Wann v. Scullin
| Decision Date | 20 June 1911 |
| Parties | CARRIE V. C. WANN, Appellant, v. JOHN SCULLIN, FESTUS J. WADE and MERCANTILE TRUST COMPANY |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon George H. Williams Judge.
Affirmed.
John A Gilliam and Luther Ely Smith for appellant.
(1) Upon receipt of plaintiff's certificate of shares of stock by defendant Scullin in response to the telegram of April 24, 1902, to her, it became his duty to exercise judgment, discretion, vigilance and zeal in her behalf. He was bound to see that the terms of the offer that he transmitted to her, and under which she sent her stock to him, were complied with before he surrendered her stock. (2) Defendant Scullin was a stockholder to the extent of $ 1,750,000 in the purchasing company at the time he sent the telegram of April 24, 1902, and received her stock in response thereto, and turned same over to the immediate agent of the purchasing company; and he was also a large stockholder in the Mercantile Trust Company, the immediate agent for the purchaser of this stock. Such interest on the part of defendant Scullin in the purchaser constituted an interest in the subject-matter adverse to plaintiff, and she knew nothing of it then or until long afterwards; it constituted in law, therefore, a fraud upon plaintiff. (3) Plaintiff upon discovery of that adverse interest is not restricted to the remedy of rescission. She is entitled, in law, to bring suit against defendant Scullin for the difference between the price which he could have obtained and that which he did obtain. Nor is she compelled, in order to establish her damages, to buy other shares, and sue for the difference. She may retain what she did obtain and sue for the difference between that figure and the price which he should have obtained but failed to obtain. Mulvane v O'Brien, 58 Kan. 463; Bank v. Simon, 133 Mass. 415. (4) The fact that another purchaser came into the field and the further development that the situation changed rapidly, far from being any excuse to defendant Scullin as plaintiff's agent, is all the more reason why he should be held to the full terms of the telegram of April 24, 1902. Had defendant Scullin retained plaintiff's stock in order to make certain, before turning over plaintiff's stock, that a majority had agreed to sell to his undisclosed purchaser at $ 500 a share, he would have had her stock a sufficient length of time to have informed plaintiff of the new offer and the higher prices, and to have enabled him to have obtained the highest price possible for plaintiff. His failure to exercise the discretion, zeal, vigilance and loyalty towards plaintiff with reference to her stock, under the conditions which he did know, made it impossible for him to serve plaintiff loyally under the conditions which unexpectedly arose. His zeal, vigilance and haste with reference to plaintiff's stock were all manifested in behalf of the purchaser; he signed an option agreement without plaintiff's authority, knowledge or consent; he turned over her stock immediately upon its receipt. Had he been absolutely free and independent of any connection with the purchaser (Rock Island) or the purchaser's immediate agent (Mercantile Trust Company) he would most naturally and most unquestionably have gone about the matter cautiously and deliberately. He would have endeavored to ascertain first that the majority had agreed to sell at $ 500 a share. Failing in that endeavor, he would have communicated with plaintiff before turning over her stock. The result of that deliberation and caution would have made it possible for defendant Scullin to have informed plaintiff of the changed conditions and the new offer in ample time for her to have obtained $ 1,000 or $ 1,500 per share for her stock, even though defendant Scullin did not, when he sent the telegram of April 24, 1902, anticipate that the offer of $ 500 a share for a majority or all of the stock ever would be withdrawn or any other offer substituted for it.
Klein & Hough, Ferriss, Zumbalen & Ferriss, and Joseph S. Laurie for respondents.
