Hamlin v. Abell

• Decision Date: 01 October 1893
• Citation: 25 S.W. 516,120 Mo. 188
• Parties: HAMLIN et al. v. ABELL.
• Court: Missouri Supreme Court

25 S.W. 516

120 Mo. 188

HAMLIN et al. v. ABELL.

Supreme Court of Missouri, Division No. 2.

October 1, 1893.

AGENCY — LIABILITY OF AGENTS — FALSE REPRESENTATIONS — DAMAGES.

1. If a person, without knowledge of the existence of a fact, makes a positive representation that such fact exists, in order to induce another to act, the law imputes to him a fraudulent intent.

2. The mere fact that a person selling commercial paper is a broker is not notice that he is acting as agent.

3. The words "rediscounts, National Bank of Fairmont, Neb.," in a letter by a broker offering commercial paper for sale, do not notify any one purchasing the same that the broker is acting as the agent of the bank.

4. If an agent makes statements fraudulent in law, which cause injury to a person dealing with him, he is liable therefor.

5. When facts are admitted by the pleadings, and are uncontroverted by the evidence, there is no error in assuming their truth for the purpose of instructing the jury.

6. In order to recover from the vendor of a note for fraudulent representations as to the solvency of the maker, it is necessary to show that an indorser thereon is insolvent in order to show any damages.

Appeal from circuit court, Jackson county; R. H. Field, Judge.

Action by Henry W. Hamlin and another against Melville B. Abell. From a judgment for plaintiffs, defendant appeals. Affirmed.

The other facts fully appear in the following statement by GANTT, P. J.:

This is an action for damages growing out of alleged deceit and misrepresentations in the sale of three pieces of commercial paper. Plaintiffs were, during the transactions complained of, and now are, copartners in the general banking business, buying and selling notes and bills of exchange in the city of East Bloomfield, in the state of New York. They allege: That prior to the 28th day of April, 1888, the defendant, Abell, who resides in Kansas City, Mo., was the owner of, and held for sale, three promissory notes, in words and figures following:

"$1,000. Fairmont, Neb. April 2, 1888. October 2nd, '88, after date, for value received, I or we promise to pay J. O. Chase, president, or order, $1,000, at the National Bank of Commerce, Kansas City, with interest at 10% per annum after maturity. [Signed] J. W. Walters."

Indorsed: "Pay M. B. Abell or order. First National Bank of Fairmount, Neb. J. O. Chase, President."

"$806.90. Fairmont, Neb., April 12, 1888. October 12th, after date, for value received, I or we promise to pay J. O. Chase, president, $806.90-100, at the National Bank of Commerce, Kansas City, with interest at 10% per annum after maturity. [Signed] Chase & Walters."

Indorsed: "Pay M. B. Abell or order. First National Bank of Fairmont, Neb. J. O. Chase, President."

"$800. Fairmont, Neb., April 7, 1888. Four months after date, for value received, I or we promise to pay J. O. Chase, president, or order, $800, at the National Bank of Commerce, Kansas City, with interest at 10% per annum after maturity. [Signed] E. L. Martin."

Indorsed: "Pay M. B. Abell or order. First National Bank of Fairmount, Neb. J. O. Chase, President."

