Cantley v. Plattner et al.

• Decision Date: 08 January 1934
• Docket Number: No. 17741.,17741.
• Citation: 67 S.W.2d 125
• Court: Missouri Court of Appeals
• Parties: S.L. CANTLEY, COMMISSIONER OF FINANCE IN CHARGE OF NORTH MISSOURI TRUST COMPANY, APPELLANT, v. HARRY PLATTNER ET AL., RESPONDENTS.

67 S.W.2d 125

S.L. CANTLEY, COMMISSIONER OF FINANCE IN CHARGE OF NORTH MISSOURI TRUST COMPANY, APPELLANT, v. HARRY PLATTNER ET AL., RESPONDENTS.

No. 17741.

Kansas City Court of Appeals. Missouri.

January 8, 1934.

Appeal from Circuit Court of Chariton County — Hon. Paul Van Osdol, Judge.

AFFIRMED.

Gilbert Lamb and Fry, Hollingsworth & Francis for appellant.

George P. Adams, Rodgers & Buffington and Roy McKittrick for respondents.

REYNOLDS, C.

This is an action in behalf of the above named, closed bank, the North Missouri Trust Company, a corporation, by the State Finance Commissioner on defendants' promissory note for $6400 dated March 21, 1930, payable to the order of the North Missouri Trust Company, which, as indicated, is now closed and in the hands of the said commissioner for the purpose of liquidation. Defendants are husband and wife. Said note bears seven per cent compound interest per annum from date and was made payable at the office of the said trust company, the payee, in Mexico, Audrain County, Missouri. The note sued on is the renewal of a former note for the same amount dated July 24, 1929, which defendants, on that date, executed and delivered to the said North Missouri Trust Company in payment for sixty-four shares of stock in the W.H. Scott Abstract Company held by the trust company.

The suit was filed in the Circuit Court of Chariton County at Keytesville; and, by agreement, the venue was later changed to the Circuit Court at Salisbury.

In their first amended answer filed November 19, 1931, defendants admit the right of the State Commissioner to have charge of said trust company's affairs and to sue on the note in question, he being now engaged in the process of liquidating the business of said trust company as a banking corporation. The amended answer also admitted the execution of the note in suit and alleged that it was a renewal of the former note of July 24, 1929, and further set up the following:

That the W.H. Scott Abstract Company was incorporated in February, 1924, with one hundred shares of capital stock of the par value of one hundred dollars per share, all of which were issued to and owned by the stockholders of said abstract company except nine shares and the North Missouri Trust Company owned fifty-five shares of said stock from the abstract company's organization to the time the said trust company sold said fifty-five shares together with the nine shares, making sixty-four in all, to the defendants; that, for many years prior to the incorporation of said abstract company and down to May, 1930, Mr. Walker Pollock was president of the said trust company and, from the date of the incorporation and organization of the abstract company down to said May 1, 1930, Pollock was also a stockholder in and secretary-treasurer of said abstract company; that he was the prime mover in its organization and in the sale of stock in said abstract company; that he secured the housing of the property and office of said abstract company in the banking building of said trust company in Mexico, Missouri, and, as an office in each of said companies, "was during all that time, thoroughly familiar with the character and extent of business which said abstract company had done from its incorporation to August 1, 1929, and said Pollock so told the defendants at the time said Pollock was negotiating with them for the sale of said stock of said Abstract Company;"

That, during all this time, R.M. White was a stockholder and director in the said trust company and also president of the Mexico Savings Bank, another bank in Mexico, and was solvent and financially able to buy the stock in the abstract company at the price at which Pollock was trying to negotiate a sale of it to defendants, all of which Pollock told them at the time;

That for many years, continuously and prior to August, 1924, defendants well knew and were intimately acquainted with Pollock, had often done business with him and, during all that time, a strong and intimate friendship and relationship of trust and confidence had existed between defendants and Pollock and they had implicit confidence in his honesty, fairness, truthfulness, and judgment, not only in all matters of business but especially in all business dealings and transactions between them, and implicit confidence in him that he would not knowingly misrepresent any fact or deceive or attempt to deceive defendants in any trade or deal in which they were interested;

