Williams v. Butler

• Decision Date: 26 May 1914
• Docket Number: No. 8784.,8784.
• Parties: WILLIAMS v. BUTLER.
• Court: Indiana Appellate Court

58 Ind.App. 47

105 N.E. 387

WILLIAMS

v.BUTLER.

No. 8784.

Appellate Court of Indiana.

May 26, 1914.

Appeal from Circuit Court, Marion County; Charles Remster, Judge.

Suit by Charles N. Williams against Noble C. Butler, guardian of John A. Butler. Judgment for defendant, and plaintiff appeals. Affirmed.Gavin, Gavin & Davis, of Indianapolis, for appellant. Addison C. Harris, of Indianapolis, for appellee.

FELT, C. J.

This suit was brought by appellant against appellee for rescission of a contract, and for a recovery in money upon the quantum meruit. The case was tried upon an amended complaint of three paragraphs, one of which sought rescission on the ground of mutual mistake, and another on the ground of failure of a material part of the consideration. Another paragraph sought recovery upon the quantum meruit for the amount of the benefits received by John A. Butler under the contract, less the value of benefits conferred by him in pursuance thereof. Issues were joined by an answer of general denial to each paragraph of the complaint. The case was tried by the court, and upon due request a special finding of facts was made, upon which the court stated its conclusions of law in favor of appellee.

Error is duly assigned on the conclusions of law, and upon the overruling of appellant's motion for a new trial.

The facts found by the court, as far as material to questions presented for decision, are in substance as follows:

In May, 1906, appellant was the principal stockholder and president of the Farmers' Trust Company, of Indianapolis, a corporation engaged in the loan and trust business, with a capital stock of $100,000, paid up, and worth par. John A. Butler was an experienced trust officer, secretary of the Indiana Trust Company, with a high reputation for efficiency and capacity as such. Appellant desired an experienced, capable man as first vice president and treasurer of said company to build up its trust department. The Farmers' Trust Company then had a large and valuable business, requiring a great deal of labor from its officers and managers, and it was to its interest and that of appellant to procure a competent man capable of filling said positions and doing the work desired. Said Butler was desirous of forming a connection with said company, and of obtaining stock in it, with the view of building up a trust department for it, increasing its business, and making its stock more valuable, in order to secure to himself the benefits of continued and permanent employment and the consequent enhancement of the value of his stock. Both Williams and Butler believed that, by continuous and persistent effort in its management, and by Butler's skill and experience, the business of the company, especially in its trust department, would be greatly increased and become more valuable.

Thereupon, on May 14, 1906, appellant and said John A. Butler entered into a written contract which showed that appellant was the owner of $71,600 of the capital stock of said company, and expressed the intentions and plans of the parties thereto with reference to the officers, directors, and business of said company, and stated that, “in consideration of the premises and of the mutual covenants and agreements” therein recited, the parties mutually agreed to the several provisions of the instrument; that Butler agreed to purchase of Williams, and he agreed to sell to Butler, 175 shares of the stock of said company for $10,000; that said Butler and certain other persons named in the contract agreed upon by the parties should be elected as directors of the company for one year beginning July 1, 1906; that Butler should at that time be made vice president and treasurer of the company at a salary of $3,600 per year, and should have special charge of and devote his time and attention to the building up of the trust department;that Williams should perform all the usual duties of president of such company, and have charge of and give his special attention to the business of the loan department of said company; that it was mutually agreed that each of the parties should devote all of his energies and abilities to advance and promote the best interests of the company and its stockholders; that each should devote all his time and attention thereto exclusively within ordinary business hours; that on said day said Butler valued the property of said trust company at $90,000, but it was in fact worth $100,000, and said Williams and said Butler both believed said stock to be worth par, and it is now, and has been since the commencement of this suit, worth not less than $135 per share; that appellant fully performed his part of the contract, and has devoted his time to the upbuilding of the business of said company; that Butler performed his part of said contract and his duties thereunder until it became impossible for him to do so by reason of his ill health and insanity; that the trust company elected no successor to Butler as treasurer until July, 1908; that prior to entering into said contract said Butler had been seriously afflicted with disease in the membranes and bones of the head, and had suffered intensely therefrom; that pus had formed in the antrums and frontal sinus, and several operations had been performed to relieve him, and finally, in 1903, he went to New York, where the frontal sinus was obliterated, and after four or five months' care he was greatly improved in health; that during most of this time, except while in New York, he continued to perform his duties with the Indiana Trust Company, and his conduct and actions were those of a competent, careful, skillful, diligent, trustworthy employé and officer; that, from 1904 up to the time of his connection with the Farmers' Trust Company, said Butler suffered from headaches from time to time, and on occasions manifested some nervousness; that, after entering the services of said trust company, he continued to suffer from headaches and pain in the head at intervals more frequent than theretofore, and suffered from inability to sleep, and became nervous and somewhat irritable, and manifested a disposition to worry over inconsequential matters, but continued to perform his duties with said company until the latter part of January, 1907, when he was sick with the grippe and incapacitated for a few days; that thereafter he suffered a relapse, but visited the office occasionally until the latter part of February; that during his illness he showed signs of mental aberration, and about March 1st became maniacal, and has since been permanently insane and wholly unable to perform his duties as officer and employé of said trust company; that said contract was made with the knowledge and consent of the officers and stockholders of said Farmers' Trust Company, and would have been advantageous to it had said Butler been and continued in good health and able to perform his duties; that said agreement was entered into in the belief, upon appellant's part, that Butler was in full possession of his physical and mental faculties, and that he would be able to perform his work and assist and co-operate with appellant in upbuilding the business of said trust company, and without any knowledge by appellant of any physical or mental infirmity upon the part of said Butler; that Butler, when making the contract, was not completely cured, and knew that his disease had not been wholly eradicated, but thought there had been almost a complete recovery, and did not believe that such disease would permanently and materially interfere with the performance of his duties; that he represented to appellant, and led him to believe, that he was mentally and physically able and capable of performing such duties in accordance with said contract; that both of said parties entered into said contract with the belief that Butler was in full possession of his mental faculties, and was not, because of his physical condition, unfitted for or incapable of performing the duties of said offices and employment; that said Butler was at the time of making said contract in full possession of his mental faculties, and had no knowledge that his mind would become permanently impaired by reason of said disease, or from any other cause; that it was the mutual expectation and intention of both parties that the connection and employment of said Butler and their association together in the upbuilding and management of said company should continue for an indefinite period of more than one year; that the agreement of said Butler to perform the duties of his offices, and especially in the trust department, and devote thereto all of his time and attention within ordinary business hours, was a material part of the consideration for the execution of the contract and sale of the stock by appellant upon the terms made, and the contract was made and the stock sold with the mutual expectation that Butler would do so, but because of his subsequent affliction aforesaid he was wholly unable to do so after March 1, 1907; that Butler received benefits under and by virtue of the contract of the aggregate value of $20,700, of which $17,500 was the value of the stock received by him from Williams, and $3,200 was cash paid him for services to the company; that the company and Williams received from Butler, under and by virtue of said contract, benefits of the aggregate value of $13,200, of which $10,000 was the cash paid Williams, and $3,200 was for services rendered the trust company.

Proper demand and tender for rescission were made and refused.

Appellant contends that he is entitled to a reversal, and bases his claim on three propositions:

(1) The contract was entered into under mutual mistake of appellant and John A. Butler as to the health and capacity of the latter to perform the service which, by the terms of the contract, he agreed to render in the building up of the business of the Farmers' Trust Company.

(2) There was a substantial...