210 Mo. 429 | Mo. | 1908
This action was commenced in the circuit court for the city of St. Louis on May 15, 1902, and contained but one count, charging the defendants with having converted to their use fifty shares of stock in' the Wiggins Ferry Company, which belonged to the plaintiff. Thereafter on December 1, 1902, plaintiff
St. Lotos, Mo., April 24th, 1902.
Mrs. Carrie Y. C. Wann,
Care F. A. Wann, 4731 Ellis Ave., Chicago.
I am offered five hundred dollars per share for a majority or all of the stock of the Wiggins Ferry Company. Have agreed to sell all of my holdings and strongly recommend you do likewise. If you concur in my recommendation, send me your stock hy mail imme*440 diately, and if the owners of a majority of stock agree to sell, I will forward to you five hundred dollars per share for your holdings on or before May fifth next. Please regard this as strictly confidential. Wire reply immediately.
John Scuixin,
Pres. Wiggins Perry Company.
And said Wade in furtherance of said conspiracy, wired plaintiff’s husband as follows:
St. Louis, Mo., April 24th, 1902.
P. A. Wann, 4731 Ellis Ave., Chicago.
John Scullin’s telegram to your wife explains why . I did not reply to your letter.
Festus J. Wade.
That, upon the receipt of said telegram, the defendants having fraudulently concealed from plaintiff John Scullin’s interest in the Rock Island Company, and that the said company was the intending purchaser, and that the Mercantile Trust Company was the agent of the Rock Island Company to make said purchase and said Scullin’s interest in the Mercantile Trust Company, and believing that John Scullin had no interest in conflict with hers, and that as president of the Wig'gins Perry Company and trustee of the voting trust was in good faith seeking to forward her interest and that in applying to- her for the possession of her stock and agency to sell the same he was acting in good faith, plaintiff wired said Scullin that she would forward her stock to him, and on April 25, 1902, mailed her stock to him with the following letter:
Chicago, April 25th, 1902.
Mr. John Scullin,
Pres. Wiggins Ferry Company,
St. Louis, Mo.
My dear sir: Many thanks for your telegram, which was received at my house late last night. I answered you immediately*441 that I would forward my stock this morning, so I take pleasure in enclosing you herewith fifty shares, certificate No. 293, and I trust the sale will go through, as per your telegram.
Yours very truly,
Carrie V. C. Wann.
Plaintiff states that upon receiving- said stock of plaintiff’s, said Scullin, upon a date unknown to plaintiff, delivered it to said "Wade as tlie representative of the Mercantile Trust Company, the purchasing agent of the Eock Island Company, without any authority from her to him so to do and without any knowledge on her part that he intended so to do and said Scullin claims he signed in plaintiff’s name a paper reading as follows:
St. Louis, Mo., April —, 1902.
The Mercantile Trust Company, acting herein for other parties, offers to purchase a majority of the shares of the capital stock of the Wiggins Ferry Company, a corporation existing under the laws of Illinois, and agrees to pay therefor on the delivery of the certificates for so many of said shares not less than a majority as shall be deposited with said Trust Company on or before May 5, 1902, properly endorsed in blank for assignment and transfer’ on the books of said Ferry Company, the sum of five hundred dollars per share. The Trust Company, acting in the capacity as agent for other parties, is to receive from such other parties for its services a commission of two and one-half per cent upon the purchase price.
The Mercantile Trust Company will not be obliged to accept any stock, unless the owners of a majority of shares have agreed to sell same to said Mercantile Trust Company, agent, on or before May 5, 1902.
Mercantile Trust Company,
By Festus J. Wade, President.
The undersigned stockholders of the Wiggins Ferry Company do hereby accept the foregoing proposition and sell to the Mercantile Trust Company, on and subject to the terms therein stated, the number of shares of the' capital stock of the Wiggins Ferry Company set opposite our respective names.
St. Louis, Mo., April 27, 1902.
Carrie V. C. Warm,
Care F. A. Warm, Chicago, Ills.
The Mercantile Trust Company pledges its honor to the statement that it has already contracted for purchase for more than a majority of the stock of Wiggins Perry Company. If you have not already done so, send in your certificate and receive payment according to terms.
Mercantile Trust Company,
By Festus J. Wade, President.
■ Plaintiff states that said Mercantile Trust Company at the time of sending said dispatch claimed to have signatures of 5522 shares of said stock; that 554 shares thereof never had signed at five hundred dollars, but only at one thousand dollars per share. That sixty shares had been signed at five hundred dollars per share, but said Trust Company agreed 'to give one thousand dollars per share to get the stock. ■ That 267 shares had been signed at five hundred dollars per share by an agent, with the agreement that it should be cancelled if the principal did not approve the same and on Monday, April. 28, 1902, seven hundred dollars per share was paid for the same, the principal having
St. Louis, Mo., April 26, 1902.
