Lewis v. Michigan Stove Co.

• Citation: 102 N.E. 391,54 Ind.App. 1
• Decision Date: 25 June 1913
• Docket Number: No. 8,018.,8,018.
• Parties: LEWIS v. MICHIGAN STOVE CO.
• Court: Court of Appeals of Indiana

54 Ind.App. 1

102 N.E. 391

LEWIS

v.MICHIGAN STOVE CO.

No. 8,018.

Appellate Court of Indiana, Division No. 2.

June 25, 1913.

Appeal from Circuit Court, Lake County; W. C. McMahon, Judge.

Action by the Michigan Stove Company against David J. Lewis. From a judgment for plaintiff, defendant appeals. Affirmed.L. L. Bomberger and Bomberger, Sawyer & Curtis, all of Hammond, for appellant. Frank B. Puttee, of Crown Point, for appellee.

ADAMS, C. J.

Appellee brought this action against appellant for damages on account of alleged fraudulent representations as to the solvency of the East Chicago Hardware Company, a corporation of which appellant was president. The first error assigned calls in question the sufficiency of the complaint to state a cause of action.

From the averments of the complaint it appears that the East Chicago Hardware Company commenced business in March, 1905, and was declared a bankrupt by the United States District Court in March, 1907. During that time appellant was actively engaged in conducting the business of the corporation. Appellee sold the hardware company goods at wholesale, and in July, 1906, held an overdue account against the company amounting to more than $500. Appellee did not know and had no means of knowing what the financial condition of the company was and made inquiry of appellant, as the president of said company, in regard to its financial strength. Appellee was informed by statements in writing that the company was solvent, and that its resources were greatly in excess of its liabilities. On October 1, 1906, appellee wrote to the hardware company, requesting that it make a statement showing its financial condition, and inclosed a blank form on which to list its assets and liabilities. Such statement was made and signed by the appellant, in which it was represented that the resources of the company were over $36,000 and its total indebtedness less than $8,000. Appellant also represented in said signed statement that the East Chicago Hardware Company was not a corporation but a partnership, composed of himself and two others. The representations so made by appellant were false and known by him to be false at the time made, and were made for the purpose of inducing appellee to rely on the same and to sell and ship goods to said company on credit and to induce appellee to give further time on the account then due. At the time of making said written statement the company was insolvent and was a corporation and not a partnership as represented. On account of said financial statement, appellee was induced to and did extend credit and did not bring action to collect its account then due, and was also induced to thereafter sell and deliver to said hardware company goods of the value of $500 before it learned of the insolvency of said company. At the time the hardware company was adjudged a bankrupt, it was owing appellee the sum of $775.94. A dividend of 12 1/2 per cent. has been paid appellee out of the bankrupt estate, and an additional dividend of 5 per cent. will be realized on said account.

The objection strongly urged against the complaint is that it is not averred that appellee has suffered any loss on account of the representations made by appellant, and that the complaint alleges no damages.

[1] We think the complaint clearly states a cause of action. It is averred that the hardware company was indebted to appellee in a large sum at the time it was adjudged a bankrupt.

[2] The...