Mulvey v. Anderson

• Decision Date: 30 January 1915
• Docket Number: No. 1324.,1324.
• Citation: 173 S.W. 738,187 Mo. App. 430
• Parties: MULVEY v. ANDERSON et al.
• Court: Missouri Court of Appeals

173 S.W. 738

187 Mo. A. 430

MULVEY v. ANDERSON et al.

No. 1324.

Springfield Court of Appeals. Missouri.

January 30, 1915.

Rehearing Denied February 16, 1915.

Appeal from Circuit Court, Dunklin County; W. S. C. Walker, Judge.

Action by Joseph E. Mulvey against William P. Anderson and another. From a judgment for plaintiff, defendants appeal. Reversed.

Henry W. Blodgett, of St. Louis, I. R. Kelso, of Cape Girardeau, and Ely, Pankey & Ely, of Kennett, for appellants. Charles Claflin Allen, of St. Louis, and Bradley & McKay, of Kennett (J. L. Fort, of Bloomfield, of counsel), for respondent.

STURGIS, J.

This case is somewhat out of the ordinary, though the plaintiff says the petition is "very simple." As near as we can describe the cause of action in a single sentence, plaintiff asserts a conspiracy by the defendants to induce him by false promises to go in with them and help establish and build up a prosperous and going business concern in which each would share in the profits with the intention, afterward carried out, of wrongfully excluding him from such established business. The plaintiff was allowed to recover as damages the value of his proportional share of the common venture or business as a going concern at the date of the alleged wrongful expulsion of plaintiff therefrom. The plaintiff insists that his action is one sounding in tort, the basis of which is fraud and deceit, and is not one arising on contract. The cause was tried to a jury, which awarded plaintiff $5,000 damages.

Going more into details, it is alleged and proven that defendants were large manufacturers of cooperage stock, and desired to form the business concern mentioned as a selling agency for the products of their factory, though other similar products would be bought and sold to a limited extent. The plaintiff was an experienced and successful salesman in this line and held a position as salesman with another company. The defendants were men of means and good commercial standing and promised that, if plaintiff would go in with them and act as manager and salesman for the new concern, he would be paid a salary of $200 per month and share in the profits, one-third to each, and that defendants would back the concern so as to give it credit and standing and let it sell their products. Defendants were also to furnish what ready money was found necessary (which was not a large amount) to carry on the business. To this arrangement plaintiff agreed and gave up his other employment. It was also agreed that the business venture would take a corporate name, the "Manufacturers' Cooperage Company," though nothing was done or to be done in organizing this corporation except to get a certificate from the Secretary of State showing the name of the corporation with a capital stock of $30,000. The plaintiff and defendants were represented as subscribing for one-third each of this capital stock. Plaintiff testified that it was understood that the capital stock was not to be paid and no certificates of stock were to be issued.

As the business was carried on under this corporate name for 2½ years, and it is plaintiff's interest in the business venture under that name that he claims he was wrongfully and fraudulently deprived of, we adopt what plaintiff says in his brief as properly characterizing this corporation, as follows:

"The corporation, though organized formally, was a mere instrument, as means to an end, in the accomplishment of the plans and purposes of the defendants. It is so pleaded, and the uncontradicted testimony shows it to be so. The real undertaking was to divide profits independently of the corporate forms. There were no meetings, no stock was issued, no money paid in or ever intended to be paid in, no corporate act was done until December, 1912, when the plaintiff signed as an officer and assigned as an individual the certificates issued to him and turned them over to the defendants. As between the parties here in court, the corporation was `a pretended and fictitious' corporation."

The liability of plaintiff and defendants to creditors of this fictitious corporation is not here involved, though defendants say their agreement was to take care of any such creditors. It seems to us that as between these parties the business was more in the nature of a partnership, in which one partner, plaintiff, received a salary in addition to his share of the profits.

It is conceded that the business was carried on with some success under this name for 2½ years; that defendants during that time performed all their agreements, furnished the necessary money, gave the business credit and standing, and allowed it to sell their cooperage products. The plaintiff acted as manager and salesman, was paid his salary, and has received, or defendants concede his right to receive, his full share of the profits. It should be stated, however, that during the course of the business a fourth party was taken in on the basis of sharing the profits thereafter, one-fourth to each. Plaintiff does not complain of, and the evidence does not show, any violation by defendants of any agreement or duty on their part in the conduct of the business prior to the alleged wrongful expulsion of plaintiff from his further participation therein, which is presently to be noted. This case proceeds on the theory that, while all the things agreed to be done were done, yet they were done in bad faith by defendants for the purpose of utilizing plaintiff's help in building up a profitable going business concern and then depriving him of further participation therein.

It is not shown, or claimed, however, that there was any agreement as to how long the business venture or plain...