Mrs. Fred A. Warm.,
4731 Ellis Ave., Chicago.
All my family and myself have sold our stock in Wiggins Ferry Company to Mississippi Valley Trust Company of this city for five hundred dollars per share cash, with provision that if they get a majority they will pay an additional one hundred dollars per share. Proposition open to all stockholders. I recommend your immediate acceptance by wire. Please advise me, care Mississippi Valley Trust Company.
A. C. Chukch.
Chicago, April 27th, 1902.
A. C. Church,
Care Mississippi Valley Trust Company, St. Louis, Mo.
Many thanks. Have sent stock to Mr. Scullin, who will protect my interests. Please see him.
Mes. F. A. Wann.
At the same time plaintiff’s husband sent John Scullin the following telegram:
Chicago, April 27, 1902.
John Scullin,
Pres. Wiggins Ferry Company, St. Louis, Mo.
Understand if purchaser gets majority stock, will pay one hundred dollars per share additional. Kindly look out for Mrs. Wann’s interest.
F. A. Wann.
These two last mentioned dispatches were sent before said Mercantile Company’s dispatch of April 27 was received, and plaintiff not knowing the real situation, began to make inquiry and learned on April 28, 1902, that the Mercantile Trust Company on one side and the Mississippi Valley Trust Company on the other were each endeavoring to purchase a controlling interest in said Wiggins Ferry Company for a principal at that time undisclosed and unknown to plaintiff and that this contest for control began on April 26, 1902, and the Wiggins Ferry Company stock rapidly advanced, and plaintiff, having concealed from her defendant Scullin’s interest in the Mercantile Trust Company and the Eock Island Eailway Company and his agreement with the Eock Island Eailway Company, wired him as follows:
*446 Chicago, April 28th, 1902.
John Scullin, St. Louis, Mo.
I understand Wiggins Stock seven hundred and fifty dollars to-day. Trust you will get this or better for Mrs. Wann’s small holding. We need the money and I assure you it will be appreciated.
F. A. Wann.
And plaintiff, also believing that Festns J. Wade was bound in honor to act for her best interest, by her agent, wired him the following:
Chicago, April 28, 1902.
Festus J. Wade, St. Louis, Mo.
Understand Wiggins stock seven hundred and fifty dollars or better. Mr. Scullin has wife’s. Hope you will get her highest.
F. A. Wann.
No response came to either of these telegrams, but on April 29th, plaintiff received the following letter:
Mercantile Trust Company, St. Louis,
April 28th, 1902.
Mrs. Carrie V. C. Wann, care Mr. F. A. Wann, C. & A. R. R., Chicago, 111.
Dear Madam: Enclosed please find our treasurer’s check for
twenty-five thousand dollars, in payment for your fifty shares of stock in Wiggins Ferry Company, sold by you in accordance with the terms of the proposition made by this company and accepted by you. Kindly acknowledge receipt of same, and oblige.
Yours very truly,
Festus J. Wade,
President.
The Mercantile Trust Company’s check for $25,000 was enclosed in this letter. On April 29, 1902, plaintiff having received no satisfactory answer to her telegrams of April 28, 1902, sent Mi’- Scullin the following telegram:
*447 Chicago, April 29, 1902.
John Scullin,
President Wiggins Ferry Company,
St. Louis, Mo.
If you are unable to deliver majority of- Wiggins Ferry stock to Mercantile Trust Company, or party whom you are dealing with on or before May fifth, kindly advise me at once what action you have taken to protect my interests. I understand the Mississippi Valley Trust Company offer to-day six hundred dollars per share or more for any and all stock. I will, of course, expect you to protect my interests fully. Please answer.
Carrie V. C. Wann.
In response to this telegram Mr. Scullin sent plaintiff the following- dispatch:
St. Louis, Mo., April 29th, 1902.
Carrie V. C.' Wann, care F. A. Wann, C. & A. R. R., Chicago.
Mercantile Trust Company mailed you check last night in full payment for stock it bought of you last week. Mercantile Trust Company, its president and myself pledge our individual honor that we now have a majority of all the stock contracted for and exercise the right to pay you for your stock on or before May fifth.
John Scullin.
After receiving this telegram plaintiff and her husband on the morning of April 30, 1902, left Chicago for St. Louis, whdre they arrived on the evening of the 30th of April, 1902. On the next day, plaintiff and her husband learned that Wiggins Ferry stock had been bought by the Mercantile Trust Company at fifteen hundred dollars per share, and she and her husband went to the defendant Wade, and the Mercantile Trust Company, with said check, and informed said company and said Wade that plaintiff was dissatisfied with said sale, when said Wade informed them that he had plaintiff’s stock and proposed to keep it. They then went to see. defendant Scullin on May first, and told him of their dissatisfaction, and
Plaintiff states that by reason of the concealments by the defendants and the telegrams sent to her with intent to deceive, lull and defraud her and by their withholding said fifty shares of stock from her, defendants have deprived plaintiff of the greater part of the value of said fifty shares of stock; that the said stock was worth at least $1,525' per share; that it was the duty of the defendant,. Scullin, to have obtained that price for her, but because of his conspiracy with the said Wade and the said Mercantile Trust Company to get her said stock at $500 per share, and because of the concealments, misrepresentations and deceits knowingly perpetrated by and participated in by all of said defendants, plaintiff, instead of receiving seventy-six thousand, two hundred and fifty dollars for said stock, has received only twenty-five thousand dollars therefor, and has wholly lost fifty-one thousand, two hundred and fifty dollars and the interest thereon, whereby and because of the premises, defendants have become liable to her for the amount of said loss. Wherefore, she pra3'-s judgment for $75,000.
