Coulter v. Clark
| Decision Date | 20 March 1903 |
| Docket Number | 19,987 |
| Citation | 66 N.E. 739,160 Ind. 311 |
| Parties | Coulter v. Clark |
| Court | Indiana Supreme Court |
From Fountain Circuit Court; J. M. Rabb, Judge.
Action by Jerome Clark against David A. Coulter. From a judgment for plaintiff, defendant appeals.
Affirmed.
H. C Sheridan, for appellant.
Joseph Claybaugh, N. P. Claybaugh and J. P. Gray, for appellee.
This is an appeal from a judgment for damages for an alleged fraud practiced by the appellant as a promoter of the organization of a company for the manufacture, sale, and erection of a combined hedge and wire fence. The questions of law presented arise upon the rulings of the court sustaining each paragraph of the complaint, its refusal to render judgment for the appellant on the answers of the jury to questions of fact submitted to them, and the denial of a motion for a new trial.
The first paragraph of the complaint was, in substance, as follows: On June 20, 1895, the Indiana Hedge & Wire Fence Company owned the right, under letters patent issued by the United States of America, to manufacture, sell, and erect in Clinton county, Indiana, and elsewhere, an improvement known as a "growing hedge and wire fence," and was desirous of selling the right to make, sell, and erect such fence in said county. The appellant, who was a banker and successful business man of said county, and who was known to the inhabitants of said county, conspired and agreed with certain agents of the said Indiana Hedge & Wire Fence Company to induce the appellee and other citizens of said county to purchase from said company, for the sum of $ 12,500, the right to make, sell, and erect said fence in said county. In furtherance of said conspiracy, the appellant with the other agents of said company, agreed to call upon the appellee, and to represent to him that the appellant was so convinced of the great value and availability of the said patent rights and of the said territory that he was ready and anxious to join with other citizens of said county in the purchase of said patent rights for said Clinton county at said price of $ 12,500, and to organize a corporation to be known as the Clinton County Hedge & Wire Fence Company with a capital stock of $ 25,000, for the purpose of making, selling, and erecting such patent fence. The plan of such proposed organization was as follows: The persons forming said last-named corporation were to execute their promissory notes to the said Indiana Hedge & Wire Fence Company, in consideration of the assignment of such patent rights for said Clinton county to the said Clinton County Hedge & Wire Fence Company. Thereupon, the last-named corporation was to issue to the persons so associated in it shares of its capital stock to the amount of $ 2 for every $ 1 of the sums for which their respective notes had been so executed to the said Indiana Hedge & Wire Fence Company. It was further agreed between the appellant and said other conspirators that the appellant should solicit the appellee and other citizens to join him in the purchase of said patent rights for said county, and that appellant should pretend that he was one of the joint purchasers of such patent rights, and was executing his notes for the same; but it was secretly agreed between the appellant and his co-conspirators that, if the appellant should succeed in inducing the appellee and said other citizens to purchase said patent rights from the said Indiana Hedge & Wire Fence Company, and to enter into said scheme, then the notes executed by the appellant for his share of the purchase money for said patent rights were to be returned to him by said Indiana Hedge & Wire Fence Company, and he was to receive $ 1,000 of the proceeds of the sale of such patent rights for his services. Pursuant to this scheme, the appellant and his co-conspirators called on the appellee and on other citizens, and represented that the patents were of great value; that they were worth $ 25,000; that the appellant was so convinced of their value that he was ready and anxious to go in with appellee and other citizens in the purchase of said rights at the price of $ 12,500, and earnestly solicited the appellee and others to join him in the said purchase, and in the organization of the said Clinton County Hedge & Wire Fence Company. Appellant assured the appellee and other citizens of said county that, in his judgment as a business man and financier, the stock of said proposed corporation would be more valuable than any bank-stock, and that its dividends would pay the notes executed to the said Indiana Hedge & Wire Fence Company long before they became due. The appellee, having no knowledge of the facts, and believing the said representations, relied thereon, and, on September 10, 1895, entered into said agreement, and, along with twenty-three other citizens of said county, executed his two notes to said Indiana Hedge & Wire Fence Company, each in the sum of $ 250, payable at twelve and eighteen months after date, and the appellant, also, at the same time pretended to execute his notes to the said company for the same amount, and joined in causing the said Clinton County Hedge & Wire Fence Company to be organized, to which said patent rights were thereupon transferred by said Indiana Hedge & Wire Fence Company. The said Clinton County Hedge & Wire Fence Company issued to the appellee stock of the said company to the amount of $ 1,000. As soon as the said notes were issued to said Indiana Hedge & Wire Fence Company, and said last-named company transferred said stock to the appellee and the other persons executing said notes, appellant's co-conspirators caused the notes executed by the appellant to be handed back to him, and they paid to him $ 1,000 for his services in carrying out said scheme. The said patent rights for Clinton county were of no value, and said stock was worthless, as the appellant at all times well knew. Before the appellee discovered the fraud which had been practiced upon him, he paid his said notes. He was unable to reconvey said patent rights to said Indiana Hedge & Wire Fence Company, for the reason that, as a part of the said scheme of fraud, they were conveyed to the said Clinton County Hedge & Wire Fence Company, and were beyond his control. The second paragraph of the complaint is similar to the first, and need not be set out.
The sufficiency of the facts stated in each paragraph to constitute a cause of action is questioned by the demurrers. The objections taken to each paragraph of the complaint are that the alleged representations made by the appellant related to the credit, conduct, and dealings of a third person, and that, as they were not in writing and signed by the appellant, they were within the statute of frauds, and not actionable; that the alleged representations were expressions of opinion, merely, and not statements of material facts; that as the appellee had the opportunity to examine into the truth of the representations for himself they will not support a charge of fraud; and that the payment of his notes by the...
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