SMITH V. BOLLES
132 U.S. 125 (1889)
NATURE OF THE CASE: This was a dispute over the nature of damages for the fraudulent sale
of stock.
FACTS: Smith (D) and others organized a corporation for mining with a capital of $2
million divided into 100,000 shares of $20 each. Bolles (P) was wholly ignorant of the
company and mining in general. D solicited P to purchase some of the stock. During this
solicitation D made a large number of misrepresentations. Based on these misrepresentations,
P purchased 2,000 shares at $1.50 each. Eventually P realized the stock was worthless after
being told it was worth at least $10 per share. Other parties purchase shares based on the
same misrepresentations with aggregate total losses from the purchases that were far less
than what they sought in damages. They assigned all their claims to one party and that party
sued in the aggregate for $65,000 in damages. D admitted incorporation but denied all the
allegations and set up the defense of the statute of limitations. In the original petition P
merely wanted rescission of the contract and to get his money back but the amended petition
asked for damages from the alleged false and fraudulent representations. P got the verdict
with damages at $8,140. This appeal resulted.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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