
    CHARLESTON
    Burkheimer v. Blake et al.
    
    Submitted January 16, 1912.
    Decided October 22, 1912.
    
      Fraud — Fraudulent Representations — Sale of Merchandise.
    
    The judgment below, in an action on the case for damages sustained hy plaintiff by the fraud and deceit of defendants, in obtaining from him a stock of goods and merchandise, is supported by the evidence, and is affirmed on familiar legal principles.
    Error to Circuit Court, Cabell County.
    Action, by William M. Burkheimer, Jr., against A. G. Blake and another. Judgment for plaintiff, and defendants bring error.
    
      Affirmed.
    
    
      Vinson & Thompson and Marcum & Marcum, for plaintiff in error.
    
      Switzer & Wiatt and Holt & Duncan, for defendants in error
   Millee, Judge:

In an action for .damages against Blake and Bromley for alleged fraud and deceit plaintiff recovered a verdict and judgment for three thousand dollars, and defendant Blake complains of that judgment.

The declaration, in substance, charges that plaintiff being the owner of a stock of merchandise in the City of Huntington, of the value of thirteen thousand dollars, defendants fraudulently combined and confederated to cheat and defraud him, and pursuant thereto solicited plaintiff to sell them his stock of goods upon the terms that an inventory thereof should be taken, the value ascertained, a discount of twenty per cent, deducted therefrom, and that Bromley should purchase and take three thousand dollars worth of the goods, and pay therefor by his individual notes, one for one thousand dollars at four months, and one for two thousand dollars at six months from date, and should pledge to plaintiff as collateral security therefor two twenty year guaranty gold trust bonds of the Realty Banking •& Trust Company, of the face value of one thousand dollars ■each, and that the defendant Blake should take the remainder of the goods, and pay therefor in cash and notes. That in furtherance oE their fraudulent purposes, defendants falsely and fraudulently represented to plaintiff that they intended to form a co-partnership, of which Bromley was to be general manager, that Bromley was financially responsible; and that the bonds ■of the Realty Banking & Trust Company were genuine and valuable and would furnish ample security for the payment of his notes; that James W. Hughes of Huntington, who was financially responsible, was indebted to Bromley fifteen hundred dollars, which woiild fall due at or about the time of the maturity of the first note and out of which Bromley would pay the same.

It is further alleged that these representations were wholly false, and known by defendants to be false when made, and that they were made for the purpose of obtaining three thousand dollars worth of goods from plaintiff upon the worthless notes and securities of Bromley, and when acquired to turn them over to'Blake for a small or no consideration, and without just compensation to plaintiff; that plaintiff being ignorant of the falsity of said representations, believed them to be true and relied thereon, and was thereby induced to accept said proposition, and that between the 2nd and 12th days of February, 1909, sold and delivered said goods to defendants, and accepted the notes and collateral securities of Bromley for his share of the goods, and from Blake the notes and cash agreed to be paid by him for the goods he agreed to take, and that in consummation of the fraud and conspiracy Bromley immediately turned over to his confederate Blake his interest in the goods,, the latter paying him for his services three hundred dollars.

It is also alleged that Bromley, at the time of his purchase,, was and still is insolvent, and that his notes, past due at the-time of the suit, and the bonds given as collateral security, are without value, and that plaintiff had been defrauded and cheated out of three thousand dollars worth of his goods as aforesaid, and for which he asks damages.

Briefly stated, the alleged fraudulent representations were,, that defendants proposed to form a co-partnership, of which Bromley was to be general manager; second, that Bromley was1 financially responsible, and that the bonds of the Bealty Banking & Trust Company were genuine and valuable and ample ■security for the payment of Bromley’s notes; third, that Hughes-was indebted to Bromley fifteen hundred dollars, maturing when the first note of Bromley would mature and out of which that note would be paid.

On the trial below the contract between the parties was-proven to have been in writing, substantially as alleged in the declaration, but this contract contains no reference to any co-partnership to be formed, except what may be inferred from the character of the purchase, and contains no representations, as to the value or genuineness of-the bonds of the Bealty Banking & Trust Company, nor any reference to the alleged indebtedness of Hughes to Bromley, or that Bromley expected' or would out of that indebtedness make payment of the first note, and the last paragraph of said contract is: “It is further' understood and agreed that these are two separate and distinct sales, and that said Blake shall be in no way responsible for the purchase made by Bromley, and said Bromley in no way responsible for the goods purchased by said A. G-. Blake.”

The trial was had in the court below on the issue joined cm the plea of not guilty by both defendants, but Blake alone has assigned error in this Court.

It is contended here on Blake’s behalf that there is no proof of the fraud and conspiracy alleged, and that the evidence wholly fails to establish that the several alleged false representations were in fact made, or if made, that they were in fact false, or made to induce plaintiff to part with his goods, or that plaintiff relied thereon, or that any fraud was committed.

We will consider these alleged false representations in the order named, with the evidence bearing thereon, keeping in mind the charge that the ultimate objects of defendants were to procure the goods purchased in the name of Bromley for the benefit of Blake, without just compensation, and to defraud plaintiff.

First, as to the proposed partnership. Burkheimer alone swears that such representation was made. Bromley, whom plaintiff made 'his witness, was not asked and did not testify, either on direct or cross examination, that either he or Blake represented-to plaintiff that a partnership was to be formed by the purchasers. Blake did not testify in the case. Besides Burkheimer’s evidence, the character of the purchase was such as to imply a proposed partnership; at least there was nothing in the singleness of the purchases described in the contract to negative the positive testimony of Burkheimer, and as neither Bromley nor Blake denied the positive evidence of Burkheimer, the jury had the right to believe Burkheimer and find accordingly.