(1) The action of the court in sustaining the motion for a new trial on the ground that plaintiff's instruction number two should have been refused, was proper. Said instruction was based upon the theory that Scullin's failure to disclose to plaintiff the fact that he was a stockholder in the Chicago, Rock Island & Pacific Railway Company, and that the offer to purchase was made by that company, was a fraud upon plaintiff which entitled her to recover against defendant Scullin. And as to the defendants Mercantile Trust Company and Wade, it was based upon the theory that they were liable jointly with Scullin if Wade knew that Scullin was a stockholder in the Rock Island Company and did not communicate the fact of such knowledge to plaintiff. (a) As to the defendant Scullin the instruction is erroneous because the failure to disclose to plaintiff the fact that he was a stockholder in the Rock Island Company and that said Company was the intending purchaser, was not in law a fraud upon the plaintiff, and did not disqualify him from receiving from plaintiff her stock and delivering the same to the Trust Co. under the terms of the telegram of April 24th, and did not entitle her to recover against him. Hardwick v. Jones, 65 Mo. 54; Kitchen v. Railway, 69 Mo. 224; Gaty v. Sack, 19 Mo.App. 470; Van Dusen-Harrington Co. v. Jungeblut, 75 Minn. 299; Alexander v. Williams, 14 Mo.App. 13; Insurance Co. v. School District, 25 C. C. A. 492; Northrup v. Ins. Co., 48 Wis. 420; 1 Thompson on Corporations, sec. 1071; 1 Morawetz on Corporations, sec. 521. (b) The rule requiring the agent to disclose his adverse interest applies only to agents who are intrusted with a discretion in the matter of the agency, and is not applicable where the principal makes his own bargain and the agent is a mere ministerial one, without any discretion. Tiffany on Agency, p. 418; Mechem on Agency, sec. 67; Pollatschek v. Goodwin, 40 N.Y.S. 682; Mining Co. v. Fox, 4 Ired. Eq. 61; Spalding v. Mattingly, 89 Ky. 83; Knauss v. Brew. Co., 142 N.Y. 70; Ranney v. Donovan, 78 Mich. 318; Kilbourn v. Sunderland, 130 U.S. 505; Atwood v. Railroad, 85 Va. 966. (c) The instruction is erroneous for the further reason that it does not require the jury to find the essential elements in an action of this kind, that the facts concealed were material and that plaintiff would not have sent her stock to Scullin had she known that he was a stockholder in the purchasing company. 14 Am. & Eng. Ency. Law (2 Ed.), p. 113; Wannell v. Kerm, 57 Mo. 478; Bailey v. Smook, 61 Mo. 213; Dunn v. White, 63 Mo. 181; Powell v. Adams, 98 Mo. 598; Feller v. McKillip, 100 Mo.App. 664; Tinker v. Kier, 195 Mo. 183; 20 Cyc. 23 and 40; Jordan v. Pickett, 78 Ala. 331. (2) The motion for a new trial was properly sustained, because the trial court erroneously refused to give the instructions asked in behalf of each of the defendants at the close of the plaintiff's case. These instructions should have been given as to all three defendants, because: (a) There was no evidence of any fraud having been perpetrated by either of the defendants nor of any fraudulent motive or intent on their part; hence there was no evidence which would authorize a recovery under the pleadings as against either of the defendants. 20 Cyc. 35; Koontz v. Kaufman, 31 Mo.App. 397; Florida v. Morrison, 44 Mo.App. 538; Tootle v. Lysaght, 65 Mo.App. 139; Culver v. Smith, 82 Mo.App. 390; Lovelace v. Suter, 93 Mo.App. 429; Bank v. Trust Co., 179 Mo. 662; Nations v. Pulse, 175 Mo. 86, 94; Boulder v. Stilwell, 100 Md. 543. (b) The plaintiff's evidence disclosed the fact that there had been an accord and satisfaction between plaintiff and defendants as to the subject matter of this suit. McCormack v. St. Louis, 166 Mo. 335; Coal Co. v. St. Louis, 145 Mo. 651; McCregor v. Ware Co., 188 Mo. 611; St. Joseph v. Hull, 72 Mo.App. 403; Andrews v. Stubbs Co., 100 Mo.App. 599; Perkins v. Hedley, 49 Mo.App. 556; Cornelius v. Rosen, 111 Mo.App. 619; Lightfoot v. Hurd, 113 Mo.App. 612; Rogers v. Pub. Co., 118 Mo.App. 1; Railroad v. Clark, 178 U.S. 353; U. S. B. & S. Co., v. Thistell, 69 C. C. A. 651; Nassoily v. Tomlinson, 148 N.Y. 326; Jackson v. Volkening, 80 N.Y.S. 1102; Goss v. Rishel, 85 N.Y.S. 1045; Paper Co. v. Tonawanda Co., 94 N.Y.S. 946; Gas Co. v. Johnson, 123 Pa. St. 576; Keck v. Hotel Co., 89 Iowa 202; Truax v. Miller, 48 Minn. 62; Creighton v. Gregory, 142 Cal. 34; Leather Co. v. Foyer, 104 Ill.App. 268; Coal Co. v. Parlin, 215 Ill. 244; Richardson v. Taylor, 100 Me. 175.
This cause was begun in the circuit court of the city of St. Louis, May 15, 1902. There was a trial at the March term, 1904, on the second amended petition, resulting in a verdict for plaintiff for $ 50,000.
Defendant's motion for a new trial was sustained and plaintiff appealed. The action of the trial court in granting a new trial was sustained by this court in an opinion reported in 210 Mo. 429.
The case was retried on June 2nd and 3d, 1909. The trial court sustained a demurrer to the evidence and entered its verdict for defendants, and the plaintiff, after her motion for new trial was overruled, perfected her appeal to this court.
It would be vain to try to improve upon the exhaustive statement of the facts in the case made by Gantt, J., and his statement will be used as the basis of the statement for the present purposes, and only such additions will be made thereto as are required to show the difference in the facts as developed at the last trial.
On May 27, 1908, a third amended petition was filed. This petition differs from that on the former trial in three points:...
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