J. S. Curtiss & Co. v. White

PELPHREY, Chief Justice.

On April 22, 1931, appellee, who was then (he owner of 21 shares of stock in the Electrical Securities Corporation, delivered to appellant said stock at a valuation of $90 per share, and in turn appellant delivered to her 19 shares of stock of the Texas-Louisiana Power Company, valued at $98 per share; appellee receiving the difference in cash.

Appellee filed this suit on August 23, 1934, seeking to recover, from J. S. Cur-tiss & Co., Inc., the value of the Electrical Securities Corporation stock, which was alleged to be $2,000.

On December 17th of the same year, ap-pellee filed her third amended petition making John S. Curtiss individually a party defendant and praying for $4,000 exemplary damages in addition to the $2,000 actual damages previously prayed for.

As ground for the recovery of damages, appellee, in her original and amended petitions, alleged numerous false and fraudulent representations were .made to her as to the Texas-Louisiana Power Company and its stock by both John S. Curtiss and C. A. Collins, an employee of John S. Curtiss & Co., Inc., and in her second trial amendment she alleged that John S. Curtiss represented to her that the Texas-Louisiana Power Company stock was as good as could be found.

An issue as to whether such representation was made to appellee was submitted to the jury and answered in the affirmative. This was the only issue as to what representations were made.

The jury having found in response to special issues that the aforementioned representation was made; that the representations were false; that appellee did not know of its falsity; that she relied on the representation; that but for such representation she would not have purchased the Texas-Louisiana Power Company stock; that the market value of that stock on April 22, 1931, was $55; that appellee did not rely on her son’s judgment in making the purchase of the stock; that appellant represented to F. B. White, appellee’s son, that the stock was as good as could be found; that such representation was false; that he relied on such representation in making his recommendation to his mother; that he would not have recommended to his mother that she buy the stock but for such representation; that appellee did not know of the falsity of the representation before August 23, 1932; that she did not have information that would put her on inquiry as to its falsity on such date; that she did not have the knowledge by which a person of ordinary prudence could and would have ascertained its falsity before such date; that appellants made such representations willfully;. that appellee should recover exemplary damages in the sum of $1,000; that appellants knew of the falsity of the representation prior to April 22, 1931; and that the representation was made as a statement of fact — the court sustained in part the motion of appellant for a judgment non obstante veredicto and rendered judgment that appellee take nothing on her plea for exemplary damages, but that she recover from John S. Curtiss & Co., Inc., a corporation, and John S. Curtiss, individually, jointly and severally, the sum of $817, with interest at the rate of 6 per cent, per annum from April 22, 1931. Because the court refused to sustain their motion for judgment non obstante veredicto in toto, appellant has brought the cause to this court for review.

Opinion.

Appellant, in forty-two assignments and eleven propositions, complains of the judgment rendered against it, and contends that it should be reversed because a period of more than two years had elapsed between the discovery of the fraud and the filing of the suit; because the representations *1097made were mere expressions of opinion and therefore could not furnish a basis for an action for fraud; because the evidence was insufficient to support the jury’s finding that appellee did not rely upon the judgment' of her son in making the purchase of the stock; because appellee should not have been permitted to file her second and fourth trial amendments; and because the court improperly placed the burden upon appellant to prove that it did not make the 'representation complained of.

If, as claimed, more than two years had elapsed between the discovery of the fraud and the filing of suit, then we need go no further into the several questions presented.

The substance of the propositions touching this matter is that, in an action to recover damages for fraud, the statute of limitations begins to run when the fraud is discovered or could have been discovered by the use of reasonable diligence, and that'the failure of the Texas-Louisiana Power Company to pay dividends and the fact that it went into the hands of a receiver on January 2, 1932, were facts sufficient to put appellee upon inquiry as to whether the stock she had bought was’as it had been represented to her.

Appellee, in reply to such contention, does not question the correctness of the legal proposition advanced, but asserts that under the circumstances presented in this case it was a fact question whether the action was barred or not.

There is no contention made here that appellee had any actual knowledge of the falsity of the representations made to her until a short while before her suit was filed, but it is claimed that she had knowledge of facts more than two years before her suit was filed of such a character as to put her on inquiry, and that, if inquiry -had been made, she would have at that time learned of the fraud, that whatever knowledge the receiver had or which he had an opportunity to learn from an inspection of the books and accounts of the Texas-Louisiana Power Company was imputable to appellee, and that therefore she had knowledge of the falsity of the representations, as a matter of law, more than two years prior to the filing of suit. With these claims we- do not agree. Unless the evidence is such that reasonable minds may not differ as to its effect, the question as to whether a party has ‘ exercised diligence in discovering fraud or mistake is for the jury. 28 Tex. Jur. § 207, p. 301, and cases cited.

