French v. Ryan
| Decision Date | 16 April 1895 |
| Court | Michigan Supreme Court |
| Parties | FRENCH v. RYAN ET AL. |
Error to circuit court, Wayne county; Henry N. Brevoort, Judge.
Action by Ellen B. French against John Ryan and others. There was a judgment for defendants, and plaintiff brings error. Affirmed.
Atkinson & Haigh (Wm. T. Mitchell, of counsel) for appellant.
Elliott G. Stevenson and Charles B. Warren, for appellees.
This suit is brought upon a promissory note of $5,000, made by John Ryan, indorsed by James Ryan, and given in payment for a subscription to stock in the Port Austin Manufacturing Company, a corporation. The defense is fraud and misrepresentation respecting the business to which the corporation succeeded, and concerning the parties who were to join in the new enterprise and the amount of capital which had been secured. The fact that Mark Carrington is the real owner of the note is not seriously questioned. Thomas Winsor and his father-in-law, Mark Carrington, had for some years been engaged in business, as Thomas Winsor & Co. They had a sawmill and salt blocks and a general store. The evidence tended to show that the sawmill was without available timber and that the salt blocks had not been operated for some time except at a loss; that the general business of the firm had been unprofitable, and Carrington and Winsor were anxious to dispose of it; that their real estate was incumbered for $22,000, which was more than its value; that they had on hand a stock of merchandise, some salt, logs, horses, wagons, and other personal property, and their unsecured indebtedness amounted to $9,000. John Ryan was induced to take stock in the new enterprise by Thomas Winsor. He first took $5,000 worth of stock, and paid for it, and was induced to subscribe for further shares, the par value of which aggregated $5,000 for which the note in question was given.
There is no question upon this record, but there was sufficient evidence to go to the jury, as to whether Thomas Winsor had not been guilty of fraud and misrepresentation as to the profits of the business of Thomas Winsor & Co., and also respecting the persons who were to join in the enterprise and furnish the capital. The principal contention is that Mark Carrington was not connected with the fraud, and that whatever misrepresentations were made were not brought home to him. the theory of the defense was that the scheme was to unload the assets of Thomas Winsor & Co. and the unprofitable business upon the new corporation, and to absorb the capital paid in. Winsor represented that the real estate would be turned in at the face value of the mortgage thereon, and that the personal property was worth about $10,000; that Carrington was to take $10,000 worth of stock and that he (Winsor) was to take $10,000; that Carrington's stock was to be charged up against the personal property, and, if any balance remained, it was to be credited upon Winsor's stock account, and he would pay the balance in cash. It is clear from Carrington's testimony that he understood that this was the basis that was being suggested. John Ryan paid for his first block of stock as follows: Cash, $300; a deed to Mark Carrington of real estate of the value of $1,200; a note for $1,000, which he afterwards paid; and a deed of another parcel of land worth $2,500, to one Smith. Smith afterwards conveyed to Winsor, and Winsor to Carrington. One Newell subscribed to stock, paid $300 in cash, and gave his note for $1,200. The note in controversy here is alleged to have been discounted at the bank, but the cashier testified that the money was furnished by Mark Carrington; that $1,000 of the amount was credited to Thomas Winsor & Co., and the balance was paid out for the benefit of the company. James Ryan subscribed for $5,000, and paid for it by turning over 400 acres of land and the balance in cash. T. Winsor & Co. received of the proceeds of this stock the John Ryan note of $1,000, and the Newell...
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