Moore v. Carrick

• Decision Date: 13 April 1914
• Docket Number: 3954
• Citation: 140 P. 485,26 Colo.App. 97
• Parties: MOORE v. CARRICK.
• Court: Colorado Court of Appeals

140 P. 485

26 Colo.App. 97

MOORE v. CARRICK.

No. 3954

Court of Appeals of Colorado

April 13, 1914

Error to District Court, Mesa County; Sprigg Shackleford, Judge.

Action by Herbert L. Carrick against Thomas B. Moore. There was a judgment for plaintiff, and defendant brings error. Reversed and remanded.

Fry &amp Welch, of Grand Junction, and Rothgerber & Appel, of Denver for plaintiff in error.

Solon T. Williams, of Seattle, Wash., for defendant in error.

KING J.

This action was brought by Herbert L. Carrick, defendant in error to obtain the cancellation of a deed by which he conveyed to Thomas B. Moore, plaintiff in error, 20 acres of land situated in Mesa county, Colo., for which he received from said Moore 90 shares of the capital stock of the Hudson's Bay Mutual Fire Insurance Company of Vancouver, a corporation organized under the laws of British Columbia. The complaint alleges that the deed was procured by the defendant througn his fraud, and through the fraud and conspiracy of defendant and the said insurance company; that the defendant falsely and fraudulently represented to the plaintiff that the said stock was good stock, was worth $110 a share, and that he had paid $110 a share for the same; that the officers and agents of said company and the defendant, conspiring to cheat and defraud plaintiff, falsely and fraudulently represented to plaintiff that the stock was good stock and worth the sum of $110 a share; that defendant knew such representations were false, and made the same for the purpose of defrauding plaintiff out of his land; and that plaintiff relied upon said false and fraudulent representations, believing the same to be true, and, so believing and relying, accepted defendant's offer, and on March 4, 1911, in consideration of said stock, made, executed, and delivered the deed; that the said company, at the time of the signing of said deed, was totally insolvent; and that the stock was and is of no value. The answer admitted the exchange of the land for the 90 shares of stock mentioned in the complaint, and denied each and every other allegation of the complaint.

The evidence on the part of the plaintiff is substantially as follows: Plaintiff and defendant had no conversation or communication, were not acquainted, and had not met each other until long after the transaction in question. Plaintiff was a resident of Seattle, defendant of Vancouver, but was doing business in both Vancouver and Seattle as a broker, and buying and selling lands and stocks on his own account. George L. Estes was a resident of Seattle, engaged in the general brokerage business. About February 24, 1911, Estes overheard a conversation between Moore and the Sunset Realty Company, in which Moore mentioned that he had for sale or trade some stock in the insurance company. Estes followed Moore out of the office, and a conversation took place between them on the street, in which Estes stated that if the stock was good he thought he might be able to handle some of it, in answer to which Moore said, "You assure yourself that it is all right, and then, if you want to make the deal, all right," and suggested that he inquire of the president of the insurance company and of brokers in Vancouver. At that time, and perhaps about the 27th also, Moore stated that the stock was good, was worth $110; that he had paid that for it. On the 27th of February, Estes procured from Moore or from his certificate of stock the name of the president, and sent the telegram and received the answer following:

"Seattle, Wash., Feb. 27, 1911. Chas. W. Jennings, Dominion Trust Building, Vancouver, B.C. What is stock Hudson Bay Mutual Fire worth *** what price can it be cashed. *** Send full particulars. [ Signed] Geo. L. Estes, 1258 John St."

"Vancouver, B.C., Feb. 27, 1911. 6:12 P.M.G.L. Estes, 1258 John St., Seattle. Hudson Bay Fire has no more stock for sale. Vancouver brokers paying 110 per share. Chas. W. Jennings, President."

