McAleer v. McMurray

The opinion of the court was delivered, February 27th 1868, by

Thompson, C. J.

Not á word of testimony appears to have been given by the plaintiff to show that he was induced to purchase any stock in the “ Olive Branch Oil Company,” by direct representations, true or untrue, by any person. This essential was attempted to be supplied by presumptions; one to stand as a postulate, and another as the inference. This is not admissible: Douglass v. Mitchell, 11 Casey 446; and is the substance of the ruling of Erie, C. J., in Common Bench in Wheelton v. Hardisty, 8 El. & Bl. 232. I cannot well conceive of a case where a presumption of fact can ever be drawn from presumptions of the same kind. The practical operation of the theory in this particular case is, that it is to be presumed that the plaintiff must have seen and inspected the certificate of organization of the company, either in the auditor-general’s or recorder’s office, and by its false presentation he is to be presumed to have been induced to purchase the stock in question. Neither one nor other of these propositions asserts a natural or even a very probable result. They are not such presumptions as to induce the belief that it would be most likely that the plaintiff would examine the certificate before purchasing. That would depend on many things — amongst others, the business habits of the man, and his convenient opportunity. The paper itself, if seen, would hardly, if in proper form, have held out any peculiarly lively inducements to buy. A much greater probability is, that the plaintiff purchased the oil stock because such stocks were just then in great demand. In . fact that is the only inference that can reasonably be drawn from the testimoqv of Riddle, his vendor. This shows that he simply wanted oil stock, and he sold him the stock, with some others, without inquiry by him in regard to the character of the company, or how its shares were going in market, or any representation in regard to it whatever. As he asked for Hubert oil stock, and not for Olive Branch, it does not appear that he knew of the existence of that company until that moment. He bought without inquiry. These facts show that the presumption of examination of the organization by plaintiff, if otherwise good for anything, would in this instance be very unreliable. But on this point it is well settled that the representations which will entitle a party to, recover on the groüñd~oi a deceirmust'be'bothmlse and iraiU “witiThis money: Huber v. Wilson, 11 Harris 178; Harris v. Tyson 12 Id. 347 Nothing like that was shown.

It is not intended to deny that a false and fraudulent advertisement, prospectus, or label; instances of which have been given, may not be such representations as may be the foundation of an action of deceit; but I do not believe that it has ever been held that a party may recover as for a deceit practised alone by such means, without it having been shown that he had seen the fraudulent instruments. The notice that our brother Sharswood took of the eases on this point in his opinion in deciding the reserved question, however, is a sufficient vindication of this position. In such cases the instrument., must not only be fraudulent in its representations^ but intended to defraud the plamtlfflir life plamactiorTas this. Testimony to this extent was entirely wanting in flnsTSase.

The other reserved question was sufficiently dealt with in the opinion of the learned president of the District Court. If the defendants, acting as agents for the corporation, purchased land at one price, and transferred it for a greater, to the company, this was a fraud on the company which it alone could redress. The allegation and proof of a purchase of the realty by the defendants at $12,500 in cash, and $3000 worth of stock, would not advance the plaintiff’s case. He did not connect his loss with this act, but with another cause, viz., that the land was not oil territory — had no oil on it. It was not on account of the realty as such he bought the stock, but because he presumed its product would make it valuable. In that he was mistaken. He is entitled to his proportion of the capital, and this he must get from the company. It must collect whatever is due to it, or has been wrongfully taken from it, in order to make distribution in winding up. If it can sue for this alleged fraud of its agents, the plaintiff cannot, and that it can admits of no doubt, and needs no authority to prove. Perhaps we ought to say that Mr. McMurray, one of the above-named defendants, was acquitted below of all blame, and any remarks in regard to the alleged fraua on the company by others of the defendants do not apply to- him; nor do we say there was intentional fraud on the part of the others; but if the facts are as stated, their acts operated as a fraud. Seeing nothing to correct, the judgment of the District Court is

Affirmed.