Duffy v. Blake

• Decision Date: 27 July 1914
• Docket Number: 11944.
• Citation: 80 Wash. 643,141 P. 1149
• Parties: DUFFY v. BLAKE
• Court: Washington Supreme Court

141 P. 1149

80 Wash. 643

DUFFY v. BLAKE

No. 11944.

Supreme Court of Washington

July 27, 1914

Department 2. Appeal from Superior Court, King County; Boyd J. Tallman Judge.

Action by D. A. Duffy against J. Fred Blake. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

Carkeek McDonald & Kapp, of Seattle, for appellant.

Eugene A. Childs, of Seattle, for respondent.

MOUNT J.

This action was brought by the plaintiff to recover damages from the defendant on account of false representations. The false representations alleged in the complaint are to the effect that the defendant represented to the plaintiff that the Valdez Furniture Company had a stock of merchandise worth $11,413, when it was worth less than $5,000; that the business had made a net profit of $4,600 for the preceding year, when it had made less than $2,000; that a note for $2,000 was given by the plaintiff to the defendant with the agreement that it would be paid out of the profits of the business, when in fact there were no profits from the business after the note was given. The cause was tried to the court with a jury. At the close of the evidence on behalf of the plaintiff, the trial court granted a nonsuit and dismissed the action. This appeal followed.

It appears from the evidence offered on behalf of the plaintiff that prior to the 1st day of July, 1910, the defendant, J Fred Blake, was operating a secondhand furniture store in the city of Seattle. This business was incorporated and known as the Valdez Furniture Company. The defendant Blake owned substantially all the stock. He desired to sell an interest in the business and offered for sale one-half of his stock. A Mr. Rutherford acted as broker. The plaintiff at that time was a man 75 years of age. He had known Mr. Rutherford for 10 or 12 years. Mr. Rutherford introduced the plaintiff to the defendant, and the plaintiff was informed that the defendant desired to sell one-half of his shares of stock in the Valdez Furniture Company. The plaintiff, for about 20 years preceding July 1st, had been engaged in the bakery business. He had sold his business and desired to enter other business. Previous to engaging in the bakery business, for a number of years he had been engaged in the general merchandise business, consisting of gents furnishing goods, boots, shoes, etc. At the request of the defendant, the plaintiff visited the furniture store and was informed by the defendant that the stock of merchandise on hand was of the value of $10,000 or $12,000. The plaintiff inquired as to the profits of the business, and the defendant stated that for the year 1909 the business had made a profit of $4,600. The defendant stated he would see one-half the stock of the company for $5,000. The plaintiff stated that he would not purchase the stock of the corporation unless an inventory was made of the secondhand goods on hand. An inventory was taken by the defendant and two men in his employ. The plaintiff was there part of the time while the inventory was being taken. He had no experience in the furniture business, did not know the value of secondhand furniture, and so stated to the defendant. While the inventory was being taken, the defendant requested his employés to put the prices up, which was done. As a result, the inventory showed that the stock of goods was worth $11,413.30. The plaintiff thereupon stated that he did not have $5,000, the amount asked by the defendant for one-half the stock of the corporation; that he had only $3,000. Whereupon Mr. Blake told him that the profits of the business would pay the balance of the purchase price, $2,000, within one year, and that Mr. Duffy might give his note for the balance. Accordingly $3,000 was paid in cash on the 5th day of July, 1910, and a note executed for the sum of $2,000, payable in one year. The plaintiff then went into the store, and soon after learned that articles were being sold for much less than the prices named in the inventory. He complained to Mr. Blake and was informed that the inventory was about double the value of the goods. Soon after the note for $2,000 was executed, it was sold by Blake to innocent purchasers. Suit was afterwards brought upon it, and a judgment was had against the plaintiff for the amount of the note, with interest and costs. See Wells v. Duffy, 69 Wash. 310, 124 P. 907.

The plaintiff testified that he knew nothing about the value of these secondhand goods, and relied upon the statements of Mr. Blake with reference to their value, and also relied upon his statement with reference to the profits the business had been making. The plaintiff also testified that he saw some books in the office, but did not examine them to find out the condition of the business or the profits which had been made. The evidence shows that the stock of goods on hand at that time was not worth to exceed $6,000; that the profits for the year 1909 were $1,016 instead of $4,600; and that after the plaintiff purchased the stock and went into the store there were no profits.

The trial court was of the opinion that, because the plaintiff was an experienced business man, was present at the time the inventory was taken, and knew that the books were at hand which disclosed the condition of the business, he was therefore bound to take notice of the value of the stock of goods, of the condition of the business, and the profits...