Reed v. Cooke

• Decision Date: 03 November 1932
• Citation: 55 S.W.2d 275,331 Mo. 507
• Parties: W. H. Reed, Appellant, v. Thornton Cooke, Geo. K. Buecking, Chester Cooke, J. M. Miller, Geo. E. Powell, Chas. L. Smack, W. C. Widener, E. H. Wright, C. A. Buscher, H. J. Eaton, Chas. A. Sumner and C. W. Sydenstricker
• Court: Missouri Supreme Court

55 S.W.2d 275

331 Mo. 507

W. H. Reed, Appellant, v. Thornton Cooke, Geo. K. Buecking, Chester Cooke, J. M. Miller, Geo. E. Powell, Chas. L. Smack, W. C. Widener, E. H. Wright, C. A. Buscher, H. J. Eaton, Chas. A. Sumner and C. W. Sydenstricker

Supreme Court of Missouri

November 3, 1932

Appeal from Jackson Circuit Court; Hon. Ralph S. Latshaw Judge.

Affirmed.

Ed A. Harris and Chas. N. Sadler for appellant.

(1) The court erred in sustaining each demurrer of respondents. (a) All facts properly pleaded and all inferences based thereon must be taken as true. Martin v. Ray Co. Cement Co., 288 Mo. 253; American Brewing Co. v. St. Louis, 187 Mo. 367; Rodgers v. Western Home Town Fire Ins. Co., 186 Mo. 255; Troll v. Third Natl. Bank, 211 S.W 545. (b) The bank, acting by and through its board of directors, had a right to employ an advisor or manager to assist in the operation of the bank, and had a right to appoint respondents or either of them as agent to make such arrangements. R. S. 1929, sec. 11746; Robinson v. Mining Co., 163 S.W. 885; Loud v. St. Louis Union Trust Co., 281 S.W. 744; Jones v. Williams, 39 S.W. 486, 139 Mo. 1; Interstate Hotel v. Woodward, 77 S.W. 114, 103 Mo.App. 198; Holland Land & Loan Co. v. Holland, 281 S.W. 744; Concrete & Steel Const. Co. v. Natl. Asphalt Refining Co., 2 S.W.2d 157; 14a C. J. pp. 94, 95, sec. 1862. (c) Respondents making such representations without authority so to do, bind themselves personally. Wright v. Baldwin, 51 Mo. 269. (d) This contract is not within Statute of Frauds because for an indefinite period, because partially performed and because of possibility that it may be performed within one year. Matthews v. Wallace, 104 Mo.App. 98, 78 S.W. 296; Sugget v. Cason, 26 Mo. 221; Brest v. Ver Steej Shoe Co., 97 Mo.App. 137, 70 S.W. 1081; Alexander v. Alexander, 52 S.W. 256; Nowak v. Berger, 34 S.W. 489; Foster v. McO'Blenis, 18 Mo. 90.

Charles M. Blackmar and Ralph M. Jones for respondents; Meservey, Michaels, Blackmar, Newkirk & Eager of counsel.

(1) The alleged agreement that appellant would be elected general manager of the Twelfth Street Bank of Kansas City and paid a salary of three hundred dollars a month until the bank stock was worth $ 135 a share was unenforceable under the laws of Missouri and appellant was charged with that knowledge. Citizens Bank of Hayti v. Wells, 269 Mo. 190, 190 S.W. 314; Wells v. Natl. Surety Co., 194 Mo.App. 389, 184 S.W. 474; Wilson v. Torchon Lace & Mercantile Co., 167 Mo.App. 305, 149 S.W. 1156; R. S. 1929, secs. 5363, 5380. (2) There can be no actionable fraud arising from breach of an agreement which is in itself unenforceable. Basye v. Basye, 152 Ind. 172, 52 N.E. 797; Dawe v. Morris, 149 Mass. 188, 21 N.E. 313, 4 L. R. A. 158; Dung v. Parker, 52 N.Y. 494; Gaylord v. Gaylord, 150 N.C. 222, 63 S.E. 1028; Rasdell v. Rasdell, 9 Wis. 379; Smith v. Bowler, 1 Disney, 520, affirmed 2 Dis. 153. (3) Appellant, being charged with the knowledge that the alleged agreement was unenforceable, had no right to rely upon it and thus an essential element of an action for fraud is lacking. Dung v. Parker, 52 N.Y. 494; Edwards v. Noel, 88 Mo.App. 434; Paretti v. Rebennack, 81 Mo.App. 494. (4) There was no reliance in fact on the alleged misrepresentations. Independent investigation contradicts the allegation of reliance. Anderson v. McPike, 86 Mo. 293; Bunch v. Munger Securities Co., 211 S.W. 703; Shores v. Hutchinson, 69 Wash. 329, 125 P. 142; Slaughter v. Gerson, 20 L.Ed. 627, 13 Wall. 379; Warren v. Richie, 128 Mo. 311, 30 S.W. 1023; Younger v. Hoge, 211 Mo. 444, 111 S.W. 20, 18 L. R. A. (N. S.) 94. (5) The alleged agreement to elect appellant general manager and pay him a certain salary until the stock reached $ 135 was a promise to do a future act, which will not support an action for fraud even though the promise be made without intent to perform. Grand Lodge of U. B. F. v. Mass. Bonding & Ins. Co., 25 S.W.2d 783; Hockley v. Hulet Bros. Storage & Moving Co., 16 S.W.2d 749; Shoup v. Tanner Buick Co., 211 Mo.App. 480, 245 S.W. 364; Younger v. Hoge, 211 Mo 444, 111 S.W. 20, 18 L. R. A. (N. S.) 94. (6) The other misrepresentations alleged were immaterial and cannot form the foundation of an action for fraud. Birch Tree State Bank v. Dowler, 167 Mo.App. 373, 151 S.W. 784; Dawe v. Morris, 149 Mass. 188, 21 N.E. 313, 4 L. R. A. 158; Shoup v. Tanner Buick Co., 211 Mo.App. 480, 245 S.W. 364; Stufflebean v. Peaveler, 274 S.W. 926.

