Smith v. Bolles
|Smith v. Bolles|
|Court||Supreme Court of the United States|
|Date decided||December 11, 1889|
Mr. Bolles bought 4,000 shares of stock in a mining company at $1.50/share for a total purchase price of $6,000. Bolles relied on the representation of Mr. Smith in deciding to buy the stock.Later on, Bolles learned that Smith had mis-represented the stock value.
Bolles filed a suit against Smith for fraudulent misrepresentation & sought damages.
Bolles claimed that Smith's representation made the stock appear $10/share.
The judge instructed that
(Bolles's damages) = (reasonable market value of the stock if it was as Smith represented) - (amount Bolles paid)
Smith appealed to SCOTUS under a writ of error.
The jury decided in favor of Bolles.
Is the proper measure of damages in a fraudulent inducement action= (the reasonable value of the property if it'd been as represented) - (contract price) ?
No. The proper measure of damages in a fraudulent inducement case isn't the difference between the contract price & the reasonable value of the property if it'd been as represented.SCOTUS: The jury had awarded improper compensation to Bolles.
Fuller: The question is
- What did the plaintiff (Bolles) lose?
- not "What would plaintiff have gained?"
- Case text at Legal Information Institute of Cornell Law School
- Case text at Justia
- Video summary at Quimbee