Clappison v. Foley

• Citation: 148 Me. 492,96 A.2d 325
• Court: Maine Supreme Court
• Decision Date: 17 April 1953
• Parties: CLAPPISON et al. v. FOLEY et al.

Page 325

96 A.2d 325

148 Me. 492

CLAPPISON et al. v. FOLEY et al.

Supreme Judicial Court of Maine.

April 17, 1953.

Goodspeed & Goodspeed, Augusta, for plaintiff.

John J. Devine and Berman, Berman & Wernick, Portland, for defendant.

Before MERRILL C. J., and FELLOWS, and NULTY, JJ.

FELLOWS, Justice.

In this bill in equity pending in Sagadohoc County, James A. Clappison of Bath complains against Fred J. Foley, Margaret M. Foley, Alice F. Littlefield, Harold E. Foley, Fred Foley, Jr., John J. Devine and Community Oil Co. Inc. all of Portland. The original bill was brought by James A. Clappison, Alice C. Clappison, and James A. Clappison, Inc., against these same defendants, and upon demurrer filed by the defendants, the presiding justice sustained the demurrer with the right on the part of the plaintiffs to amend the bill. The justice stated in his decision, sustaining the demurrer, that it was not decided on the claim of laches. The plaintiff, James A. Clappison moved to amend by filing a new and amended bill as an amendment. The justice presiding denied the motion to amend, because 'in my opinion a demurrer to the amended bill would be sustained.' The plaintiff filed exceptions.

The issue raised is stated in the bill of exceptions as follows:

'The sole issue raised by these exceptions is whether or not, as a matter of law, the amended bill, so-called, as amended by the addition of Paragraph 8A of the prayers for relief, is itself demurrable in the matter of substance and jurisdiction. If it is, the exceptions should be overruled. If it is not, the exceptions should be sustained.'

An amendment which is itself demurrable should not be allowed. Gilbert v. Dodge, 130 Me. 417, 156 A. 891; Garmong v. Henderson, 112 Me. 383, 92 A. 322; Gray v. Chase, 115 Me. 350, 98 A. 940.

In the amended bill the plaintiff, James A. Clappison, seeks to enforce rights to which he, as an individual, claims to be entitled under a contract that he made with the defendant, Fred J. Foley, who allegedly obtained said contract by fraudulent conduct. The contract was relative to the future formation of a corporation to be known as the James A. Clappison Company, the equal distribution of shares of stock between the parties in the new corporation, and the conveyance to the new company of Clappison's private business, as hereafter more fully stated. The bill asks for accountings with the defendants, and any or all of them, with a lien on the stock of James A. Clappison Company held by Foley, and other defendants, to enforce judgment. The bill further prays that the stock of Clappison Company held by Foley and the other defendants be ordered transferred to the plaintiff. The plaintiff does not seek to set aside the conveyance of his personal business which he made to the new corporation.

The allegations in the amended bill are; that the plaintiff was the individual owner on December 21, 1933 of a gasoline and oil business at Bath, which represented a good will acquired through several years, together with physical properties consisting of leases, storage tanks, pumps and other equipment; that the defendant Foley being familiar with the growth and possibilities of plaintiff's business, and, as the bill states, 'fraudulently intending and craftily contriving to eventually procure all of the plaintiff's said business and its good will and all of its assets and its profits for himself without paying adequate compensation therefor, started his operations to that end by endeavoring to persuade and entice the plaintiff during the year 1933 to join with him in the formation of a corporation to take over all of said plaintiff's business, and in which said Foley promised that the plaintiff and he would each own and/or control a one-half interest in said business, and receive equal profits and enjoy equal rights therein.'

The bill further alleges that 'the plaintiff, being inexperienced and easily influenced in such matters, and not having the same business acumen as said Foley, and trusting in the apparent friendship and superior experience of said Foley, finally yielded to Foley's said importunities, and on December 21, 1933 at Foley's office in Portland, as the result thereof, the James A. Clappison Inc. Company was organized, with an even division of stockholding rights between them.'

The plaintiff Clappison, it is alleged, conveyed to the Clappison Company his profitable business, as soon as the Clappison Company was organized. That he joined with the defendant, Fred J. Foley, in organizing said corporation; that the same number of shares of stock of said corporation were issued to him and said Fred J. Foley, or their nominees; that neither Fred J. Foley, his nominees, nor any of the individual defendants ever paid any consideration for the stock of the Clappison Company standing of record in their names; and that said Fred J. Foley and said John J. Devine became directors of the Clappison Company at the time of its organization. It is less definitely alleged that the exceptant took all such action as the result of promises, or representations, made to him by the defendant, Fred J. Foley, as to the more profitable relationship which would exist in the future between the Community Oil Company, controlled by Foley, and the James A. Clappison Company. The plaintiff further alleges that 'the principal promise and inducement' offered to him by said Fred J. Foley was that by the organization of the Clappison Company, and the pooling of its orders with those of the Community Oil Company, the increase in the volume of business of the Community Oil Company would make a lower cost of products available with 'allowable discounts and commissions,' which Fred J. Foley and said Community Oil Company would pass along and credit to the Clappison Company, the benefits of all which would accrue to the plaintiff 'as the owner of an equal interest with said Foley in said Clappison Company.' It is alleged that whatever benefits may have accrued, no accounting has been made.

The defendants demurred to the original process. The demurrer admits the truth of all factual allegations which are well pleaded. Whitehouse, Equity, 357, Sec. 321; Donna v. City of Auburn, 148 Me. ----, 93 A.2d 484. The causes of demurrer alleged against the original process were both general and special. There were allegations in the demurrer that a court of equity had no power, on the alleged facts, to grant the relief sought; that the bill contained no equity, and had failed to state a case remediable therein, or one within the jurisdiction of such a court; that the claims sought to be asserted were barred by laches, and by the Statute of Limitations. The sitting Justice in sustaining the demurrer expressly declared 'I do not place my decision upon the claim of laches urged by the defendants' and made no mention of the other special causes of demurrer. The allegations show that nearly twenty years have elapsed. See Estey v. Whitney, 112 Me. 131, 90 A. 1093; Getchell v. Kirkby, 113 Me. 91, 92 A. 1007, relative to recission and restitution, although restitution or tender not always necessary, Masters v. Van Wart, 125 Me. 402, 134 A. 539; Pitcher v. Webber, 103 Me. 101, 68 A. 593.

There are two grounds upon which the plaintiff says the Court has equity jurisdiction viz.: A 'fiduciary' or 'confidential' relationship by virtue of which Foley owed Clappison strict and unusual duties that he failed to observe, and 'constructive' fraud in that Foley deliberately misrepresented what was to be accomplished in the future. The factual allegations, however, are not sufficient...