Righter v. Parry

109 A. 917, 266 Pa. 373, 1920 Pa. LEXIS 577
CourtSupreme Court of Pennsylvania
DecidedFebruary 23, 1920
DocketAppeal, No. 120
StatusPublished
Cited by4 cases

This text of 109 A. 917 (Righter v. Parry) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Righter v. Parry, 109 A. 917, 266 Pa. 373, 1920 Pa. LEXIS 577 (Pa. 1920).

Opinion

Opinion by

Mr. Justice Simpson,

Defendant was president, director and majority stockholder of the Righter-Parry Lumber Company, and plaintiff was secretary, treasurer, director and minority stockholder thereof. On March 8, 1909, at a special meeting of the stockholders, defendant elected others to the offices held by plaintiff, served notice upon him to keep away from the place of business of the company, and thereafter denied him all information in regard to its affairs. The litigation which followed was settled by an agreement dated June 25, 1909, providing that a dividend of $75,000 be declared by the stockholders of the company^ payable out of its unconverted assets selected by defendant, the whole amount of said dividend, on the majority and minority shares alike, to be paid to him, in consideration whereof he agreed to transfer all the majority shares to plaintiff. In this agreement defendant represented that the accounts, set forth in an attached “ ‘statement as of June 22, 1909,’ appear on the books of the company as due and owing by the several parties thereto, and neither the Righter-Parry Lumber Company nor the said Charles K. Parry have discharged the same nor any part thereof.”

The agreement was carried out, but afterwards plaintiff brought the present action of deceit, alleging that defendant, in order to induce plaintiff to make the settlement, had knowingly made thirty-five false and fraudulent statements in regard to the assets and liabilities of the company. At the trial the court below held the evidence was insufficient to justify the allegations as to [375]*375twenty of them, bnt submitted to tbe jury that wbicb related to the other fifteen, at tbe same time refusing defendant’s point for binding instructions. A verdict was rendered for plaintiff, a motion for judgment non obstante veredicto was dismissed, judgment was entered on tbe verdict and defendant now appeals.

Tbe first fourteen assignments wbicb allege error in overruling defendant’s motions to strike out tbe evidence relating to fourteen of tbe allegations of fraud, violate our rules in that they do not quote tbe motions made or tbe rulings of tbe court thereon. We have, however, considered each of tbem, and tbe evidence relating thereto, and are of opinion tbe issues thus raised were properly submitted to tbe jury. It would swell this opinion to an inordinate length, and answer no good purpose, to specify in detail all tbe evidence relating to each assignment. It is sufficient to say that, — with tbe exception of tbe D. M. McColl account, and tbe prepaid freight account, hereinafter to be considered separately, —they each fall into one of tbe following classes: (a) Where tbe amount due was in dispute, and tbe debtor sent to defendant a check or promissory note, in settlement of tbe account, and defendant received and used it, yet kept upon tbe books tbe apparent balance as an indebtedness due to tbe company; or (b) Where customers refused to receive lumber shipped to tbem, and defendant took it back, yet left upon tbe books, as apparent claims against tbe customers, tbe profits wbicb would have accrued bad they accepted and paid for tbe lumber; or (c) Where tbe price of lumber sold was paid to defendant personally, or to tbe company, yet no credit therefor was entered on tbe books-; or (d) Where defendant actually settled with tbe debtor but did not enter this fact upon tbe books. According to plaintiff’s testimony, each of tbe foregoing matters occurred while defendant was in sole control of tbe business, no information was given to plaintiff in regard thereto, and tbe amounts, thus apparently but not actually due by tbe [376]*376debtors of the company, formed part of the gross sum due by “Customers $62,089.94,” set forth in the account attached to the agreement of settlement.

So far as the D. M. McColl account is concerned, plaintiff’s evidence showed the following: It was part of defendant’s contribution to the corporation at its organization in 1904, stock being issued to him for it. During the next four years efforts were made to collect it, but as this was not found possible, the parties agreed, while still together, that it should be eliminated from the assets of the company, and accordingly it was transferred back to defendant. After plaintiff’s exclusion from all connection with the business, and while negotiations for settlement were pending, defendant put the account back on the ledger, and when the settlement was made it was included in the alleged gross sum due by customers. Defendant did not inform plaintiff of this fact, and thereafter nothing could be collected on the claim.

So far as the prepaid freight account is concerned, it appeared from plaintiff’s evidence that, while defendant was in charge of the business, certain freight bills, which the company had to pay on customers’ accounts in advance of shipment of lumber to them, had been refunded to the company, but no part thereof was credited on the books, thereby also swelling the apparent assets which plaintiff was to get under the agreement.

It was strongly urged by defendant that the evidence in relation to the foregoing items at most showed mistakes, was not incompatible with innocence, and hence deceit would not lie. This can hardly be said of the evidence as to the D. M. McColl account. Moreover, as the fact might fairly be otherwise, the case was one for the jury as to each item, and so it was submitted to them in a charge to which defendant makes no objection, save as to the refusal of his point for binding instructions. Like JEsop’s “bundle of sticks,” the strength of plaintiff’s case rests in the fact that the evidence is to be considered as [377]*377a whole, and is a series of such transactions, each resulting in loss to him. This being so, proof of falsity in regard to a material fact relating to each item of claim, with circumstances from which an intention to defraud may be found, justifies the jury in finding it (Griswold v. Gebbie, 126 Pa. 353), a rule as applicable to the suppression thereof as to falsity in assertion: Boyd v. Browne, 6 Pa. 310; Rheem v. Naugatuck Wheel Co., 33 Pa. 358.

In Stauffer v. Young, 39 Pa. 455, 460-1, in speaking of cases of this kind, and of the sound discretion to be exercised by the trial judge in giving wide latitude to the proof, we said: “And when this has been done, and the jury have found the fraud, we always expect to hear it argued here that this and that piece of evidence was incompetent to establish it, and should not have been admitted — one circumstance was too remote to furnish any inference, another was too trifling, and another was calculated to mislead the jury away from the real issue. It is always added that fraud is not to be presumed, and must be proved......[But] A guilty deed, like any other fact, may be inferentially established. Almost all human knowledge rests in inferences from proofs. The fact that a fraud has been committed is not an exception, but may be proved in the same manner. Nor has the author of a fraud any right to complain of the latitude of proofs which the law allows, for it is a universal truth, that the more thoroughly an honest transaction is investigated, the more honest will it appear......True, the jury may have been misled, but he is bound to show that very clearly. If there was evidence, from which a jury might reasonably have inferred the fraud, we are to presume they based their verdict on that evidence, even though other facts were in proof which were irrelevant.

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Bluebook (online)
109 A. 917, 266 Pa. 373, 1920 Pa. LEXIS 577, Counsel Stack Legal Research, https://law.counselstack.com/opinion/righter-v-parry-pa-1920.