Livermore v. Middlesborough Town-Lands Co.

• Decision Date: 14 March 1899
• Citation: Livermore v. Middlesborough Town-Lands Co., 106 Ky. 140, 50 S.W. 6 (Ky. Ct. App. 1899)
• Parties: LIVERMORE v. MIDDLESBOROUGH TOWN-LANDS CO. [1]
• Court: Kentucky Court of Appeals

50 S.W. 6

106 Ky. 140

LIVERMORE v. MIDDLESBOROUGH TOWN-LANDS CO. ^[1]

Court of Appeals of Kentucky.

March 14, 1899

Appeal from circuit court, Bell county.

"To be officially reported."

Action by the Middlesborough Town-Lands Company against Charles W Livermore to enforce a vendor's lien. Judgment for plaintiff, and defendant appeals. Affirmed.

G. W Saulsberry and C. C. Turner, for appellant.

Hiram R. Steele, J. R. Sampson, Chapman & Sampson, J. W. Alcorn and J. H. Tinsley, for appellee.

DU RELLE, J.

The appellee, the Middlesborough Town-Lands Company, a Kentucky corporation, brought suit against appellant, averring that on the 17th day of October 1889, the Middlesborough Town Company sold Livermore five lots in the city of Middlesborough, for the deferred payments upon each of which Livermore executed three notes, due one two, and three years after date. The note due one year after date had been paid, and judgment was prayed for the amount of the notes due at two and three years, and for the enforcement of the vendor's lien retained in the deed, those notes having been, for value, assigned to appellee. To this petition, Livermore filed an answer and counterclaim, alleging that the town company was formed for the purpose of engaging in speculation, and "booming" Yellow Creek Valley, under the name of the city of Middlesborough; that it acquired about 5,000 acres of land in the vicinity of Yellow Creek Valley solely for the purpose of speculation; that it was unimproved, and miles from any other town, and that, upon acquiring it, the company laid off a large part of it in blocks, town lots, streets, alleys, and parks; that the territory laid out had sufficient area to erect a large city; that the company had charts and maps printed, showing spaces set apart for various large manufacturing establishments, iron furnaces, spoke factories, etc., and laid off dummy lines and street railways, and did various other things to induce the belief by the public that a large and prosperous city would soon be built; that thereupon the company fraudulently gave out to the public that it could and would fulfill its promise, commenced the construction of a street-car line, long since abandoned, and which it has wholly failed to construct or operate; that it has partly constructed a dummy line; that only a few of the industries marked off on the charts have ever existed, except in imagination; that there has been partly constructed by other than the company, but never operated, one furnace and one steel plant; that it staked off and showed the public where it intended to build or procure the building of a large charcoal furnace, and procured the foundation to be laid, all of which was done for the fraudulent purpose of deceiving the public; that such maps were circulated in large numbers in this and other countries; and that the company, by its officers and agents, represented to the public, of which defendant was a part, and to defendant, and by printed prospectuses spread broadcast to the public, that many vast enterprises had been established, and secured to be established, in the city of Middlesborough, to wit, the Middlesborough Building & Investment Company, with a capital of $100,000, and 15 other named enterprises, the capital of each being stated in the petition; that defendant "was lured to the town of Middlesborough, and to purchase the property for which the notes sued on were given, by those advertisements and representations, and then induced to buy the property set up in the plaintiff's petition"; that he had now ascertained, and the information was then known by the company, that no such institutions as 10 of the institutions theretofore named in the answer, with any capital, had been procured to locate at Middlesborough; that three of the named institutions had a much less capital stock than had been represented, and that the representations in regard to each of said institutions were made with intent to defraud and deceive the public and the defendant; that one of the named institutions, the Cumberland Gap Charcoal Furnace, was commenced to be constructed for the fraudulent purpose of deceiving and inring the public into the belief that the company would comply with its representations, but that, soon after the defendant and others bought property, the work thereon ceased, and nothing further has been done towards its completion; that, prior to his purchase, the company, by its authorized agents, represented that the iron and steel works would be immediately constructed and pushed to completion as rapidly as could be done, and would give employment to about 7,000 men, but that none of such iron and steel works have been constructed or operated; that the company represented that the industries already secured to be located in Middlesborough would employ at least 12,000 men, and he relied upon these representations and statements, which were fraudulent; that none of the enterprises had been established, and that, by reason of such failure, the property is almost worthless, and not worth more than one-fifth of the amount sued for; that, if the representations had been true, Middlesborough would now be a city of 40,000 or 50,000 inhabitants, and the property purchased worth much more than was agreed to be paid; that the appellee is the successor of the town company, being the same company reorganized in a different name; and that it took the notes with knowledge of, and subject to, all existing defenses. He prayed that the notes should be canceled. In a second paragraph, reiterating the averments of the first paragraph, and averring that the matters and things set out in the first paragraph were to have been done in a reasonable time, which had expired, he prayed that the deeds to him be set aside, and that he recover $1,237.50, with interest, averring that he was an unmarried man, was such at the date of the execution of the deeds, and ever since, and that "he here tenders back to plaintiff any title or right to said lots he may have received by said deeds executed to him." He further averred that by reason of the failure of the town company to perform its agreements, and by reason of the false and fraudulent representations, he had been damaged in the sum of $1,237.50, with interest, and prayed judgment therefor. In the reply, all the affirmative averments of the answer were denied as to the representations and the failure to fulfill them; and it was pleaded affirmatively that a number of the enterprises mentioned had been established. The company further pleaded that it, in good

