David v. Belmont
| Decision Date | 06 July 1935 |
| Citation | 197 N.E. 83,291 Mass. 450 |
| Parties | DAVID v. BELMONT et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Exceptions from Superior Court, Suffolk County; F. T Hammond, Judge.
Action of contract by Lucien H. David against Morgan Belmont and others. Verdicts for plaintiff for $13,492.39, and defendant brings exceptions.
Exceptions overruled.
G. E Mears and F. G. Moulton, both of Boston, for plaintiff.
C. P. Curtis, Jr., of Boston, for defendants.
This is an action at law in which the plaintiff seeks to recover damages alleged to have been sustained by reason of his purchase of three hundred shares of the common stock of the Cooper-Bessemer Corporation from the defendants, who were partners engaged in the business of banking and dealing in securities, with an office in Boston.
The declaration is in two counts. The first relates to one hundred shares of stock purchased on September 24, 1929, which it was alleged, the plaintiff was induced to continue to hold, when he otherwise would have sold, by reason of certain false and fraudulent representations made to him by the defendants in May, 1930. The second count relates to two hundred shares, which, it is alleged, the plaintiff was induced to purchase, at the same time in May, 1930, when he was induced to hold the one hundred shares, by the same false and fraudulent representations.
There was evidence at the trial that the plaintiff purchased of the defendants one hundred shares of the common stock of the Cooper-Bessemer Corporation on September 24, 1929, at $56.50 a share, and two hundred more on May 29, 1930, at $54.75 a share; that certain advertisements regarding this stock were published by the defendants in the Boston Herald on May 12, May 19, and May 26, 1930; that the defendants' manager on or about May 21, 1930, made certain other representations to the plaintiff; that late in November or early in December, 1930, the plaintiff discovered that some or all of these representations were false; that on December 22, 1930, the plaintiff repudiated his purchase of the two hundred shares and tendered them, together with all dividends received thereon, to the defendants; that the market price of the shares at the time the representations were made was between $52.125 and $57 per share; that when the plaintiff discovered the falsity of the representations the price was between $20.50 and $23 per share; that when the plaintiff repudiated his purchase of two hundred shares and tendered them to the defendants the price was between $18.25 and $19 per share. It appeared that the common stock of the Cooper-Bessemer Corporation was regularly and actively traded in on the New York Curb from September, 1929, down to and including December 22, 1930. The market price of the shares, as hereinbefore set out, represented the range of prices at which the stock sold on the New York Curb during the periods, and on the dates as hereinbefore referred to, and it was not disputed that the market prices represented the market value of the shares. There was no evidence in the case, and none was offered either by the plaintiff or by the defendants, as to the actual value of the shares of stock of the Cooper-Bessemer Corporation as distinguished from their market value. There was no other evidence of the value of the stock.
The jury in answer to special questions submitted to them found that the representations made by the defendants with respect to this stock were not true. The defendants made among others the following requests for rulings: These requests were refused, and the defendants excepted. The case was submitted to the jury for a general verdict.
The judge charged with respect to damages under the first count, in substance, that if the untrue statements were made with intent that the plaintiff should act upon them by refraining from selling his stock and he did so act, he would be entitled to damages measured by the difference between the market value of the stock at the time the statements were made and the market value when he discovered that they were untrue; and with respect to damages under the second count, that if the untrue statements were made with intent that the plaintiff should rely on them in purchasing stock and he did so act, and within a reasonable time after discovering the statements were untrue he tendered back the stock, the plaintiff would be entitled to damages measured by the difference between the price paid for the two hundred shares when they were bought and the market value of those shares at the time he repudiated the sale, which was about December 22, 1930. The defendants excepted to the charge as given on the issue of damages. The jury returned verdicts for the plaintiff on both counts.
The defendants' exceptions relating to the first count are on the basis that the judge erred in ruling that damages recoverable were to be measured by the difference between the market value of the stock at the time the statements were made which induced the plaintiff not to sell, and the market value at the time he discovered that they were untrue instead of ruling as requested by the defendants that the damages should be measured by the difference between the actual value of the stock at the time the statements were made and the value which the stock would have had if these statements had been true. Reliance to support this contention is placed on cases holding that the measure of damages when sales have been induced by false representations is ‘ the difference...
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