Frauds, Statute of, Representations concerning the credit of another. Evidence, Materiality, To show damages in action of deceit.
The requirement by Pub. Sts. c. 78, § 4, of a writing, to charge one upon a representation concerning the character or credit of another, applies only when the purpose of the representation is to enable the person recommended to obtain credit, money or goods.
An action can be maintained for oral misrepresentations made by an investment broker concerning the credit of a certain investment association in order to induce the plaintiff to place a sum of money in the defendant's hands for investment.
In an action for false representations of the defendant whereby the plaintiff was induced to place $5,000 in the defendant's hands for investment, it appeared, that the plaintiff intrusted the sum named to the defendant for investment and thereafter received from him certificates purporting to represent shares in an investment association. The plaintiff was allowed to testify that she received $20 in July, $100 in October and $100 the next January on her investment, and nothing more; also that she had endeavored in every manner to realize on her investment, by way of collection, without success. She was also allowed to testify, that thereafter the defendant advised her to employ a New York lawyer to compel one S. to return to her her money, this evidence being admitted to show an admission by the defendant as to the value of the certificates. Held, that, on the question of damages, it was competent for the plaintiff to show what she had paid the defendant and what she had received in return, and that the admission of the defendant was competent on the question of the value of the certificates.
LATHROP, J.
While there are many exceptions in this case, most of them depend upon the question whether the Pub. Sts. c. 78, § 4, apply to the facts which are disclosed by the plaintiff's testimony, or which the jury might have found to be the facts, if they believed the plaintiff's testimony rather than the evidence for the defendant. The statute in question was first passed in this Commonwealth in 1834, and has been in force ever since. St. 1834, c. 182, § 5. Rev. Sts. c. 74, § 3. Gen. Sts. c. 105, § 4. It appears in the Pub. Sts. c. 78, § 4, in these words: "No action shall be brought to charge a person upon or by reason of a representation 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 and signed by the party to be charged thereby, or by some person thereunto by him lawfully authorized."
The St. of 1834, contained the words "to the intent or purpose that such person may obtain credit, money or goods thereupon." These words were omitted in the Revised Statutes and the subsequent revisions; but it has always been held that the statute was to be construed as if these words still remained; and that the statute does not apply unless the intent or purpose of the representation is to enable a third person to obtain credit, money or goods by means of it. Medbury v. Watson, 6 Met. 246, 249. Norton v. Huxley, 13 Gray, 285, 287. Belcher v. Costello, 122 Mass. 189.
In the case at bar, the declaration does not proceed upon the ground that the false representations were made to enable the Lowell Rent Purchase Society to obtain the plaintiff's money, but upon the ground that they were made to induce the plaintiff to place the sum of $5,000 in the defendant's hands for investment. This distinction was carefully pointed out by the judge in his charge to the jury; and it was for the jury to say on all the evidence which view was correct.
The case of Wells v. Prince, 15 Gray, 562, relied upon by the defendant, is distinguishable from the case at bar by the fact that the representations alleged and relied upon in that case were made with the intent of inducing the plaintiffs to make a contract of insurance with a certain insurance company, so that the insurance company might obtain the money of the plaintiffs, as the premium for such insurance.
Another exception to the charge of the judge relates to the misrepresentation concerning the Lowell Rent Purchase Society, to the effect that it had been recently incorporated. It was admitted that there was no such corporation, but there was evidence that it was a voluntary association, though the testimony on this point was very indefinite, and it was a disputed question whether there was any voluntary society on June 22, when the plaintiff paid her money. The judge instructed the jury that the statute applied not only to an individual but to a corporation or to a society; that the statute did not apply to a thing which did not exist. This was repeated in several forms. The judge then said: "But a thing which does not exist, whether it was something represented as a person or a corporation or a society, if such a thing was not in existence, no such person in existence, no such organization in existence, of course it [the statute] cannot apply to it. . . . So that if the jury should find that no such corporation existed as the Lowell Rent Purchase Society, or did not exist at the time that the money was borrowed, an action may be brought to charge the defendant, in spite of this section of the statute, that is, would not preclude an action being brought for it." We are of opinion that taking this portion of the charge as a whole the judge did not intend to use the word "corporation" as meaning exclusively an incorporated body, and that the jury could not have been misled by what was said. If, however, a different construction is to be adopted, and the word "corporation" is to be limited to an incorporated body, we are still of opinion that the defendant has no ground of exception. According to the testimony of the plaintiff the representation was that the Lowell Society had recently been incorporated. This it was admitted was false.
The remaining exception relates to the admission of evidence on the question of damages. The plaintiff was allowed to testify that she received $20 in July, $100 in October, and $100 the next January on her investment, and nothing more; also that she had endeavored in every manner to realize on her investment, by way of collection, without success. She was also allowed to testify, that in April, 1899, the defendant advised her to employ a New York lawyer to compel one Stewart to return to her her money. This evidence was admitted as tending to show an admission by the defendant as to the value of the certificates.
There is nothing in the bill of exceptions to show that any request was made by the defendant in respect to the measure of damages, or what the ruling of the judge was upon this point, although the exceptions state at the end of the part of the charge which is given: "The foregoing is all of the charge which is material to the issues raised by this bill of exceptions." It must be assumed therefore that proper instructions were given on this point. It was clearly competent for the plaintiff to show what she had paid the defendant, and what she had received in return. The question of the value of the certificates does not rest alone upon the evidence objected to, but upon other evidence of admissions of the defendant; and that which was objected to was competent on the question of value.
Exceptions overruled.