Holdom v. Ayer

Mr. Justice Scott delivered the opinion of the Court: It can not be contended in this court, as was done in the courts below, the verdict is against the weight of the evidence. That question is not open for consideration in this court. In passing upon the questions of law discussed, it will be assumed the verdict is warranted by the evidence. The point is made the court erred- in admitting and rejecting certain testimony on the trial, but the matters complained of in this respect are not of. enough importance to be the subject of any serious consideration. The merits of the case were hardly affected by the action of the court of which complaint is made, and the errors in that respect, if any existed, are too trivial to warrant a reversal of the judgment, if no other error shall be discovered. An instruction asked by defendant, and given by the court, in effect informed the jury that if defendant guaranteed the stock purchased by plaintiff, and that plaintiff, in making such purchase, relied upon such guaranty, and did not rely upon the representations, as charged in the declaration, the law is for defendant. The instruction, as formulated, states a correct principle of law. The declaration was not framed with a view to recover upon any guaranty as to the value of the stock, but upon deceitful representations as to its value. It is said there was no evidence on which to base such an instruction, and it was therefore error in the court to give it. The evidence contained in the record on this branch of the case has been examined, and it is seen it is sufficient to warrant the court in submitting that view of the law to the jury, as was done. But it is most confidently insisted the court erred in the modifications it made to instructions asked for on the part of plaintiff, and in giving such instructions after they were so modified. Plaintiff asked the court to instruct the jury, if they believe, from the evidence, defendant made representations as to the value of the shares of stock, or as to the extent, value and condition of the property of the mining company, which were false and untrue, and that plaintiff, relying upon such false and untrue statements, was induced to and did buy the stock, then the verdict should be for plaintiff. To all of the instructions in which this proposition is stated the court added, with reference to the alleged false representations, “known by him to be false,” or words implying the .same meaning, and it is that modification it is said was error. Narrowing the discussion to the case made by the declaration, it will be seen the modifications to plaintiff’s instructions were entirely proper, and' necessary to enable the jury to reach a correct conclusion. This is not a case like Allen v. Hart, 72 Ill. 104, where plaintiff rescinded the contract made with the vendor, on account of the fraud in procuring it, and brought an action against him to recover the consideration paid, and the principle of that and analogous cases can have no application to the case being considered. It will be observed it is not averred in the declaration in this case the stock purchased by plaintiff was bought of defendant. It was bought of the corporation, and it is averred plaintiff paid the money for the shares of stock to the company itself. Had defendant offered to rescind the contract which he alleges he made, on account of the fraud of one of the promoters of the corporation in obtaining it, and brought suit against the corporation itself, to recover the consideration paid for the shares of stock, a case more analogous with Allen v. Hart would have .been presented. The gist of the action against defendant is, that being a promoter and one of the original corporators of the company, he made false and untrue representations as to the value of the shares of capital stock of the corporation, and of the dividends to be declared, and as to the condition and value of the property of the company, upon which plaintiff relied in making the purchase of stock. The contract was not with defendant, and no money was paid to him for his personal benefit. The action is for deceit, in the strictest sense. In such cases it is not enough the representations' made by defendant were false,—they must have been “known by him to be false.” This point has been so often ruled in this court the question is not now open for discussion. In all actions like the one being considered, the holding is uniform that to warrant an action for deceit the false representations must have been knowingly made, with the intent to deceive.' The fraud and the scienter constitute the grounds of the action. Wheeler v. Randall, 48 Ill. 182; Hiner v. Richter, 51 id. 299; Merwin v. Arbuckle, 81 id. 501; Schwabacker v. Riddle, 99 id. 343; Mitchell v. Deeds, 49 id. 416. Other cases in this court declare the same doctrine. There was no error in modifying plaintiff’s instructions, as was done by the trial court, and the judgment of the Appellate Court will be affirmed. Judgment affirmed.