Cresent Grocery Co. v. Vick

• Decision Date: 09 May 1922
• Citation: 240 S.W. 388,194 Ky. 727
• Parties: CRESENT GROCERY CO. v. VICK.
• Court: Kentucky Court of Appeals

240 S.W. 388

194 Ky. 727

CRESENT GROCERY CO. v. VICK.

Court of Appeals of Kentucky.

May 9, 1922

Appeal from Circuit Court, Daviess County.

Action by the Cresent Grocery Company against W. S. Vick to recover damages for deceit. Judgment for defendant for failure of plaintiff to plead further after general demurrer to the petition was sustained, and plaintiff appeals. Affirmed.

E. B Anderson and W. Foster Hayes, both of Owensboro, for appellant.

Sandidge & Sandidge and Louis I. Iglehart, all of Owensboro, for appellee.

SAMPSON J.

A general demurrer was sustained by the lower court to the petition of appellant, Cresent Grocery Company, by which it sought to recover of appellee, Vick, $2,094.24, which it is averred in the petition appellee, Vick, by deceit and fraud wrongfully obtained from appellant company. Vick was an experienced traveling grocery salesman in the district adjacent to the city of Owensboro, and had a large number of customers. He had been working for Parsons & Scoville, of Evansville, Ind., a wholesale grocery concern. In April 1911, the W. S. Vick Grocery Company, of Owensboro, was incorporated and entered into a contract with appellee, Vick whereby Vick was to and did become its traveling representative in certain territory, the contract being, as contended by appellant company, that he was to receive from said concern the same compensation which he had received from Parsons & Scoville for his services to them for the last year next before the organization of the W. S. Vick Grocery Company, but Vick claims that he was to have 40 per cent. of the profits deriving from his sales. Vick was elected a director and also president of the new grocery concern, and entered upon the discharge of the duties of traveling salesman for it. It is averred in the petition that Vick, at the time of his employment as salesman, fraudulently represented to appellant company that under his contract with Parsons & Scoville he was to and did receive 40 per cent. of all the profits derived by the firm from the sale of goods brought about through the efforts of Vick, and that pursuant to said representation the appellant company paid him 40 per cent. of the profits derived by appellant company from the sales of goods made by Vick; but it further averred in the petition that appellee, Vick, fraudulently suppressed and withheld from appellant company a certain part of the contract which he had with Parsons & Scoville, whereby the said Vick was to bear 40 per cent. of all losses sustained by his employer from sales made by him, and by such fraudulent means induced and caused appellant company to pay him $2,094.24 more than it otherwise would have paid him had it known the true terms of the contract under which he had worked for parsons & Scoville, and which were to be and were in fact the terms of the contract of employment by which appellee Vick was to work for appellant company. The action, therefore, was one in the nature of deceit. The petition was three times amended, but finally held by the trial court not to state a cause of action against appellee Vick, and this appeal is from a judgment dismissing this petition for failure of the plaintiff to further plead after the general demurrer had been sustained.

Actionable fraud may consist as well of suppression or concealment of material facts as by the assertion of what is false, for the gist of the action is the production of a false impression upon the mind of the party misled to his injury. Adkins v. Stewart, 159 Ky. 219, 166 S.W. 984.

We have adopted the general rule that an action cannot be maintained for fraud or deceit unless it be made to appear (1) that defendant made a material representation; (2) that it was false; (3) that when he made it he knew it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with intention of inducing plaintiff to act, or that it should be acted upon by the plaintiff; (5) that plaintiff acted in reliance upon it and (6) that plaintiff thereby suffered injury. Although the alleged representation was made by defendant, it was not material, or was not false, or defendant did not know it was false, and did not make it recklessly in disregard of the truth, or did not make the representation intending that plaintiff should be induced to act upon it; or, if plaintiff was not induced to and did not act upon the representation, or if he did so without injury or loss resulting to him, no cause of action exists in favor of the plaintiff. Anheuser-Busch Brewing Association v. Daviess County Distilling Co., etc., 49 S.W. 541, 20 Ky. Law Rep. 1522; Tudor v. Tudor, 101 Ky. 530, 41 S.W. 768, 19 Ky. Law Rep. 747; Livermore v. Middlesborough Town-Lands Co., 106 Ky. 163, 50 S.W. 6, 20 Ky. Law Rep. 1704; Southern Express Co. v. Fox & Logan, 131 Ky. 257, 115 S.W. 184, 117 S.W. 270, 133 Am. St. Rep. 241; Chicago Building & Manufacturing Co. v. Beaven et al., 149 Ky. 267, 148 S.W. 37; Taylor v. Mullins, 151 Ky. 597, 152 S.W. 774; Bewley v. Moreman et al., 162 Ky. 32, 171 S.W. 996. In sustaining the demurrer to the petition of appellant company, the trial court was no doubt of opinion that the averments of the pleading were insufficient to show the foregoing six essentials of a cause of action for fraud or deceit, and the correctness of this conclusion is the sole question to be determined upon this appeal. After alleging the appellant Cresent Grocery Company was duly incorporated, being but the...