Mayer v. Rankin

• Decision Date: 31 December 1936
• Docket Number: 5781
• Citation: 91 Utah 193,63 P.2d 611
• Court: Utah Supreme Court
• Parties: MAYER v. RANKIN et al

63 P.2d 611

91 Utah 193

MAYER v. RANKIN et al

No. 5781

Supreme Court of Utah

December 31, 1936

Appeal from District Court, Third District, Salt Lake County; Allen G. Thurman, Judge.

Action by Karl H. Mayer against Lester Rankin and the Fidelity &amp Casualty Company of New York. From a judgment of dismissal plaintiff appeals, and the second named defendant moves to dismiss the appeal.

REVERSED AND REMANDED WITH DIRECTION.

Allen T. Sanford and Chris Mathison, both of Salt Lake City, for appellant.

Hurd &amp Hurd, of Salt Lake City, for respondents.

ELIAS HANSEN, Chief Justice. FOLLAND, EPHRAIM HANSON, and MOFFAT, JJ., WOLFE, Justice, concurring.

OPINION

ELIAS HANSEN, Chief Justice.

Plaintiff prosecutes this appeal from a judgment dismissing his complaint in which was alleged six causes of action. Both of the defendants were served with summons. Defendant Rankin did not answer or otherwise plead to the complaint. He has not filed a brief on this appeal. The defendant Fidelity & Casualty Company of New York, hereinafter referred to as respondent, filed a special and general demurrer to each of the six causes of action set out in the complaint. The demurrers were sustained and leave granted to amend. Plaintiff filed an amended complaint, which, upon motion of the respondent, was stricken on the ground that the amended complaint did not cure the defects of the original complaint. Plaintiff failed to further plead whereupon the action was, by the court, dismissed. Plaintiff assigns as errors the order sustaining the demurrers to the complaint, the order striking the amended complaint, and the judgment dismissing the action.

At the threshold of this appeal we are confronted with respondent's motion to dismiss the same. The motion is bottomed on the claim that the action was not dismissed as to the defendant Rankin, and that therefore the judgment of dismissal is not a final judgment from which an appeal may be had. The judgment of dismissal states, among other matters, that "now, on motion of Hurd & Hurd, attorneys for defendant Fidelity & Casualty Company, no one appearing in opposition: It is ordered and adjudged that the said action be and the same is hereby dismissed." It will be observed that the judgment of dismissal is in no sense limited to respondent. By its plain language the entire action was dismissed. It is stated by counsel for respondent that the action was not dismissed upon their motion, but upon the motion of the attorneys for appellant, and that, therefore, appellant is precluded from prosecuting his appeal. The difficulty with respondent's claim that not it but appellant requested the dismissal of the action is that such claim is dehors the record. If the judgment appealed from was in fact entered upon appellant's motion, the lower court could, and, upon timely motion, should have made the record speak the truth. This court may not change the record made by the trial court. The judgment, in its present form, was final as to all parties thereto, and, as such, an appeal may be had therefrom. As a further reason why the appeal should be dismissed, respondent urges that the assignment of errors was not served on defendant Rankin. There is no merit to that contention even though it be assumed that such objection is available to respondent. The record shows that the assignment of errors was served upon J. A. Barclay who, according to affidavits filed in the cause, was authorized by defendant Rankin to accept such service for and on his behalf. The motion to dismiss the appeal is denied.

In the main, the allegations of each of the six causes of action are the same. Each cause is founded upon alleged fraud of the defendant Rankin in the sale of mining stock to one of plaintiff's assignors. Plaintiff seeks to hold the respondents liable on their bond which it, as surety, executed to enable Rankin to secure permission to do business as a dealer in securities pursuant to the provisions of Laws of Utah 1925, chap. 87, p. 188, as amended by Laws of Utah 1929, chap. 79, p. 140. The allegations of the original and amended complaints differ in a number of immaterial particulars which need not concern us. There are, however, some differences in the two complaints which are deemed material and which will presently be discussed. The claimed errors in sustaining the demurrers to the original complaint and in striking the amended complaint involve a consideration of the same questions of law; that is to say, if the original complaint is fatally defective in the particulars urged, and none of such defects were cured by the amended complaint, then, and in such case, the appellant has no just cause to complain because the latter was stricken. To avoid prolixity, we shall dispose of the law questions presented in the light of the allegations of the amended complaint. The fraud alleged in plaintiff's first cause of action is:

