Palmer v. Shields

Crow, J. This action was commenced by Margaret Palmer against B. F. Shields, C. F. Shields, and William H. Liven-good, to recover the difference between the alleged value of stock which she sold to or through defendants, and the price paid by them. Plaintiff’s stock consisted of 3,200 shares, of the par value of one dollar each, in the Spokane Grain Company, a corporation organized under the laws of this state, with its principal place of business in the city of Seattle. The defendants were stockholders and officers of the corporation, in charge of its business and affairs. Plaintiff in substance alleged that, on August 14, 1907, the stock which she then sold to or through the defendants for $3,200 was of the actual valué of $10,000; that she was inexperienced in and unused to business transactions, a fact well known to the defendants ; that they confederated and conspired to take advantage of her and secure the stock for much less than its actual value; that they falsely represented to her that the [464] corporation was in immediate danger of insolvency and liable to go into the hands of a receiver; that they stated she would not receive ten cents on the dollar unless she then sold her stock for $3,200; that they represented the assets of the corporation as insufficient to cause her to realize more than $3,200; that these representations were false and fraudulent; that the corporation was not then in danger of insolvency; that there was no probability of a.receivership; that in fact it had assets of sufficient value over and above its liabilities to give plaintiff’s stock a value of $10,000; that plaintiff, relying on the false and fraudulent representations thus made, was thereby induced' to sell, and did sell, her stock for $3,200, and that she has been damaged in the sum of $7,000. The answer consisted of denials only. At the close of plaintiff’s evidence, the trial judge entered a nonsuit and dismissed the action. The plaintiff has .appealed. The controlling question before us is whether the trial court erred in sustaining respondent’s motions for a nonsuit. The appellant sold her stock on August 14, 1907, for $3,200. There is no evidence showing any dealing or negotiations between her and the respondents C. F. Shields and William H. Livengood or any representations by them. There can be no question but that as to them the nonsuit was properly granted. The only evidence introduced by appellant to show false and fraudulent representations as the basis of her claim was directed against the respondent B. F. Shields. After a careful examination of such evidence, we conclude it is insufficient to sustain any recovery against him. The theory of appellant’s case is that she was fraudulently deceived by the representations of the respondent B. F. Shields as to the financial condition of the corporation; that, relying upon such representations, she made the sale, and that the stock was of the actual value of $10,000. In order that appellant may recover, it devolves upon her to show that the alleged representations were made; that they related to or assumed to state existing facts, that they were not expressions of opinion [465] only, that they were false, that she believed them to be true, that she relied and acted upon them, and that she was damaged thereby. We find that the appellant has failed to meet these requirements. Her evidence shows that she did not believe the statements and representations which she contends were made by the respondent B. F. Shields. She testified that, before acting upon his statements, she employed an attorney to investigate the affairs of the corporation and advise her; that the attorney had every opportunity to make such an investigation; that he was not denied access to the books or records of the corporation; that he advised appellant to sell her stock for $3,200; that she then made the sale; and that she did not make it until after she obtained his advice. It further appears from appellant’s statements that, for nearly three years after the sale which was made on August 14, 1907, she made no complaint; that she did not commence this action until August 12, 1910, and that she made no demand upon respondents or the corporation prior to its commencement. The only evidence she produced to show the value of the stock consisted of certain trial balances and financial statements of the corporation, which were made prior to and shortly after the sale. A number of these statements had been delivered to her regularly as a stockholder, some of them a short time prior to the sale, and had remained in her possession or control until the date of the trial. All statements and trial balances made prior to the sale were subject to the examination and inspection of her attorney, and none of them differ materially from the trial balances made after the sale. If they were sufficient evidence at the trial to show that the stock had a value of $10,000 when sold, they were also sufficient evidence to show that fact before the sale was made and at the time when they were subject to the inspection of her attorney. The record indicates that, in the latter part of the year 1907, during a financial panic which prevailed throughout this country, appellant was anxious to sell her stock; and that she did sell it upon the advice of her [466] own attorney. If she was deceived or misled, which we do not believe, it was the fault of her attorney and not of the respondents or any of them. The judgment is affirmed. Mount, C. J., Paekee, Gose, and Chadwick, JJ., concur.'