Scoville v. Brock
| Citation | 81 Vt. 405,70 A. 1014 |
| Court | United States State Supreme Court of Vermont |
| Decision Date | 08 October 1908 |
| Parties | SCOVILLE v. BROCK. |
81 Vt. 405
SCOVILLE
v.
BROCK.
Supreme Court of Vermont. Washington.
Oct. 8, 1908.
Appeal In Chancery, Washington County; John W. Rowell, Chancellor.
Bill by William L. Scoville against James W. Brock. Decree of dismissal, and orator appeals. Affimied and remanded.
Argued before ROWELL, C. J., and TYLER, MUNSON, and WATSON, JJ.
Elbridge R. Anderson, Edward H. Deavitt, and Harry C. Shurtleff, for appellant.
Hunton & Stickney, for appellee.
MUNSON, J. When this case was last before us (79 Vt. 449, 65 Atl. 577, 118 Am. St. Rep. 975) It was remanded, that the report might be recommitted for the master to And "whether the defendant, in continuing to hold the securities, acted with fidelity, and with that measure of care and diligence that a prudent man would have exercised in the same circumstances." The finding is for the defendant, but the orator contests its validity on several grounds.
It is said that the mandate contemplated a further finding on the case as then made up, and that the taking of additional testimony was not authorized. The order of recommittal is not before us, but presumably it followed the mandate, and the terms of the mandate did not preclude an exercise of the master's discretion regarding the hearing. See Richardson v. Wright, 58 Vt. 367, 5 Atl. 287. It is said, however, in view of the circumstances and ground of the recommittal, that the mandate cannot be allowed the construction adopted by the master without doing the orator an injustice, and that the construction is therefore one that the court cannot have intended. But the first reception of evidence at the rehearing was on the orator's offer, and no objection was made to the taking of further testimony, nor was the report excepted to because based on the testimony so taken.
It is said that, when the allegations of the bill were examined on demurrer (76 Vt. 385, 57 Atl. 967), they were held sufficient to show that the securities the defendant received were not proper investments, and that it was his duty to sell them if a sale was feasible;
that the only question before the master on recommittal, if the mandate be given a construction consistent with that decision, was whether the defendant had any excuse for not selling; and that, inasmuch as the master has found that certain of the securities could have been sold above par without incurring personal liability, and had evidence before him from which he ought to have made the same finding regarding them all, his ultimate finding in exoneration of the defendant is beyond his authority. It is said, further, that, since the allegations then passed upon are now admitted by the answer, the record is the same on the merits as on the demurrer, and requires the same decision. These claims are not justified by the scope of the former adjudication. The point of that decision was that the defendant could not be excused from the exercise of ordinary care in disposing of securities which had a marketable value, but were in fact worthless, on the ground that, if he had ascertained the facts, he could not have effected a sale without committing a fraud. It was not necessary to determine just what knowledge was chargeable to the defendant on the pleadings, nor whether that knowledge was such as charged him with the duty of selling.
It is urged that the conclusion of the master is inconsistent with a conclusive admission contained in the answer. This claim is based on a consideration of the admission in connection with certain reported facts. It was alleged, in substance, in the first paragraph of the first amended bill, that the securities were in fact worthless, that it was widely believed at the places where the companies were located that they were fraudulently organized and conducted, and that if the defendant had gone to these places and made an investigation he would have been satisfied, as a man of ordinary prudence, that the investments were unsafe. The defendant, in his amended answer, admitted in general terms the allegations of this paragraph. It now appears that the defendant visited Pioux City while he was holding the securities, and went to the office of the Loan & Trust Company, and inquired how the company was getting along. The master reports that in reaching his conclusion he treated the admission as conclusive of the facts alleged, but not as conclusive of the ultimate fact to be determined. The orator's argument is this: The defendant admits that, if he had gone to Sioux City and inquired as to the standing of the Loan & Trust Company, he would have ascertained its condition. The master finds that he did go to Sioux City and make the inquiry. So he must either have ascertained the facts, or been negligent in his investigation. Upon this reasoning, the fact that the defendant visited Sioux City gives to the admission an effect at variance with the master's conclusion. The question is whether the orator is entitled to have the admission given a conclusive effect as regards the ultimate fact.
We think the orator's argument is without substantial basis. The allegation of what the defendant would have discovered is not the allegation of a matter of fact, but of a matter of opinion or speculation. It cannot be said that the existence to a considerable extent in the community generally of the unfavorable belief was something which one making a diligent inquiry on the ground must necessarily have discovered. The admission of an allegation of this nature cannot convert the matter alleged into a positive and conclusive fact. Moreover, the matter alleged, if it be treated as a fact, is but one of several elements to be considered in determining the question submitted. The defendant might have learned of the unfavorable views entertained by a portion of the community, and still have become satisfied on reasonable grounds that the company was solvent and well managed. The final...
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