Opinion
June 9, 1911.
George R. Cooper and Arthur B. La Far, for the appellant.
Leon M. Woodworth and Lester S. Abberley, for the respondent.
Defendant appeals from a judgment in an action for damages for fraud and deceit in connection with the sale of stock of the Rubber Company of America. He was a promoter and engaged in the sale of stock of said company.
There was a sharp conflict of evidence as to the character of the representations made. At the close of plaintiff's case there was no direct evidence that, even if defendant made the representations testified to by plaintiff as to the amount of capital stock which had been sold for cash, the price paid therefor, as to the existence of large orders for goods manufactured by said company, and other similar matters, they were known to him to be false. It might possibly be, however, that there was then enough to go to the jury upon the theory that defendant made statements recklessly, not knowing whether they were false or true and not caring what the effect might be, and paying no heed to the injuries which might result therefrom. ( Kountze v. Kennedy, 147 N.Y. 124.)
Defendant, however, was clearly entitled to show the sources of his information, and that he was justified in relying upon it, and made the statements in good faith. When defendant was upon the stand, he was asked whence he obtained the information in connection with which he made the statements to plaintiff, and this was excluded. This was error. ( Duryea v. Zimmerman, 121 App. Div. 560.)
The correctness of many other rulings in the course of the trial has been challenged. As the foregoing is fatal we need not consider any others.
The judgment of the Municipal Court must be reversed and a new trial ordered, costs to abide the event.
JENKS, P.J., HIRSCHBERG, BURR, WOODWARD and RICH, JJ., concurred.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.