Smith v. Duffy

Supreme Court of New Jersey

Smith v. Duffy

32 A. 371, 57 N.J.L. 679, 28 Vroom 679, 1895 N.J. LEXIS 49

CourtSupreme Court of New Jersey

DecidedMarch 15, 1895

StatusPublished

Cited by10 cases

This text of 32 A. 371 (Smith v. Duffy) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Smith v. Duffy, 32 A. 371, 57 N.J.L. 679, 28 Vroom 679, 1895 N.J. LEXIS 49 (N.J. 1895).

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Opinion

The opinion of the court was delivered by

Dixon, J.

In cases of this character, the true rule of damages is that the wrongdoer must answer for those results, injurious to the other party, which should be presumed to, have been within his contemplation at the time of the commission of the fraud. Crater v. Binninger, 4 Vroom 513; Smith v. Bolles, 132 U. S. 125.

We think it clear in the present case that the defendant must have expected, when he made his fraudulent representation, that the plaintiff would probably retain the stock so long as he believed the representation to be true. The plaintiff did so retain'it until the. company failed, and during all that time the deceit practiced upon him was effective in controlling his conduct. The loss, therefore, actually resulting from the fraud, and which must be presumed to have been within the contemplation of the defendant, was the difference between the plaintiff’s investment and the value of the stock after the fraud ceased to be operative — that is, after the failure of the company. In the ascertainment of this difference, the market price of the stock at the time of the sale, or during the year succeeding, or at any time 'before the failure, was of no importance.

The ruling of the trial court was correct, and. the judgment should be affirmed.

For affirmance — The Chancellor, Dixon, Garrison, Lippincott, Mague, Reed, Boqert, Brown. 8.

For reversal — The Chief" Justice, Gummere, Van Syckel, Sims. 4.

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The opinion of the court was delivered by

Dixon, J.

In cases of this character, the true rule of damages is that the wrongdoer must answer for those results, injurious to the other party, which should be presumed to, have been within his contemplation at the time of the commission of the fraud. Crater v. Binninger, 4 Vroom 513; Smith v. Bolles, 132 U. S. 125.

We think it clear in the present case that the defendant must have expected, when he made his fraudulent representation, that the plaintiff would probably retain the stock so long as he believed the representation to be true. The plaintiff did so retain'it until the. company failed, and during all that time the deceit practiced upon him was effective in controlling his conduct. The loss, therefore, actually resulting from the fraud, and which must be presumed to have been within the contemplation of the defendant, was the difference between the plaintiff’s investment and the value of the stock after the fraud ceased to be operative — that is, after the failure of the company. In the ascertainment of this difference, the market price of the stock at the time of the sale, or during the year succeeding, or at any time 'before the failure, was of no importance.

The ruling of the trial court was correct, and. the judgment should be affirmed.

For affirmance — The Chancellor, Dixon, Garrison, Lippincott, Mague, Reed, Boqert, Brown. 8.

For reversal — The Chief" Justice, Gummere, Van Syckel, Sims. 4.

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Bluebook (online)

32 A. 371, 57 N.J.L. 679, 28 Vroom 679, 1895 N.J. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-duffy-nj-1895.

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