Whitney v. Lynch

• Decision Date: 14 October 1915
• Citation: 222 Mass. 112,109 N.E. 826
• Parties: WHITNEY v. LYNCH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

222 Mass. 112

109 N.E. 826

WHITNEY

v.LYNCH.

Supreme Judicial Court of Massachusetts, Worcester.

Oct. 14, 1915.

Exceptions from Superior Court, Worcester County; Wm. F. Dana, Judge.

Action by Alice N. Whitney against Edwin W. Lynch. Verdict for plaintiff, and defendant excepted. Exceptions overruled in part and sustained in part.

W. C. Foley, D. A. Foley, and Taylor & Taylor, all of Worcester, for plaintiff.

Wm. C. Mellish and Raymond B. Fletcher, both of Worcester, for defendant.

DE COURCY, J.

There was ample evidence that the plaintiff bought from the defendant five shares of preferred stock of the Worcester Amusement Company, and that she was induced to do so by certain material representations of fact made by him. Among these was a statement that certain prominent Worcester business men, named by him, were heavy investors in the company, two of them having put in $5,000 each; an assertion that the company was practically financed and had substantially enough money to build the new theater; that the stock was selling very rapidly, and there was little left to be sold; and an assurance that the preferred stock was a first claim upon the property, and that in case of failure or liquidation she would get her money back, with 7 per cent. guaranteed interest. As matter of fact the business men referred to never paid anything for their stock, but it was given to them by the defendant. Instead of the enterprise being ‘practically financed’ at that time, October 18, 1910, the corporation had only a lease of the land with an option to purchase, there were mortgages on the property aggregating $125,000, and payment in full for the work done in September had not been made to the contractor, who later was obliged to take over the property. Of the $200,00 of preferred stock only 50 shares had been sold and paid for by the persons to whom the certificates were issued. It could be found that the defendant, who was president, treasurer and a director of the corporation, knew that these representations made by him were untrue; and the jury further could find that the stock for which the plaintiff paid $100 a share was of little or no value.

The foregoing disposes of the first ruling requested by the defendant. The fourth, fifth and sixth rulings singled out certain facts which counsel properly might emphasize in his argument to the jury, but which the judge rightly refused to embody in his impartial and accurate statement of the principles of law governing liability. The seventh ruling, as it appears in the record, is unintelligible, and is apparently incomplete. The ninth was rightly refused. The tenth so far as it relates to liability, and the eleventh were covered by the charge in a manner sufficiently favorable to the defendant.

On the issue of damages, however, the defendant was entitled to have the jury instructed in accordance with his eighth request. As the plaintiff retained her stock, the...