That in the spring of 1929, at Pollock's request, they met him a number of times, he acting for and within the scope of his authority from the trust company, at which meetings he proposed and endeavored to sell to defendants the said sixty-four shares of the capital stock in said abstract company for one hundred dollars per share and told defendants of the said capital stock, its par value, and that the trust company had purchased and was then the owner of fifty-five shares of said stock which it had authorized him to sell and falsely and fraudulently stated to defendants that he had sought them out for the purpose of giving them — because they were his friends — an opportunity to buy, as the shares of stock at that price were a bargain and he wanted to help defendants in that way; that said Pollock, in order to sell said fifty-five shares and the said nine shares, falsely, knowingly, and fraudulently, with the intent, purpose, and design of deceiving defendants and fraudulently inducing defendants to purchase said shares, made to defendants and to each of them the following false and fraudulent statements, to-wit:

1 — That said abstract company was then, and ever since its organization had been, doing a large, prosperous, and profitable business 2 — That said abstract company, ever since its organization, had been making good money and that its stock at one hundred dollars per share was then a profitable and safe investment;

3 — That the value of said stock was then one hundred dollars per share and was worth that figure;

4 — That said R.M. White was, and for some time past had been, wanting to buy said abstract company stock at one hundred dollars per share but that he, Pollock, did not want to sell it to White because the latter would remove the abstract company's office to his bank building and have its business conducted there; that White was, at the time, away from town but would be back in a few days and would buy said stock when he returned if it had not been sold before and, if defendants wanted to buy it, they would have to act before White returned and would make a great mistake if they did not for he, Pollock, knew the abstract company's business had been, and then was, profitable and would continue to be so;

5 — That said Pollock requested and cautioned defendants not to inquire of any one but himself about the stock or let it be known that they were contemplating buying it and especially not to let W.H. Scott, manager of the abstract company, know of their contemplating the purchase of it for the reason that White would hear of it and immediately buy the stock at one hundred dollars per share for cash, thereby preventing defendants from buying it;

6 — That, if defendants would buy fifty-five shares of the stock at one hundred dollars per share, he would buy, at the same price per share, the nine shares which he said were treasury stock; but, after they had agreed to buy fifty-five shares, Pollock falsely and fraudulently told defendant Harry Plattner it did not suit him then to pay for the nine shares but, if they would permit the same nine shares to be issue to them and include the price in their promissory note, he would shortly pay for the nine shares and they could have the nine hundred dollars paid by him therefor credited on their sixty-four hundred dollar note; and, relying on him, they did this; but, when asked afterwards to pay for said nine shares, Pollock refused; and they say that the fact is, as now discovered, that Pollock never did intend to purchase said nine shares;

7 — That Pollock falsely and fraudulently represented that the abstract property actually cost twelve thousand dollars, being two thousand dollars more than the sum for which it was incorporated; but that said amount was borrowed and the same had since been practically paid out of the earnings of the business.

Defendants then alleged that each and every one of said statements and representations was false, fraudulent, and untrue, was known by Pollock to be false, fraudulent, and untrue, and was made with the fraudulent intent, purpose, and design to make defendants believe them and act upon them, which they did; that, relying upon said statements, defendants purchased said stock and gave the original note for sixty-four hundred dollars, of which the note sued on is a renewal; that, upon the refusal of said defendants to pay said last named note, the said Finance Commissioner had said stock sold at public auction to the highest bidder and it brought five dollars per share which, after expenses of sale were paid, were credited on said note, which was, and is, in excess of the value of said stock; that, in view of the facts and fraud herein set forth, plaintiff should not recover anything on the note. Wherefore, the defendants ask to be discharged with their costs.

The reply denied all fraud and set up that, immediately upon the purchase of said stock, the defendants became actively engaged in the affairs of said abstract company; that defendant Harry Plattner was elected secretary-treasurer thereof and received a salary therefor of thirty dollars per week and continued to receive same and to act as such officer past the date of the institution of this suit (December 8, 1930), down to some time in the year 1931; that, during all these times, said defendants were both thoroughly conversant with the business of the abstract company and fully cognizant of all the conditions and affairs of same, yet,...