
    Walter B. Hatch, Respondent, v. Ebenezer Spooner and Edward A. Spooner, Appellants.
    
      False representations—non-payment of dividends not evidence of insolvency — review of facts.
    
    Where an action is brought to recover damages for alleged false representations made by the defendants as to the value of certain stock, and the defendants at the close of the plaintiff’s case move to dismiss the complaint upon the ground that there is no evidence as to the truth or falsity of the representations in question, or that the defendants knew that the representations were false, and the motion is denied and the defendants except, the exception raises the question whether the plaintiff has given evidence from which the jury can find the facts necessary to establish a cause of action.
    There is no presumption either of fact or of law that a corporation is not making a profit merely because it does not declare a dividend.
    Where, in an action tried before the court and a jury, no order is entered upon a motion for a new trial, the appellate court cannot review the facts, and an appeal must be sustained, if at all, upon the exceptions taken at the trial.
    Appeal by the defendants, Ebenezer Spooner and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 2d day of June, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit.
    The notice of appeal states that an appeal was taken from an order denying the defendants’ motion for a new trial. No such order, however, appears in the printed case.
    
      Thomas MeAdam, for the appellants.
    
      Thomas Bracken, for the respondent.
   Rumsey, J.:

This was an action to recover damages alleged to have been sustained by the plaintiff because of false representations made to him by the defendants as to the value of certain stock which he was induced to purchase and which proved to be worthless. The action has been tried once before and a verdict rendered for the plaintiff. The judgment entered upon that verdict was reversed by the General Term for the reason that there was no evidence to sustain it. (Hatch v. Spooner, 37 N. Y. St. Repr. 151.) The appeal in that case was taken from an order denying a new trial, as well as from the judgment, and, therefore, the court was at liberty to review the facts. As the case is now presented no order was ever made upon the motion for a new trial. We are, therefore, not in a position to review the facts, and the appeal must be sustained, if at all, upon the exceptions taken at the trial. (Code Civ. Proc. § 1346 ; Third Ave. R. R. Co. v. Ebling, 100 N. Y. 98.) These exceptions, however, clearly raise the question whether there was any evidence upon which it was proper to submit the case to the jury, because at the close of the plaintiff’s evidence he moved to dismiss the complaint upon the grounds, among others, that there was no evidence as to the truth or falsity of the statements, or that the defendants knew that they were false. This motion was denied and the defendants excepted. By this motion the question was raised whether the plaintiff had given evidence from which the jury were at liberty to find the necessary facts to establish a cause of action. These facts wrnre, among others, that the representations made were false, and were known to be false by the defendants at the time they were made. The representation was substantially that the company was making ten per cent profit. That is the only fact stated upon which a verdict for the plaintiff could have been based. To establish the falsity of this representation the plaintiff proved in the first place that no> dividend was ever paid by the company. This, standing by itself,, was of comparatively slight importance. There is no presumption either of fact or of law that a corporation is not making a profit, merely because it does not declare a dividend. Ordinarily it may be that the corporation which is making money will declare dividends, but many reasons might be suggested why that should not be done, and, therefore, no presumption can arise, because it is not done, that there was no profit out of which a dividend might have been declared.

The plaintiff, however, sought to supplement this proof by showing that the company was in fact insolvent at the time that these representations were made. To prove that he offered in evidence a statement purporting to have been a statement of the business of the company for the year ending May 1, 1884. It appeared that during that year the defendants had been directors of the company, Edward Spooner being president and Ebenezer Spooner being actively engaged in the management of its affairs. The plaintiff identified the statement when it was offered, as the first statement which had ever been presented to him. There was no proof, however, from which it could have been found that the statement was taken from the books of the company ; that it was a true resume of the affairs of the company, or that either of the defendants had ever seen it or knew anything about it. When the statement was offered its reception was objected to and the defendants excepted to the ruling receiving it in evidence. Had it been received without objection, it was entirely immaterial as against the defendants. So far as they were concerned it proved nothing.

Hpon the other trial the treasurer of the company testified that the statement was a correct statement of the affairs of the company as shown by the books ; but upon this trial no such evidence was given. For this reason, the statement, when admitted, had no probative force as against these defendants.

There was, then, no testimony whatever competent as against the defendants, from which the jury could have found either that the representations were false, or that the defendants were aware of their falsity at the time they made them, and without such proof the judgment cannot be sustained.

The defendants excepted to the reception of this statement in evidence, because it was incompetent and immaterial. It is plain, from what has been said above, that this exception was well taken, and, standing by itself, it would be sufficient to require the reversal of bliis judgment.

For the reasons above given, without considering any other of the grounds of error relied upon by the defendants, the judgment must be reversed and a new trial granted, with costs to the appellants to abide the event of the action.

Yan Bbtjnt, P. J., Barrett, Williams and Ingraham, JJ., concurred.

Judgment reversed and new trial ordered, with costs to appellants to abide event.  