The defendants for their answer to the said first and second counts of plaintiff’s second amended petition, admit that on the first day of April, 1902, plaintiff was and had.been the owner for a long time of fifty shares of stock in the Wiggins Ferry Company, of the par value of one hundred dollars each; admit that the defendant Scullin was president and director of the Wiggins Ferry Company and a stockholder in
The reply is a general denial, and a further denial that she had any dispute with the defendants before she received the check and denies that she had knowledge of all the facts prior to the filing of this suit and the taking of depositions therein.
On the trial before the jury the evidence tended to show that the Wiggins Ferry Company was an Illinois corporation, which had existed many years prior to 1902. Its capital stock was $1,000,000, divided into ten thousand shares of the par value of $100 each. Prior to the contest between the Mercantile Trust Company and the Mississippi Valley Trust Company for the acquisition of a majority of the capital stock, a contest which began late in the afternoon of Saturday, April 26, 1902, the stock was selling in the open market in the city of St. Louis at $236 to $237 per share, although one witness testified that he understood it had sold as high as $250 per share, 'and another that to the best of his recollection the market value varied from $250 to $280 per share prior to April 24, 1902, but he could not testify to any actual sales. Up to April 21, 1902, John Scullin and David R. Francis were the joint owners in equal shares of all of the capital stock of the St. Louis, Kansas City & Colorado Railway Company, at that time an incomplete railroad between St. Louis and Kansas City, having an entrance into the city of St. Louis to the ITnion Station over the Wabash Railway. Shortly after April 1, 1902, the officers of the Chicago, Rock Island & Pacific Railway Company requested their general attorney, Mr. M. A. Low, of Topeka, Kansas, to go to St.
Testimony further showed that Wade became a director of the Wiggins Ferry Company April 1st, 1902, succeeding Judge Madill, then lately deceased. Having become a member of the board, Wade desired to buy some stock in the company so as to have a sufficient interest to justify his giving the necessary time to it. He acquired ten shares before he was elected director and afterwards and before the 19th of April, he had acquired some few additional shares. On April 19th, and before he had learned of any desire on the part of the Rock Island, to purchase the Wiggins Ferry property, Wade wrote to Mrs. Wann in which letter he said: ‘Should you agree to sell any of your holdings, I should be pleased to have you name a price on the same. ’ ’ In answer to that letter under date of April 21, 1902, plaintiff’s husband wrote to Wade as follows: “My Dear friend: Your favor of the 19th inst. to Mrs. Wann, is received. Will you kindly advise me what the value of the Wiggins Ferry Company stock is to-day, and what you are willing to pay for .it.” On April 24th, Scullin haviug sent the telegram of that date to Mrs. Wann, Wade telegraphed to Wann as follows: “John Scullin’s telegram to your wife explains why I did not reply to your letter.” It also appears in evidence on the part of the plaintiff
Chicago, April 29, 1902.
•John Scullin,
President of the Wiggins Ferry Company,
East St. Louis, Illinois.
If you are unable to deliver majority Wiggins Ferry Company ¡stock to Mercantile Trust Company, or party whom you are dealing with, on or before May fifth, kindly advise me at once what action .you have taken to protect my interests. I understand the. Missis- , •sippi Valley Trust Company offer to-day six hundred dollars per .share, or more, for any and all stock. I will, of course, expect you to protect my interests fully. Please answer.
Cabbie V. C. Wann.
St. Louis, Mo., Apr. 29, 1902.
Carrie V. C. Wann, care F. A. Wann, C. & A. R. R., Chicago.
Mercantile Trust Company mailed your check last night in full payment for stock it bought of you last week. Mercantile Trust Company, its president and myself, pledge our individual honor that we now have a majority of all the stock contracted for, and exercise the right to pay for your stock on or before May fifth.
John Scuixrn.