With the financial condition of the country being what it has been for the past six years, no court could say that a mere failure of the Texas-Louisiana Power Company to pay dividends would be sufficient notice, as a matter of law, that a representation as to its standing, even three months previous, was probably untrue, nor can it be said that the taking over of the business by a receiver in January, 1932, was, as a matter of law, sufficient notice of the condition of that business in April, 1931, to- put a person upon inquiry as to the truth of representations made to them at such time.

While it may be the rule that knowledge of the receiver is chargeable to creditors, such rule should and could not be made to include stockholders.

The only theory upon which the knowledge of the receiver is imputed to the creditors is upon the theory that he is their representative. There is no showing here that the receiver of the Texas-Louisiana Power Company was appointed upon the application of the stockholders and certainly there is nothing to indicate that, if such were true, appellee had any part in such proceeding. The assignments raising the question as to limitation are overruled.

Appellant also contends that the statement that “the stock was as good as could be found” was a mere expression of opinion rather than a statement of fact,- and therefore could not be made the basis of an action for fraud.

It is well established that circumstances may exist under which an expression of opinion may form the basis for a recovery for fraud.

Statements which might be classed as merely statements of opinion, if intended to be accepted as statements of fact, and falsely and fraudulently made, are actionable, the same as any other material representation inducing action by the opposite party, Doolen v. Hulsey (Tex.Civ.App.) 192 S.W. 364; Benton v. Kuykendall (Tex.Civ.App.) 160 S.W. 438; Ingram v. Abbott, 14 Tex.Civ.App. 583, 38 S.W. 626; and it has repeatedly been held that even an opinion expressed as to matters concerning which the truth is not equally *1098open to both parties, and the party making the statement should have foreseen that the other would rely and was justified in relying on his supposedly superi- or knowledge, it may be regarded as a statement of fact. 20 Tex.Jur. § 12, p. 24, and cases cited.

And, further, mere expressions of opinion by a person, made with a knowledge of their falsity and with the fraudulent intent to ■ induce the other party to act, are actionable. Houston v. Darnell Lumber Co. (Tex.Civ.App.) 146 S.W. 1061 (writ denied); White v. Peters (Tex.Civ.App.) 185 S.W. 659 (writ refused); Hawkins v. Wells, 17 Tex.Civ.App. 360, 43 S.W. 816 (writ denied).

In the case at bar we have the appellant, who was engaged in the business of buying and selling stocks and presumed to know something more than the ordinary person would as to their values, dealing with appellee, who had no knowledge of the value of such things except what she might have acquired from having owned some stock in the Electrical Securities Corporation. As between these people, the jury found that the statement made by appellant as to the quality of the stock they were exchanging with appellee was made' as a statement of fact, was false, and willfully made. These matters being within the province of the jury, their findings place the statement made within the rules above cited and therefore actionable.

This holding disposes of not only the assignments as to the sufficiency of the representations to constitute fraud, but also those as to the admission in evidence of the statements made by appellant- Cur-tiss and as to appellee’s right to rely upon such statements. Special issue. No..- 7, as submitted, reads: “Do you find fijom a preponderance of the evidence that the defendants did not represent to the plaintiff that the stock of the Texas-Louisiana Power Company was as good as could be found?”- •

This issue was objected to on the ground that there was no evidence to the effect that defendants had represented the stock was the best- investment that could be found and “because, it puts too great a .burden -upon the defendants.”

■Appellant now complains of the issue as placing^ the burden on- it when it should have been upon appellee. ' ;

The objection urged below, not pointing out the particular vice in the issue was too general to form the basis for the assignment here presented. 3 Tex.Jur. § 141, pp. 213, 214; McDonald v. Cartwright (Tex.Civ.App.) 72 S.W.(2d) 337; Sloan Lumber Co. v. Southern Ornamental Iron Works (Tex.Civ.App.) 66 S.W.(2d) 722; Chase Bag Co. v. Longoria (Tex.Civ.App.) 45 S.W.(2d) 242.

Furthermore, the submitting- of the issue with the burden on defendants in this special issue would probably not constitute reversible error in view of the fact that the same question was submitted with the burden on appellee in issue No. 1.

The matter of filing trial amendments is largely within the discretion of the trial court, and, finding no abuse of discretion which would justify reversal of the judgment, we overrule the assignment complaining of the court’s action in that regard. We are further of the opinion that the jury’s answers to special issues 8 and 9 are supported by the evidence.

Finding no reversible error, the judgment will be affirmed. •