Dickson v. Fowler

• Decision Date: 10 January 1911
• Citation: 79 A. 519,114 Md. 344
• Parties: DICKSON et al. v. FOWLER.
• Court: Maryland Court of Appeals

79 A. 519

114 Md. 344

DICKSON et al. v. FOWLER.

Court of Appeals of Maryland

January 10, 1911

Appeal from Superior Court of Baltimore City; Henry D. Harlan Judge.

Action by William E. Fowler against Robert Dickson and others copartners trading as Dickson & Tweeddale. From a judgment for plaintiff, defendants appeal. Affirmed.

Argued before BOYD, C.J., and BRISCOE, PEARCE, SCHMUCKER, BURKE THOMAS, PATTISON, and URNER, JJ.

George A. Finch, for appellants.

Charles Markell, and W. Calvin Chestnut, for appellee.

THOMAS J.

This is a suit on the following promissory note of the appellants in favor of the appellee, which was field with the declaration in the court below: "$5000.00. Jan. 5, 1908. Four months after date, we promise to pay to the order of Wm. E. Fowler, five thousand dollars, at the First Nat. Bank of Baltimore, Md. Value received with 6% interest. Dickson & Tweeddale." In addition to the general issue plea, the defendants filed special pleas, in which they charged, first, that the note "was procured by the fraud of the plaintiff"; and, secondly, that the note "was procured by the fraudulent representations of the plaintiff." These special pleas were traversed by the plaintiff, and the case was tried on issues joined on the general issue plea and on the replications to the special pleas. At the trial the plaintiff offered in evidence the note sued on and rested his case, and the defendants then offered evidence in support of their pleas. During the trial the defendants reserved 44 exceptions to the rulings of the court on the evidence; but, in the view we take of the case, it will not be necessary to pass on these exceptions separately. At the conclusion of the testimony offered on behalf of the defendants, the plaintiff filed two motions to strike out certain evidence, and offered four prayers. The defendants objected to the motions and prayers being received at that time, but the court overruled the objection, and the forty-fifth exception is to this ruling of the court. The court below then stated that he refused the motion to strike out the evidence, and that it was for the plaintiff to say whether he desired to offer any evidence, to which the plaintiff replied that he submitted on the prayers, when the court further stated that, as the plaintiff did not desire to offer evidence, he would ask for the prayers of the defendant. The defendants then offered seven prayers, and filed a special exception to plaintiff's fourth prayer; and the forty-sixth exception is to the rejection of the defendants' prayers, the overruling of the special exception to plaintiff's fourth prayer, and to the granting of the prayers of the plaintiff, instructing the jury (1) that "there is no evidence legally sufficient to show that the note was procured by fraud"; (2) that "there is no evidence legally sufficient to show that the note was procured by duress"; (3) that "there is no evidence legally sufficient to show lack or failure of consideration for the note"; and (4) "that it is admitted by the pleadings and the testimony of the defendant Tweeddale that the note sued on was executed by the defendants and was delivered to the plaintiff, and that, there being no evidence legally sufficient to establish any defense to said note, the verdict of the jury should be for the plaintiff for the sum of $5,000, with interest at 6 per cent. from January 5, 1909, to date." The defenses relied on by the appellants are fraud, duress, and want of consideration; the contention of the appellants, in regard to the last defense, being that the note was given for services which the appellee was bound to perform under a previous contract with the appellants. After a careful consideration of the evidence, which covers over a hundred pages of the printed record, we think it fails to establish either of these defenses.

