Fottler v. Moseley
| Decision Date | 18 June 1901 |
| Citation | 179 Mass. 295,60 N.E. 788 |
| Parties | FOTTLER v. MOSELEY. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Robert W. Nason, Thomas W. Proctor, and Nathaniel L. Foster, for plaintiff.
Benj. L. M. Tower and Ernest O. Hiler, for defendant.
The parties to this action testified in flat contradiction of each other on many of the material issues, but the evidence in behalf of the plaintiff would warrant a finding by the jury that on March 25, 1893, the plaintiff, being then the owner of certain shares of stock in the Franklin Park Land & Improvement Company, gave an order to the defendant, a broker, who was carrying the stock for him on a margin, to sell it at a price not less than $28.50 per share; that on March 27th the defendant, for the purpose of inducing the plaintiff to withdraw the order and refrain from selling represented to the plaintiff that the sales which had been made of said stock in the market had all been made in good faith, and had been 'actual true sales throughout,' that these statements were made as of the personal knowledge of the defendant, and that the plaintiff, believing them to be true, and relying upon them, was thereby induced to and did cancel his oral order to the defendant to sell, and did refrain from selling; and that the statements were not true as to some of the sales in the open market, of which the last was in December, 1892, and that the defendant knew it at the time he made the representations. The evidence would warrant a further finding that, in continuous reliance upon such representations, the plaintiff kept his stock, when he otherwise would have sold it, until the following July, when its market value depreciated, and he thereby suffered loss. The defendant, protesting that he made no such representations, and that the jury would not be justified in finding that he had, says that, even upon such a finding, the plaintiff would have no case. He contends that the representation was not material; that a false representation to be material, must not only induce action, but must be adequate to induce it, by offering a motive sufficient to influence the conduct of a man of average intelligence and prudence; and that in this case the representation complained of, so far as it was false, was not adequate to induce action, because the fictitious sales were so few and distant in time; and that, therefore, it was not material.
It may be assumed that the plaintiff desired to handle his stock in the manner most advantageous to himself, and that the question whether he would withdraw his order to sell was dependent somewhat, at least, upon his view of the actual or the probable market value of the stock; and upon that question a man of ordinary intelligence and prudence would consider whether the reported sales in the market were 'true sales throughout,' or were fictitious, and what was the extent of each. It is true that a corporation may be of so long standing, and of such a nature, and the number of the shares so great, and the daily sales of the stock in the open market so many and heavy, that the knowledge that a certain percentage of the sales reported are not actual business transactions would have no effect upon the conduct of an ordinary man. On the other hand, a corporation may be so small, and of such a nature, and have so slight a hold upon the public, and the number of its shares may be so small, and the buyers so few, that the question whether certain reported sales are fictitious may have a very important bearing upon the action of such a man. Upon the evidence in this case, we cannot say, as matter of law, that the representation, so far as false, was not material. This question is for the jury, who are to consider it in the light of the nature of the corporation and its standing in the market, and of...
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