Newman v. Mercantile Trust Company

• Decision Date: 15 June 1905
• Parties: NEWMAN, Trustee, Appellant, v. MERCANTILE TRUST COMPANY et al
• Court: Missouri Supreme Court

88 S.W. 6

189 Mo. 423

NEWMAN, Trustee, Appellant, v. MERCANTILE TRUST COMPANY et al

Supreme Court of Missouri, First Division

June 15, 1905

Appeal from St. Louis City Circuit Court. -- Hon. Daniel D. Fisher Judge.

Affirmed.

John W Noble and George H. Shields for appellant.

(1) Fraud is a question for the jury -- the court invaded the domain of the jury. Slight circumstances warrant submission of the issue of fraud to the jury. Hack v. Rollins, 158 Mo. 182; Bank v. Brunswick & Co., 155 Mo. 602; Tracy v. McKinney, 82 Mo.App. 506; Robertson v Shepherd, 165 Mo. 360; Paquin v. Millikin, 163 Mo. 79. (2) The second count of plaintiff's petition states a cause of action at common law and is well established in Missouri. Perry v. Musser, 68 Mo. 477; Watriss v. Piera, 36 N.H. 239; Chitty on Pleadings (16 Am. Ed.), 248; Bank v. Tiger Tail Co., 152 Mo. 157; Bank v. Fisher, 55 Mo.App. 51; Norman v. Horn, 36 Mo.App. 422; Turley v. Tucker, 6 Mo. 583; Buddington v. Maderbrook, 17 Mo.App. 577; Beattie v. Lett, 28 Mo. 596; Parker v. Rhodes, 79 Mo. 91; Kniffer v. Blumenthal, 107 Mo. 670; Huner v. McKinney, 3 Mo. 382; Ross v. Clark, 27 Mo. 549; Battell v. Crawford, 59 Mo. 215; Mohr v. Langan, 77 Mo.App. 490; Nanson v. Jacobs, 93 Mo. 331; Koch v. Branch, 44 Mo. 542; Williams v. Wall, 60 Mo. 321; Dusky v. Rudder, 80 Mo. 400; Stephens v. Elwall, 4 Maule & Selw. 259. (3) A declaration for conversion pleading only ultimate facts, states a cause of action and a general averment of conversion is sufficient to admit of any evidence on the trial of the issues joined that tend to prove such conversion. McAllister v. Kuhn, 96 U.S. 89; Budd v. Mutomah & Co., 12 Ore. 275; Wilson v. Commercial, etc. Co., 51 S.C. 541; Beebe v. Knapp, 28 Mich. 58; Bliss v. Cattle, 32 Barb. 323; Hunter v. Hudson, etc., 20 Barb. 493; Johnson v. Wabash, etc. Co., 22 Mo.App. 560; Reilly v. Cullin, 159 Mo. 329. (4) The retention of the check till the last day of the option worked no estoppel on plaintiff. He did not then know that defendants had violated their contract and were paying others, who signed the acceptance of the proposition as plaintiff did, more than five hundred dollars a share, and that defendants had not procured a majority of the stock. Defendants did know it and failed to disclose it. This created a false impression in plaintiff's mind and worked a fraud on him. Stewart v. Wyoming Ranch Co., 128 U.S. 389; Utley v. Donaldson, 94 U.S. 46; Hoffman v. Aetna Ins. Co., 32 N.Y. 405. Consent must be ad idem. Hazard v. Ins. Co., 1 Sumner 218; Gottschalk v. Kircher, 109 Mo. 184; Adams v. Cates, 24 Mo. 223; Barrow v. Alexander, 27 Mo. 530; Griggsby v. Stapleton, 94 Mo. 423; Cottrell v. Krum, 100 Mo. 397; Story on Eq. Jur. (13 Ed.), sec. 192; Clinkenbeard v. Weatherman, 157 Mo. 114; Och v. Railroad, 130 Mo. 71; Herman v. Hall, 140 Mo. 276; Livingston v. Strong, 107 Ill. 303; Bridge v. Goldsmith, 143 N.Y. 428; Albany Savings Ins. v. Burdick, 87 N.Y. 40; Strimpton v. Philbrick, 53 Minn. 366; Darnley v. Proprietors, etc., 2 Md. 259; Duncan v. Hoge, 24 Miss. 671. Even money paid will not prevent recovery for deceit. Owens v. Rector, 44 Mo. 389; Ives v. Carter, 24 Conn. 392; Krum v. Beach, 96 N.Y. 398; Vail v. Reynolds, 118 N.Y. 297; Pryor v. Foster, 130 N.Y. 171; Gustafson v. Rustemeyer, 70 Conn. 125. (5) A party induced by fraud to make a contract may rescind and revover back what he paid or sold where the contract originally executory has been performed on his part, and the knowledge acquired subsequently and previous to performance on his part. Parker v. Marquis, 64 Mo. 41; Nilnosek v. Libera, 86 N.W. 100, 83 Minn. 288; Williams v. Chicago Co., 112 Mo. 470; R.S. 1899, sec. 654; Gerard v. St. Louis, etc. Co., 123 Mo. 358; Horwith v. Metropolitan Co., 129 Mo. 