On the following day plaintiff and her husband came to St. Louis and on the next day, May 1st, they went to the Mercantile Trust Company’s office and saw Mr. Wade, and Mr. Wann speaking for the plaintiff said they were not satisfied with the sale of the plaintiff’s stock. Mr. Wade replied he had the stock and proposed to keep it. The plaintiff herself did not see Mr. Scullin, but Mr. Scullin did see Mr. Wann and told him the matter was out of his hands, that he had no further control over it. On May 18th, the plaintiff endorsed and deposited the check which had been sent her in payment of her stock, in the First National Bank of Chicago, and it was received by the said bank as cash on that day and credited to the plaintiff’s account, and was afterwards, on the 19th of May, 1902, paid by the Mercantile Trust Company. Mrs. Wann among other things testified she did not think there was anything so very wrongful until she got to St. Louis. “Q.. And you found out it was all wrong, did you? A. I did, most emphatically. Q. I know, but I want to know what you knew? A. Well, that they had my stock and were keeping it, when they were paying other people bigger prices. Q. Yes, and you knew that they did not have a majority. You were informed of that, weren’t you? A. Yes, sir, everybody was talk
With regard to the check for $25,000, the plaintiff testified that she knew when she received the check that it was intended to be in full payment for her stock. This was substantially all the evidence offered by the plaintiff in the case, except the details of transactions resulting in the purchase of the shares of stock of different stockholders at different prices. At the close of the plaintiff’s ease, the defendants requested the court to instruct the jury that on the pleadings and the evidence plaintiff was not entitled to recover against either of the defendants, and said instructions were refused and the defendants excepted.
On the part of the defendants the following additional facts were developed:
Mr. M. A. Low testified that on the 2nd day of April, 1902, he was general attorney of the Chicago^ Rock Island & Pacific Railway Company, and on that day called on Governor Francis in the city of' St. Louis, and inquired whether the St. Louis, Kansas City and Colorado Railroad property was for sale, and a day or two later commenced negotiations with Governor Francis for the purchase of the property, and then met Mr. Scullin for the first time. As a result of these negotiations Francis and Scullin fixed a price at which they would be willing to sell the property, giving Mr. Low an unsigned memorandum of the terms. During these negotiations, Mr. Low asked Mr. Scullin
Mr. Scullin also testified to that. Wade had never acted in any manner for the Rock Island Company before that time' and was not interested in any way in the St. Louis, Kansas City & Colorado Railroad Company. Before negotiations in New York took place, Mr. Low went over the Colorado railroad with Mr. Scullin and Mr. Sands and other employees of the road whose names he did not remember. Mr. Sands at that time was the general manager of the Colorado-Railroad and also of the Wiggins Perry and a director in the Wiggins Perry Company. Mr. Low did not go over any part of the Wiggins Perry property and made no examination of it until after the stock was purchased. Late in the afternoon of Saturday, April 26, Mr. Low, then at his home at Topeka, Kansas, received information over the telephone from Mr. Wade that another purchaser for the Wiggins Perry stock was in the field. He immediately wired that fact to-Mr. Mather in Chicago. The Mercantile Trust Company was paid by the Rock Island Company a commission of two and one-half per cent upon $500 per share for all the stock purchased by it. The defendant, John Scullin, testified that prior to April, 1902, the business of the Wiggins Perry Company had been diminishing. It was being hard pressed by the Terminal Railroad Association and by the Interstate Transfer Company, the Missouri Pacific, the Vandalia and Interstate Car Transfer Company, and it had been compelled to lower its charges for transportation and ferriage to a considerable extent. The rate for transportation of coal was cut from thirty to fifteen cents per ton, and the coal business was a very large part of the business of the company; that cut in the rates was made by order of the board of directors of the Wiggins Perry Company in March, 1902, although-it had been discussed for more
Festus J. Wade testified that he was elected a director in the Wigging Ferry Company in January or February, 1902, to succeed Judge Madill, then recently •deceased; that in order to qualify him for the office, Mr. Scullin transferred to him fifty shares of stock, and "thereafter Mr. Wade purchased twenty shares of stock; that he secured fifteen shares in the latter part •of February or the first part of March through the brokerage firm of G-. H. Walker & Company, whom he lad instructed to purchase for him as much as one
St. Louis, Mo., April 12, 1902.
S. Prentiss Smith, Esq., 538 California street, San Francisco, Cal.
Deab sib: I have recently been elected a member of the hoard
of directors of the Wiggins Ferry Company, as successor of the late George Madill, and desire to purchase some stock, so as to have an interest, sufficient to justify my giving the position the necessary time. Should you care to sell any of your holdings X shall be pleased to have you name a price on same.
Very respectfully yours,
Festus J. Wade.
The same form of letter was sent to Mrs. Wann, the plaintiff, on April 19th. In response to the letter to Mrs. Wann, Mr. Wade received a letter dated April 21st, from Mr. Wann, which has already been set out above, and in response to this letter of Mr. Wann’s dated April 21st, he telegraphed to Mr. Wann April 24th, “John Scullin’s telegram to your wife explains why I did not reply to your letter.” ,On April 25th Mr. Wann acting for his wife, the plaintiff, wrote Mr. Wade as follows:
Monadnock Building, Chicago, April 25, 1902.
