Coolidge v. Goddard

Peters, C. J. In February, 1882, an electric light company was formed in Portland, with two thousand shares, of a par 'value of one hundred dollars each share, making two hundred '¡thousand dollars of capital stock. The plaintiff was the president of the company, its principal manager, and the owner of a majority of its stock. In June, 1882, he contracted to sell to the defendant five shares for five hundred dollars. At that time ■there had been taken or purchased from the company four hundred and ten shares and the money therefor paid into its treasury, one thousand five hundred and ninety shares remaining unsold, and the company had voted to sell no more. When the plaintiff made the sale to the defendant, he represented that he was selling to him at the same price which all others had paid who were interested in the stock. ■ Paid to whom ? It must have been to the company, the seller [581] of the stock. The clear and irresistible implication of this positive assertion was that the company had forty-one thousand dollars in its hands. The defendant was undoubtedly induced to believe that the company had a working capital of one hundred times as many dollars as it had issued shares. The statement amounted to a representation to that effect. But the company had only about one-third of that amount of working capital or of money. The defendant, instead of getting stock which represented about one-eightieth of the working assets of the company, got stock which represented only one-two hundred and fortieth of such assets. Was not this an assertion of an important fact? Suppose that nothing had been paid in, but that the stock, as is sometimes the case in those speculations, had been given by the company to the holders. In such case, what would the defendant have got for his money? Suppose the plaintiff had said to defendant, " I will sell you five shares for five hundred dollars, but all others received their shares at the rate of one-third as much.” Would the defendant have purchased? The plaintiff voluntarily and artfully represented the working assets of the company to be forty-one thousand dollars; they were only about fourteen thousand dollars. To be sure, it may be said that the defendant was not told how many shares had been issued. The answer to that is that he undoubtedly supposed, if he did not know, and would have a right to suppose, that some substantial amount of capital had been paid in. It is urged in extenuation by the plaintiff that the defendant offered himself as a purchaser. The affirmation complained of is none the truer on that account. Undoubtedly the case is near the line which marks the distinction between actionable and non-actionablo representations. However near to it, the facts place the plaintiff' upon the wrong side. It is often a narrow line which separates right from wrong. We feel well assured that the requested instruction, or its. equivalent, should have been given. The learned judge evidently had not at the moment in mind the distinction between what the-plaintiff had paid, and what the company had actually received,, [582] for the stock. In any view, there was at least a question for (the jury. We think that the exceptions and the motion should be sustained. Sharp v. Ponce, 74 Maine, 470. Motion and exceptions sustained. Walton, Virgin, Libbet, Foster and Haskell, JJ., •concurred.