*1 Í10
(No. 19786 . Harry Brodsky, Plaintiff vs. Error, et al. Frank Sam
Defendants in Error. Opinion December filed
Ill for error. Abrams, & Gallagher, Shulman David K. & Tone, Blanksten, Free Freeman error. man,
Mr. this opinion: reported Partlow Commissioner in in the court Harry superior Plaintiff error, Brodsky, on case trespass of Cook an action of county, began Morris Frank, Smith, against Singer, Joseph Sam Sie- Joe and a The the Textile Headwear gel Company, corporation. in favor case was tried a A verdict was returned by jury. in error of Frank defendants and the other against entered and $10,000 A remittitur of was $30,000. judg- ment was rendered for the balance. Court Appellate the ground for the First reversed the judgment upon District that theory that declaration was predicated upon business ar- error induced enter into a in reason of false and by defendants error rangement in error defendants and fraudulent by representations fails to show evidence known them to be that the false; that the fact; as to false any existing representation most be said in of the contention that can support plain- a tiff in been may misrepresentation error is that there have influenced the a which have may as to matter of intention as to something but that a transaction, representation a fraud law as warrants done the future is not such a and fraud, recovery ground on misrepresentation time of the trans- at the that the fraud must be complete in the fu- a fault action and be an intention to commit a writ of certiorari. ture. this court The case comes to that declaration additional count of the first in manu- in error was May engaged 16, 1925, aof large was the owner that he hats facturing caps; merchandise fixtures, machinery, appliances quantity business, with large doing used his business that customers; defendants will and many extensive good in error Frank, Singer, Smith were at the same Siegel officers and time the Textile agents Headwear Company, line corporation, engaged business; and said individually, its corporation by and officers, for the agents and defraud- cheating in error out of his business and acquiring same for themselves, falsely, fraudulently maliciously to him if represented he would turn over to defendants in error his fixtures, merchan- machinery, appliances, goods, dise, good customers and will, organization, accounts and combine the same with the business of the Textile Head- wear his efforts busi- devote combined ness to December up 31, he would from receive de- fendants one-fourth stock of the capital Textile Headwear on the said faith of Company; rep- resentations, thereon and the same to be relying believing turned true, over business to defendants in error and combined efforts with them in and about *3 the business of the Textile Headwear Company; in representations by made defendants error were false and untrue, were not faith or with intention good any carried being effect, into not made with inten- tion or deliver to pay one-fourth of plaintiff stock, said' were made with the intention of inducing him to and rely said statements believe them to true and to deliver his business to defendants in error so could and cheat and willfully, maliciously fraudulently him after same, falsely, defraud out of and so fraudu- and him out of maliciously lently cheating defrauding him his business refused to said stock or give capital any other consideration confiscated to appropriated fixtures, their own use said etc. The second ad- business, fraud ditional count was for and deceit and sub- contained first allegations count, as the additional stantially with the as to the confiscation exception allegations third of the additional count contained most property.
113 first, plaintiff error was in a line of business with competitive defendants and that error, acquiring possession of the business and in error from hav- preventing plaintiff same, defendants in did then and there seize of and possession their own use and benefit appropriate and refused to return to the property.
