Hines v. Royce
| Decision Date | 06 January 1908 |
| Citation | 106 S.W. 1091,127 Mo.App. 718 |
| Parties | v. V. G. HINES, Defendant in Error, |
| Court | Kansas Court of Appeals |
Error to Jackson Circuit Court.--Hon. William B. Teasdale, Judge.
AFFIRMED.
Henry C. Solomon for plaintiff in error.
(1) The court erred in overruling defendant's demurrer to the evidence and peremptory instructions. Kerr on Fraud and Mistake, p. 384; Bernecker v. Miller, 44 Mo. 112; Garesche v. McDonald, 103 Mo. 111; Rumbold v Parr, 51 Mo. 592; Funkhouser v. Lay, 78 Mo 462; Henderson v. Henderson, 55 Mo. 534; Ridge v. Grenwell, 53 Mo.App. 483; Waddingham v Laker, 44 Mo. 132; Priest v. Way, 87 Mo. 16. (2) The court erred in giving plaintiff's instructions numbers one, two, three and seven. Davis v. Insurance Co., 81 Mo.App. 264; Buford v. Caldwell, 3 Mo 477; Dunn v. White, 63 Mo. 181; Cahn v. Brungardt, 18 Mo.App. 115; Morse v. Rathburn, 49 Mo. 91; Langdon v. Green, 49 Mo. 363; 157 Mo. 115; Clark v. Edgar, 12 Mo.App. 351; Hitchcock v. Baughan, 36 Mo.App. 220; Baitley v. Smock, 61 Mo. 217; Brauckman v. Leighton, 60 Mo.App. 43; Long v. Warren, 68 N.Y. 426. (3) The court erred in ordering the jury to return to the jury room to further consider of their verdict. Haydel v. Hurck, 5 Mo.App. 267; Ramey v. Bader, 48 Mo. 540; State v. Rombauer, 44 Mo. 592; State v. Knight, 46 Mo. 84.
Ellis, Cook & Ellis for defendant in error.
(1) Overruling demurrer and peremptory instructions not error. (2) The instructions fully and fairly state the law of the case in line with plaintiff's theory and the evidence adduced in support of that theory. State ex rel. v. Haase, 6 Mo.App. 586; Drey v. Doyle, 99 Mo. 459. (3) In refusing to accept a verdict for a less amount than $ 4,500, and in ordering the jury to return to the jury room to "further consider their verdict" the court committed no error.
--This is a suit by plaintiff against the defendant for damages for an alleged fraud. The admitted facts are as follows: The defendant who resided in Kansas City, Missouri, caused to be published an advertisement soliciting persons with capital to take interest in a certain dry goods corporation known as the Royce Dry Goods Company. At that time the plaintiff who was a resident of Sarcoxie, Missouri, answered said advertisement and received a letter from defendant dated February 28, 1903, in which among other things was stated that said dry goods company was conducting a large and profitable business at Kansas City, Missouri, with a stock of about $ 100,000, in value, practically all new goods bought at first hand; that the capital of the said company had been $ 60,000, but at a meeting held on the day of the writing of said letter the managing officers of the corporation had voted to increase the capital stock to $ 100,000; that the corporation was ready to issue such increased stock to purchasers; that the managing officers had concluded to install a new manager, in the shoe, clothing and furnishing-goods department, of their business; and that upon receiving said letter plaintiff went to Kansas City and had an interview with defendant in which he repeated to plaintiff substantially all that was said in the letter.
The plaintiff paid to the defendant $ 4,500, and received in exchange from the defendant forty-five shares of $ 100 each in said corporation. The plaintiff remained in charge of the said department of the business until some time in the early part of July in that year, when on account of some altercation he had with a customer he was discharged by the defendant. The forty-five shares of stock issued to the plaintiff was not additional stock of the corporation but a part of the original stock which was owned by the defendant. There was no such additional stock issued by said corporation. The forty-five shares of stock issued to the plaintiff showed upon their face that it was a part of the original stock. Plaintiff upon receipt of this stock did not examine them but put them in a drawer, in defendant's establishment, to which he had access.
The plaintiff's evidence tends to show, that on about the 2nd of July, 1903, he first learned from the defendant that the corporation had issued no increase of treasury stock and he then learned for the first time, that the shares of stock issued to himself were not increased treasury stock, but were shares of original capital stock and owned by defendant at which time he demanded of defendant the return of said $ 4,500, and offered to return to defendant the said certificates of stock issued to him; that the Royce Dry Goods Company did not have a large and prosperous business; that it was not carrying a stock of goods to the value of $ 100,000, and that the goods carried by it were not new and not bought at first hand, but were largely made up of second-hand inferior goods; that it was not true that defendant had issued prior to said transaction with plaintiff, a part of said increase of treasury stock to subscribers and purchasers; and as a matter of fact the plaintiff introduced evidence tending to prove all the material allegations of his petition.
We do not understand, that defendant contends, that the plaintiff failed to introduce such evidence, but that his contention is that it disclosed such a state of facts as debarred his right to recover, viz., that according to plaintiff's own testimony when he came to Kansas City after having received defendant's advertisement, he was afforded every opportunity to examine said stock of goods on hand and did examine them to his own satisfaction; that he was a merchant of experience capable of informing himself of the quality and the value of the goods on hand; that the shares of stock issued to him showed upon their face that they were not issued for any increase of the capital stock of the corporation but a part of its original stock; that the plaintiff had the opportunity of inspecting them after they were issued to him; that the said advertisement did not purport that any new stock had been issued and only that it was proposed to be issued; and that the plaintiff expressed no dissatisfaction and made no complaint until he was discharged as aforesaid from the employment of the corporation. While such was proved the plaintiff introduced evidence tending to show that notwithstanding he had been a merchant of several years' experience his experience had been in the line of the shoe business mostly and that it was not such as to qualify him to know the value and quality of other kinds of goods belonging to said corporation; and that he relied entirely upon the representation of defendant as to the character of the stock which he was receiving and as to the value and quality of the goods. And it was shown that the goods were of much less value than $ 100,000, and that in the course of a short while the corporation became insolvent and went into bankruptcy.
The cause was submitted to the jury which returned a verdict for the plaintiff, and judgment was rendered from which defendant appealed.
The evidence conclusively establishes that the representation made by the defendant in reference to the proposed issue of increased stock of the said corporation and quality and value of the goods was false and no doubt was an inducement to the plaintiff to purchase said stock. But it is contended by defendant, that there can be no recovery for said false representation because the plaintiff had within easy reach everything necessary to enlighten him concerning said corporation's stock and the quality of and value of the goods.
It is said in Davis v. Insurance Co., 81 Mo.App. 264: "Neither law nor equity will afford relief on the ground of false representation where the subject matter is equally known to both parties, if both parties have equal means of information, and in regard to which one of the other is negligent." And such is the general rule declared and recognized by all the appellate courts of this State. [63 Mo. 181; Brauckman v. Leighton, 60 Mo.App. 38.] In business transactions parties must not neglect to use their own judgment and discretion. [Langdon v. Green, 49 Mo. 363.]
It is clear from these authorities that plaintiff, nothing else...
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