Clark v. Morrill

• Decision Date: 01 April 1929
• Parties: CLARK v. MORRILL.
• Court: Maine Supreme Court

145 A. 744

CLARK

v. MORRILL.

Supreme Judicial Court of Maine.

April 1, 1929.

On Motion and Exceptions from Supreme Judicial Court, York County, at Law.

Action by Cecil P. Clark against Ernest L. Morrill. Verdict for plaintiff. On defendant's motion for new trial and exceptions. Motion sustained, and new trial granted.

Argued before WILSON, C. J., DEASY, STURGIS, and BARNES, JJ., and PHILBROOK, A. R. J.

Emery & Waterhouse, of Biddeford, for plaintiff.

Willard & Ford, of Sanford, and Louis B. Lausier, of Biddeford, for defendant.

WILSON, C. J. An action of deceit. The allegations are that the defendant on August 20, 1920, as an inducement for the plaintiff to purchase of the defendant 498 shares of the capital stock of the Crescent Towing Line, a corporation doing a towing business chiefly in New York Harbor, falsely represented to the plaintiff that the stock was of great value; that the company "was doing a thriving and profitable business"; and that the 498 shares were worth a large amount of money, to wit, $7,000.

The plaintiff further alleged that he was induced to convey certain real estate to the defendant in exchange for said 498 shares of stock by reason of the false representations of the defendant that the Crescent Towing Line was a solvent corporation doing a "healthy and profitable business"; and that as a further inducement the defendant exhibited to the plaintiff the books of account of the company which showed a "healthy financial condition," which representation and books the plaintiff relied on; but that said representations were false and the books of the company exhibited to the plaintiff did not contain a true statement of the financial condition of the company, but "were grossly wrong and intended to deceive innocent purchasers and especially the plaintiff."

The jury awarded a verdict for the plaintiff in the sum of $7,000. The case comes to this court on a general motion for a new trial and on exceptions to the admission and exclusion of certain evidence, and on motion based on newly discovered evidence.

It is unnecessary to consider the bill of exceptions or its form, of which the plaintiff complains, or the motion based on the newly discovered evidence, as the general motion must be sustained. The jury must have failed to appreciate the nature of the allegations and the issues raised thereby and the burden resting on the plaintiff in such cases.

So far as representations as to value of the stock are concerned, if such were made, the law is well settled in this state "that the statements of the vendor as to its value, or the price which he has given or been offered for it, are so commonly made by those having property to sell in order to enhance its value, that any purchaser who confides in them is considered as too careless of his own interests to be entitled to relief, even if the statements are false and intended to deceive." Palmer v. Bell, 85 Me. 352, 27 A. 250; Long v. Woodman, 58 Me. 49, 52; Bishop v. Small, 63 Me. 12; Bourn v. Davis, 76 Me. 223; Braley v. Powers, 92 Me. 203, 42 A. 362.

An action of deceit cannot be based on every false representation or statement. To sustain an action, the statement must be as to matters of fact substantially affecting the subject-matter, and not as to matters of opinion, judgment, or expectation. Martin v. Jordan, 60 Me. 531.

As to the allegation that the Crescent Towing Line was solvent and doing a profitable business, if the evidence sustained the allegation and the plaintiff had no opportunity to investigate, it was false, and the defendant knew it was false and made it intending to deceive, it might be actionable. Chellis v. Cole, 116 Me. 283, 101 A. 444. But the evidence does not sustain this allegation.

While there was a conflict of testimony between the plaintiff and the defendant as to what was said preliminary to the exchange of the stock for the real estate, we must assume the jury accepted the plaintiff's story as true. His only testimony, however, was that some time in July, 1920, at a conference between them the defendant said: "That the property was bothering him out there a lot and he wanted someone interested with him in taking care of it; that if it was well to continue operating to go on with it, and if not liquidate. We then looked over the accounts which he discounted certain of those items and on his own figures gave me a slip showing that if we liquidated the corporation one-third of that would be worth seventy-six hundred dollars."

We have searched the record for other statements by the defendant supporting this or the other allegations, but find none.

Surely there is nothing in the above statement to the effect that the company was doing a profitable business or was in a healthy financial condition. Rather, doubt is expressed. Such a statement couched in the plaintiff's own language should have put any man experienced in business affairs, as the evidence shows the plaintiff was, on his guard. Not only was this statement suggestive of doubt as to the success of the business, but for nearly six months prior thereto the plaintiff had been in touch with the business, had examined on several occasions the books of the company at the suggestion of the defendant, and seen its principal assets, consisting of boats; had installed a new system of keeping the accounts of the business and prepared a form for making monthly reports of the status of the business with a trial balance which was furnished the plaintiff each month, and all for the purpose of more clearly disclosing, by the books of account and by monthly reports, the true state of the business:

It does not appear from the testimony that ...