The evidence shows that in error was forty- three old. He years had learned the business cap-making Russia and was an expert He came cap-cutter. to this coun- try eighteen years ago followed trade until he be- came foreman of a large establisment. he the time During worked at his trade he became with acquainted in error. In he started business for himself, 1919 as a Joseph Steinberg partner. following year business was as the Hat and incorporated Easter Com- Cap with a pany, $20,000. Plaintiff in capital error owned owned shares, shares and Steinberg Klitnick Sam 77 owned shares. Plaintiff in error testified that in May, all of the 1925, stock of his In purchased con- partners. tradiction of this testimony, defendants’ exhibit is a copy of a sworn to report by error on July 27, 1925, and sent State, Secretary the stock- showing holders at that time were in error, Brodsky Saul and Max The certificate Shulman. stated that the corpo- rate debts and liabilities were and its assets were $3993.21 $9093.21, including machinery of in- $1000 $2500 ventoried assets. This was dissolved decree of court account its file on failure to its annual report its franchise tax, The evidence June shows that the Hat and Company acquired Easter Cap pat- ents for devices connected with the manufacture of caps. *4 and the adjustable One was called an other a steel- cap visor. These were made edged by special machinery caps and sold at than Plaintiff in er- a other higher price caps. ror his business was a May 16, 1925, contends that on go- concern, various and salesmen employees, selling
his but there is products, evidence which that at that shows time he had stored the a small machinery, of woolen quantity and some hats goods and at street, Market caps South that orders received him Chicago; were made by by up he concerns; that had some salesmen who on the road were his but in selling commission connection products with other lines carried and them, that he had tried to consolidate with another failed, and he company opened with defendants in negotiations error for a consolidation. In June, and 1925, Frank, offi- Singer, Siegel Smith cers and directors of the Textile Headwear Company each drew a week. This salary per $60 manufacture of hats and Plaintiff engaged caps. error testified that the first week in he had June, 1925, talk with the four defendants in error, they agreed that he was to his merchandise and over bring machinery to the Textile Pleadwear and was to work there until when an December, was to be appraisement of both If the property corporations. appraisement showed that was worth less than error’s plaintiff property one-fourth of defendants in he was the difference and if it was worth more defendants pay in error were to in error difference, plaintiff an with defendants in error. Plain- equal partner his tiff in error testified that in he severed November, 1925, under the connection with the Textile Headwear Company him circumstances: asked one an day why following Smith in error that cut, order was not replied Singer “You’re a it; said, liar,” told him not to cut Singer “I’m not a you’re replied, liar — knife at took a and started liar;” Singer them, and when came between error; Smith face floor, he was on the was wet in error came to him he that later told head; he a sore on Singer had left and then factory, not come back to could *5 him his that list and some of his mailing books; took his take because he did not have a machinery he did not and that he later it, to went back and demanded place put and defendants in error refused to deliver machinery it to him. on that evidence behalf of defendants is never
they to take in error in as an equal promised partner to him one-fifth or one-fourth or give capi- tal stock of the Textile Headwear his assets business; that that he suggested bring over such merchandise as use and he they could that would start as a cutter for the Textile Headwear that Company; he was to be salary as defendants in error paid and at the close of the were to determine whether year they it was that he mutually agreeable become a owner, part that he stated a number of times to that Siegel Smith he had evidence that was Singer from the stealing company. They asked him to his evidence. He said he would produce produce it ten but failed to do and he then left days so, and never came back. denied he as- place They was saulted by of them that him or refused to give his machinery, of a letter sent produced copy to him in him December, to take his 1925, asking away machinery.
There are marked variances between the allegations of the declaration and the evidence of in error, which is the evidence offered to the case. principal support The declaration turn to was over to error all of his on stock machinery, hand and manufactured De- accounts, and on products cember was to receive one-fourth of the 31, 1925, capital stock of the Textile Headwear er- Plaintiff in Company. ror accounts, testified that he was not to turn over his manufactured or stock that he collected hand; products his the debts of $10,000 accounts, paid corporation, the balance $6000, or amounting appropriated $5000 merchandise that the use; greater part own him and hats and were sold and manufactured caps use. He.did not testify own proceeds appropriated that on December he was to receive one-fourth as alleged stock the Textile Headwear Company, at time he did an declaration, testify appraisal and an each made of the to be he time testified that made. At one adjustment *6 Textile Headwear to the stock of the receive one-fourth of receive he testified he was to and at other times Company, machines He one-fifth of the stock. testified twenty or nine of them were in his business, only eight used in the error. At close delivered ever to to the attention variances were called evidence these verdict, direct a of was made to the court and a motion the A must which overruled. prove motion was on the He can recover only case in his declaration. alleged of and not a case alleged, the declaration A the evidence. even such a is established by case though in order are, charges has know what the defendant right taken being make a defense and to prevent properly Midland v. trial. (Feder evidence on the by surprise Co. Ill. The was Casualty question of variance 552.) 316 raised in the trial court and the direct a motion to properly verdict should have been sustained. Railroad Co. Wabash v. 212 v. Mandel id. 37; Buckley Ill. Bros. Billings, 333 368. the
The
in
declaration
error was
owner
the
and of the cause of action
property
question
suit
which the
was based.
evidence shows that
Hat and
was a
Easter
corporation organ-
Cap
this
stockholders,
ized under the laws of
with three
State
an officer. Plain-
error, who
also
including testified that May, 1925,
purchased
tiff
at
time the
two stockholders and
stock of
was the
of all
the stock. His
owner
suit was brought
July,
Secretary
sworn statement
State
117
1925, contradicts his statement. The sale of all of the stock
of a
corporation is,
a sale
legal effect,
of all of its as
sets;
(Joseph v. Canfield,
Ill. 101;
Dakin,
Benedict v.
