Wonderly v. Little & Hays Inv. Co.

• Decision Date: 04 April 1916
• Docket Number: No. 14274.,14274.
• Citation: 184 S.W. 1188
• Court: Missouri Court of Appeals
• Parties: WONDERLY v. LITTLE & HAYS INV. CO. et al.

184 S.W. 1188

WONDERLY v. LITTLE & HAYS INV. CO. et al.

No. 14274.

St. Louis Court of Appeals. Missouri.

April 4, 1916.

Rehearing Denied April 18, 1916.

Error to St. Louis Circuit Court; Dan'l D. Fisher, Judge.

"Not to be officially published."

Action by Charles P. Wonderly against Little & Hays Investment Company and another. Judgment for defendants, and plaintiff brings error. Affirmed.

See, also, 186 Mo. App. 75, 171 S. W. 564.

Christy M. Farrar and Vital W. Garesche, both of St. Louis, for plaintiff in error. Franklin Ferriss and Henry T. Ferriss, both of St. Louis, for defendants in error.

ALLEN, J.

This is an action to recover damages alleged to have been sustained by plaintiff by reason of false and fraudulent representations charged to have been made to plaintiff by defendants in and about a transaction relating to the purchase of certain corporate stock. The suit was instituted against the Little & Hays Investment Company and William C. Little. The latter died during the pendency of the litigation, and the cause has been revived against the administrator, Alden H. Little. This is the second suit prosecuted by plaintiff on the same demand, plaintiff having suffered a nonsuit in the prior action. When the cause came on for trial in the circuit court, and after the impaneling of the jury and the making of an opening statement by counsel for plaintiff, the court, on motion of defendant's counsel, again forced plaintiff to a nonsuit; and after unsuccessfully moving to set the same aside, plaintiff appealed to this court.

The amended petition alleges that the original defendants were engaged in the business of buying and selling stocks, bonds, and other securities in the city of St. Louis; and that plaintiff is the owner of 50 shares of the preferred stock of a Missouri corporation known as the Tennent Shoe Company, of the value of $100 each, which the defendants sold to plaintiff on or about February 24, 1905. And it is alleged that at the time of the purchase of such stock by plaintiff defendants were the owners of at least 100 shares of this stock and, being desirous of selling the same, offered the stock to plaintiff and "induced him to enter into a partnership arrangement with the defendants by which the defendants were to purchase said one hundred shares of stock for the joint account of the plaintiff and defendants, and the plaintiff and defendants were to be charged equally with the purchase of said stock for the joint account of himself and the defendants, the stock to be sold out at such price as might be agreed upon between the plaintiff and defendants, and any and all profit or loss on the same was to be equally divided between the plaintiff and defendants, and that the plaintiff was to be allowed interest at 6 per cent. on the amount due from time to time."

It is alleged that prior to entering into this "partnership arrangement," and as an inducement to plaintiff to enter into the same, defendants falsely represented that they were acting as brokers for the sale of this stock, and that they proposed the partnership arrangement because they considered the stock a good investment and wanted to acquire some of it themselves; but that defendants were then in truth the owners of the stock, for which they had paid less than par value, but concealed this from plaintiff and fraudulently pretended to purchase the same. And it is further alleged that to induce plaintiff to enter into the partnership arrangement, defendants exhibited a certain statement of the Tennent Shoe Company showing its assets and liabilities, and knowingly made certain false representations concerning the same and respecting the financial condition of said Tennent Shoe Company.

And it is averred that "shortly prior to January 18, 1906, it became generally known that the Tennent Shoe Company was insolvent and its stock worthless, and in the light thereof plaintiff asked the defendants to wind up and pay him what they owed under the aforesaid partnership arrangement for money advanced by him," and that on or about January 18, 1906, the defendants, after taking into account interest due and dividends received upon the stock, owed plaintiff $4,928.34 for moneys advanced for defendants under the partnership arrangement, as security for which plaintiff held 50 shares of the stock; and that the partnership arrangement was thereupon terminated, defendants taking 50 shares of the stock, and plaintiff 50 shares thereof, defendants paying to plaintiff the sum of $4,928.34, and plaintiff giving the defendants the following receipt, viz.:

                                             "Jan. 18, 1906
                "Charles P. Wonderly in Account with Little &amp
                    Hays Investment Co. and Charles P. Wonderly
                                     Dr
                  1905
                Feb. 14.  100 Tennent Shoe Pfd.
                           at 100 ................   $10,000.00
                  1906.
                Jan. 18.  Interest to date, 6%....       556.67
                                                     __________
                                                     $10,556.67
                                     Cr.
                  1905.
                March 1.   Div. 100 Tennent Pfd...   $   175.00
                June  1.   Div. 100 Tennent Pfd...       175.00
                Sept. 1.   Div. 100 Tennent Pfd...       175.00
                Dec.  1.   Div. 100 Tennent Pfd...       175.00
                  1906.
                Jan. 18.   50 shares taken up by
                             Charles P. Wonderly..     4,928.33
                Jan. 18.   50 shares taken up by
                             Little & Hays........     4,928.34
                                                     __________
                                                     $10,000.00
                

"E. & O. E. Jan. 18, 1906. Received $4,928.34 in settlement of above account.

                                             "Charles P. Wonderly."
                

(The last total stated in the above account, to wit, $10,000 is evidently a typographical error and should be $10,556.67.)

And it is alleged that at the time of the alleged representations by defendants, and at all times thereafter, the stock was worthless, and that plaintiff was damaged in the sum of $5,000, for which he prays judgment.

The separate answers of the defendants specifically deny the facts alleged to constitute the fraud charged, and, among other things, allege that prior to the partnership arrangement plaintiff personally investigated the financial condition of the Tennent Shoe Company and agreed to purchase 100 shares of its stock on condition that his son be employed by that company, and that the agreement ultimately made between plaintiff and defendants came about by reason of plaintiff's expressed desire to reduce his actual purchase to 50 shares but nevertheless appear as the owner of 100 shares on the books of the company. And defendants set up that the settlement of January 18, 1906,...