Shine v. Dodge

Decision Date18 November 1931
Citation157 A. 318
PartiesSHINE v. DODGE.
CourtMaine Supreme Court

Exceptions from Superior Court, Androscoggin County.

Action by Julia Shine against Ruth B. Dodge. Exceptions by plaintiff to ruling of presiding justice sustaining demurrer to declaration.

Exception sustained.

Argued before PATTANGALL, C. J., and DUNN, STURGIS, BARNES, FARRINGTON, and THAXTER, JJ.

Frank A. Morey, of Lewiston, for plaintiff.

Clifford E. McGlauflin, of Portland, for defendant.

THAXTER, J.

This is an action of deceit based on alleged fraudulent representations in the sale of shares of stock. To the declaration, a general demurrer was filed by the defendant, and the case is before us on exceptions by the plaintiff to the ruling of the presiding justice sustaining the demurrer.

After setting forth the purchase of a substantial amount of stock of the Sagadahoc Fertilizer Company by the plaintiff of the defendant, the declaration avers that "as an inducement to the plaintiff to buy the aforesaid stock of the Sagadahoc Fertilizer Company, and with intent to deceive the plaintiff the defendant falsely represented to her that she would guarantee to her that she would get dividends on both the common and the preferred stock, and as a further inducement to the said plaintiff to purchase said stock, and with intent to deceive the plaintiff the said defendant falsely represented to her that the stock that the plaintiff herein owned in the Central Maine Power Company, amounting to over fifteen thousand dollars ($15,000) was not as good stock as that of the Sagadahoc Fertilizer Company; that the Sagadahoc Fertilizer Company was in good financial standing and that its stock was better than the stock of the Central Maine Power Company, and paid more dividends; and the said defendant with intent to deceive the plaintiff further falsely represented to the plaintiff, and as an inducement for her to buy said stock in the Sagadahoc Fertilizer Company, that she had forty thousand dollars ($40,000) of her own money in stock in the Sagadahoc Fertilizer Company and that she would not have put her forty thousand dollars ($40,000) into the stock of the Sagadahoc Fertilizer Company had she not known that it was all right, and that the said company was all right, and that it was sound financially."

The declaration then alleges that the stock purchased was in fact worthless, that the company was insolvent at the time the plaintiff bought the stock, and that the plaintiff relied on the false representations, and was deceived by them.

A purchaser, defrauded in a contract of sale, may elect one of two remedies. He may rescind the sale, and, in an action of assumpsit for money had and received, recover back the purchase price; or he may without rescission sue in tort for deceit. Carey v. Penney, 129 Me. 320,151 A. 667. In such case, the measure of his damages is the difference between the actual value of the property at the time of the purchase, and its value if it had been as represented. Wright v. Roach, 57 Me. 600; Mullen v. Eastern Trust & Banking Co., 108 Me. 498, 81 A. 948; Morse v. Hutchins, 102 Mass. 439. The plaintiff in this case, though his declaration contains several averments inapplicable to an action of deceit, did not rescind the contract of sale, and has elected to sue in tort and not in contract.

The essential elements of an action for deceit have been so often and so recently stated by this court that it is unnecessary to reiterate them. Allan v. Wescott, 115 Me. 180, 98 A. 630; Prince v. Brackett, Shaw & Lnnt Co., 125 Me. 31, 130 A. 509; Gilbert v. Dodge, 130 Me., 156 A. 891. The defendant's objection to the declaration is that it nowhere avers a misrepresentation by her of a material fact, but rather sets forth expressions of opinion by her as to the merits of the stock, or the breach of a promise by her to guarantee dividends on it in case of a default.

The allegation in the declaration that the defendant represented that she would guarantee the dividends on the stock is quite immaterial, for it is well settled in this state that the breach of a promise to do something in the future will not support an action of deceit, even though there may have been a preconceived intention not to perform. Albee v. LaRoux, 122 Me. 273, 119 A. 626.

It is likewise established that there is no liability in an action of deceit for a false statement of an opinion. Martin v. Jordan, 60 Me. 531; Holbrook v. Connor, 60 Me. 578, 11 Am. Rep. 212; Bourn v. Davis, 76 Me. 223; Clark v. Morrill, 128 Me. 79, 145 A. 744. Deceit is a specific term, and imports a false and fraudulent representation, which must not only influence the buyer's judgment in making the purchase, but also must relate to a fact which directly affects the value of the property sold. Albee v. LaRoux, supra. Thus a false statement as to the value of property is held to be merely an expression of opinion; and a false declaration of its cost is treated in the same category, because such fact is nothing more nor less than evidence of some one else's opinion of its value. Holbrook v. Connor, supra. On the other hand, a false statement to a purchaser of shares of stock of a corporation of the amount paid to the corporation for such stock is a misrepresentation of a fact affecting directly the value of the stock purchased, for it relates to the amount of cash assets in the treasury of the company. Coolidge v. Goddard, 77 Me. 578, 1 A. 831. Opinion as to value, the price paid for property, mere seller's talk, are regarded as collateral matters; they do not relate to facts affecting the value of property. In the words of this court, "the fraud or deceit relied upon must relate distinctly and directly to the contract, must affect its very essence and substance, and it must be material to the contract." Palmer v. Bell, 85 Me. 352, 354, 27 A. 250. Furthermore, an essential inquiry is, is the statement one on which a purchaser is justified in relying? If it consists of nothing more than dealer's talk, or if it is an averment of a fact and the person to whom it is made has equal means with the maker of knowing the truth, the rule of caveat emptor applies, and the one relying on it does so at his peril. Palmer v. Bell, supra; Bishop v. Small, 63 Me. 12.

The line between what is a statement of fact and of opinion is often shadowy. The ordinary rule is that the determination of that question and of the general materiality of the representation is for the court and not for the jury. Caswell v. Hunton, 87 Me. 277, 32 A. 899; Greenleaf v. Gerald, 94 Me. 91, 46 A. 799, 50 L. R A. 542, 80 Am. St. Rep. 377. But the precise form of the language is not always the controlling factor. The relationship of the parties or the opportunity afforded for investigation and the reliance, which one is thereby justified in placing on the statement of the other,...

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  • Clavet v. Dean
    • United States
    • Maine Superior Court
    • 8 Enero 2020
    ...own intention to do or not to do a particular thing is fraudulent if he does not have that intention[,]" overruling Shine v. Dodge, 130 Me. 440, 443, 157 A. 318, 319 (1931) and abrogating the old rule that promises of future performance are not actionable in fraud. Cianchette, 2019 ME 87, ¶......
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    ... ... opinion.'" Wildes v. Pens Unlimited Co., ... 389 A.2d 837, 840 (Me. 1978) (citing Shine v. Bodge, ... 130 Me. 440, 444., 157 A. 318, 319 (1931)). No such ... relationship is alleged here. [ 4 ] Therefore, were the ... ...
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    ...would be merely an expression of opinion.'" Wildes v. Pens Unlimited Co., 389 A.2d 837, 840 (Me. 1978) (citing Shine v. Bodge, 130 Me. 440, 444, 157 A. 318, 319 (1931)). No such relationship is alleged here.4 Therefore, were the Plaintiffs alleging only misrepresentation of future performan......
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    ... ... opinion.'" Wildes v. Pens Unlimited Co., ... 389 A.2d 837, 840 (Me. 1978) (citing Shine v. Bodge, ... 130 Me. 440, 444., 157 A. 318, 319 (1931)). No such ... relationship is alleged here. [ 4 ] Therefore, were the ... ...
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