Redding v. Wright
| Decision Date | 18 April 1892 |
| Citation | 51 N.W. 1056,49 Minn. 322 |
| Parties | Marguerite B. Redding v. Charles A. Wright and another |
| Court | Minnesota Supreme Court |
Appeal by defendants, William A. Godwin and Charles A. Wright, from an order of the District Court of Hennepin County, Canty, J made July 13, 1891, refusing a new trial.
Frank P. Redding brought this action against the above-named defendants to recover $ 4,000 damages sustained by him from their false and fraudulent representations regarding the financial condition of the Minneapolis Milk Association whereby he was induced to buy of defendant Godwin thirty shares of its stock. Redding departed this life on September 8, 1889, and his widow, Marguerite B. Redding, was appointed administratrix of his estate, and substituted as plaintiff in the action in his stead. The issues were first tried in December, 1890, when plaintiff had a verdict for $ 1,900 against both defendants. That verdict was set aside, and a new trial granted. Redding v. Godwin, 44 Minn. 355.
The second trial was had February 10, 1891. The plaintiff gave evidence tending to prove that defendant Godwin, on August 1 1888, employed Wm. G. Wilson, a real-estate man, to find a purchaser for his stock in the corporation; told him it was A No. 1, and the business was paying over and above expenses $ 18 a day, and was free of debt and incumbrance. Wilson saw Redding, who was a railroad contractor, and told him what Godwin had said, and arranged a meeting between them, when Godwin said the same things in substance to Redding. Then defendant Wright came in, and Godwin introduced him to Redding, and told Wright what he had said to Redding about the corporation and its stock. Wright then said to Redding "Yes, sir; those are the facts." Wright was then secretary and treasurer of the corporation. The two defendants met Redding August 11, 1888, at Wilson's office, in Kasota Block, Minneapolis, to complete the sale when Redding told them he would close the deal if the corporation was in the condition they stated. Godwin said it was, and asked Wright, in Redding's presence, if it was so, when Wright said it was. Redding then bought the stock, took the certificates, and gave $ 1,090 cash, a horse and buggy at $ 200, and deeded to one Rollins, on Godwin's request, eight lots in Saunder's Park for $ 1,715, subject to mortgages of record.
In the mean time Wilson and Redding had been out to the plant of the Milk Association and looked it over. While there, Godwin told them that, if Redding wanted to know the condition of the corporation, the bookkeeper would show him the books then or at any time he would appoint, and would tell him anything about the business that he wanted to know, but neither Redding nor Wilson looked at the books or asked the bookkeeper anything. Redding said he was no bookkeeper and did not understand them.
On this second trial plaintiff offered in evidence the account books of the corporation to show its insolvency, and the falsity of defendant's representations. Defendants objected to receiving anything entered in them later than August 11, 1888, the day Godwin sold the stock. The court overruled the objection, and they excepted. The books were received in evidence, showing its business down to September 20, 1888. On that day the corporation made a general assignment of all its property, under Laws 1881, ch. 148, and also made a schedule of its assets and of its liabilities, and filed it, as required by 1878 G. S. ch. 41, § 24, showing its condition at the date of the assignment. This was offered in evidence, but defendants objected to its reception. The court admitted it in evidence as a list of the property without the values, saying neither the title of the paper nor its verification nor anything but the list of property will be regarded in evidence. To this ruling defendants excepted. Exhibit "D" was a statement made by the bookkeeper from the books of the corporation showing its debts and credits some time after the sale to Redding.
Defendants produced one E. R. Ide as an expert witness in the milk business, and in manufacturing, buying, and selling butter, cheese, and other dairy products. He testified that he examined the plant and business of the Minneapolis Milk Association about May 1, 1888; spent two hours in doing it. Defendants then offered to show by this witness the amount and value of the plant and business at that time, saying they would further show that the property and its condition and value remained the same down to August 11, 1888, when Redding purchased. Plaintiff objected, and the court excluded the evidence, saying: "I don't think that a two-hours examination would enable him to tell anything about the amount or extent of the business." The defendants excepted to the ruling.
