Loughery v. Cent. Trust Co.

• Decision Date: 06 January 1927
• Parties: LOUGHERY v. CENTRAL TRUST CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

258 Mass. 172

154 N.E. 583

LOUGHERY

v.CENTRAL TRUST CO. et al.

Supreme Judicial Court of Massachusetts, Norfolk.

Jan. 6, 1927.

Appeal from Superior Court, Norfolk County; M. Morton, Judge.

Action in tory by James J. Loughery against the Central Trust Company and others. From an order for entry of judgment for defendant, after sustaining of demurrer to declaration, plaintiff appeals. Affirmed.J. A. Locke, of Boston (E. S. Abbott, of Boston, on the brief), for appellant.

H. D. McLellan, of Boston (J. A. Daly, of Boston, on the brief), for appellees.

WAIT, J.

This is an appeal from an order for entry of judgment for the defendant, after the plaintiff's declaration had been held had on demurrer and no amendment thereto had been made. The action is at law, in tort. The declaration is very long, but in a single count. After the recital of transactions in which the plaintiff, the defendants, one Richard Hittinger, and the American Ammonia Company were concerned, the declaration alleges that, knowing these things, the defendants conspired to defraud the plaintiff and, in pursuance of the conspiracy, to obtain control of the plaintiff's majority interest in the voting capital stock of the American Ammonia Company and to obtain releases of the claims of that company against the estate of Richard Hittinger and the defendants George B. and Morton B. Howard, by falsely and fraudulently representing and agreeing that if the plaintiff would do certain things, particularly set out, the defendant Bright, acting for himself and for the other defendants, would become trustee under a voting trust for the purpose of making it possible properly to finance the company and to handle and manage its affairs, actively and intelligently, for the benefit of its creditors and stockholders; the defendant Central Trust Company would designate a treasurer of the company in place of the plaintiff until a time to be determined in accord with the terms of a written agreement dated August 12, 1922, a copy of which was annexed to the declaration; the defendants Davis, Morton B. Howard, and one Richard Hittinger, Jr., would serve as directors of the company until that time; the Central Trust Company and Morton B. Howard would choose a general manager for the company in place of the plaintiff; Bright and the other defendants would properly finance the company; and Bright would handle and manage the company's affairs actively and intelligently for the benefit of its creditors, stockholders and the plaintiff, who was to be employed on terms fixed in said agreement. It alleges that in reliance on these representations, the plaintiff signed the written agreement referred to, resigned as treasurer and general manager of the company, transferred his shares of voting capital to Bright to be held upon the terms of the agreement of August 12, 1922. It fails, however, to allege that he did all the things set out to be required of him, and to allege that he did certain of the things which he sets out to be done by him. It alleges that Bright neglected and refused to act as voting trustee; that he and the other defendants neglected and refused to carry out this agreement to manage the company for the best interests of its stockholders and creditors and the plaintiff, or to do anything whatever in regard to financing the company further. It alleges that the company was not managed in good faith, and that in pursuance of the conspiracy and to effect its object, the defendants destroyed the value of the company which in consequence became, and, on November 8, 1922, was adjudicated bankrupt. It alleges that all the representations and agreements made in pursuance of the conspiracy as set forth in the declaration were made ‘with knowledge of the falsity of said representations, and with no intent to carry out and perform and with the intent not to carry out and perform said agreements and to manage [the company] in good faith in accordance with the fiduciary duty thereby undertaken and represented to be undertaken’; that they intended that the plaintiff should rely and act on the representations and agreements; that the plaintiff was ignorant of the falsity, of their lack of intent to perform and of their intent not to perform the agreements and to manage the company in accord with the duties undertaken; that he relied upon the representations and agreements, and acted thereon to his damage.

The declaration concludes with alleging ignorance of the conspiracy, of the wrongful acts of the defendants and of their wrongful and illegal acts in carrying it into effect, until shortly before bringing the action; and that the defendants destroyed the value of the American Ammonia Company so that the plaintiff lost the value of his stock, of his position, of his secret formula used in manufacturing ammonia, and the value of a note for $21,288.28, made by the company and held by him.

[1][2] Not of the statements alleged to be representations is the affirmation of an existing fact. If representations to be actionable must be assertions of facts as existing, it is clear that no cause of action is set out. The law refuses to permit recovery in tort for damage resulting from reliance upon false statements of belief, of conditions to exist in the future, or of matters promissory in nature. Knowlton v. Keenan, 146 Mass. 86, 15 N. E. 127,4 Am. St. Rep. 282;Brown v. C. A. Pierce & Co., 229 Mass. 44, 118 N. E. 266;Dawe v. Morris, 149 Mass. 188, 21 N. E. 313,4 L. R. A. 158, 14 Am. St. Rep. 404.

[3][4] The plaintiff contends that the gist of the action is the conspiracy. We have held in Willett v. Herrick, 242 Mass. 471, 136 N. E. 366,Martell v. White, 185 Mass. 255, 69 N. E. 1085, 64 L. R....