629; Hancock v. Bakewell, 139 Mo. 440. (6) The plaintiff had the right to know when he received the check whether the defendants had complied or would comply with the contract; but defendants refused to enlighten him. If the purchaser had not obtained a majority of the stock, or could not obtain it at $ 500 a share, he was not bound, and if he was not, the seller was not bound. There must be mutuality in the contract to be binding in law. Glass v. Rowe, 103 Mo. 513; Kirtland, etc., Co. v. Ripley, 10 Wall. 339; Johnson v. Tupper, 33 F. 530; Stanton v. Singleton, 126 Cal. 657; Sayward v. Houghton, 119 Cal. 545. (7) The contract for the sale of the stock was for a majority of the stock at five hundred dollars a share, the certificates to be indorsed and delivered before May 5, 1902, before any obligation to pay for the same would arise. This contract was an entirety and unless the purchaser had the certificates on May 5th of a majority of the shares at $ 500 a share, either party could withdraw. Current v. Fulton, 10 Ind.App. 617; Cravens v. Eagle Cotton Mills, 120 Ind. 6; 7 Am. & Eng. Ency. Law (2 Ed.), 102; Carney v. Chillicothe W. & L. Co., 76 Mo.App. 532; Hollmann v. Conlon, 143 Mo. 369; Green v. Sigua Iron Co., 88 F. 213; Wagon Co. v. Crocker, 4 F. 577; Eskridge v. Glover, 5 Stewart & P. 264; Bell v. Bowers, 44 Tenn. 311; Bangs v. Loeber, Fed. Cases 840; Hutchings v. Moore, 61 Ky. 110; Sewell v. Wilkins, 14 Mo. 168; Speak v. Sheppard, 6 Har. & I. 85; Robinson v. Harbour, 42 Miss. 795; Vreeland v. Mitchell, 8 Mo. 487; Dwiggins v. Shaw, 20 N.C. 46; Dunham v. Dayton, 3 Ohio Dec. 329; 4 Rawle 6; 4 Watts & S. 527; Piques v. Moseby, 15 Miss. 340; Hamilton v. Thrall, 7 Neb. 210; Mecum v. Railroad, 21 Ill. 533; Gardiner v. Corson, 15 Mass. 500; Dalrymple v. Lauman, 23 Md. 376; Harding v. Gibbs, 125 Ill. 85; Perkins v. Hadsell, 50 Ill. 216. (8) The defendant, the Chicago, Rock Island & Pacific Railway Company, could not buy or hold shares of stock of the Wiggins Ferry Company. Who the purchaser was was unknown to plaintiff till the 5th of May, 1902. This company was not authorized to do business in this State. It could not have been compelled to take plaintiff's stock and he was not bound to sell to it. Wiggins Ferry Company charter; Private Laws Illinois, 1853, p. 193; Ibid. 1857, p. 1146; Ibid. 1867, vol. 1, p. 938; Toomey v. Supreme Lodge, 74 Mo.App. 507; People v. Chicago Gas Co., 130 Ill. 267; Buckeye v. Harvey, 18 L.R.A. 252; Franklin, etc., Co. v. Lewiston Co., 68 Mo. 43; Pearson v. Railroad, 62 N.H. 537; Central, etc., Co. v. Collins, 40 Ga. 382; Hazelhurst v. Savannah, etc., Co. 43 Ga. 13; Milbank v. N.Y. Co., 64 How. Pr. 20; Elkins v. Camden, etc., Co., 36 N.J. 65; Mackintosh v. Flint & Co., 34 F. 615; Franklin Bank v. Commercial Bank, 36 Ohio St. 350; Concord, etc., v. Hawkins, 174 U.S. 364; California Bank v. Kennedy, 167 U.S. 367; McCormick v. Bank, 165 U.S. 549; Scott v. Daniels, 176 U.S. 216; Robinson v. Bank, 180 U.S. 309; Trans. Co. v. Pullman Co., 139 U.S. 24; Car Co. v. Trans. Co., 171 U.S. 138; Logan v. Townsend, 139 U.S. 67; Hotel Co. v. Furniture Co., 73 Mo.App. 137; Ollesheimer v. Mfg. Co., 44 Mo.App. 172; Green's Brice's Ultra Vires, p. 95, note; Beach on Corporations, sec. 843; Mallroy v. Oil Works, 86 Tenn. 598; St. Joseph v. Saville, 39 Mo. 460; Hoagland v. Hannibal, etc., Co., 39 Mo. 451; Missouri, etc., Co. v. Hannibal, etc., Co., 35 Mo. 84; St. Joseph, etc., Co. v. St. Louis, etc., Co., 135 Mo. 202; Pearce v. Railroad, 21 How. 441; Railroad v. Smith, 76 Ala. 580; New Orleans, etc., Co. v. Ocean, etc., Co., 28 La. Ann. 174; Baird v. Howard, 51 Ohio St. 57; Farmers', etc., Co., v. Railroad, 150 N.Y. 429; 1 Thompson on Corp., sec. 1102, vol. 4, sec. 5719; Ehrhardt v. Robertson, 78 Mo.App. 410; Thomas v. Richmond, 12 Wall. 355; Spring v. Knowlton, 103 U.S. 49; Sto. Eq. Jur., secs. 298, 700; Railroad v. Railroad, 145 U.S. 393; Garrett v. Kansas, etc., Co., 113 U.S. 330.

