Meech v. Malcolm

• Decision Date: 21 December 1914
• Citation: 92 A. 657,88 Conn. 720
• Court: Connecticut Supreme Court
• Parties: MEECH v. MALCOLM.

92 A. 657

88 Conn. 720

MEECH

v. MALCOLM.

Supreme Court of Errors of Connecticut.

Dec. 21, 1914.

Appeal from Superior Court, New Haven County; Marcus H. Holcomb, Judge.

Action on a note by Charles E. Meech against Thomas Malcolm. Judgment for plaintiff. Defendant appeals. Affirmed.

George O. Brott and George J. Stoner, both of Hartford, for appellant.

George E. Beers and Charles F. Roberts, both of New Haven, for appellee.

RORABACK, J. This is an action upon a renewal note dated December 8, 1909, payable six months after date to Randolph C. Andrus and William D. Johnson, or order, and transferred by them to the plaintiff. The complaint averred that the plaintiff "is now the bona fide holder and owner of the note." The note in suit was the last of a series of renewal notes for one that was originally given by the defendant in May, 1908, to Andrus and Johnson. The original note was given in payment of a certain number of shares of the capital stock of the Four Metals Mining Company of California. The answer denied that the plaintiff was the bona fide holder and owner of the note. It was also averred by the defendant in his answer that he was induced to purchase the stock by the fraud and misrepresentation of the original payees of the note. The defendant also alleged in his answer that a certain pamphlet or prospectus which had been issued by the mining company was the fraudulent means used to induce him to purchase the stock and give the note upon which the plaintiff bases his cause of action.

The superior court has found that the defendant was not induced to purchase the mining stock or give this note by the statements and representations of the payees of the note, or by the statements set forth in the pamphlet or prospectus of the mining company, but that the defendant concluded to make this purchase of the stock in consequence of information which he obtained of all the facts from other sources, and by an investigation of the mining property which he personally made before he purchased the stock for which he gave his note. The trial court has also found that the plaintiff was the bona fide holder and owner of the note in question. The finding also states that in April, 1908, the Four Metals Mining Company had an agreement for the purchase of the mining properties which were afterwards conveyed to it. This agreement was made with one McGrath, as trustee for the company. It was duly recorded in the land records of the county in which the mining property was located. A deed conveying all of the property to McGrath as trustee for the company was also deposited in escrow. This deed was to be delivered upon payment of the purchase price of the property as fixed by the terms of the agreement. This agreement was consummated in March, 1910. In February, 1910, McGrath, by his deed, conveyed all of this property to the mining company.

The defendant in the spring of 1908, had his office and place of business in Hartford, Conn. At this time the Pour Metals Company had its principal office in San Jose, Cal. One Randolph C. Andrus, a stockholder and director of the mining company, was then the authorized agent of the mining company to sell its stock. During the winter of 1907 and 1908 Andrus was in Hartford selling the stock of the Four Metals Mining Company. One William D. Johnson introduced Andrus to the defendant. Johnson and the defendant were intimate acquaintances, and had their offices in the same building in Hartford. The defendant and Johnson became interested in the properties as described by Andrus who suggested to them that they go out and investigate and examine the properties for themselves, and this they decided to do. On April 13, 1908, the defendant, with Andrus, Johnson, and one Rhodes, left Hartford, and they went to the mines of the company, located near Keeler, in the state of California. While at the mines the defendant personally met McGrath, the trustee, and was personally present at, and took part in, several conversations between McGrath and the members of the party, in which conversations the details of the agreement for the purchase of the property by the Four Metals Mining Company were explained and discussed. The members of the party, including the defendant, were conducted around the property, smelter, and other buildings connected with the mines. The defendant and those with him remained two days and one night at the mines upon the property in question. At this time there were notices posted upon buildings connected with the mines in conspicuous places which stated that the title to the mines was in the name of the Purchasing & Reduction Company, and that McGrath held them under a contract of sale.

After leaving the mines the members of the party, including the defendant, went to San Francisco, Cal. On the way to San Francisco the defendant talked with Johnson and others concerning the contract for the purchase of the properties by McGrath, the trustee. At San Francisco the defendant and Johnson visited the Bureau of Mines for information concerning the mines and mining property. From San Francisco the defendant and Johnson went to San Jose, Cal., to the main office of the Four Metals Mining Company. At this office the defendant was introduced to several officers of the company, including the president and secretary thereof. He there conversed with them regarding the property and affairs of the company, including the contract, which was produced. The defendant then had full opportunity to read and examine the contract as he desired, and to obtain full knowledge concerning the affairs of the company.

It was agreed between the defendant and Johnson that each would keep a daily memorandum upon their trip to California. Each kept a memorandum as agreed, and during their return trip to Hartford each read his memorandum to the other. In the memorandum made by Johnson mention was made of the purchasing contract of E. McGrath, trustee. Johnson then discussed with the defendant how the payments due under the purchasing contract could be met from the profits of the Four Metals Mining Company in operating the mines.

The...