Brandow v. Whitney

Department No 2, Sharpstein, J. The gravamen of the complaint is, that the plaintiff was induced by the fraudulent representations of the defendants, all of whom were stockholders, and six of them Trustees, of the Virginia Silver Mining Company, to purchase the stock of that corporation, which he alleges was worthless. He alleges that the representation which induced him to purchase said stock [586]was that the above named corporation " had purchased a certain mill and mines from an Indiana corporation, and was the. absolute owner thereof, and that the certificates of stock (which he purchased) did in fact represent the said mill and mines so purchased.”

We are unable to find in the transcript any evidence which tends to prove that any of the defendants, except defendant Bailey, made any representations whatever to the plaintiff. The plaintiff testified on the trial, and the nearest approach that he made to inculpating any of the other defendants, is in his statement that he casually met defendant McDonald on the street, and told him that he, plaintiff,. “ understood Mr. Bailey that there was a consolidation of the Virginia and Big Smoky Mill Mine,” and McDonald replied, that “that was his understanding of it.”

It is unnecessary to point out the discrepancy between this statement and that above quoted from the complaint. Plaintiff’s counsel admits, in his brief, “That there is some evidence tending to show that Whitney and McDonald acted in good faith.” If there is any tending to prove that they did not, it has escaped our observation.

Defendant Bailey, according to the testimony of the plaintiff, told him, on two or more occasions, that there was a consolidation of the two corporations. Bailey so said in response to questions asked him by the plaintiff. Bailey did not state, nor did plaintiff inquire, what the terms of the consolidation were. This is a brief but fair statement of all the testimony introduced by the plaintiff to sustain the allegation of his complaint, that the defendants represented that the Virginia Silver Mining Company had purchased the mill and mines of the Indiana corporation, and was the absolute owner thereof. As this and all the other allegations of the complaint, which charge that the defendants made false representations, are denied in their answer, the inadequacy of the evidence in this respect is sufficiently apparent.

But the evidence shows that there was, at the time when plaintiff purchased his stock, a contract of sale and purchase between the two corporations. One of the terms of the sale was,