William E. Fowler, of Baltimore city, the appellee, who was an agent of and largely interested in the German Union Insurance Company, and who was dissatisfied with its management and apprehensive of a depreciation of the stock because of its inefficiency, went to New York in August, 1908, to arrange with the appellants Robert Dickson, Robert D. Tweeddale, and George N. Thomson, copartners trading as Dickson & Tweeddale, for the purchase by the appellants of a controlling interest in said company. As the result of the negotiation, the appellee and the appellants entered into the following contract, which was signed by the appellants and appellee, but not sealed:

"This agreement made this 21st day of August, 1908, by and between Robert Dickson, George N. Thomason, and Robert Dickson Tweeddale, doing business in the city of New York under the firm name and style of Dickson & Tweeddale, parties of the first part and W.E. Fowler of Baltimore, Maryland, party of the second part, witnesseth that:

"Whereas the party of the second part is a large stockholder in the German-Union Insurance Company of Baltimore, and the parties of the first part are desirous of acquiring an interest as stockholders in that company: Now, therefore, in consideration of the premises and of the sum of one dollar ($1.00), lawful money of the United States and other good and valuable consideration by each of the parties hereto to the other in hand paid, the receipt of which is hereby mutually acknowledged and further in consideration of the covenants and conditions hereinafter contained, it is agreed by and between the parties hereto as follows:

"(1) The party of the first part shall forthwith endeavor to secure options for the purchase of at least (51%) fifty-one per cent. of the capital stock of the German-Union Insurance Company of Baltimore at ($15.00) fifteen dollars per share; said options are to be taken in the name of George N. Thomson of

Larchmont, New York, and to be treated as hereinafter provided.

"(2) The party of the second part shall hold or control the voting power of at least thirty-seven hundred and fifty (3,750) shares of the stock of said company so secured under said options; such ownership to be continued as hereinafter provided, the balance of the said stock so secured on the said options to be taken by the parties of the first part as hereinafter provided.

"(3) The said options shall be secured by the party of the second part within sixty (60) days of the date of the execution of this agreement; said options, when obtained, to be deposited with the Baltimore Trust & Guaranty Company of Baltimore, or the First National Bank of Baltimore, or the Drovers' & Mechanics' National Bank of Baltimore; and the parties of the first part on being notified in writing by the party of the second part that options on the required number of shares have been secured, shall name a date on which payment for their portion of said stock shall be made, which shall be within fifteen days thereafter unless the condition of the money market in New York City is abnormal."

By the fourth paragraph of the contract the parties agreed that "if these aforesaid options be exercised by the parties hereto, and the control of the said German-Union Insurance Company be thereby acquired by them," they would forthwith execute an agreement that neither party should dispose of his or their stock within certain periods without the consent of the other without the stock having been first offered to the other party at its book value. The other paragraphs of the contract provided for a change of the domicile of the company, for the appointment of general agents, etc.

The contract makes no provision for payment for the services to be rendered by the appellee in securing the options on the 51 per cent. of the stock, but it appears from the testimony of Mr. Dickson and Mr. Tweeddale that the matter was fully discussed during the negotiations leading up to the execution of the contract; that the appellee stated that he would be able to secure the options at $12 or $12.50, and that they agreed that the appellants should take the stock at $15 per share; and that the appellee should receive the difference for his services in securing the options. And Mr. F. Willard Smith, who was an employé of the appellants, was present during most of the conversations between the appellants and the appellee prior to the execution of the contract of August 21, 1908, and who represented the appellants from the 15th of October to the 30th of November in the subsequent transactions in Baltimore looking to securing the control of the company, when asked by appellants' counsel if he had "ever heard of any arrangement to pay Mr. Fowler any compensation by way of money for his services or for any services," said: "I was under the impression that Mr. Fowler's remuneration was to consist principally of general agency appointments for the German-Union Company and for other companies then controlled by Dickson & Tweeddale. The question of money payment was to my mind more or less open to be dealt with according to developments." In answer to the further question, "Was there any amount stipulated for as for services?" He replied: "At the time the agreement was drawn up there was some conversation about a cash payment, but I do not think any amount was definitely decided on." It is therefore apparent that at the time the contract was executed it was understood that the appellee was to receive something for his services in securing the options in addition to the general agency appointments provided for in the written contract.

Mr Tweeddale states that, after the execution of the contract of August 21st, Mr. Fowler advised the appellants from time to time that he was proceeding under the contract; that about October 1st Mr. Fowler telephoned him to come to Baltimore; that, when he reached Baltimore, Mr. Fowler...