But if false, was the representation material? We think it was material in this, that as Burkheimer was to part with three thousand dollars worth of goods to Bromley, with only two thousand dollars of bonds as collateral, he would naturally rely on the interest Bromley was to acquire in the partnership as additional security for the payment of his notes. If Burkheimer had known, as Bromley admits in his testimony, that he was acting for Blake and intended immediately on obtaining possession of the goods to turn over his interest therein to Blake for one hundred and fifty, not three hundred dollars, as he swears he did, and that Blake was to get the goods, for which Bromley had obligated himself to pay three thousand dollars, for this nominal consideration, he evidently would not have made the sale to Bromley. We think the jury had the right to conclude from all the evidence that there was fraud and collusion in this representation and that the plaintiff relied thereon, and was damaged thereby.

Second, as to the Realty Banking & Trust Company bonds: Did defendants falsely represent them to be genuine and valuable, and did plaintiff rely upon this representation? Plaintiff so swears, and Bromley does not distinctly deny that such representation was made, but he qualifies his tacit admission, as a witness for plaintiff, by saying, that he gave it as his opinion that the bonds were genuine and valuable, but that he told the plaintiff he could investigate the bonds for himself, and that he turned them over to him for that purpose. Burkheimer admits that he took the bonds to his banker, who consulted the blue book, and gave it as his opinion from information derived from the book that the bonds were good. Burkheimer admits also that before he concluded' the contract and parted with his goods a message of inquiry was sent to the Bealty Banking & Trust Company, the principal in the bond, at Washington, D. C., and that he received a reply that the bonds were 0. K. He still insists, however, that he relied upon the representations of the defendants. But the question remains, was the representation false? No witness swears that the bonds were not genuine and valuable. Plaintiff relies mainly on a volunteer statement of his own, made on cross examination, not responsive •of the question, and which was objected to at the time. He was being interrogated about a conversation with Mr. Hughes regarding the alleged indebtedness of Hughes to Bromley, and he was asked when this interview took place; he answered, that "It was along about the 12th and 2nd day of February, some where along about that time, may be a little later when I found out that the bonds were ivorthlessPlaintiff had not testified previously, on direct or cross examination, that he had found out that the bonds were worthless. The time he mentions was .about the time he was consulting his banker and got the telegram, which was dated February 10th, assuring him the bonds were all right. The home of this bond company seems to have been in Washington, D. C. If the bonds were worthless that fact could easily have been shown, and it ought to have been shown, and not left to mere inference, as the record of this case has left it. There is, however, some evidence in the case of a discrediting character. Hambriek, the broker, through whom these bonds were obtained corroborates Bromley, that three hundred dollars was to be paid for the use of these bonds; that they did not belong to Bromley, but were only loaned to him, and he swears, that of the three hundred dollars raised by Bromley on a note of Blake to pay for the use of the bonds, but one hundred and seventy-five dollars was paid to him, the rest being retained by Bromley for some purposes of his own. Brom-ley swears he did not get the bonds directly from Hambriek, but from two other persons to whom Hambriek had previously pledged them for small sums of money borrowed, which were adjusted or paid, when he obtained the bonds. Who was to get the three hundred dollars premium for the use of the bonds does not ■ appear. Presumably the company thus lending its credit would be entitled to the premium. But if the telegram of the company to Burkheimer was genuine, it recognized the right of Bromley to the bonds and to dispose of them to Burk-heimer, as he did, and who still has them. What the value of these bonds is, is not otherwise shown. The jury could hardly have found from all the eivdence that they were not genuine and valueless, or that the representations respecting them were false.

Third, as to the indebtedness of Hughes. The plaintiff is the only witness who swears to this representation. He is flatly contradicted by his witness Bromley. But if the representation was made, and made the basis of credit, and was relied oh by the plaintiff, it does not clearly appear that the representation was false. An attempt was made to prove the falsity of the representation by plaintiff himself. He testifies that he saw Hughes and asked him about the matter, and places the time between the 2nd and the 12th of February, but he does not pretend to swear what Hughes said about the matter, and the question is left in that indefinite and uncertain state. The only other evidence relating to the subject, or on which the jury may have inferred that Hughes was not indebted to Bromlejq is the latter’s admission on the witness stand, that he was only worth at the time of the trade from one hundred and fifty to two hundred dollars. Why 'he was not examined specifically about this Hughes indebtedness, we cannot understand. It is almost certain, however, that if Bromley was worth only one hundred and fifty to two hundred dollars at the time of his purchase from Burkheimer, Hughes could uot have been indebted to him fifteen hundred dollars.

An absorbing fact, however, in connection with this whole transaction, and which must have been uppermost in the minds of the court and jury trying the' case, is the undisputed fact that Bromley, immediately after the purchase of the goods, turned over his interest to Blake, the latter paying him but one hundred and fifty dollars for his services, leaving Burk-heimer, who had parted with three thousand dollars worth of his goods to Bromley, with nothing but the worthless notes-and doubtful securities pledged therefor. Both notes were past due when this suit was brought, and not a dollar had been' paid upon them, and Bromley, according to his confession, was. execution proof. Naturally twenty year bonds of the character of those pledged as security had little, if any, market value at. the place where they were pledged. The jury and court were justified, we think, in concluding, whatever value the bonds may have, that the purpose of the whole transaction 'upon the part of Blake and Bromley was to get three thousand dollars worth of plaintiff’s goods for Blake without compensating him therefor.

For the fraud and conspiracy alleged, and to the extent proven, and as found by the jury, and upon familiar legal principles, not necessary to reiterate, we are of opinion the judgment below should be affirmed.

Affirmed„  