Davis v. Clark

• Decision Date: 16 March 1914
• Citation: 85 N.J.L. 696,90 A. 303
• Parties: DAVIS v. CLARK.
• Court: New Jersey Supreme Court

90 A. 303

85 N.J.L. 696

DAVIS

v. CLARK.

Court of Errors and Appeals of New Jersey.

March 16, 1914.

Error to Supreme Court.

Action by William G. Davis against Samuel Clark. There was a judgment for plaintiff, and defendant brings error. Affirmed. Jerome T. Congleton and Frank E. Bradner, both of Newark, for plaintiff in error. Lintott, Kahrs & Young and John R. Hardin, all of Newark, for defendant in error.

KALISCH, J. The judgment challenged by the appellant was given on a verdict directed against him for plaintiff in the court below. The action was based on a promissory note for $10,000, under date of December 20, 1911, made by Samuel Clark, the appellant, to the order of William Rotter, and indorsed by the latter to William G. Davis, the respondent, who gave $9,100 value for it. The sole inquiry raised by the appeal is: Were there facts bearing on any question that would defeat the respondent's right to recover? The facts developed on the trial showed that the appellant bought 250 shares of stock, in the People's Talking Machine Company, having a par value of $25,000, for $5,000. Rotter, the payee of the note mentioned, and one Meiselbach, were stockholders in the company. Rotter was an inventor, and Meiselbach a practical manufacturer, and both were relied on by the other stockholders in the company to manage and carry on the business. In the month of April, 1911, at a meeting of stockholders, Rotter stated in the presence of all the stockholders, including the respondent, who was also a stockholder, that he (Rotter) had a position offered him by a rival company at a much larger salary than he was receiving, and that he had accepted it, and therefore was going to leave, whereupon Meiselbach stated that, if Rotter left, he would leave. The stockholders endeavored to induce Rotter to remain, and he then suggested that he would buy their stock, and it was finally agreed to sell him their stock for 40 cents on the dollar. The appellant received $10,000 from Rotter for his 250 shares, claiming that he was induced to sell through the representations made by Rotter and Meiselbach. Later, in December, 1911, Rotter sold back to the appellant 100 shares of the stock for $10,000, for which appellant paid with the note in controversy. On the 18th day of January, 1912, respondent purchased the note of Rotter, giving him therefor $4,000 in cash, capital stock of the People's Talking Machine Company having a par value of $5,000, respondent's note for $900, and $100 were allowed for discounting the note. The $900 note was not paid, and the plaintiff was permitted to recover the amount the note actually cost him, which was $9,100.

The appellant claimed as a defense against the payment of the note that he was induced to sell out his 250 shares to Rotter in consequence of what Rotter and Meiselbach represented at the stockholders' meeting in April, 1911, which representations he declares were false. But, even if this be conceded, there was no...