alleged, was false, known by defendant to be false, made to deceive, believed, relied on, and acted on by plaintiff to his damage. That is enough.

The verdict as to the special finding was bad. It was

'That, in committing the tort complained of,

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