My deab Festus: Your telegram, also one from my good friend, Mr. John Scullin, received at my house last night at 7:45, and I answered the latter immediately, stating that I .would forward*467 the Wiggins Ferry Company stock this morning, which I have done. I more than thank you for looking out for Mrs. Wann’s interest. In this connection, I was offered last week 500 shares of the stock at $240 and am awfully sorry I did not telegraph Mr. Scullin, asking his advice. It is true, the party who offered it to me might not have been in the position to make delivery, but it makes a fellow feel sorry, just the same, that he did not take it. I expect to be in St. Louis in the near future, when I will do myself the pleasure of calling on you and my good friend, Mr. Scullin.
Very truly yours,
Fred A. Wann.
To Festus J. Wade, St. Louis, Mo.
On the same day Mr. Wade wrote a letter to Mr. Wann on the same subject, as follows:
April 25, 1902.
Fred A. Wann, Esq., care C. & A. Railway Co., Chicago, 111.
My dear Me. Wann: When I wrote your good wife last week about Wiggins Ferry stock I had no idea of the sale at the time. The next day, however, it developed that there was an opportunity to sell it, and I have been working on it ever since. As I was acting as agent for the purchaser, thought it would be unwise for me to write to you in regard to the matter unt-il it was closed. Yesterday the authority to buy was given me and I immediately wired you, as did also Mr. Scullin. I sent you the following telegram which I now beg to confirm: “John Scullin’s telegram to your wife explains why I did not reply to your letter.”
Very truly yours,
Festus J. Wade.
In response to the letter written to S. Prentiss Smith, he received the following letter:
San Francisco, Cal., April 17, 1902.
Festus J. Wade, Esq., St. Louis, Mo.
Dear sir: Referring to the contents of your favor of the 12th inst., upon the subject of Wiggins Ferry stock, I have fifteen shares which I have been holding for $250 per share, and would be pleased*468 to deliver them at any point you may indicate, if this offer is accepted during the current month. My preference would be to send the endorsed certificate by registered mail directly to your good self, to be paid for upon delivery by a check upon New York.
Respectfully yours,
S. Peentiss Smith.
Said letter was received in St. Louis on April 21st, while Mr. Wade was yet in New York, and his secretary on the evening of that day, telegraphed Mr. Wade of the option given him by Mr. Smith and Wade immediately telegraphed his secretary to do nothing with respect to Smith’s option, and on his return to St. Louis on April 24th, sent Mr. Smith the following telegram :
St. Louis, April 24, 1902.
S. Prentiss Smith, 528 California street, San Francisco, Cal.
Your option of April declined in view of the fact that stock has been sold at $500 per share, provided a majority can be delivered. President Scullin wires you fully to-night.
Festus J. Wade.
A telegram similar to the one sent to Mrs. Wann was sent to Mr. Smith on the evening of the 24th of April, and on the 25th of April Wade wrote a letter to Mr. Smith as follows:
St. Louis, Mo., April 25, 1902.
S. Prentiss Smith, 538 California street, San Francisco, Cal.
Deas sie: Your favor of the 17th reached me in due time, but in the meantime I have been working on a deal which came up rather suddenly for the sale of the entire stock of the Wiggins Ferry Company. I have accomplished the result and sold the stock at $500 per share, provided I can deliver more than a majority of the stock on the fifth of May. In view of that fact, I did not think it would be just to you to take advantage of your offer, hence I sent you the following telegram, which I now confirm: “Your option of April 17th declined, in view of the fact that stock has been sold at $500.00 per share, provided a majority can be delivered.*469 President Scullin wires you fully to-niglit.” If you have not already done so, I advise you to send Mr. Scullin your stock immediately, in compliance with his telegram.
Tours truly,
Festtjs J. Wade.
Mr. Smith- availed himself of the offer by telegram of April 25th, 1902, and forwarded his stock to Mr. Scullin accordingly. The same telegram concerning the fact that the Mercantile Trust Company had contracted for a majority of the stock, was sent to' Mr. Smith on April 27th, as was sent to all other stockholders. Smith in response to this telegram wrote Wade as follows:
San Francisco, Cal., May 1, 1902.
Festus J. Wade, Esq., President,
Mercantile Trust Company, St. Louis, Mo.
Dear sir: But for your explicit telegram of the 27th ult, I should now he in serious suspense as to'where I stand in the Wiggins Ferry deal; upon the day on which the wire was received I was tendered right here a $9,000 check for my fifteen shares, to which I was obliged to reply that my holdings were not free. It then dawned on me that my contract was binding upon me, but conditioned on the part of the purchasers. Your wire has set that question at rest. If the matter has been settled, I would be pleased to receive proceeds either by check on St. Louis, or New York, the latter preferred if obtainable at par. With renewed thanks to you and Mr. Scullin for your good care of my interests, I remain,
Faithfully yours,
S. Prentiss Smith.
On April 28th, Smith wrote a letter to Mr. Scullin, as follows:
San Francisco, Caí., Monday morning,
April 28th, 1902.
