Holmes v. Wilkes

• Decision Date: 25 June 1915
• Docket Number: No 19215 [135].,19215 [135].
• Citation: 153 N.W. 308,130 Minn. 170
• Parties: HOLMES v. WILKES et al.
• Court: Minnesota Supreme Court

130 Minn. 170

153 N.W. 308

HOLMES

v.WILKES et al.

No 19215 [135].

Supreme Court of Minnesota.

June 25, 1915.

Appeal from District Court, Mille Lacs County; William L. Parsons, Judge.

Action by E. M. Holmes against A. C. Wilkes and others. From denial of a new trial, plaintiff appeals. Affirmed.

Syllabus by the Court

A vendor, who induces the purchase of corporate stock by promising the vendee a salaried position with the corporation, knowing that the vendee will not be accepted for such position, and not intending that his representation will be made good, is guilty of actionable fraud.

Evidence held sufficient to sustain a finding that the plaintiff, to induce a purchase of corporate stock by one of the defendants, made such a representation.

The plaintiff having by fraudulent representations induced an exchange of stock owned by him for lands owned by the defendant, the stock by agreement of the plaintiff and the defendant being afterwards temporarily pledged for a debt primarily that of the plaintiff, and having been sold by the pledgee to pay the debt through the fraud of the plaintiff, he cannot complain that the stock was not restored to him upon a rescission of the exchange by the defendant. Laybourn & Lucas, of Minneapolis, for appellant.

E. L. McMillan and Charles Keith, both of Princeton, for respondents.

DIBELL, C.

This action was brought by the plaintiff against the defendants A. C. Wilkes, and his wife, Josephine Wilkes, and William C. Doane, and his wife, Essie P. Doane, to determine adverse claims to 120 acres in Mille Lacs county. The Market State Bank, which had an apparent mortgage on the lands, and Paul F. Ochu, its cashier, were afterwards made defendants on application of the other defendants. There were findings for the defendants; and the conclusions of law directed the cancellation of a deed to the plaintiff, hereinafter mentioned, the cancellation of an agreement for the exchange of the lands for corporate stock, and the cancellation of the mortgage held by the Market Bank. Plaintiff appeals from the order denying his motion for a new trial.

[1] 1. It is the law of this state that a vendor, who induces the purchase of his property by false representations, though promissory in nature, at the time not intending to perform them, and not intending that his representations will be made good, is guilty of actionable fraud. McElrath v. Electric Investments Co., 114 Minn. 358, 131 N. W. 380, and cases cited; Olson v. Smith, 116 Minn. 430, 134 N. W. 117.

[2] 2. A question of some difficulty is whether the evidence in the case at bar presents a state of facts justifying the application of the rule of law stated.

In August, 1913, the plaintiff and the defendant Wilkes entered into negotiations for the exchange of the lands involved for shares of stock in the Quaker Creamery Company. The court finds that for the purpose of inducing defendant Wilkes to make such exchange the plaintiff represented that he held a position with the company at a salary of $1,500, which in fact he had; that he would, as a part of the transaction, secure to Wilkes a position at the same salary, going so far as to say that the position had been secured; that the position was not secured; that the plaintiff knew at all times that he could not secure it for Wilkes; that he did not intend to do so; and that such representations were falsely and fraudulently made for the purpose of effecting the exchange and that Wilkes was induced thereby to make it.

We have examined the evidence in support of the findings recited. It is not entirely satisfactory. The trial court did not find it so; but it was of the opinion that fraud was fairly proved and we accept its finding. It said:

‘While the testimony of defendant A. C. Wilkes is in some...