"That in order to induce these plaintiffs to buy the aforesaid three promissory notes the defendants falsely and fraudulently represented to the plaintiffs in writing that the said names thereon, that is to say, the makers and indorsers thereof, `were responsible and always and reliably prompt,' and that the said E. L. Martin was a `large dealer in coal, and stock feeder and shipper, and doing a successful business. The notes are well secured by collateral.' J. W. Walters was `a large and prosperous cattle grower and feeder, and pays his obligations promptly. This note is well secured by collateral.' And that the said Chase & Walters was a firm `in good financial circumstances, and engaged in raising horses and cattle. They own a large amount of stock, and they are prompt.' And that the First National Bank of Fairmont, Neb., had a surplus fund of $3,000, and undivided profits of $4,196, a copy of which writing has been hereto annexed, and made a part hereof, marked `Schedule A;' and thereupon, the plaintiffs believing the said representations, and all of them, to be true, and not knowing otherwise, and relying solely upon said representations of the defendant, were induced to, and did, buy the said three promissory notes mentioned, and paid therefor, on April 28, 1888, the sum of $2,521.80; but plaintiffs say that said statements and representations so as aforesaid made by the defendant were not true, and were by the defendant known not to be true, and were made by defendant without any knowledge of the truth of any of said statements. The said names upon said notes, that is to say, the makers and indorsers thereof, were not responsible, and were not prompt, and the said E. L. Martin was not a dealer in coal and a stock feeder and shipper, nor was he doing a successful business, and the said note made by him for $800 was not secured by collateral or at all; and the said J. W. Walters was not a large and prosperous cattle grower or feeder, and did not pay his debts promptly or at all, and said note for $1,000 made by said Walters was not secured by collateral or at all; and the said firm of Chase & Walters was not in good financial circumstances, nor engaged in raising horses and cattle, nor did they own a large amount of stock, nor were they prompt; and the said First National Bank of Fairmont had no surplus fund or surplus, and no undivided profits; and the said E. L. Martin, J. W. Walters, the First National Bank of Fairmont, and Chase & Walters were each and all of them unable to pay their debts, and were insolvent, remained so, and still are insolvent, — all of which defendant then well knew, and the plaintiffs have not been able to collect said notes, or any part thereof, and are unable to obtain payment for any part thereof, and the same, and all thereof, are utterly worthless; and the said plaintiffs, by reason thereof, say that the said notes, nor either of them, were of any value of these plaintiffs, and the plaintiffs have lost the use of their money and the interest thereon, to wit, $2,521.80, by them expended in purchasing the said notes; and that the interest upon and use of said money was and is of the value of 6 per cent. per annum thereon; and that the plaintiffs have also lost and incurred court costs and attorney's fees, to wit, $250, in fruitless and unsuccessful efforts to collect the said notes, and all thereof, by reducing the same to judgment, and the said notes, and each and every one thereof, were, and so as aforesaid, sold by the defendant to these plaintiffs, wholly and absolutely worthless." Wherefore they pray judgment.

The Schedule A referred to in the petition is as follows:

                SCHEDULE A
                Subject to previous sale or withdrawal.     |    List of paper offered for sale by               | These names are responsible. If
                  Please telegraph by                       |                M. B. ABELL,                        |   you wish to investigate them
                  name if wanted. When not                  |  Dealer and Broker in Commercial Paper,            |   please wire me, and, when possible
                  otherwise stated, payable in              |      National Bank Stock, Bond, and                |   will hold paper for your
                  New York or Boston.                       |        Other Investment Securities.                |   KANSAS CITY, Mo., April 21
                                                            |   609 DELAWARE STREET, KANSAS CITY, Mo.            |   1888.
                --------------------------------------------|-|--------------------------------------------------|----------|---------|-------------------
                   PROMISOR OR ACCEPTOR.                      |            DRAWER OR INDORSE.                    |  DUE.    | AMOUNT. |   RATE.
                ----------------------------------------------|--------------------------------------------------|----------|---------|-------------------
                       REDISCOUNT.                            |Payable to and indorsed by the FIRST NATIONAL     |As stated.|         |7½ per cent.
                                                              |               BANK, Fairmont, Neb.               |          |         |
                E. E. MARTIN, Fairmont, Neb.                  |                                                  |          |         |
                  He is a large dealer in coal,               |                   STATEMENT OF                   |          |         |
                  and stock feeder and shipper,               |         FIRST NATIONAL BANK, Fairmont,           |          |         |
                  and doing a successful business.            |            Neb. February 14th, 1888.             |          |         |
                  Note is well secured by                     |                                                  |          |         |
                  collateral.                                 |                                                  |          |         |
                    Due, August 10th, '88...........$  800 00 |                      RESOURCES.                  |          |         |
                                                              |                                                  |          |         |
                J. W. WALTERS, Fairmont,                      | Loans and discounts..................$ 95,006 67 |          |         |
                  Neb. He is a large and prosperous           | United States bonds to secure                    |          |         |
                  cattle grower and feeder,                   |   circulation........................  11,500 00 |          |         |
                  and pays his obligations                    | Other stocks, bonds and mortgages....   9,808 00 |          |         |
                  promptly. This note is well                 | Real estate, furniture and fixtures..   7,055 60 |          |         |
                  secured by collateral.                      | Current expenses and taxes paid......   3,090 52 |          |         |
                    October 5th, '88.................1,000 00 |

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