John Scullin, Esq., St. Louis, Mo.
My dear sir: Your telegram of Saturday has been answered today. By to-morrow morning you will receive my letter of the 25th*470 with my Wiggins Ferry stock certificate. I have also a telegram from Mr. Wade, and regret that you and he should consider it necessary to embarrass me with the sense of my obligation in the premises. Though I have a firm offer to-day of $600 per share for my stock, I still feel under obligations to you and Mr. Wade for taking me into the syndicate and selling my stock for $500 per share, instead of accepting my offer for $250 per share. My understanding is that I am getting the same price you receive, and it looks as if we both might have done a little better, but it would have taken some remarkable guessing. From the terms of a certain telegram shown me to-day I think that $1,000 per share could be obtained for my stock if I were free, but I viewed the matter differently last Friday, when I was apprehensive of a purchaser obtaining their majority before I could get in. It is not my nature to hold out for miracles. Renewing my thanks to you and Mr. Wade for your good care of my interests (though we miss the miracle), I remain,
Very truly yours,
’ S. Prentiss Smith.
It appears from the evidence that Mr. Scullin had signed the acceptance of the proposition of the Mercantile Trust Company in behalf of Mr. Smith in the same manner as he had accepted the same in behalf of Mrs.'Warm, the plaintiff. It also appeared that Wade received responses from' about a half a dozen other stockholders of the Wiggins Ferry Company in reply to his letters of April 12th and 19th, soliciting offers • of their stock, and that they were all treated in the same way as Mrs. Wann and Mr. Smith, except that about April 12th, he purchased from George O. Hitchcock, who lived in St. Louis, five shares at $237 per share. The uncontradicted testimony of Mr. Wade shows that he was first informed of the sale of the Colorado Road to the Rock Island Company by Mr. Scullin on or about April 23rd or 24th on their way home from New York. He corroborated Scullin in regard to his going to New York on the 19th of April. He met Mr. Scullin on Monday morning and, the latter said to
Wade testified that at the time he was endeavoring to purchase some stock for himself, he had no knowledge whatever that the Rock Island Company desired to purchase the Wiggins Perry Company stock or the Colorado Railroad and had no knowledge of any intention on Scullin’s part to sell either the Colorado Railroad or his stock in the Wiggins Perry Company. He'corroborated Mr. Scullin’s testimony in regard to the strong opposition that had developed against the Wiggins Perry Company and as to the reason for cutting the price for transportation. In relation to Mr. Church’s testimony in regard to communicating to the directors of the Wiggins Perry Company the offer of $600 for the stock, he testified that about three o’clock on Saturday afternoon of April 26th, 1902, he was sitting in Mr. Scullin’s office, and Mr. Church came ip and Mr. Peugnet happened to be there; Mr. Church stated that he would like to have a meeting of the board; that he had some matters he wanted to submit. “Mr.
There was no rebuttal testimony offered and the foregoing is substantially all the material evidence in . the case.
I. As already said, the circuit court granted a new trial on the ground that its second instruction given in béhalf ■ of the plaintiff was erroneous. That instruction was in the following words:
* ‘ The jury are instructed that if they believe from the evidence that John Scullin had a pecuniary interest, as a stockholder, in the Chicago, Rock Island & Pacific Railway Company, and, while he had such interest, solicited from the plaintiff the possession and control of her fifty shares of stock in the Wiggins Ferry*475 Company, in order to sell it to the said Chicago, Rock Island & Pacific Company, but did not disclose to plaintiff his interest in said railway company, and thereafter, in response to his solicitation, he received plaintiff’s stock and thereafter placed her stock in possession of the Mercantile Trust Company, the purchasing-agent of said railway company, and it was withheld from her and she was thereby deprived of her said stock, and the opportunity to sell it, and.that plaintiff was ignorant of such interest of said Scullin in said railway company, then said acts and concealment was a fraud upon plaintiff, and if you find that'thereby plaintiff has sustained damages, she is entitled to recover against defendant Scullin, and if you further find from the evidence that at the time said Scullin solicited the stock, he did so at the request of the Mercantile Trust Company, acting through the defendant Wade as its president, and that said Wade, at the time of such solicitation, or at the time the stock was delivered to said trust company, knew of said interest of said Scullin as a stockholder in said railway company, and did not communicate the fact of such knowledge to plaintiff, and that she was at such times ignorant of such interest, and has, by reason of such concealment, sustained damages, then she is entitled to recover as against all the defendants.”
