Liland v. Tweto

• Decision Date: 18 March 1910
• Citation: 125 N.W. 1032,19 N.D. 551
• Court: North Dakota Supreme Court

125 N.W. 1032

19 N.D. 551

SOLOMON J. LILAND v. A. K. TWETO

Supreme Court of North Dakota

March 18, 1910

Appeal from District Court, Richland County; Allen, J.

Action by Solomon Liland against A. K. Tweto. Judgment for defendant, and plaintiff appeals.

Reversed with directions.

Reversed.

Engerud Holt & Frame and W. S. Lauder, for Appellant.

Producing a false impression may be done by words, acts, or concealment or suppression. Stewart v. Wyoming Ranche Co., 128 U.S. 383, Paddock v. Strobridge, 29 Vt. 470; Howard v. Gould, 28 Vt. 523; McAdams v Cates, 24 Mo. 223; Marsh v. Webber, 13 Minn. 109, (Gil. 99.); Jeffreys v. Bigelow, 13 Wend., 519; Rawdons v. Blatchford, 1 Sandf. Ch. 344; Brown v. Gray, 72 Am. Dec. 563; Rheem v. Wheel Co., 33 Pa. 358; Newell v. Randall 19 N.W. 972; Rosenbaum v. U. S. Credit Co., 44 A. 966; Brue v. Ruler, 17 Eng. Com. L., 700; Hill v. Gray, 2 Eng. Com. L., 167; Mellish v. Motteaux, Peake's Cases, 115, Burns v. Dockray, 30 N.E. 551; Busch v. Wilcox, 46 N.W. 940; Hanson v. Edgerly, 9 Foster, 343, 359; Englehardt v. Clanton, (Ala.), 3 So., 680; Dowling v. Lawrence, 16 N.W. 552; Downing v. Dearborn, 1 A., 407; Mallory v. Leach, 35 Vt. 156; 2 Kent's Com. 482; I Story's Eq. Jur., Sec. 208-216; Pomeroy Eq. Jus. Sec. 901, page 1611 and note 2; Bank v. Baxter, 31 Vt. 101.

Purcell & Divet, and Chas. E. Wolfe, for Respondent.

Mere expression of opinion, though false, is not fraudulent Krause v. Cook, 108 N.W. 83; Fargo Gas & Coke Co. v. Fargo Gas & Elec. Co., 4 N.D. 219, 59 N.W. 1066; Pasley v. Freeman, 3 T. R. 51; 2 Smith's Leading Cases, 1300, (Collin's 9th Ed.) Mooney v. Miller, 102 Mass. 217; Manning v. Albee, 11 Allen 520; Gordon v. Parmellee et al., 2 Allen, 212; Credell v. Swindell, 63 N.C. 305; Wise v. Fuller, 29 N.J.Eq. 257; Wilkinson v. Clausen, 29 Minn. 91; Ellis v. Andrews, 56 N.Y. 83, 15 Am. Rep. 379; Markel v. Moudy, 11 Neb. 213; Dowagiac Mfg. Co. v. Mahon & Robinson, 13 N.D. 517; Neidefer v. Chastain, 36 Am. Rep. 198; James Music Co. v. Bridge, 114 N.W. 1108; French v. Ryan et al., 62 N.W. 1016; Hubbell v. Meigs, 50 N.Y. 480; Gordon v. Butler, 105 U.S. 553, 26 L.Ed. 1166; Homer v. Perkins, 124 Mass. 431; Kimball v. Bangs, 11 N.E. 113, and note.

A party defrauded may tender back what he received and recover what he gave, or retain what he received and sue for damages. 20 Cyc. 87; Westerfeld v. New York Life Ins Co., 58 P. 92; Wilson v. Nichols et al., 43 A. 1052; Wabash Valley Protective Union v. James, 35 N.E. 119; Teachout v. Van Hoesen, 76 Ia. 113, 14 Am. St. Rep. 206, 40 N.W. 96; Hargadine-McKittrick Dry Goods Co. v. Swofford Bros. Dry Goods Co., 63 P. 281; Weaver v. Shriver, 30 A. 188; Gilchrist v. Manning, 19 N.W. 959; Minazek v. Libera et al., 86 N.W. 100; Whitney v. Allaire, 1 N.Y. 305; Wilson v. New United States Cattle Ranch Co., 73 F. 994; Am. Bldg. & Loan Ass'n v. Rainbolt, 67 N.W. 493; Friend Bros. Clothing Co. v. Hulbert, 73 N.W. 784; Moore v. Howe et al., 87 N.W. 750; Smeesters v. Schroeders, 101 N.W. 363.