About the same time, Estes began to talk with Carrick relative to purchase of the stock. Estes showed the telegram to Carrick, and told him that it sounded good. Both Estes and Carrick went to Vancouver personally to investigate the company and the stock. Estes examined the articles of incorporation, and found that the company was incorporated for $100,000 "guaranteed" stock, so called. He examined the law under which the company was incorporated, and came to the conclusion that under such law its capital stock was insured or guaranteed, and inquired of the president of the company and of the cashier of some bank as to its value. Plaintiff had a personal interview with Jennings, president of the company, who told him, and also Estes, that the stock was worth 110 and would be worth more. The conversation between the president and Carrick was on March 1st. Prior to that time, Carrick, or Carrick and Estes, had secured 26 shares of the stock, which plaintiff then offered to sell at par, and took back to Seattle a letter from Jennings, addressed to Estes, dated March 1st, stating that a man named Allen would take the stock at par, and had deposited a check for $100, and directing Estes to send the stock and draft through a bank in Seattle. This offer was accepted. Thereafter, Estes met Moore, and stated that he could get some fruit land in Colorado for shares of the stock, to which Moore replied, "All right, he would consider anything of that kind if we" (meaning Estes and his client, Carrick) "were satisfied that the stock was all right." Estes told Moore that the proposition was for fruit land in Colorado--20 acres at $500 an acre. After some negotiations between Carrick and Moore, carried on entirely through Estes, the trade was closed. Estes delivered the deed to Moore and received the stock on or about March 4th. It is shown that, at about the time of the foregoing transaction, the Dominion Investors' Corporation, Limited, was attempting to secure, and did secure, a majority (more than $50,000) of the capital stock of said company, for the purpose of obtaining control of the corporation; that they traded property at their market price for the stock at par value, and that other trades were made for the stock at or about the same time; that about November, 1910, one James Ball traded a house to defendant for 30 shares of the said stock, and that Ball got in communication with Moore through an advertisement which stated that the advertiser had some good commercial stock to exchange for a house, and to apply at a certain telephone number, which thereafter appeared to be the telephone number of the insurance company. It further appeared that, some time after the transaction between the plaintiff and the defendant was concluded, the persons who had secured a majority of the stock demanded a statement from the president of the company, and began investigations of its conditions, preparatory to taking charge, whereupon the president fled. Upon such investigation, no assets or books could be discovered. The president was arrested, tried, convicted for swindling, and sent to the penitentiary. Ball caused the arrest of Moore as a conspirator with the company. Upon trial before the county court tn Vancouver, at which both Carrick and Estes testified for the prosecution, Moore was acquitted; a transcript of their evidence at that trial being in evidence here.

All the evidence upon the part of the plaintiff in this case is by deposition or transcript as aforesaid, with the exception of one witness as to the value of the land. Neither Carrick nor Estes testified, nor does it otherwise appear, that the statements made by Moore to Estes, relative to the stock, were communicated to Carrick. Neither of them testified that Carrick relied upon such statements, or any of them. The transcript of Estes' testimony before the county judge shows that while Estes was under examination, the following questions were asked and answers made: "Q. At any rate, he (Moore) left it to you to make your inquiries about the stock in Vancouver? A. Yes. Q. You did investigate it? A. Yes. Q. And it was not from anything he said to you that you recommended the deal to your client, but rather from what you learned from Mr. Jennings' telegram, or some other source? A. That's right." And in his deposition: "Q. But I mean Mr. Moore left it to you to investigate the value of the stock, didn't he? A. He told me to investigate it, yes. Q. And it was not from what Moore told you, but rather from what you got from Jennings and what Mr. Carrick found out, that you relied on in making the deal? A. It only backed up what Mr. Moore had already said in regard to the stock--that it was good--that part of it; but I didn't particularly go into the proposition until I investigated both ends of it, you understand. I could tell you that stock was good, but you wouldn't take it until you went and seen what the company was. Q. Did Mr. Moore ever make any representation of the value of the stock before the deal? A. He spoke about the stock being good: 'As far as I know, the stock is good. I would not take less than $110 a share.' Q. That is what Mr. Moore said? A. Yes. Q. Did he tell you to investigate? A. Yes." There was no testimony on the part of plaintiff showing, or tending to show, that Moore did not pay $110 for the stock, nor, indeed, what price he paid; nothing to show that, if any of his alleged statements of fact were false, he knew them to be false, except as to the price he had paid; nothing tending to show that he knew or had opportunity to know anything more about the company's affairs than Carrick and Estes knew. The witness Ball testified that he had seen Moore in the office of the company--Ball was there himself.

At the time of the trial in this case, Moore was called...