Drees v. Minnesota Petroleum Co.
| Decision Date | 20 October 1933 |
| Docket Number | 29,569 |
| Citation | 250 N.W. 563,189 Minn. 608 |
| Parties | PETER DREES v. MINNESOTA PETROLEUM COMPANY AND OTHERS; PETER M. DREES v. SAME DEFENDANTS |
| Court | Minnesota Supreme Court |
Two actions in the district court for Lyon county, each to recover $1,500 paid for stock of the defendant Minnesota Petroleum Company. The cases, consolidated for trial, were heard before C. M. Tifft, judge of the eighth judicial district acting for a judge of the ninth judicial district. At the close of the evidence the court directed a verdict in each case for the plaintiff against the defendants Minnesota Petroleum Company and E. W. Richtmeyer and J. O. Stevens, the treasurer and president, respectively, of the company. From orders denying his motion for a new trial defendant Richtmeyer appealed. Affirmed.
License -- sale of unregistered corporate stock.
1. The evidence conclusively shows that stock of the defendant corporation was sold in this state in violation of our statute requiring that such stock be registered and the sale thereof licensed or approved by the state securities commission.
License -- sale of unregistered corporate stock.
2. It also conclusively appears that defendant Richtmeyer aided and participated in sales of such stock to the plaintiffs.
Corporation -- officer -- liability for illegal sale of stock.
3. An officer of a corporation aiding and participating in the illegal sale of stock or securities of his corporation is liable to the purchaser for the money paid therefor.
License -- sale of unregistered corporate stock -- remedies of purchaser.
4. No rescission or tender back of the stock so purchased was necessary before bringing suit in the situation here shown.
Action -- form of action.
5. The action is not one in quasi contract for money had and received but for recovery on the ground of tort.
Hall & Catlin and Tom Kirby, for appellant.
A. R English and Clarence J. Donnelly, for respondents.
Two cases tried together. In each case the plaintiff sought to recover $1,500 and interest paid by him to defendant Minnesota Petroleum Company, a corporation, for the alleged purchase of stock in that company. The defendants E. W. Richtmeyer, J. O. Stevens, and L. H. Redetzke, are respectively treasurer, president, and secretary of the corporation. At the close of the evidence, the court directed a verdict in each case in favor of the plaintiff against the company and Richtmeyer and Stevens. The defendant Richtmeyer alone moved for a new trial and appeals from the orders denying such motion.
The plaintiffs base their right to recover in tort on the ground that the sales of stock for which they paid their money were illegal and void because said stock had not been registered or licensed or authorized to be sold in this state by the state securities commission, and that defendant Richtmeyer aided and participated in such sales. The stock was sold to plaintiffs in March and April, 1928.
1. That this stock was not registered or licensed to be sold in this state by the securities commission, that it was sold here, and that there was an attempt to evade the law requiring the stock to be so registered and licensed is conclusively shown. The sales were illegal and void.1 Mason Minn. St. 1927, §§ 3996-4, 3996-22; Vercellini v. U.S.I. Realty Co. 158 Minn. 72, 196 N.W. 672; Webster v. U.S.I. Realty Co. 170 Minn. 360, 212 N.W. 806; 14 C.J. 529, § 793.
2. The next question is whether it conclusively appears that defendant Richtmeyer aided and actively participated in the sales of the stock to the plaintiffs. The company was incorporated in Delaware. Its president and treasurer were and are residents of Lyon county, Minnesota. Richtmeyer appears to have been one of the principal organizers of the company. An office was opened and conducted in his building at Marshall in said county. He personally was in charge of and conducted the office. As far as appears, this was the only office of the company where any of its business was transacted. Two salesmen, apparently working out of that office, were employed to solicit and sell stock in the territory of Marshall and vicinity in this state. These salesmen reported their doings to Richtmeyer. Money and checks received by them on sales were brought into the office and delivered to Richtmeyer or the bookkeeper. Richtmeyer deposited funds so received in a...
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