Goodwin v. Dick
| Decision Date | 24 February 1915 |
| Parties | GOODWIN v. DICK et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Currier, Young & Pillsbury, of Boston (Samuel
H Pillsbury and Henry C. Tuttle, both of Boston, of counsel) for plaintiff.
Warner Warner & Stackpole, of Boston, for defendants.
DE COURCY, J.
The plaintiff, who is a stockbroker in Boston, bought from the defendants, who are stockbrokers in New York, 500 shares of the Boston & Alta Copper Company. He alleges that he was induced to subscribe thereto by the following statement in a circular issued by the defendants:
'Having been requested to use our business facilities for marketing some of the treasury stock of the Boston & Alta Copper Company, we have carefully considered the history and prevailing conditions surrounding this enterprise, and the reputation, skill and ability of the men associated therewith, and have concluded that we can, with propriety, recommend the stock as being an attractive mining investment, likely to have very great value with the further development of the property.'
The auditor to whom the case was referred found that the plaintiff bought and paid for the stock, relying upon the statement that the shares offered for sale were treasury stock; that this was a material statement, and the plaintiff was justified in relying upon it; and that it was false and known by the defendants to be false, as the stock in fact was held by the Railways Company General as collateral security, and also was subject to an option in favor of the defendant E. R. Dick and others. At the trial the defendants introduced evidence as to the entire transaction, which need not be recited in view of the conclusion at which we have arrived.
Assuming that the facts were as found by the auditor, the plaintiff had the choice of two remedies. He might have elected to rescind the contract which had been induced by the false representations, and have recovered the money he paid, on returning the consideration received by him. Nash v Minnesota Title Ins. & Trust Co., 163 Mass. 574, 581, 40 N.E. 1039, 28 L. R. A. 753, 47 Am. St. Rep. 489, and cases cited; Ginn v. Almy, 212 Mass. 486, 99 N.E. 276. Or he might have chosen to affirm the purphase, to retain the stock, and sue for the damages sustained by reason of the deceit. Whiteside v. Brawley, 152 Mass. 133, 24 N.E. 1088; McKinley v. Warden, 218 Mass. 310, 105 N.E. 990. Since he chose the latter course and sued in tort for deceit he is bound by the rule of damages in that form of action. That is to say, he can recover only the difference in value between the stock which in fact he got and the treasury stock which he would have got if the representation made by the defendants...
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