Rogers v. Rosenfeld

• Decision Date: 06 October 1914
• Citation: 158 Wis. 285,149 N.W. 33
• Parties: ROGERS v. ROSENFELD ET AL.
• Court: Wisconsin Supreme Court

158 Wis. 285

149 N.W. 33

ROGERS

v.ROSENFELD ET AL.

Supreme Court of Wisconsin.

Oct. 6, 1914.

Appeal from Circuit Court, Juneau County; James O'Neill, Judge.

Action by John Rogers against Robert T. Rosenfeld and others. Judgment for plaintiff, and defendants appeal. Affirmed.Daniel H. Grady, of Portage, and J. T. Dithmar, of El Roy, for appellants.

Grotophorst. Evans & Thomas, of Baraboa, for respondent.

TIMLIN, J.

This action was to recover damages for deceit in the sale of mining stock of the Tusas Peak Gold & Copper Mining Company. The plaintiff purchased the shares from the defendant Rosenfeld, and the defendant Barge aided Rosenfeld in making the sale. Three misrepresentations were charged. The first two were eliminated by somewhat doubtful rulings of the trial court in favor of the defendants, and the jury found upon the third as follows: (2) The defendant Rosenfeld, for the purpose of inducing the plaintiff to purchase the stock, represented to the plaintiff that there was ore enough on the dump at the mine to run a mill three to five years; that it was a good grade of ore, a high grade of ore; and that there was a half million dollars' worth of ore on the dump ready to mill. (3) This representation was not understood by the plaintiff as an expression of opinion. (4) The plaintiff was induced to purchase by reason of such representation. (5) Plaintiff relied on such representation in making the purchase of the stock. (6) Such representation was false and untrue. (7) Plaintiff's damages are $319.50. Similar findings were made by the jury with reference to the defendant Barge.

Errors are assigned: (1) In denying defendants' motion for a directed verdict; (2) in the admission and rejection of evidence; (3) in refusing to include in the special verdict questions requested by defendants; (4) in refusing requested instructions.

[1] In support of the first error, it is argued that the representations found to have been made were mere expressions of opinion; that there was no competent evidence of the falsity of such representations or of damages resulting therefrom; and that it appears affirmatively that the plaintiff did not, in making the purchase, rely upon these representations. But the sale of stock was made in Wisconsin. The alleged mine is in New Mexico. The defendant Rosenfeld was a large stockholder, and his brother was an officer thereof and participated in the management. The defendant Rosenfeld had recently returned from the mine, and the plaintiff never saw it, and had no reasonable opportunity for examination. There was no request for a question to be embodied in the verdict asking whether the defendant intended this statement as a mere expression of opinion or a statement of fact; hence we must presume a finding in support of the judgment that the representation was intended as a statement of fact. Section 2858m, Stats.

With reference to the evidence of untruth. In 1909, November 9th, as shown by the report of the president and secretary to the stockholders, the mine, which included the dump in question, was quite worthless. The defendant Rosenfeld signed this report as secretary, having since the sale in question taken that office. The same dump or ore pile was there at this time in 1909 as was there in 1906, when the representations were made and the shares sold. This dump was about 30 feet high and 30 by 60 feet at the base. In 1906 the corporation had a mill of 100 tons' daily capacity. According to the books of the corporation, the total amount of ore sold prior to 1909 was about $14. Defendant Rosenfeld testifies that there was a quantity of what he was told was ore on this dump, but he did not know the difference between ore and refuse, but he denies that he made the representation in question.

The appellants cite Morgan v. Hodge, 145 Wis. 143, 129 N. W. 1083,Jones v. Kinney, 146 Wis. 130, 131 N. W. 339, Ann. Cas. 1912C, 200,Burwash v. Ballou, 230 Ill. 34, 82 N. E. 355, 15 L. R. A. (N. S.) 409,Tuck v. Downing, 76 Ill. 71,Crocker v. Manley, 164 Ill. 282, 45 N. E. 577, 56 Am. St. Rep. 197, and other cases to support their contention that the representations found to have been made express mere matters of opinion, and are therefore nonactionable, while the respondent cites to the contrary Warner v. Benjamin, 89 Wis. 290, 62 N. W. 179,Barndt v. Frederick, 78 Wis. 1, 47 N. W. 6, 11 L. R. A. 199, and Brown v. Ocean Accident, etc., Corp., 153 Wis. 196, 140 N. W. 1112.