Unless statement of case has all the exhibits enumerated therein, or officially identified as a part thereof, Supreme Court cannot try the case anew. Eakin v. Campbell, 10 N.D. 416, 87 N.W. 991; Bank v. Davis, 8 N.D. 83, 76 N.W. 998; U. S. Savings & Loan Co. v. McLeod, 10 N.D. 111, 86 N.W. 110; Edmonson v. White, 8 N.D. 72, 76 N.W. 986; Otto Gas Engine Works v. Knerr, 7 N.D. 195, 73 N.W. 87; State ex rel. Wiles v. Heinrich, 11 N.D. 31, 88 N.W. 734; Marck v. Soo Railway 15 N.D. 86; State v. School District No. 50 of Barnes Co., (N.D.) 120 N.W. 555; National Cash Register Co. v. Wilson, 9 N.D. 112, 81 N.W. 285; Geils v. Fluegel, 10 N.D. 211, 86 N.W. 712; Iowa Business Men's Bldg. & Loan Ass'n v. Fitch, 120 N.W. 694; Kipp v. Angell, 10 N.D. 199, 86 N.W. 706; Littel v. Phinney et al., 10 N.D. 351, 87 N.W. 593; Teinen et al v. Lally, 10 N.D. 153, 86 N.W. 356; Schmidt v. Beiseker, 19 N.D. 35; 120 N.W. 1096; Berteson v. Ehr, (N.D.) 116 N.W. 335; O'Keefe v. Beecher, 117 N.W. 353 (N.D.)

OPINION

SPALDING, J.

This is a suit in equity, commenced and tried in the district court of Richland county to obtain a judgment rescinding an exchange of plaintiff's farm and personal property for defendant's shares of stock in the United Farmers' & Merchants' Exchange Company of Abercrombie, a corporation. Defendant had judgment, from which plaintiff appeals, demanding a new trial of the entire case.

Epitomized, the pleadings state the following facts: That on the 15th day of November, 1906, plaintiff was the owner of the real estate described, being two half sections of land in Richland county, and of certain personal property consisting of horses, farming utensils, and cattle; that the value of the land was about $ 30,000 and of the personal property about $ 2,000, and that the land was incumbered to the amount of about $ 14,000; that the defendant was at that time the owner of 1,726 shares of the capital stock of the corporation named, and that such shares were of par value of $ 10 each; that the plaintiff was an old man, not conversant with the English language, had been a farmer all his life, with no business experience otherwise than as a farmer; that the plaintiff had been intimately acquainted with defendant for many years, and had implicit confidence in defendant's honesty, business ability, and friendship, and for that reason reposed great confidence in his advice and representations relating to business matters; that the defendant, when the transaction involved occurred, well knew the facts as to plaintiff's confidence in him, his advice, and statements; that on the 15th day of November, 1906, with intent to deceive plaintiff and induce him to sell and convey to defendant the real estate and personal property mentioned, defendant wrongfully and fraudulently stated and represented to plaintiff that said corporation was in a very prosperous and flourishing financial condition, and doing a large and profitable business; that its shares of stock were worth at least $ 12 per share; that it had been earning large profits, so that a dividend of at least 7 per cent. on the paid-up capital stock would be declared and paid at the next annual meeting of the corporation to be held in January thereafter, and that defendant requested and advised plaintiff to exchange his property for stock in said corporation; that plaintiff was wholly ignorant of the financial condition of such corporation, and by reason of his implicit confidence in the honesty, business ability, and friendship of defendant in general he implicitly believed and relied upon such statements and representations and advice, and was thereby induced to sell and convey to defendant such real estate and personal property for the shares of stock mentioned and owned by defendant, and in pursuance of such agreement, and to carry it into effect executed and delivered a deed of conveyance, conveying to defendant the land described, subject to incumbrances against the same, and also delivered possession of the personal property in controversy and possession of the lands, and that defendant assigned and transferred the shares of stock referred to, to plaintiff; that at the time defendant made the false and fraudulent statements set forth he well knew said statements were false and untrue, and that plaintiff would and did rely thereon, and that said statements were false and untrue in that such corporation, at that time, was in an insolvent condition, unable to pay its debts, did not have sufficient property to pay its obligations, and was in fact in a bankrupt condition, and would not be able to, and the officers and directors did not expect said corporation would or could pay any dividend to its stockholders, and that the shares so transferred were of no value whatsoever; that plaintiff did not discover the falsity of said representation and the deceit practiced upon him by defendant until immediately before the commencement of this action; that he is ready, willing, and able, and offers, to restore and reassign defendant all such shares of stock and brings the same into court and offers to assign them to defendant. The complaint then alleges the sale by defendant of the personal property involved for the sum of $ 1,900, and the payment by defendant of certain indebtedness, and that plaintiff is ready, able, and willing to return to defendant the sums of money paid out by him on account of the transaction, and to comply with all other conditions which the court may impose, in order to restore defendant to the condition in which he was before the exchange was made, and he prays for judgment requiring a reconveyance of the lands and an accounting as to the personal property and an adjustment of the amount received therefrom by the defendant and the amount paid out by the defendant.

The answer is a general denial, except as to matters admitted and admits the ownership, but denies that the real estate was of the value of $ 30,000; admits the existence of the corporation and defendant's ownership of the 1,726 shares of the par value of $ 10 per share and the exchange of the property and the incumbrances upon the real estate; alleges that defendant assumed and agreed to pay the same, and has paid about $ 1,040 thereon. The answer further alleges that at the time of such transaction the stock transferred was of the actual value of $ 10 per share, and that the corporation was solvent and possessed of resources largely in excess of its liabilities, but that after the transaction between these parties such corporation became involved in financial difficulties, that though solvent, it was unable to meet its obligations as they became due, and as a result made a deed of assignment of all its property for the benefit of its creditors, and was by...