Proctor Trust Co. v. Upper Valley Press, Inc.
| Decision Date | 12 June 1979 |
| Docket Number | No. 210-78,210-78 |
| Citation | 405 A.2d 1221,137 Vt. 346 |
| Parties | PROCTOR TRUST COMPANY and Alfred R. Leblanc and Lyman Cousens, Counter-Defendants, v. UPPER VALLEY PRESS, INC., Charles F. Harris, Jr., and Margaret Carolyn Harris a/k/a Carolyn F. Harris and a/k/a Carol F. Harris. |
| Court | Vermont Supreme Court |
Crowley, Banse & Kenlan, Rutland, for plaintiff.
Stephen C. Walke, Jr., and Paterson, Gibson & Noble, Montpelier, for defendants.
Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.
This mortgage foreclosure action arises out of the purchase and sale of a printing business in Bradford. The Proctor Trust Company (the Bank) owned and operated the press during the time it was searching for a buyer, a period of eight months. The defendants purchased the business, claiming to have relied on two statements and projections of income, one prepared by Lyman Cousens, a former vice president of the Bank, who had left its employ at the time of the transaction, and the other by his successor, Alfred Leblanc. The evidence in the case is that these statements were highly misleading, being based on a period of untypically healthy cash flow, and making no adjustment for profitable business about to be lost.
The Bank brought its foreclosure action alleging that the defendants were in default on two mortgage notes in the total principal sum of $144,500 given in connection with the purchase and sale. The defendants counterclaimed, alleging fraud and deceit and two counts of breach of contract against the Bank and against the above named former and current officers as individuals. The two counterclaims alleging breach of contract were settled and dismissed by stipulation of the parties. V.R.C.P. 41(a)(1)(ii). The counterclaim alleging fraud and deceit was tried to a jury and resulted in a verdict for the defendants in the amount of $48,750 against the plaintiff bank alone. The trial court then issued a consolidated judgment granting plaintiff a decree of foreclosure but setting off against the principal amount due on the mortgage notes the amount of the defendants' verdict on their counterclaim. The court further reduced the amount due the plaintiff by the costs incurred by the defendants in taking depositions in connection with their counterclaim. The judgment included interest on the net amount due, but did not provide for attorney's fees to the plaintiff.
The plaintiff made a timely motion to set aside the defendants' verdict and, in the alternative, for a new trial, which the trial court subsequently denied. From the consolidated judgment, the plaintiff, with permission, 12 V.S.A. § 4601, appealed, and the defendants filed a cross-appeal.
The plaintiff and defendants claim that the trial court erred in several particulars. The plaintiff claims that the defendants' verdict is inconsistent, and that the evidence viewed in the light most favorable to the defendants cannot support the verdict, Weeks v. Burnor, 132 Vt. 603, 609, 326 A.2d 138, 141-42 (1974). Plaintiff also claims that the trial court erred in its computation of interest, in allowing the defendants costs on their counterclaim, in not allowing plaintiff attorney's fees, in not striking the testimony of an expert witness on behalf of the defendants, and in not granting the plaintiff a personal judgment against the defendants on the notes.
The defendants claim that the trial court erred in not instructing the jury as to the elements of constructive fraud as distinguished from actual fraud, and in not allowing the jury to consider punitive damages if it found actual fraud involved.
The trial court was without error in denying plaintiff's motion for judgment notwithstanding the verdict, since the plaintiff failed to renew at the close of all of the evidence its earlier motion for a directed verdict. V.R.C.P. 50(b); Palmisano v. Townsend, 136 Vt. 372, 375, 392 A.2d 393, 395 (1978); Houghton v. Leinwohl, 135 Vt. 380, 381-82, 376 A.2d 733, 735-36 (1977).
Upon review of the record, however, it appears that the trial court manifestly abused its discretion in denying plaintiff's motion for a new trial after judgment. Plaintiff's liability rests on the doctrine of respondeat superior, and a principal cannot be held liable unless at least one of its agents could be liable. The plaintiff can only act through its board of directors, officers, or agents. Johnson v. Hardware Mutual Casualty Co., 108 Vt. 269, 286, 187 A. 788, 796 (1936). In the case at bar, the defendants counterclaimed against the plaintiff, one former vice president, and one current vice president. The jury returned a verdict exonerating both officers but holding the bank liable. A judgment may stand against a principal and at the same time exonerate an agent provided there is evidence allowing the jury to find that some other agent, although not a named defendant, acted for the corporation. Waters v. Anthony, 256 Ala. 370, 372, 54 So.2d 589, 590-91 (1951). Thus if it were shown that Mr. Cousens and Mr. Leblanc believed in the accuracy of their figures and projections, but that other officers of the bank knew them to be wrong, the verdict against the Bank alone would be supported.