The representation here found by the jury to have been made may be compared to those held actionable in each of the cases last cited. It is often a close question whether a statement or representation put forward by the seller to induce a purchase is a statement of fact or the mere expression of an opinion, as the preceding cases amply show.

[2] It is quite apparent that the misrepresentation found by the jury to have been made in the instant case does not, at least in its entirety, take the form of an expression of opinion. “There was ore enough on the dump to run the mill five years,” and “it was a high grade of ore,” are statements of fact. “That there was half a million dollars' worth of ore on the dump ready to mill” is somewhat in the nature of an expression of opinion, but not clearly so, and when coming from a seller who was narrating what he had seen on the property to a buyer who never saw it, and had no reasonable opportunity to see it, must be considered a statement of fact. Besides this we may consider that:

“The mere fact that a statement takes the form of an expression of opinion, however, is not always conclusive. Whenever there is any doubt as to whether it is made as a mere expressionof opinion or as a statement of fact, the question must be determined by the jury or court.” J. H. Clark Co. v. Rice, 127 Wis. 431, 465, 106 N. W. 231, 236 (7 Ann. Cas. 505).

Here we have the fact found against the appellant by the verdict and the judgment. This finding rests upon evidence.

“It is generally held that where the property involved is situated at a distant place, and thus an inspection cannot be made without expense and inconvenience, and the prospective purchaser is ignorant of the facts, he may rely on the vendor's positive statements regarding the property, and may hold him liable, if they are false and fraudulent, even though they are representations of the value, quality, and condition of the property.” 20 Cyc. p. 58, and cases in notes 51 and 52.

We must hold that the representation found to have been made under the circumstances stated was, if false and if relied upon, an actionable misrepresentation.

[3] When it was shown that the same dump existed at the same mine in 1909, and that only $14 worth of ore had been shipped in the interim or had ever been shipped from the mine, and that the defendant Rosenfeld, as secretary of the corporation, reported the mine as worthless, coupled with proof tending to show that the property was abandoned, evidence was presented from which the jury was authorized to infer that the representation was false. The declaration of Rosenfeld against his interest was competent evidence against him. The corporation records and their competency as against the defendant Rosenfeld and the competency of both as against both defendants will be considered hereafter.

Where a mine is admitted to be worthless, this carries an admission that the dump, which is part of the mine, is worthless, and a mill situated upon or built as an adjunct to a worthless mine is usually worthless. At least the jury was authorized to find that the representation made in 1906 that there was a half a million dollars' worth of ore in this dump was untrue.

[4] As we understand the appellants, they contend that, even assuming this, there was no proof of plaintiff's damages. The difficulties which the appellants see in assessing damages are largely imaginary. Where the jury is furnished with evidence that the corporate assets are $500,000 less than represented, and a certain number, say 1,000,000, shares of stock of $1 each had been issued and were outstanding, and that the plaintiff bought in at 40 cents per share or at about $400,000 for the property, and there is further evidence that the property is worthless, it may be found, by a very easy computation, that the represented value was at least 50 cents per share, or $500,000, and the actual, real, or market value was nothing or was 5 cents per share, and the difference this would make on the number of shares bought by him constituted plaintiff's damages. The defendants could not complain under such a condition of the evidence, if the jury found damages in favor of the plaintiff of less than 50 cents per share.

[5] Cases are not dismissed, nor are judgments reversed merely because of difficulty in fixing accurately the amount of the damages. Treat v. Hiles, 81 Wis. 280, 50 N. W. 896. The fact that sales of shares had been actually made at or about the time of plaintiff's purchase for 40 or 50 cents per share was not more than countervailing evidence on the question of value, and was not at all conclusive on the jury. That is all that is necessary to decide in this case, but it should be noted that some of the cases go further:

“When the real pecuniary condition of the company is shown, from which it appears that the stock was worthless, the price at which it sold in New York or elsewhere is entitled to no weight upon the question of its value. The plaintiff * * * was under no obligation * * * to mitigate his loss by cheating some ignorant purchaser himself. The question is, what was the stock really worth at the time of purchase? not what it would sell for by practicing the deceptive arts resorted to * * * to inflate the price.” Hubbell v. Meigs, infra.

When we come to the consideration of appellants' points and arguments with reference to the admission of incompetent evidence, we must weigh this argument by considering all the issues presented by...