"That on or about the 28th day of November, 1932, the defendant, Lester Rankin, devised a scheme to defraud the plaintiff's assignors hereinafter named, and others, by selling them stock issued by the Mineral Veins Coalition Mines Company at false and fictitious values; and the said defendant, for the purpose of carrying out said scheme, on or about the date aforesaid, secured an option to purchase, and did thereafter purchase, from said Mineral Veins Coalition Mines Company, 1,000,000 shares of its treasury stock. And the plaintiff is informed and believes, and therefore alleges the fact to be, that, for the same purpose, the said Lester Rankin, during the months of December, 1932, and January, 1933, purchased about 5,000 shares of the capital stock of said company at a price not exceeding 2 1/2c per share.

"That on the 19th day of January, 1933, the defendant, Lester Rankin, proposed to sell to A. A. Miller 5,000 shares of the capital stock of said Mineral Veins Coalition Mines Company at the price of 15c per share. And the said Lester Rankin for the purpose of inducing said A. A. Miller to purchase said stock, and pursuant to the fraudulent scheme hereinabove alleged, stated and represented to said A. A. Miller, as follows:

"That said stock was the treasury stock of said Mineral Veins Coalition Mines Company, and that the same had been registered in the office of said State Securities Commission of this State; that on February 1, 1933 he was going to sell his said stock to a New York bank, and that the money was already in said bank to meet the payment for said stock.

"That said A. A. Miller believed and relied upon each and all of said statements and representations, and, induced thereby, he, on or about the 19th day of January, 1933 entered into a contract with said Lester Rankin to purchase, and he did actually purchase, 5,000 shares of capital stock of said Mineral Veins Coalition Mines Company at the price of 15c per share; and thereupon, and pursuant to said contract, the said Lester Rankin transferred and delivered to said A. A. Miller 5,000 shares of said stock, and in consideration thereof said A. A. Miller paid to said Lester Rankin the sum of $ 750.00.

"That each and all of said statements and representations so as aforesaid made by the defendant, Lester Rankin, to said A. A. Miller, were false and were made for the purpose of defrauding said A. A. Miller of his money; and said Lester Rankin intended by such statements and representations to deceive said A. A. Miller, and to induce him to act otherwise than he would have acted but for such statements and representation. That said statements and representations were false in this:

"That said stock sold, and offered to be sold, by said Lester Rankin to said A. A. Miller was not the treasury stock of said Mineral Veins Coalition Mines Company, but his own stock; that said stock had not been registered in the office of the State Securities Commission of this State; that he, said Lester Rankin, was not going to sell said stock to a New York bank on February 1, 1933, or at any time, and the money for that purpose was not already, or at any time, in said bank, or elsewhere, to meet the payment for said stock."

Similar allegations are contained in each of the other five causes of action. In one of such other causes it is alleged that Rankin, contrary to the fact, stated that the stock was selling at 40 cents per share, and that the same was listed on the Chicago exchange, and was there selling at 50 cents per share. In two of the causes of action it is alleged that for the purpose of inducing plaintiff's assignor to purchase the stock Rankin falsely stated that he had actually entered into a contract for the sale of the stock at, in one case, for 50 cents per share, and in the other for 60 cents per share.

It is contended by respondent that the foregoing alleged facts, even if established by the evidence, are not sufficient to justify a rescission of the contract of sale. That contention cannot be maintained. Wilson v. Guaranteed Securities Co., 82 Utah 224, 23 P.2d 921; Campbell v. Home Bldg., etc., Co., 46 Utah 1, 148 P. 401. Respondent further contends that it is not liable on its bond to purchasers of securities who may have been defrauded by Rankin. The bond which respondent executed and delivered to the securities commission of Utah provides:

"Know all men by these presents, that we Lester Rankin of Salt Lake City, State of Utah, as principal and the Fidelity & Casualty Company of New York, State of New York * * * as sureties are, by this obligation held and firmly bound unto the State of Utah, in the sum of Five Thousand ($ 5,000.00) Dollars good and lawful money of the United States of America, and for the payment of said sum of money and the faithful observance of this instrument in writing, the subscribers bind...