Crosby v. Wells

• Decision Date: 19 April 1907
• Citation: 67 A. 295,73 N.J.L. 790
• Parties: CROSBY v. WELLS.
• Court: New Jersey Supreme Court

67 A. 295

73 N.J.L. 790

CROSBY

v. WELLS.

Court of Errors and Appeals of New Jersey.

April 19, 1907.

(Syllabus by the Court.)

Error to Supreme Court.

Action by George W. Crosby against Samuel I. Wells. From a judgment for defendant, plaintiff brings error. Affirmed.

This was an action upon contract brought by the plaintiff in error, also plaintiff below, against the defendant in error, also defendant below. The plaintiff set forth in his declaration the common counts for money, and annexed thereto, as the particulars of his demand, a copy of a promissory note made by the defendant, November 8, 1901, for the payment of $1,600, three months after date, to the order of the plaintiff, and also a notice that judgment would be claimed for the said sum of money, with interest and costs. The defendant filed a plea of the general issue, and annexed to his plea a notice of special matter of defense, as follows: "The note set out in the plaintiff's declaration was given without consideration, and the defendant received no benefit in any way therefrom; the said note was given as a renewal of another note made by said defendant to said plaintiff, on or about the 8th day of August, 1901, for $2,100, given by the defendant to the plaintiff in payment for 3,000 shares of the capital stock of the Ohio Oil Company upon a contract of purchase by the defendant from the plaintiff, which contract was afterwards rescinded by the said defendant for fraud in its procurement by said plaintiff; and that at the time of such renewal, November 8, 1901, the defendant gave the plaintiff the note set out in his declaration, and paid him the sum of $500, without any knowledge of the fraud aforesaid." The defendant also annexed to his plea a notice of set-off in respect of the sum of $500, paid to the plaintiff under the circumstances mentioned in the first notice, and due and owing from the plaintiff to the defendant. The issues joined between the parties were sent down to the county of Atlantic for trial at nisl prius.

The proceedings at the trial before one of the justices and a jury involved the proofs and matters following:

(a) Formal proof having been made of the note, whereof a copy was annexed to the declaration, the plaintiff rested. Then the defendant offered evidence, which, if believed, tended to show that the original note, whereof the note in suit was a renewal, had been given by the defendant to the plaintiff on a sale by the plaintiff to the defendant of 3,000 shares in the stock of the Ohio Oil Company (name changed at a later day), at 70 cents a share, and that such bargain had been brought about through representations of value and profitableness made by the plaintiff, for the most part as being true to his personal knowledge; and that, after $500 had been paid upon the original note, and the renewal note given, investigation on the part of the defendant had brought to light fraud in the representations, and thereupon the defendant, by notice in writing and orally, had offered to return the certificate of stock and had rescinded the contract of sale. The representations above referred to were such as these: That the plaintiff held shares in the Ohio Oil Company; that the company owned 3,500 acres of oil land that was very productive, having thereon 55 producing wells and 17 miles of pipe line connected with the Standard Oil Company's main pipe; that the plaintiff had visited the field, and everything was all right; that the stock was safe—safe as any bank—and was paying a dividend of 2 per cent. a month; and that the plaintiff had $50,000 of the stock, and other persons named were taking stock. The manner of the rescission indicated by the testimony was this: After written notice, the defendant met the plaintiff at the office of the latter's attorney; he had the certificate of stock and an assignment thereof in his pocket; he said that he rescinded the contract, and had the papers with him for delivery; and he asked that the money paid on the stock be refunded. To this, answer was made that the plaintiff would not accept the papers at all. In the presenting of the defendant's case, the written examination of one James A. Davis, taken in Ohio under a statutory notice, in another ease wherein the plaintiff, Crosby, was defendant, was read by consent. It appeared that Davis was 46 years of age, was an oil producer and driller of oil wells, had been such during his whole business life, and was at the time employed in the capacity of driller upon the land of the Ohio Oil Company, which, previously, he had "explored" for oil. He was actually present when the plaintiff made a visit to the oil land in June, 1901. On the cross-examination in such other action, Davis had been asked: "Q. 86. From the exploration and examination made by you, in your opinion, were these lands profitable or unprofitable territory?" When the question was read at this trial, it was objected to as not proper cross-examination, and as dealing with a matter not proper for expert testimony; but it was allowed and answered thus: "A. As a whole, they were unprofitable."

