Maturo v. Gerard
Decision Date | 02 July 1985 |
Citation | 196 Conn. 584,494 A.2d 1199 |
Parties | Dominic MATURO, et al., v. Edward J. GERARD, et al. |
Court | Connecticut Supreme Court |
James M.S. Ullman, Meriden, for appellants (defendants).
Herbert Watstein, Bristol, with whom were William Wynne, Bridgeport, and, on the brief, Julia T. Bradley, New Haven, for appellees (plaintiffs).
Before PETERS, C.J., and ARTHUR H. HEALEY, SHEA, DANNEHY and SANTANIELLO, JJ.
This case is an action brought in two counts: (1) to recover monies paid by the plaintiffs to the named defendant, Edward Gerard, obtained by him through fraud and misrepresentation, and (2) to set aside as fraudulent a conveyance of the family real estate by the named defendant, to the codefendant, Helen Gerard, his wife. From a judgment granting relief to all the plaintiffs but one 1 on both counts rendered by Hon. Roman J. Lexton, state trial referee, the defendants have appealed.
The trial court could reasonably have found the following facts, which are set forth in the memorandum of decision. The defendant, Edward J. Gerard, 2 became employed in 1971 by two partners, Dolce and Rhinehart, (hereinafter referred to as Dolce) as a salesman and messenger. His job was to collect delinquent accounts. About three months later, he became a full time salesman. He was instructed to persuade people to invest money in what Dolce represented to be his present and contemplated business enterprises. The representation was that if each participant would invest a given amount in a lump sum, the return, payable in installments over time, would yield a substantial profit. The defendant received a salary plus a commission on every dollar invested in the Dolce enterprises. Dolce instructed him on how to conduct himself and what to say, and told him always specifically to represent himself as an agent for Dolce.
At this time, Dolce and Rhinehart owned and were operating two small food co-ops and were renting a small warehouse in connection with the merchandise for the co-ops. Dolce claimed ownership of or contemplated ownership in warehouses, a golf course, a fast food franchise, several mini plazas, a car wash, a car-load of antifreeze bought for a "financial killing," and an advertising enterprise. The defendant was instructed to use these various holdings in his sales pitch and he did make use of them while inducing individuals to invest money in Dolce's "enterprises" which, in fact, aside from the co-ops and warehouse, did not exist. He made said claims to potential investors recklessly and on an unreasonable and groundless belief in their truth. At all times, the defendant represented that he was acting only as an agent for Dolce.
In spite of the aforementioned factors, the defendant made unqualified endorsements of Dolce and the phantom investment prospects, telling the plaintiffs that Dolce was a fine, honest man who offered these investment opportunities in order to help the working people. He further represented that Dolce was a genius with great goals, that his deals would pay much higher interest than a bank, and that the investments were stable and perfectly safe. Inducements were paid to investors for procuring new prospects and the defendant continually encouraged the plaintiffs to reinvest, always assuring them that things were going well.
Subsequently, in July, 1974, the entire scheme showed signs of failure. Dolce attempted to placate his investors by issuing dividend checks which were postdated to November 1, 1974. The Dolce checks given to the investors in July, 1974, were dishonored in November, 1974, and Dolce declared bankruptcy. The defendant then gratuitously transferred his interest in the family real estate to his wife.
The trial court rendered judgment in favor of all plaintiffs except Frances Maturo to recover money damages as against the defendant Edward while holding for the defendant Helen on the first count. The court further rendered judgment in favor of all the plaintiffs except Frances Maturo on the second count, and set aside the conveyance of the real estate by the defendant to his wife, declaring it null and void and subject to attachments effected therein.
The defendants raise three claims on appeal, alleging that the trial court erred in finding (1) that the defendant Edward Gerard was guilty of fraudulent misrepresentation, (2) that the plaintiffs justifiably relied upon his representation, and (3) that the defendant's transfer of real estate to his wife was a fraudulent conveyance. We find no error.
The defendants' first claim is that the trial court erred in finding the defendant Edward guilty of fraudulent misrepresentation since he was acting for a disclosed principal and was personally unaware of any fraud.
Miller v. Appleby, 183 Conn. 51, 54-55, 438 A.2d 811 (1981).
Hathaway v. Bornmann, 137 Conn. 322, 324, 77 A.2d 91 (1950). The trier of facts is the judge of the credibility of the testimony and of the weight to be accorded it. See DeLuca v. C.W. Blakeslee & Sons, Inc., 174 Conn. 535, 547, 391 A.2d 170 (1978); see, e.g., Marko v. Stop & Shop, Inc., 169 Conn. 550, 555, 364 A.2d 217 (1975); Yale University v. New Haven, 169 Conn. 454, 463, 363 A.2d 1108 (1975). The trial court found that the defendant, acting as agent for Dolce, represented to the plaintiffs that they were, in fact, investing in a number of profitable enterprises which were enumerated and specifically identified. Most of the enumerated business ventures did not exist. The defendant took no action to identify their authenticity and made claims to potential investors recklessly and on an unreasonable and groundless belief in their truth. He made representations with the purpose of inducing the plaintiffs to act upon them. Miller v. Appleby, supra, 183 Conn., 56, 438 A.2d 811. In considering the defendant's personal liability for his statements, it matters not that these representations were made by the defendant in the course of his agency relationship so long as the defendant can be said to have made them in circumstances under which he was chargeable with knowledge of their falsity. "Where ... an agent ... commits or participates in the commission of a tort, whether or not he acts on behalf of his principal ... he is liable to third persons injured thereby." Scribner v. O'Brien, Inc., 169 Conn. 389, 404, 363 A.2d 160 (1975). Under the circumstances of this case, the trial court could justifiably find that the defendant was guilty of fraudulent misrepresentation...
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