Withroder v. Elmore
| Decision Date | 06 March 1920 |
| Docket Number | 22,463 |
| Citation | 188 P. 428,106 Kan. 448 |
| Parties | E. J. WITHRODER, Appellee and Appellant, v. M. C. ELMORE, G. O. COMBS, and J. H. LESLIE, Appellants and Appellees |
| Court | Kansas Supreme Court |
Decided January, 1920.
Appeal from Reno district court; FRANK F. PRIGG, judge. Supplemental
Judgment affirmed.
SYLLABUS BY THE COURT.
SALE--Interest in Oil Lease--Purchasers to Form Association--Fiduciary Relation of Vendor to Prospective Purchasers. Where one buys a piece of property on his own account and thereafter sells interests in it to different persons in pursuance of a plan to form an association to handle it, in making such sales he occupies no fiduciary relation to the prospective purchasers and is not bound to inform them what the property cost him, or to refrain from charging them more than a proportionate part of what he had paid for it.
F. L. Martin, John M. Martin, and Walter F. Jones, all of Hutchinson, for the appellants.
C. M. Williams, and D. C. Martindell, both of Hutchinson, for the appellee.
In this case the plaintiff sued for the return of money he had paid for an interest in an oil and gas lease, on the ground that fraud had been practiced upon him. He asked for the full amount of $ 1,000, and recovered judgment for $ 800. An appeal was taken by the defendants, in the course of which the plaintiff, on his part, complained of the refusal of instructions asked by him. In the original opinion this court declined to pass upon the question raised by way of cross appeal, because of the assumption, due to a mistake of the writer, that the plaintiff had filed no motion for a new trial. The filing of such a motion was shown by the recitals of the journal entry of judgment, which was set out in full in the abstract, but escaped notice in an examination which was less careful than it should have been, and doubtless would have been but for the fact that the plaintiff did not ask this court to order a new trial, but to direct a judgment for the full amount of the claim, and requested that the proposition referred to should be passed upon because of the pendency of other actions involving the same point.
The requested instructions, the refusal of which is complained of by the plaintiff, were substantially to this effect:
If the defendants bought the lease for the purpose of organizing a corporation or association to operate it, or to hold it for sale at a profit, and proceeded to procure subscriptions for interests in such an organization, and induced the plaintiff and others to make such subscriptions and pay the amounts subscribed, then the defendants occupied a fiduciary relation to such subscribers and were under obligations to act toward them with the utmost good faith, and to disclose to them all the material facts connected with the procuring of the lease, and if they did not disclose such facts, or if they made a secret profit in the sale of the lease to such subscribers, their conduct in that regard would entitle the subscribers to a rescission of the subscription and a return of their money.
In other words, the court was asked to say that for the plaintiff to recover he was not required to show an overstatement by the defendants of the amount they had paid for the lease, but that it would be sufficient if he showed that they had not told him how much the lease had cost them, and had charged him for his interest more than the proportionate part of the amount they had actually paid. The principle invoked is that the promoter of a corporation because of the fiduciary relation he occupies, will ordinarily not be permitted to retain a secret profit made out of his dealings with the company, or with others while he is acting in its behalf. (1 Fletcher's Cyclopedia Corporations, § 135; 10 Cyc. 274; 7 R. C. L. 70-74; Hayden v. Green, 66 Kan. 204, 71 P. 236.) The plaintiff argues, no doubt correctly, that the rule is not peculiar to transactions relating to a...
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Walker v. Patterson
...To the same effect are Milwaukee Cold Storage Co. v. Dexter, 77 N. W. 976, 99 Wis. 214, 40 L. R. A. 837, and Withroder v. Elmore, 188 P. 428, 106 Kan. 448, 10 A. L. R. 191. There is nothing to the contrary in Shevlin v. Shevlin, 105 N. W. 257, 96 Minn. 398, or Church v. Odell, 110 N. W. 346......
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... ... constructive trust. Perhaps the following are typical: ... Clester v. Clester, 90 Kan. 638, 135 P. 996, ... L.R.A.1915E, 648; Withroder v. Elmore, 106 Kan. 448, ... 188 P. 428, 10 A.L.R. 191; Silvers v. Howard, 106 ... Kan. 762, 190 P. 1; Robinson v. Eagle-Picher Lead ... Co., 132 ... ...
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Crawford v. Lugoff, 26670.
... ... Appellants cite Murray v. Close, 118 Kan. 51, 234 P. 60. For its law it goes through Withroder v. Elmore, 106 Kan. 448, 188 P. 428, ... 175 Minn. 230 ... 10 A. L. R. 191, to Densmore Oil Co. v. Densmore, 64 Pa. 43, adopted here, as already ... ...
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Crawford v. Lugoff
... ... consequences ... Appellants ... cite Murray v. Close, 118 Kan. 51, 234 P. 60. For ... its law it goes through Withroder v. Elmore, 106 ... Kan. 448, 188 P. 428, [175 Minn. 230] 10 A.L.R. 191, to ... Densmore Oil Co. v. Densmore, 64 Pa. 43, adopted ... here, as ... ...