Deceit. Frauds, Statute of. In an action of tort for deceit, if the plaintiff shows that the defendant with an intent to deceive the plaintiff made false representations for the purpose of inducing him to pay money for the benefit of the defendant and others, and that the plaintiff, relying upon these representations, made the alleged payments, the plaintiff is entitled to recover.
False representations as to the business and profits of a certain corporation, made to induce a person to become a stockholder in the corporation and to put money into the treasury of the corporation in payment for his stock, are not representations made to induce such person to enter into a transaction which will result in a debt due to him from a third person concerning whose character, conduct, credit, ability, trade or dealings the representations were made, and therefore are not within the provision of the statute of frauds contained in R.L.c. 74, § 4. Following Walker v. Russell, 186 Mass. 69.
In an action of tort for deceit it is not a defense for the defendant to show, in regard to false representations made by him on which the plaintiff relied to his loss, that the defendant used due diligence to ascertain the truth in regard to the matters which were stated by him as facts within his own knowledge, and that he believed the statements which he made to be true.
KNOWLTON, C.J.
The exceptions in this case are to the refusal of the judge to give to the jury certain instructions requested by the defendant.
The first request was for an instruction, "That the plaintiff upon all the evidence is not entitled to recover." This was rightly refused. There was much evidence that the defendant, with an intent to deceive the plaintiff, made false representations for the purpose of inducing him to pay money for the benefit of the defendant and others, and that the plaintiff, relying upon these representations, made the payments set forth in his declaration.
The fifth request was that "the defendant cannot be held for any damages to the plaintiff by reason of any dealings of the said plaintiff, or of the National Maple Sugar Company, which were not with or on account of the H.J. Blodgett Company." But the claim was for damages growing out of dealings with the defendant, William K. Blodgett, as an individual, which were witnessed in part by a contract in writing signed by the plaintiff as the party of the first part and by this defendant as the party of the second part, the making of which contract was induced by the false representations of this defendant.
The sixth, seventh and eleventh requests were to the effect that the defendant would not be liable for oral false representations which related to the assets and property of the H.J. Blodgett Company. These requests were founded upon the statute of frauds, R.L.c. 74, § 4, which provides that "No action shall be brought to charge a person upon or by reason of a misrepresentation or assurance made concerning the character, conduct, credit, ability, trade or dealings of any other person, unless such representation or assurance is made in writing," etc. This provision, which has been re-enacted from time to time, is founded upon the St. 1834, c. 182, § 5, which contains the words, "to the intent or purpose that such person may obtain credit, money or goods thereupon." It is established in a series of decisions that its meaning is the same as if these words had been retained in the revisions of the statutes. Medbury v. Watson, 6 Met. 246. Norton v. Huxley, 13 Gray, 285. Mann v. Blanchard, 2 Allen, 386. In the present case the representations were not made with an intent or purpose that the party concerning which the defendant was speaking should obtain credit, money or goods upon the representations. They were made to induce the plaintiff to become a stockholder in a corporation and to put in money in payment for his stock, which corporation was expected to succeed to the business of the H.J. Blodgett Company, concerning which a large part or all of the representations were made. The question is fully covered by the decision in Walker v. Russell, 186 Mass. 69, in which it was held that the statute applies only to representations made to induce the plaintiff to enter into a transaction which will result in a debt due to the plaintiff from a third person, concerning whose character, conduct, credit, ability, trade or dealings the representations were made.
The eighth request did not contain a true statement of the law. Due diligence to ascertain the truth in regard to statements made as of matters of fact within one's own knowledge is not enough to relieve the maker of them of liability, if they are false and are relied upon as true, and the person to whom they are made suffers loss thereby. Litchfield v. Hutchinson, 117 Mass. 195. Chatham Furnace Co. v. Moffatt, 147 Mass. 403. Montgomery Door Sash Co. v. Atlantic Lumber Co., ante, 144.
Exceptions overruled.