The defendants claim that there was evidence to show that both the board of directors and the president of the Bank participated in the alleged fraudulent activities, although not named as individual defendants. From a review of the record, it appears that, other than receiving figures on the actual monthly sales and expenses of the press, neither the board of directors nor the president had any knowledge of any projections or statements relative to future sales. Thus while the verdict is not inconsistent as a matter of law, there is no evidence in the record to support the liability of the Bank on the basis that any of its officers, aside from those exonerated by the jury verdict, participated in the alleged fraudulent activities. The plaintiff is entitled to a new trial.
Since this case must be remanded, we discuss each party's remaining claims of error for the guidance of the trial court. Plaintiff claims that the court erred when it instructed the jury that the expression of an opinion may be actionable fraud if made as part of a scheme to defraud. The plaintiff seasonably objected to this instruction. Normally, only representations of existing fact are actionable, and mere expressions of opinion cannot be the basis for an action of fraud. Batchelder v. Birchard Motors, Inc., 120 Vt. 429, 433, 144 A.2d 298, 300 (1958). In Harponola Co. v. Wilson, 96 Vt. 427, 120 A. 895 (1923), however, this Court held that promises are actionable if made as part of a scheme to defraud. This has become the well established law of this jurisdiction. See Fayette v. Ford Motor Credit Co., 129 Vt. 505, 510-11, 282 A.2d 840, 843-44 (1971) and cases cited therein.
We see no reason to distinguish in this regard between false promises and false opinions. Where there is a conscious scheme to defraud, more is involved than expressions of "mere" opinion. The allegations in this case are that agents of the plaintiff allowed representations to be made which they knew were extremely likely to turn out to be false, in order to induce a sale of the business. The defendants allege more particularly that plaintiff's agents permitted income projections to be made which they knew to be based on highly unreliable data in order to realize more than a fair price for the printing business.
If the defendants can sustain their allegation of a scheme to defraud, these opinions or projections will closely resemble misrepresentations of existing fact. Defendants' reliance on the projections of future income proceeded from the Bank's familiarity with the state of the press' business affairs. If the Bank knew as a fact that a good deal of profitable business was about to be lost, the projections, based on a constant or an increasing amount of profitable business, in effect misrepresented the present state of the press' affairs.
We thus hold that opinions are actionable where they are part of a scheme to defraud. This is consistent with the view taken by the Restatement of Torts § 525 (1938), which we quoted with approval in Fayette v. Ford Motor Credit...
To continue reading
Request your trial
-
Schaafsma v. Morin Vermont Corp.
...to plaintiffs about the fair value of the land might also have been found to be fraudulent. See Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 350-51, 405 A.2d 1221 (1979); Tetreault v. Campbell, 115 Vt. 369, 374-75, 61 A.2d 591 (1948). Because all of these representations were......
-
Greenmoss Builders, Inc. v. Dun & Bradstreet, Inc.
...motions for judgment notwithstanding the verdict as to these two issues were properly denied. Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 349, 405 A.2d 1221, 1223 (1979); Palmisano v. Townsend, 136 Vt. 372, 375, 392 A.2d 393, 395 (1978); Houghton v. Leinwohl, 135 Vt. 380, 38......
-
Winey v. William E. Dailey, Inc.
...that misrepresentation of the former can be fraud, but misrepresentation of the latter cannot. See Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 350, 405 A.2d 1221, 1224 (1979) ("mere expressions of opinion" cannot be basis for fraud This generalization is not, however, withou......
-
Repucci v. Lake Champagne Campground, Inc.
...In contrast, statements of opinion generally cannot form the basis of actions for fraud. See Proctor Trust Co. v. Upper Valley Press, Inc., 137 Vt. 346, 350-51, 405 A.2d 1221, 1224 (1979). The same can be said for actions based on negligent misrepresentation. See VNA Plus, Inc. v. Apria Hea......