Ferguson, C. Ragland, Frank, Ellison and Henwood, JJ., and Atwood, C. J., concur; Gantt, J., dissents in separate opinion in which White, J., concurs.

OPINION

FERGUSON

This is an action for damages for fraud and deceit. Plaintiff charges that he was induced by false and fraudulent statements of defendants to purchase 250 shares of bank stock, having a market value of $ 95 per share, at a price of $ 135 and to resign a position in which he was earning a salary of $ 4,000 per year upon the promise of defendants stockholders in the bank, to procure his appointment as general manager of said bank which they failed to do. Actual damages in the sum of $ 30,000 are alleged and punitive damages in the sum of $ 15,000 asked. The defendants filed separate, but identical, demurrers to the petition on the ground that "said petition fails to state a cause of action." The demurrers were sustained and plaintiff, refusing to plead further, appealed from the judgment dismissing his petition. The petition is as follows:

"Comes now the above named plaintiff and for his first amended petition states; that on the first day of October, 1923, and for a long time prior thereto, he was in the employ of the United States Government as a National Bank Examiner at a salary of $ 4,000 per year, and as such examiner had gained much knowledge of the banking business, and is and was at all said times an experienced banker and capable and competent to manage and direct the affairs of a bank; that as a result of years of dealing with bankers and financial interests plaintiff had built up a large acquaintance and personal following among such people living in the states of Missouri, Kansas and territory adjacent to and tributory to Kansas City, Missouri; that as a basis for the prosecution of the banking business in said territory, said acquaintance and following was of great value.

"That sometime shortly prior to October 1, 1923, the defendant Thornton Cooke, and all of the above named defendants, entered into an unlawful and malicious conspiracy to cheat and defraud this plaintiff, and in order to carry out and give effect to their wrongful designs, the defendant Thornton Cooke acting for himself and as agent or trustee for the other above named defendants, stated and represented to this plaintiff that he, Thornton Cooke, and certain of his associates, including all of the above named defendants owned a controlling interest in the stock of the 12th Street Bank of Kansas City, Missouri, and that he, Thornton Cooke, and his associates, the above named defendants had assembled and pooled some 250 shares of the capital stock of said bank, and that said stockholders had appointed the said Thornton Cooke agent or trustee to represent the above named owners of the stock included in said pool in the disposal and sale of same at an agreed and fixed price of $ 135 per share, and that the Board of Directors and officers of the 12th Street Bank had also appointed the said Thornton Cooke, as agent for the bank to select and designate a man to act as advisor and general manager to assist the officers and board of directors of said 12th Street Bank in building up and conducting the business of same, and that the person selected for that position by him, Thornton Cooke, would be required to purchase said 250 shares of stock at the price above mentioned; that as an additional assurance and inducement for plaintiff's purchasing said stock at the price of $ 135 per share, the said Thornton Cooke stated and represented to this plaintiff that he, Thornton Cooke, and his associates owned a controlling interest in the stock of said bank and by virtue of that fact were in a position to demand, and would request, and he did guarantee to this plaintiff, that the Board of Directors of said bank would appoint or select plaintiff to the office or position of advisor and general manager in said bank if he purchased the above mentioned 250 shares of stock at the price of $ 135, and that as such officer or employee this plaintiff could and would exercise great power and influence in directing the affairs of the said 12th Street Bank; that the said Thornton Cooke did at said time state and represent to plaintiff that he had consulted the Board of Directors of said Bank with reference to his selection of this plaintiff for the said position as Advisor and General Manager, and that said Board of Directors had informed him, Thornton Cooke, that this plaintiff's elevation to that office or position was agreeable and desirable, and that as compensation for such services as he might render said bank he was to and would receive a salary from said bank of at least $ 300 per month, for the time of his connection with the bank, which should and would be simultaneous with his purchase of said stock until such shares of stock were worth and were of the market value of $ 135 per share, and for such longer time as such employment was mutually agreeable; that at said time the shares of stock of said bank were only of the approximate market value of $ 95 per share.

"That plaintiff relying upon the statements and representations of the above named defendants, acting through and by their agent, servant or trustee, Thornton Cooke, and believeing that the said Thornton Cooke was acting as agent and representative of...