Smith v. Duffy
Supreme Court of New Jersey
On error. In May, 1891, the plaintiff bought at par, from the defendant, ten shares of the capital stock of the Noble Coal Company, a Pennsylvania corporation which had been organized by the defendant and others. The purchase was induced by a statement made by the defendant to the plaintiff that the company owned mines in Pennsylvania for which it had paid $400,000 in cash. This statement was false and fraudulent.
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On error. In May, 1891, the plaintiff bought at par, from the defendant, ten shares of the capital stock of the Noble Coal Company, a Pennsylvania corporation which had been organized by the defendant and others. The purchase was induced by a statement made by the defendant to the plaintiff that the company owned mines in Pennsylvania for which it had paid $400,000 in cash. This statement was false and fraudulent. The plaintiff purchased the stock as an investment, and, confiding in the truth of the statement, retained the stock until the company failed, early in the year 1893. The plaintiff…
1Opinion of the Court
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…
2Cases cited1 opinion
- Smith v. BollesSupreme Court of the United States · 1889
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- Gutman v. Howard Savings BankDistrict Court, D. New Jersey · 1990
- Krueger v. ArmitageNew Jersey Court of Chancery · 1899
- Citizens Banking & Savings Co. v. Spitzer, Rorick & Co.Ohio Court of Appeals · 1938
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