While the record is voluminous, the fact upon which the recovery was permitted in the circuit court under the above instruction, was that defendant Scullin was a stockholder in the Rock Island Railway Company to which he sold plaintiff’s stock and did not disclose that fact to plaintiff. Conceding- that the relation of principal and agent was established by the authority given by plaintiff to the defendant Scullin to deliver her stock to the purchaser of whom he had advised her and intrusted her stock to him, all the facts and circumstances in evidence demonstrate that
In (fold Mining Company*v. Fox, 4 Iredell’s Eq. '61, it was said: “It is a well-established principle in equity that an agent cannot make himself an adverse party to his principal while the agency continueshe can neither make himself a purchaser when employed to sell, nor, if employed to purchase, can he make himself the seller. In both cases he is but a trustee for his principal; . . . but the rule applies only to agents who are relied upon for counsel and direction, and whose employment is rather a trust than a service; and
In Kilbourn v'. Sunderland, 130 U. S. 505', the plaintiffs had employed defendants as their agents to purchase real estate in Washington City. Among other properties, plaintiffs directed defendants to ascertain the owner and the lowest price for which square 115 in said city could be bought; the defendants informed plaintiffs that the lowest price was $65,000, to which plaintiffs agreed and directed them to complete the purchase, which they did. As a matter of fact defendants were then the owners of said.square, having bought it prior to their agency for plaintiffs for $40,000. The plaintiffs brought their suit in equity'for an accounting and to recover the $25,000', but the Supreme Court of the United States said: “The relations between the parties were such that Kilbourn and Latta should have disclosed that they were acting as principals in this sale, but the complainants suffered no pecuniary loss for want of such disclosure', since they took the property at their own price. Their remedy, if they were deceived, lay in throwing up> the bargain, but they did not do so, and could not treat it, as is well said (3 Mackey, D. C. 525), ‘as a contract fulfilled and as a contract broken.’ ”
So in Atwood v. Railroad, 85 Ya. 966, it appeared that Clark & Co., the financial agents of the Railway Company, when the general mortgage bonds were placed on the market negotiated them for the company on commission. The price of the bonds were fixed by the Railway Company and they were sold by Clark & Co., who acted in entire good faith. A syndicate with which the members of the firm of Clark & Go. were connected, purchased a large portion of the bonds, the proceeds being paid to the Railway Company and used in the construction of its road. It was held that the fiduciary relation between Clark & Co. and the Railway
In Carpenter v. Danforth, 52 Barb. (N. Y.) 581, Judge Sutherland observed where there is no evidence to show that on a sale of stock by á stockholder to a director of the corporation, the purchaser made no material representation as to the affairs or condition of the company or of any fact material to the question of the value of the stock or any false representation of the material fact that induced the sale; or that he either did or said anything to mislead the seller or to divert or prevent him from ascertaining all that could then be known of the affairs, condition and prospects of the company; or from making any inquiry as to any fact material on the question of the value of the stock; or that the purchaser did anything which misled or deceived the plaintiff or was likely to mislead or deceive him; or which diverted or was liable to divert or prevent him from learning all that he, the purchaser, knew about the value of the stock or any fact material to the question of value, it could not be held there was any fraudulent concealment as would sustain a decree.
It must be kept steadily in view that this is an action for fraud and deceit. In People’s National Bank v. Central Trust Company, 179 Mo. l. c. 662, it. was said: “Fraud is a willful wrong. Some writers have undertaken to draw a distinction between fraud in fact and fraud in law, but fraud, under any definition, implies the doing of a wrong willfully. Sometimes, without proof of an actual evil purpose, the law will imply, fraud, but only so in a case where one has been so oblivious of his duty, showing such a disregard for the rights of others, as to make his conduct as bad as if actuated by a desire to do wrong. If it were not
It is not asserted, and indeed could not have been, that the telegram from the defendant Scullin of April '24, 1902, to the plaintiff in this case, contained any false statement and hence, as already said, the case •on this instruction was and is narrowed down to the fact of the concealment of Scullin’s ownership- of stock in the Rock Island Company, to which he sold not only plaintiff’s fifty shares of stock, but his own eight hun-' •dred shares for the same price. It is the settled law that an agent owes to his principal the most perfect good faith and loyalty to the principal’s interest, and will not be permitted to take upon himself the character of an agent where on account of his relation to others or on account of his own personal interest, he would be compelled to assume incompatible and inconsistent •duties and obligations. [Euneau v. Rieger, 105 Mo. 659.] Upon this groundwork the plaintiff takes her position and advances the proposition that an agent to sell cannot sell to a corporation in which he is a stockholder, without disclosing to his principal the fact that he is a stockholder in such corporation and receiving the consent of his principal to the sale in the light of such disclosure. We are cited by the appellant to many cases to illustrate the foregoing contention. Unquestionably it is the general rule that the contracts of a party procured by an agent who has an interest in the subject-matter of the agency, which is undisclosed to his principal, are voidable by the prin
In Kitchen v. Railroad, 69 Mo. 224, it appeared that a number of persons had organized a corporation to purchase the remaining bonds of the Forth Missouri Railroad Company, at seventy-two and one-half per cent and for the purpose of acquiring the railroad itself if deemed profitable. Among the persons who organized this corporation were three of the directors of the North Missouri Railroad Company, namely, James S. Rollins, Jas. H. Britton and E. W. Fox. After this corporation was formed James B. Eads presented a proposition to the board .of directors of the North Missouri Railroad Company offering to purchase the remaining bonds of that company, amounting to $3,600,000 at seventy-two and one-half cents on the dollar less a commission of three and one-half per
In Alexander v. Williams, 14 Mo. App. 13, it was sought to avoid a contract entered into by two corporations on the ground of fraud, because some of the
So that it cannot be said without qualification that the mere fact that one is a stockholder in a corporation entirely disables him from representing a third party in a business transaction with such corporation. Numerous well-considered cases hold that a corporation is a legal entity, distinct from the purposes of its contracts from the persons who own its stock, and the fact that the same person is president of two corporations will not of itself invalidate dealings between the two corporations as a matter of law, nor make the contract into which they enter void per se, but affords a ground for subjecting it to the closest scrutiny by the courts when challenged by a party entitled to challenge it. [3 Thomp. Corp., sec. 4079, and cases cited; Van Dusen-Harrington Co. v. Jungeblut, 75 Minn. 298.]