faith, undertook to build up the city, and to establish many large industries there, and did establish, and cause to be established, many such industries; that it attempted to establish many which had failed, and many which were established had, by reason of failure in business, ceased to exist; that, in doing this, it had expended great sums of money, in good faith, to build up the city, and for no other purpose, and that the failure of any enterprise was without any fault on its part, or that of its predecessor; that if any of the representations set forth as having been made by it were actually made, which it denied, or any of them were false or fraudulent, the defendant, for a long time prior to the filing of this suit and of his answer, had full knowledge of all the facts in regard thereto, and knew whether they were false or not, and, with full knowledge of the truth, made payments on the purchase; and this knowledge and laches upon appellant's part was pleaded as an estoppel of his right to claim anything by reason of the alleged representations. No rejoinder was filed to this reply. Appellee, before filing its reply, demurred to the answer and counterclaim, and also moved the court to require appellant to elect which cause of action he would prosecute by his counterclaim, whether for the rescission of contract or for damages. The court overruled both demurrer and motion. Upon final hearing, the court dismissed appellant's counterclaim, and gave judgment for appellee for the amount of its notes, and for the enforcement of its lien.

In the view we have taken of this case, it is unnecessary to consider the demurrer or the plea of estoppel. As was to be expected, the evidence is conflicting, and much irrelevant testimony has been introduced. The contract was made in October, 1889, and the evidence taken between four and five years thereafter. Testimony taken after such lapse of time is, in the nature of things, uncertain and unreliable; and especially is this true of testimony taken as to conversation and oral statements. General statements of belief, and of what is expected, under the influence of interest and desire, become distorted in the memory, and assume the proportions of definite statements of fact, or of solemn obligations to perform. On the other hand, such statements fade from the recollection of the persons making them, till not a trace remains. We can attach no very great degree of importance to such testimony, especially when, as in this case, the plaintiff claims to have relied on each and all of more than 66 representations which he avers were made, and were the inducements which led him to make his purchase, and but for which he claims he would not have made the investment. A great number of circulars, prospectuses, newspapers, and maps were filed with the depositions. All but three of them were issued subsequent to the date of the purchase, and, if admissible at all, are certainly not admissible as showing representations which induced appellant to buy.

A careful examination of the conflicting testimony has led us to the conclusion that the weight of the testimony as to the oral statements is in favor of the theory...