Summary
In Brown v. Byrne, 77 E.C.L. 702, cited in 27 Am. Eng. Ency., page 809, in note, Coleridge, J., said: "In all contracts, as to the subject-matter of which known usages prevail, parties are found to proceed with the tacit assumption of these usages; they commonly reduce into writing the special particulars of their agreement, but omit to specify these known usages, which are included, however, as of course, by mutual understanding; evidence, therefore, of such incidents is receivable.
Summary of this case from Brunold v. GlasserOpinion
No. 3368.
April 30, 1936.
Appeal from District Court, El Paso County; W. D. Howe, Judge.
Suit by J. Wylie Brown against Charles L. Byrne and another. From a judgment for plaintiff, defendants appeal.
Reversed and remanded.
February 14, 1931, appellee, Brown, and appellants, James Q. and Charles L. Byrne, entered into a contract whereby Brown sold and delivered to the appellants all of the common stock of the Tri-State Tobacco Candy Company, amounting to $10,000, which amount was paid. Appellants also agreed to purchase from Brown all of the preferred 6 per cent. stock of said company amounting to $15,000 for its par value. The preferred stock was to be purchased by appellants as follows: $1,000 February 14, 1932; $1,000 February 14, 1933; $1,500 February 14, 1934; and $1,500 February 14, 1935, and in periodical installments thereafter as stipulated in the said contract.
Appellants purchased and paid for the two installments of 1932 and 1933. Brown filed this suit against the Byrnes alleging they had failed and refused to purchase the two $1,500 installments agreed to be purchased in 1934 and 1935. It was alleged the stock was without value. The stock was tendered and judgment sought for $3,000 with interest.
The Byrnes answered setting up they were induced to purchase the stock of the company by false representations made to them by Brown concerning the condition and value of the assets of said company whereby they had been damaged. The defendants pleaded such fraud and resulting damage defensively, in abatement of the amount sued for and of the purchase price of the installments of stock thereafter agreed to be purchased and paid for.
The case was submitted upon special issues as follows:
1. "Do you find from a preponderance of the testimony that J. Wylie Brown represented to the Byrne Brothers that the stock of goods, wares and merchandise involved in this suit was first class merchantable quick moving and standard merchandise?
2. "Do you find from a preponderance of the testimony that these representations were not true?
3. "Do you find from a preponderance of the testimony that Byrne Brothers believed and relied upon such representations of J. Wylie Brown and but for the same would not have agreed to purchase the capital stock of the corporation?
4. "Do you find from a preponderance of the evidence that there was any difference between the actual value of the preferred stock on March 10, 1931, and the value which said stock would have had on that date if the representations made by J. Wylie Brown to the Byrne Brothers had been true, if he made any such statements.
5. "If you have answered Question No. 4 in the affirmative then state whether the actual value of such stock was greater or was less than the amount of $15,000 agreed upon by the parties?
6. "How much less in value than $15,000 do you find from a preponderance of the evidence that such preferred stock was actually worth?"
The first four questions were answered "Yes"; the fifth "Less"; and the sixth, "2,500."
Judgment was rendered in Brown's favor for $657.50, being the difference between the amount for which he sued with interest less the $2,500 found by the jury in its answer to question 6. The Byrnes appeal.
Brown Brooke, of El Paso, for appellants.
J. Walker Morrow, of El Paso, for appellee.
The only error assigned is to the charge of the court in limiting and submitting only the issue as to the damages sustained on the preferred stock and in not submitting any issue as to damages on account of the common stock. The question was raised by exceptions to the court's charge and requested issues which were refused. The assignment is sustained.
The findings establish the actionable fraud alleged. The value of the common as well as the preferred stock was necessarily affected and the evidence is abundantly sufficient to show the common stock was worth less than was paid for it and what would have been its actual value if the assets of the corporation had been as represented. Appellee presents no point in that connection, but seeks to sustain the correctness of the charge given upon the ground that appellants' pleading raised no issue as to the value of the common stock. Appellee asserts the appellants' pleadings relate solely to the preferred stock.
The answer is lengthy and considering same as a whole it should not be construed and limited as appellee would have it done. The isolated sentence in the answer, upon which appellee relies in support of its position, is not controlling. We regard the answer as raising the issue of damages on account of the purchase of the common stock as well as the preferred stock and it was error to limit the issue of damage to that sustained on account of the preferred stock only.
Reversed and remanded.