In our opinion the said instruction number two was erroneous and should have been refused, and the court properly granted a new trial for having given the same, because the mere fact of defendant Scullin’s failure to disclose to the plaintiff that he was a stockholder in the Eock Island Company, and the said company was the intending purchaser, was not in law a fraud upon the plaintiff, and did not disqualify him from receiving from plaintiff her stock and delivering the same to the Mercantile Trust Company under the terms of the telegram of April 24th.
As to the defendant Mercantile Trust Company and Wade, the instruction was erroneous, because there was no evidence in the case that Wade knew that Scullin was a stockholder in the Eock Island Company at any of the times mentioned in the instruction. The plaintiff offered no evidence showing such knowledge in the defendant Wade and it is not pretended that the trust company had any information save and except that which it received through Mr. Wade, and
In addition to what has already been said we think this instruction is also fatally defective for the reason that it did not require the jury to find that the failure of Scullin to disclose his ownership of stock in the Rock Island Company and that said company was the intending purchaser, were material inducements to the plaintiff’s action in sending her stock to defendant Scullin in response to his telegram of April 24th, nor that she relied upon the non-existence of such facts and would not have sent her stock had she known the facts. In 14 Am. and Eng. Ency. Law (2 Ed.), 113, the rule is tersely stated as follows: “The principle that false representations must be relied upon in order that they amount to fraud, applies with full force where failure to disclose facts or concealment of facts is relied upon as constituting fraud. It is essential, in order that an action of deceit may be maintained or a contract rescinded because of non-disclosure or concealment of facts, that the person complaining shall have been deceived; or, in other words, that the circumstances shall have been such that he would not have acted if the truth had been disclosed.” And in 20 Cyc. 40, it is said: “Where concealment is the ground of the action, it must appear that plaintiff relied on defendant to make disclosure of the fact concealed, and that the concealment was a moving inducement to the plaintiff’s change of position.” Not only was this not submitted to the jury by the plaintiff’s instructions, but there is no evidence in the record that plaintiff would have acted otherwise had she known that defendant Scullin was a stockholder in the Rock Island Company, and that the Rock Island Company was the intending purchaser. [Tinker v. Kier, 195 Mo. 183;
Not only was this instruction erroneous for the reasons assigned and therefore the circuit court committed no- error in setting aside the verdict and granting a new trial, but in our opinion there was no evidence of fraud perpetrated by either of the defendants upon the plaintiff, or any fraudulent motive or intent on their part upon which to submit the case to the jury. The transactions involved in this case were the same as those which were before this court in the case of Newman v. Mercantile Trust Co., 189 Mo. 423. And this court in that case held after a careful perusal and consideration of the evidence- that was rejected in that case, being practically the same as that in this case, that there was no evidence tending to prove the perpetration or even the contemplation of any fraud on the plaintiff or any other person. On the contrary, the evidence abundantly establishes that the defendants Scullin and "Wade not only were not moved by any fraudulent purpose in advising plaintiff to sell her stock for $500 per share, but were actuated by a desire to deal justly and fairly, not only with the plaintiff, but with every stockholder of the Wiggins Ferry Company, in endeavoring to sell said stock to the Rock Island Company. Prior to the time that the Rock Island Company through the Mercantile Trust Company offered to purchase this stock for $500’ per share, it had never sold, according to the great weight of the evidence, for a price exceeding $250 per share. And until the telegrams and letters of April- 24th* were sent out to the stockholders by Messrs. Wade and Scullin, there is not the slightest ground for supposing that any one thought this stock could be sold for $500 per share. The defendant Scullin was willing to sell his shares of stock for $400 per share until Mr. Wade advised him that the Rock Island Company could
In our opinion the plaintiff wholly failed to establish any fraudulent intent to deceive her into parting with her stock, and the court should have directed a verdict for the defendants upon the issue which the plaintiff had tendered, to-wit, that of fraud and deceit.
Accordingly, the judgment of the circuit court is affirmed.