The defendants requested the court to charge the jury as follows:
6th. The plaintiff alleges that there was a conspiracy entered into between the defendants to defraud the plaintiff's intestate, by a sale to him of the stock in question. In order to establish such conspiracy it is necessary for plaintiff to establish by a preponderance of evidence some agreement or understanding, before the transfer, between the defendants, to make such sale; and, unless you do find such conspiracy, representations made by one defendant could not be considered, to establish a liability of the other defendant, and without such conspiracy the knowledge or intent of either defendant cannot be considered by the jury as affecting the liability of the other defendant.
The court refused to give this charge, and defendants excepted to the refusal. The jury returned a verdict for plaintiff against both defendants, and assessed the damages at $ 2,163.67. The defendants made a case containing exceptions, and it was settled, signed and filed. On it and the other files they moved June 27, 1891, for a new trial, for errors of law occurring at the trial. The motion was denied, and they appealed.
Order reversed.
Weed Munro, for appellant Wright.
Gilger & Harrison, for appellant Godwin.
Frank P. Redding died after the commencement of this action, and the defendants were not permitted, under 1878 G. S. ch. 73, § 8, to deny the conversations with Redding testified to by Wilson and Alden, nor to state the conversation either of them had with him. Defendant Godwin denied that he had ever told Wilson that the association stock was "A No. 1," or that its business was in a flourishing condition, making $ 18 per day, and denied that he told Wilson anything testified to by him.
This court held, in effect, on the former appeal of this case, (44 Minn. 355,) that entries after August 11, 1888, in the records of the corporation, were not evidence against defendants. The books were admitted without limit as to time; they were in for all purposes and for all times mentioned therein, and these particular books were taken to the jury room and examined by the jury without restraint. The books were not admissible, and their admission could not have been other than detrimental to defendants.
This court held in this case, on the former appeal, that the fact of assignment and the files therein were immaterial and inadmissible. Yet the assignment schedule was admitted in evidence, evidently for the purpose of bringing before the jury the fact of the assignment, and that the inventory was made by witness in his official capacity as assignee. When once before the jury for any purpose it was before them for all there was in the instrument, notwithstanding the limitations placed upon it by the court.
Mr. Ide was an important witness for defendants as to the value of the plant; he was the only one they could offer upon that point who was not at that time subject to suspicion of prejudice, because the other witnesses as to value were parties to a similar suit, -- that of Alden v. Wright, 47 Minn. 225. He had examined the plant, and yet, with full knowledge of it and of all the testimony upon which others had based their estimates of value, he was not permitted to testify, because no sufficient foundation had been laid. Poland v. Brownell, 131 Mass. 138.
One object of defendants' sixth request to charge was to distinctly instruct the jury that the acts, statements, knowledge, or intent of one defendant would not affect the liability of the other, unless it were found that there was a conspiracy between them. It was important that the jury should so understand this well-settled principle; otherwise they might have believed that if one defendant made the representations the other would be liable, although no conspiracy were shown. Hathaway v. Brown, 18 Minn. 414, (Gil. 373;) Hopkins v. Stuart, 39 Minn. 90; Brinkley v. Platt, 40 Md. 529.
The evidence as to opportunities for investigation was not disputed. Redding was at the creamery every day, examined some of the books, talked with the employes, saw all that there was to be seen. Godwin had told him that the bookkeeper would make for him any statement he desired of the assets and liabilities. Hence, supposing the alleged misrepresentations were made, Redding must be deemed to have known they were false, and therefore he could not recover. Representations of a vendor, known by the vendee to be false, cannot amount to a fraud. Anderson v. Burnett, 5 How. (Miss.) 165; 1 Story, Eq. Jur. § 202; 2 Pom. Eq. Jur. § 893; Ely v. Stewart, 2 Md. 408.
All the authorities hold that the facts must be such that the vendee may rely upon the statements made to him without imputation of negligence. Savage v. Stevens, 126 Mass. 207; Grinnell, Deceit, pp. 49, 50; Brown v. Leach, 107 Mass. 364; Salem India Rubber Co. v. Adams, 23 Pick. 256; Rockafellow v. Baker, 41 Pa. 319.
In general, the court should give an...
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