(b) When the defendant rested, the plaintiff moved to strike out the whole defense, and to direct a verdict for the plaintiff for the amount of the note. The motion in both particulars was denied by the court.

(c) In the plaintiff's testimony in rebuttal, he gave answers on his direct examination, which, if believed, tended to show that he had never sold any of the Ohio Oil shares to the defendant, but had merely introduced him to one Peter Whitney, an agent of the oil company; that any representations made by him to the defendant (if made at all) were of beliefs only, founded upon information derived from others; and that the note had been made payable to him only that he might indorse it for discount at a bank, and, further, to show that he (the plaintiff) still owned, at the time of the trial, all of the Ohio Oil shares bought by him before August 8, 1901. On cross-examination, the plaintiff was asked, against objection, whether he had not actually sold or endeavored to sell some of his holdings in the Ohio Oil Company to Arvine H. Phillips, Caleb B. Shreve, and other persons, prior to August 8, 1901; and the making of such sales and offers he denied. Phillips, Shreve, his wife, Elizabeth, and Ferdinand Stadler were then called, and, against objections, severally testified to such offers made to them by the plaintiff. In the testimony of Caleb E. Shreve, it further appeared that he had actually bought upwards of 10,000 of such shares through the plaintiff, and that, in the course of the dealing, Peter Whitney, already named, had told him: "The Doctor holds 50,000 shares on an option, and I am assisting him in the sale of it."

(d) When all of the evidence was in, the presiding justice charged the jury. Two parts of the charge only need now be quoted. They are as follows: "You have also, as bearing upon the question of whether the stock was sold by Dr. Crosby to Mr. Wells, the fact that about that time he was offering stock of this company for sale to other persons, and you have also the receipt * * * and the envelope of August 8th. * * * In this case, there is testimony to the effect that Dr. Crosby said to Mr. Wells that he had visited the oil fields, and that everything was all right. Did he, or did he not. make that assertion intending that Mr. Wells should infer that he was making these statements of his own knowledge? And did he at that time have such knowledge? If he intended to make the assertion as of his own knowledge, and that he had knowledge of the facts, when as a matter of fact he had not, that in itself would be a false statement, from which you would be justified in inferring fraud." A verdict was rendered in favor of the defendant for the $500 paid, with interest, and judgment was entered thereupon in the Supreme Court. For error alleged in the record and proceedings, a writ of error was sued out of this court. Bills of exception to the errors complained of in the rulings at the trial and in the charge of the court below were signed and sealed, and error was duly assigned thereon in this court, unless otherwise noted in the opinion.

Clarence H. Cole, for plaintiff in error. Eli H. Chandler, for defendant in error.

The opinion of the court (the foregoing statement having been made) was delivered by GREEN. J.

I. (a) Counsel for the plaintiff in error first objects to the question addressed to the witness Davis that it was not proper cross-examination; the gist of the objection being that the question did not relate to matters brought out on the examination in chief, but tended to establish the defendant's case substantively, by cross-examining the plaintiff's witness, and that this course is not allowed by our practice. See Donnelly v. State (1857) 26 N. J. Law, 601, 610; Dennis v. Van Voy (1864) 31 N. J. Law, 38, 40, 41. Without casting the slightest doubt upon the value of these cases, we may be permitted to think that they are not now controlling.

(1) It must be borne in mind that Davis was originally examined as a witness in the action of Shreve v. Crosby (N. J. Err. & App.) 63 Atl. 333, was produced on the part of Crosby, and was cross-examined on behalf of Crosby's adversary. In order to save time and expense, it was agreed (the same attorneys being employed) that the testimony "might be used" in three other pending actions, one of which is that now under investigation. In this action, Davis was the witness of Crosby's adversary, the defendant Wells, and the question addressed to Davis and the answer given by him are naturally and legitimately to be regarded as part of his examination in chief. They would have plainly appeared in that light, if they had been taken down in writing in this action.

(2) If, however, it be preferable to regard the question and answer in their original aspect, then it is to be borne in mind that the examination of Davis was not...