167 Ky. 269 | Ky. Ct. App. | 1915
Opinion op the Court by
Affirming.
Defendant was first incorporated December 18th,. 1909, as Jones Bros., Castleman & Blakemore. On May 31st, 1911, Frank J. Brucker was employed by defendant as city salesman at a salary of $150 per month and traveling expenses. The contract, which was in writing, and was signed by Jones Bros., Castleman & Blakemore, by Gr. C. J ones, President, and by plaintiff, further provided that when H. E. Young, who was working the wholesale retail trade, severed his connection with the- company, plaintiff was to represent the company in the same capacity. Simultaneously with his employment, plaintiff subscribed for $5,000 worth of the company’s preferred stock,.for which he executed his notes. At the- same time the following agreement was entered into:
“Louisville, Ky„ May Thirty-one, 1911.
“Mr. Frank H. Brucker,
Present.
■“Dear Sir:
“Confirming our verbal understanding .with you whereby you are to enter the services of Jones Bros., Castleman & Blakemore, in the capacity of salesman in*271 the city trade of Louisville, and also whereby you purchase $5,000 worth of Jones Bros., Castleman & Blake-more’s preferred stock, it is understood and agreed that, in the event that Jones Bros., Castleman & Blakemore or successors for any cause dispense with your services as city salesman, it is agreed and understood that we, the undersigned, are to either purchase outright this stock at par, or we will find you a purchaser for same in a reasonable length of time.
“Yours very truly
(Signed) Gideon C. Jones,
Chas. W. Jones.
“G. C. J.: Bam.
“I have carefully read the above, and hereby accept same.”
At the time of the above transaction the following were the officers of the company:
Gideon C. Jones, President.
Chas. W. Jones, Treasurer.
Sam P. Jones, 2nd Vice President.
Henry E. Young, 3rd Yice President.
In December, 1911, or January, 1912, Jones Bros, disposed of their stock, principally to outside parties, and the corporation was reorganized and its name changed to Castleman-Blakemore Company. "When this occurred plaintiff had not paid for his stock.
On December 4th, 1913, plaintiff brought this suit against the Castleman-Blakemore Company in two paragraphs. In the first paragraph he pleads that the above agreement between him and Gideon C. Jones and Chas. W. Jones was made by Jones Bros, on behalf of the company; that on or about the first day of May, 1913, the defendant took away from plaintiff the privilege of selling its products to' the wholesale trade in Louisville, and that, by reason of defendant’s failure and refusal to perform its contract, plaintiff was entitled to recover of defendant the $3,500 which he paid on the stock, and have his note for $1,500, the balance of the subscription, price, cancelled.
In paragraph II. he pleads, in substance, that he was-induced to purchase the stock by the false representations of the former officers of the company with reference to the financial condition of the company. He' further alleges that the preferred stock which he purchased was not worth more than 50% of its par value.
The answer is in three paragraphs. The first paragraph is responsive to paragraph 1 of the petition and traverses certain of its allegation. It also pleads, in substance, that the contract sued on was the personal obligation of the Messrs. Jones and not the obligation of the company.
The second paragraph of the answer traverses the allegations of paragraph II. of the petition.
The third paragraph of the answer, after setting out plaintiff’s employment, alleges, in substance, that defendant had complied with the terms of its contract. It further alleges that plaintiff, since his purchase, had been cognizant of defendant’s financial condition, and with such knowledge he had repeatedly ratified and confirmed the purchase of his stock by making payments thereon after he acquired such knowledge, and that he was thereby estopped from repudiating the purchase.
On the final hearing the chancellor adjudged the cancellation of the stock and of plaintiff’s note, for $1,500, which had been executed in part payment thereof, and further adjudged that plaintiff recover of the defendant the sum of $3,500, with interest from the date of the filing of the petition. Defendant appeals.
Briefly stated, the facts developed by the record are as follows: Plaintiff had been in the employ of C. C. Bickel & Company for many years and had saved about $5,000. A few months prior to his employment by defendant, H. E. Young, defendant’s vice president, approached him with a proposition to buy some of defendant’s preferred stock. In May, 1911, Gideon C. Jones, the president of the company, sent Young to plaintiff with the information that Young was going to leave defendant’s employ and that arrangements could be made to give plaintiff his position. Plaintiff then went to the defendant’s office, the terms of employment were agreed on, and the two contracts above referred to signed. Not having had much experience in executing contracts, he did not know that the contract which he made with the company, in regard to paying for, or finding a purchaser for, his stock, in the event of his dismissal from defend
For the defendant Mr. Blakemore testified to the organization and reorganization of the company. He further said that the condition of the company on May 31st, 1911, was substantially the same as that shown on the statement. Mr. Blakemore had nothing to do with getting up the statement; he was in charge of the preserving department and merely figured on the inventory in that department. On the question whether or not there was a surplus at the time plaintiff’s contract was made, he made no statement.
Discussion of the improper misjoinder of the two causes of action set out in plaintiff’s petition is rendered unnecessary by the fact that defendant failed, at the proper time, to make a motion to require plaintiff to elect, and thereby waived its right to object to the misjoinder. Section 86, Civil Code; Wilson v. Thompson, 1 Met., 123; Chiles v. Drake, 2 Met., 146; Bannon v. Bannon, 136 Ky., 556.
The chancellor properly held that no recovery could be had under the first paragraph of the petition. The contract sued on was the individual contract of the Messrs. Jones, and there was no allegation in the petition- that the contract was intended as the obligation of the company, and that, by fraud or mistake,-it was executed by them individually instead of on behalf of the company.
The next question is whether or not a recovery was proper under paragraph II. of the petition. In’ detailing the evidence we have purposély refrained from set
But defendant insists that plaintiff did not rely on the representations made by Young, but was induced to purchase the stock solely because he was promised a position with defendant, and Messrs. Jones personally guaranteed that the stock was worth what he paid for it. That the position and guarantee may have had considerable weight with him cannot be doubted, but he certainly had the right to rely, both on the guarantee of the position and the representations as to the value of the stock. He says that he relied on such representations, and we see nothing in the record to justify the conclusion that in purchasing the stock he relied solely on the guarantee and promise of the position.
The plea of estoppel is not available. The evidence fails to show that plaintiff, with knowledge of the condition of the company’s affairs, either ratified his purchase or was guilty of laches in failing promptly to bring his suit for rescission. While it is true that after his purchase of the.stock other stockholders bought a controlling interest in the company, it does not appear that they were misled to their prejudice by any conduct on the part of plaintiff.
Judgment affirmed.