292
id.
but the
388;)
fact that one
stockholders of
243
a corporation becomes the owner of all of the stock does
not authorize him to
a suit in his
begin
own name
aon
cause of action
to the
belonging
v.
corporation.
(Randall
Dudley, 111 Mich.
Button
437;
v.
61
Hoffman, Wis. 20;
Winona Co. v.
Paul
St.
Co. Minn.
Bidwell
359;
v. Pitts
23
Railroad
burg
Co.
Pa. 535;
Juris,
Corpus
924.)
14
dissolved in June,
This suit was
1927.
started in June,
Section
of our
chapter
statutes (Smith’s
Stat.
p. 725,)
that “all
provides
corporations
under the
organized
laws of this State, whose
powers
have
may
expired by limitation or
shall
otherwise,
continue their
corporate capacity
two
years
pur
pose only
debts due such
collecting
corporation and sell
conveying
effects thereof. Such
shall use their
corporations
names for
respective
such pur
and shall
poses
capable
all
prosecuting
defending
suits at law inor
If
equity.”
were occasioned
damages
*7
by the actions of defendants in error
the
to
cor
and not to
poration
plaintiff
error.
Association
Life
of
America v. Fassett,
Plaintiff in error insists that the first additional count of his declaration stated a cause of action in good tort for conversion of the that the second property; additional count stated a cause of action for fraud good and deceit, and that the third additional count stated a cause of good action for to ruin in error’s business. conspiracy plaintiff A false rep- resentation within the the in order meaning law, to con- stitute a cause of must action, be a as an representation to or fact not a mere existing to do past some act promise in the A future. failure to with a future comply promise does constitute fraud. The rule general is that to fraud there must be to amount willful, false representa- 118
tion as to an or fact. v. Wyatt, existing (Luttrell past 305 id. 584; Ill. v. Mutual Ins. Co. Keithley 274; 271 Life id. Milan, 521; Grubb v. id. Miller v. 456; Sutliff, 241 id. v. v. Healy, Murphy, id. People 9; Murphy count these second additional Under authorities ihe 360.) did and deceit upon not state a cause of action for fraud' the the reason that which a verdict could be sustained for future, the fulfilled in count to be alleged only promises an existing and there was no allegation promise in question. which induced the transaction fraudulent fact stated a good the first additional count The claim that is in tort for conversion property cause of action so that after the of the declaration based upon in error out of falsely cheating defrauding plaintiff for the in error refused to pay defendants property, their own use. and did and confiscate it to appropriate cause states a third additional count good claim that the to ruin business of action for a conspiracy is based allegation defendants with was in line of business a competitive acquiring possession for the error, and that purpose in error from having said business preventing plaintiff seize did then and there pos- in error same, use to their own said business session of and appropriate that defend- counts in these two benefit. charges confiscate property ants in error did appropriate seized and that possession their uses benefit own to refused to return property of and averments must be read connection turned over voluntarily that the same counts property that defendants an in error under agreement by plaintiff In in December, error were that defend- the declaration charged v. Healy, supra, People of inducing fraudulently, ant falsely repre- goods, with the possession part *8 their rea- for the goods would defendant sented that value; said promise representations sonable were false and defendant were so by him, known to were made with fraudulent of obtaining pos- purpose session without that at that therefor; goods paying time defendant was insolvent and that fact, was aware of and that he never them from for paid goods got with the fraudulent not them for paying and of On 18 this cheating defrauding plaintiff. page court said: are of “We opinion
declaration were insufficient to enable therein to plaintiffs maintain an tort. action for a Their action should have been in and value of the assumpsit goods.” price
If and re- purchased it ceived from voluntarily agreed for it in December, as (cid:127)pay declaration, had it to their own use, right appropriate of conversion. The first additional guilty count did not state a cause action for conversion the third additional did count not state a cause of action to ruin in error’s business. conspiracy They both to state a cause of attempted action for fraud and de- ceit based future and not promises upon past promises and were insufficient to sustain a verdict.
It is insisted that evidence was admitted, improper are and that the excessive, court damages improperly held certain law and refused hold propositions law. It will not be consider propositions necessary to these questions. is Court affirmed. judgment Appellate
Per : Mr. foregoing opinion reported by Curiam Commissioner.Partlow is as the hereby adopted opinion the court, and is entered in accordance therewith. judgment
Judgment affirmed.