Rex Motor Car Mfg. Co. v. Dupont ( 1923 )

Cook, J.,

delivered the opinion of the court.

This is an appeal by the Bex Motor Car Manufacturing Company, a non-resident corporation in process of promotion, from a judgment of the circuit court of Pearl Biver county in a suit on a promissory note given by appellee for the purchase price of stock in the corporation. There was a verdict and judgment in favor of the defendant, and from this judgment this appeal was prosecuted.

To the declaration the appellee filed a plea of the general issue, and also a special plea, setting up, in substance, that he was fraudulently induced to purchase the stock for which the note was executed by reason of misrepresentations of material facts concerning such stock made by the agent and promoter of the corporation; that the said agent represented to him that the corporation was selling said stock in full compliance with the laws of the state of Mississippi; that said corporation would, on or before January 1, 1921, have manufactured and on the market a large number of automobiles; that said corporation had filed a surety bond witji the secretary of state at Jackson, Miss., guaranteeing that it would have the number of cars manufactured and in operation by January 21, 1921, and in the event it failed so to do, all money paid by persons purchasing stock would be returned to them or the said bond would be used to reimburse them; that all such representations were false and were fraudulently made; that appellee believed said representations and relied wholly upon them and on the faith and credit thereof purchased the stock.

At the trial the appellee testified to facts in support of the averments of his special plea, and therupon he offered two witnesses, who, over the repeated objections of appellant, were permitted to testify that various agents of the corporation, including the agent who had sold the stock to appellee, made the same or similar representations to them and thereby induced them to purchase stock of the corporation, and that these agents had entered into an agreement or arrangement with them to sell the cars when they were manufactured. These witnesses were permitted to testify in great detail as to statements and representations made to them by these agents. None of the representations made to these witnesses were communicated to or made in the presence of the appellee, and, on appeal, the admission of this testimony is assigned as error.

We think the admission of this testimony was manifest error. The witnesses were permitted to testify about' conversations with other agents of the corporation concerning contracts with which the appellee was in no way connected. None of the representations made'to these third parties were made in the .presence of or communicated to the appellee, and we think the admission of this testimony was highly prejudicial to the appellant, and that the error was not cured by an instruction granted to appellant that the appellee could hot avail himself as a defense to the suit of any statements made to other parties by the agent of the company which were not communicated to him or made in his presence and upon which he did not act in purchasing the stock.

The judgment of the court will therefore be reversed and the cause remanded.

Reversed and remanded.