Henderson v. Towle

• Decision Date: 02 February 1922
• Docket Number: Civil 1892
• Citation: 23 Ariz. 377,203 P. 1085
• Parties: R. L. HENDERSON, Administrator of the Estate of WILLIAM HENDERSON, Deceased, Appellant, v. F. F. TOWLE, P. P. GREER, J. N. ROBINSON, and THE FIRST NATIONAL BANK OF GLOBE, a Corporation, Appellees
• Court: Arizona Supreme Court

203 P. 1085

23 Ariz. 377

R. L. HENDERSON, Administrator of the Estate of WILLIAM HENDERSON, Deceased, Appellant, v. F. F. TOWLE, P. P. GREER, J. N. ROBINSON, and THE FIRST NATIONAL BANK OF GLOBE, a Corporation, Appellees

Civil No. 1892

Supreme Court of Arizona

February 2, 1922

APPEAL from a judgment of the Superior Court of the County of Gila. G. W. Shute, Judge. Affirmed.

STATEMENT OF FACTS.

The appellant (hereinafter referred to as plaintiff) on February 6, 1919, commenced an action against the appellees (hereinafter referred to as the defendants) and in his third amended complaint alleged as follows: Plaintiff is the administrator of William Henderson, who died in December 1915. Henderson being indebted to the defendant, the First National Bank of Globe, in the sum of about $17,800 transferred to it as security certain properties including 35,327 shares of the capital stock of Gibson Copper Company. After plaintiff's appointment as administrator, he applied to defendant Greer, president of the bank, for the property and effects of his intestate that might have been left over after paying the obligation due the bank, and was informed by Greer that said properties had been exhausted to pay Henderson's obligation and that therefore the bank had none of said assets. Thereafter, and on April 4, 1917 plaintiff caused the defendants, Greer and Towle, to be cited to appear and testify in accordance with the provisions of paragraphs 861 to 864, Civil Code, in the probate proceedings, and upon such appearances these witnesses deposed as follows: Greer, that he had been president of the bank since 1912; that after the bank had applied all the securities, with the exception of the stock of the Gibson Copper Company, to pay Henderson's obligations, there remained a balance due the bank of about $1,500; that he and the defendant Robinson (the latter being also an officer of the bank) paid the bank the balance due and had the stock transferred to their own names, and, as the complaint alleges, "appropriated the same to their own use and benefit." Towle's testimony was to the effect that he had been secretary of the Gibson Copper Company for about eleven years; that the records of that company showed that Henderson owned 35,327 shares of the company's stock which, on December 20, 1913, was transferred to the bank that the Gibson Copper Company sold its holdings for $250,000 to the Gibson Consolidated Copper Company, the former company receiving of the purchase price $143,000 in cash and the balance in stock of the new company.

Plaintiff then brought suit against the bank, Gibson Copper Company, and the defendants Greer and Towle and Robinson "to recover the aforesaid 35,327 shares of the stock of the Gibson Copper Company, a corporation, and, upon the establishment of said claim, for an accounting to him as such stockholder by the Gibson Copper Company and F. F. Towle of the management of the affairs of the Gibson Copper Company." In that suit the defendants proposed to plaintiff to enter into a stipulation whereby the action was to be dismissed as against the defendants the First National Bank of Globe, Greer, and Robinson, and the alleged claim of plaintiff to said stock relinquished as against all the defendants, in consideration of $44,157 to be paid to plaintiff, with the right reserved, however, to plaintiff to commence an examination of the books and accounts of the Gibson Copper Company on or before January 1, 1918, and to proceed with the same in a diligent manner to ascertain whether one-half of said stock was entitled to a liquidation value of more than $2.50 per share, being the amount paid to plaintiff as the consideration for his claim to all the stock, the suit to recover the stock to be dismissed by order of the court, upon motion of the parties to the stipulation. This stipulation was made November 27, 1917, and filed in the court, the money paid to plaintiff, and the cause dismissed as against the bank, Greer, and Robinson, the accounting being the sole issue left to be thereafter determined. It is then alleged that upon plaintiff's examination of the records of the Gibson Copper Company he found such statements to be false, in this, that at the time defendants Greer and Robinson appropriated the stock, Henderson's indebtedness to the bank had been more than paid off and satisfied, and that the representation that Gibson Copper Company received only the sum of $250,000 in cash and stock was untrue, in that it had received $250,000 in cash and 250,000 shares of the capital stock of the Gibson Consolidated Copper Company. It is further alleged that the representations made by Greer and Towle deceived and misled plaintiff and that he would not have made the agreement of compromise but for his reliance on such statements. Judgment for damages is prayed for the difference between the amount received by plaintiff in the compromise settlement and the actual value of the stock at the time of the compromise.

To this complaint the defendants (with other pleas) demurred, generally and specially, which demurrers were by the court sustained, and the plaintiff declining to amend, final judgment was rendered in behalf of the defendants, and the cause is here on appeal by plaintiff from such judgment.

Mr. Jay Good, for Appellant.

Messrs. Morris & Malott, for Appellees.

OPINION

FLANIGAN, J.

(After Stating the Facts as Above.) The former action, brought by plaintiff to recover the 35,327 shares of the Gibson Copper Company's stock from defendants, was compromised by the stipulation and agreement of the parties under which plaintiff relinquished to the defendants all claim to the stock, suffered judgment of dismissal, and received from defendants the sum of $44,157. The present action is brought to recover an additional sum in money to compensate plaintiff for the damages he alleges he sustained in parting with the stock at an inadequate price, under the agreement as executed, all of which he was induced to do by the fraudulent misrepresentations of the defendants of certain facts concerning the value of the stock.

Stated as strongly as the case allows, plaintiff's...