Klein & Hough, Clinton Rowell, Joseph H. Zumbalen and Joseph S. Laurie for respondents.

(1) The ruling of the trial court resulting in plaintiff's nonsuit was correct. The legal effect of the plaintiff's acceptance and cashing of the check for $ 50,000 sent him by the Trust Company, under the circumstances shown by the evidence, was to complete and close the transaction and thus to bar his right of action. School Board v. Hull, 72 Mo.App. 403; Andrews v. Stubbs Co., 100 Mo.App. 599; Perkins v. Headley, 49 Mo.App. 556; Coal Co. v St. Louis, 145 Mo. 651; McCormack v. St. Louis, 166 Mo. 315; Nassoily v. Tomlinson, 148 N.Y. 326; Jackson v. Volkening, 80 N.Y.S. 1102; Goss v. Rishel, 85 N.Y.S. 1045; Railroad v. Clark, 178 U.S. 353; Gas Co. v. Johnson, 123 Pa. St. 576; Truax v. Miller, 48 Minn. 62; Keck v. Hotel Co., 89 Iowa 200; Creighton v. Gregory, 142 Cal. 34; Snow v. Alley, 156 Mass. 193; Bishop, Contracts, sec. 808; Herm. Estop., p. 1172-3, 1196. (2) The contract in question, according to its true construction, is an agreement on the part of the Trust Company to purchase plaintiff's stock at $ 500 per share, with the condition reserved in favor of the Trust Company that, if it had not obtained a majority of the stock of the Wiggins Ferry Company on or before May 5, 1902, it might, if it saw fit, return the plaintiff's stock to him. The contract was mutually binding from the start, because the promise of the Trust Company, upon the conditions stated therein, was a sufficient consideration to bind the sale. Watjen v. Green, 48 N.J.Eq. 322; Danforth v. Railroad, 93 Ala. 614; Swank v. Nichols, 20 Ind. 198; Dobbins v. Edmonds, 18 Mo.App. 307; Sanford v. Halsey, 2 Denio 235; Ferry Co. v. Jones, 39 N.H. 491; McRae v. Railroad, 12 Ired. N.C. 224; Railroad v. Allen, 112 Cal. 455; Gutlon v. Marcus, 165 Mass. 335; Morrow v. Express Company (Ga.), 28 S.E. 998; Clark on Contracts, pp. 170-1; Anson on Contracts (2 Am. Ed.), p. 95; Mayer v. Dwinell, 29 Ver. 298; Backer v. Jones, 8 N.H. 413; Foster v. Goldschmidt, 21 F. 70; 6 Am. and Eng. Ency. Law (2 Ed.), 471; Benj. on...