Coolidqe v. Goddard

• Decision Date: 09 December 1885
• Citation: 1 A. 831,77 Me. 578
• Parties: COOLIDQE v. GODDARD.
• Court: Maine Supreme Court

1 A. 831

77 Me. 578

COOLIDQE

v. GODDARD.¹

SUPREME COURT OF MAINE.

Filed December 9, 1885.

Geo. E. Bird, for plaintiff.

Symonds & Libby, for defendant.

PETERS, C. J. In February, 1882, an electric light company was formed in Portland, with 2,000 shares, of a par value of $100 each share, making $200,000 of capital stock. The plaintiff was the president of the company, its principal manager, and the owner of a majority of its stock. In June, 1882, he contracted to sell to the defendant five shares for $500. At that time there had been taken or purchased from the company 410 shares, and the money therefor paid into its treasury,—1,590 remaining unsold,—and the company had voted to sell no more. When the plaintiff made the sale to the defendant, he represented that he was selling to him at the same price which all others had paid who were interested in the stock. Paid to whom? It must have been to the company, the seller of the stock. The clear and irresistible implication of this positive assertion was that the company had $41,000 in its hands. The defendant was undoubtedly induced to believe that the company had a working capital of 100 times as many dollars as it had issued shares. The statement amounted to a representation to that effect. But the company had only about one-third of that amount of working capital or of money. The defendant, instead of getting stock which represented about one-eightieth of the working assets of the company, got stock which represented only one two hundred and fortieth of such assets. Was not this an assertion of an important fact? Suppose that nothing had been paid in, but that the stock, as is sometimes the case in these speculations, had been given by the company to the holders. In such case, what would the defendant have got for his money? Suppose the plaintiff had said to defendant: "I will sell you five shares for $500, but all others received their shares at the rate of one-third as much,"—would the defendant have purchased? The plaintiff voluntarily and artfully represented the working assets of the company to be $41,000; they were only about $14,000. To be sure, it may be said that the defendant was not told how many shares had been issued. The answer to that is that he undoubtedly supposed, if he did not know, and would have a right to suppose, that some substantial amount of capital had been paid in. It is urged in extenuation by the plaintiff that the defendant offered himself as a purchaser. The...