Pritchard v. Dailey

• Decision Date: 03 March 1915
• Docket Number: (No. 112.)
• Citation: 84 S.E. 392,168 N.C. 330
• Court: North Carolina Supreme Court
• Parties: PRITCHARD. v. DAILEY.

84 S.E. 392

168 N.C. 330

PRITCHARD.

v.DAILEY.

(No. 112.)

Supreme Court of North Carolina.

March 3, 1915.

Appeal from Superior Court, Bertie County; Bond, Judge.

Action by John L. Pritchard against J. W. Dailey. From a judgment for defendant, plaintiff appeals. Affirmed.

This is a civil action, tried upon these issues:

(1) Did J. L. Pritchard within time fixed by the paper writing signed by J. W. Dailey, copied in complaint, tender the certificate of stock and demand return of his $1,000 paid for the same? Answer: No.

(2) Did defendant, J. W. Dailey, by fraudulent or by false statements which he knew or should have known were false, cause and prevent J. L. Pritchard from surrendering said stock and demanding repayment of the $1,000 he had paid for same? Answer: No.

(3) If so, what damage is the plaintiff, J. L. Pritchard, entitled to recover of defendant, J. W. Dailey? Answer.

From the judgment rendered, the plaintiff appeals.

Winston & Matthews, of Windsor, for appellant.

Ward & Grimes, of Washington, N. C., for appellee.

BROWN, J. This action is brought to recover damages of defendant for fraud and deceit in selling to plaintiff ten shares of stock in the Southern Lime & Fertilizer Works of Washington, N. C. There was a corporation in said city called the Southern Lime Company, which was practically reorganized under the name of the Southern Lime & Fertilizer Company, and all of its property conveyed to the latter. The stockholders, officers, property, and business conducted were the same. This transpired before the transaction between the plaintiff and defendant.

In December, 1910, the defendant sold the plaintiff ten shares of stock in said corporation, for which the plaintiff paid $1,000. The defendant was secretary and treasurer of the corporation, and the stock was sold on behalf of the corporation, and payment for it made by check payable to him as such treasurer.

The certificate of stock sent to the plaintiff, accepted and retained by him, was the certificate of the Southern Lime & Fertilizer Works. The fact that in the conversations and correspondence between the plaintiff and defendant the corporation is called the Southern Lime Company is immaterial. The plaintiff knew, when he received his certificate and retained it, what the correct corporate name was.

Shortly after the agreement to purchase the stock, the plaintiff wrote the defendant, inclosing the following contract, and told him to sign it, or return his check, which bad been given the defendant:

"$1,000, December 26, 1910.

"On January 1, 1912, I agree to pay to John L. Pritchard the sum of one thousand dollars for ten shares of capital stock in the Southern Lime Company of Washington, North Carolina, provided said ten shares of capital stock be delivered to me on that day or not later than ten days thereafter. J. W. Dailey.

"George T. Hardy."

The defendant executed it, and returned it as demanded.

The plaintiff bases his right to recover upon two alleged causes of action: First, fraud and deceit of defendant in the original purchase of the stock; second, to recover on the contract of December 26th upon the ground that he was beguiled by the fraud and falsehoods of the defendant from tendering the stock and demanding a compliance within the stipulated period.

1. The plaintiff tendered the proper issues based on his first cause of action. His. honor declined to submit them. In this we think his honor committed no error, as thereis not sufficient evidence of fraud in order to avoid the original transaction upon that ground.

The material elements of fraud, a commission of which will justify the court in setting aside a contract or other transaction, are well settled: First, there must be a misrepresentation or concealment; second, an intention to deceive, or negligence in uttering falsehoods with the intent to influence the action of others; third, the misrepresentations must be calculated to deceive, and must actually deceive; and, fourth, the party complaining must have actually relied upon...