Proctor v. Appleby

188 P. 481, 110 Wash. 403, 1920 Wash. LEXIS 535
CourtWashington Supreme Court
DecidedMarch 22, 1920
DocketNo. 15559
StatusPublished
Cited by10 cases

This text of 188 P. 481 (Proctor v. Appleby) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Proctor v. Appleby, 188 P. 481, 110 Wash. 403, 1920 Wash. LEXIS 535 (Wash. 1920).

Opinion

Fullerton, J.

In this action the respondent sought to recover from the appellants some four hundred shares of the capital stock of a corporation known as The Camp Lewis Amusement Company; or, in the case return of the stock could not be had, the value thereof. As the assignments of error are based to a large extent on the admission of evidence, a somewhat minute statement of the issues is necessary.

In his complaint, the appellant alleged that the corporation named was organized for the purpose of developing a part and portion of the army cantonment known as Camp Lewis, which was set aside by the duly constituted authorities as Greene Park, and that for that purpose the corporation had become and was the owner of a certain license, franchise, and privilege, granted by the commanding officer of the cantonment on October 22, 1917; that the capital stock of the corporation was one thousand shares, of the par value of one hundred dollars each; that, on the organization of the corporation, the respondent became and was the owner of six hundred shares of such stock, and that the defendants Neely and Smyly each became and was [406]*406the owner and holder of two hundred shares of such capital stock; that the license, franchise and privilege held by the corporation was secured for the corporation largely through the efforts and labors of the respondent, in which he was greatly assisted and aided by a certain committee, composed of citizens of Pierce county, who had theretofore been appointed and selected as an advisory committee by the commanding officer at Camp Lewis, of which committee the appellant Appleby was chairman; that on June 11, 1918, the privilege held by the corporation was of large value; although subject to cancellation at any time by the commanding officer of the army post or by any higher military authority; that its business consisted of locating and granting concessions to persons desirous of establishing them in such park, and in supervising the construction, operation and conduct thereof, and of putting in and constructing permanent utilities therein; that, previous to June 11, 1918, the corporation had expended, or caused to be expended, in the construction of permanent utilities in such park, and in the laying out of its streets and alleys, and in its gas, water and sewer systems, a large sum of money, approximating one hundred thousand dollars, and had also expended or caused to be expended by concessionaires holding rights in such park additional large sums approximating five hundred thousand dollars; that all of such concessions and improvements were largely secured by the labors and at the instance of the respondent.

It is further alleged that, for several years prior to June 11, 1918, the appellant Appleby was the cashier ■of the National Bank of Tacoma, at which bank the respondent had for several years done a general banking business; that, in the course of such business, he had become acquainted and friendly with the appellant, [407]*407and had frequently sought his advice and counsel regarding business matters; that, by reason of his friendship for Appleby and of Appleby’s apparent friendship for him, he had, on June 11, 1918, the utmost faith and confidence in Appleby, and in his honesty, truth and probity; that he also had confidence in the' truthfulness and integrity of the appellant Kelly; that, on and prior to June 11,1918, the appellants, Appleby, Kelly, Neely and Smyly, confederated and conspired together for the purpose of obtaining from him four hundred shares of the capital stock of the Camp Lewis Amusement Company, and for the purpose of injuring and defrauding him out of such stock, and for the purpose of securing the stock for themselves; that on June 11, 1918, in pursuance of the conspiracy aforesaid and for the purposes aforesaid, the appellants Appleby and Kelly wilfully and falsely represented and stated to him that the commanding officer at Camp Lewis had threatened, and was threatening, to cancel the privileges held by The Camp Lewis Amusement Company, and had also stated that he was greatly dissatisfied with the respondent and with the way in which he was handling the business of the corporation—that he, the commanding general, was tired of the complaints of the concessionaires, and that he would cancel the privileges granted to the corporation unless.there was a change in the management of the corporation, and unless the respondent would transfer to Appleby and Kelly two hundred shares each of the capital stock of the corporation so that they could become actively identified with the management thereof ; that the respondent, by reason of his implicit faith and confidence in Appleby and Kelly, and believing to be true the representations so made, turned over and delivered to Appleby four hundred shares of the corporation stock. That the representations so made [408]*408were false and untrue, and were made by tbe appellants and each of them and known to be so by Appleby and Kelly when so made, and that they were made for the purpose of cheating and defrauding him out of the stock; that the stock is and on June 11, 1918, was of the reasonable market value of more than forty thousand dollars, and that he had demanded the return thereof from the appellants, which demand had been refused.

It was further alleged that, at all times prior to June 11, 1918, the respondent was treasurer and vice-president of the corporation, in the active management thereof, and was receiving á salary of $350 per month; that, as soon as the appellants Appleby and Kelly got possession of the stock, all of the defendants met and removed the respondent from his official connection with the corporation, and assumed the management of the corporation themselves; that, since assuming such management, the appellants have grossly mismanaged the affairs of the corporation; that, because thereof, many of the concessions theretofore granted have not been fulfilled, and the commanding officer of Camp Lewis has notified the company to perform work which has not been performed, and that there is danger that the concession granted the corporation may be can-celled ;'that all of said work would have been performed had he not been defrauded of his stocks and removed from the active management of the company; and that, by reason thereof, his remaining stock has greatly decreased in value and in earnings and dividends, all to his loss in the sum of ten thousand dollars. The prayer of the complaint is (1) for the return of the shares of stock, or in case they cannot be returned, judgment for their value in the sum of forty thousand dollars; (2) for judgment in the sum of ten thousand dollars for damages and injuries sustained by the de[409]*409tention of the stock; and (3) for the costs and expenses in the action to he incurred.

The appellants Smyly and Neely answered the complaint jointly, and the appellants Appleby and Kelly answered separately. Their answers were, in substance, the same, and were in effect a general denial of the traversable allegations of the complaint. No special affirmative defense was interposed by Neely, Smyly, or Appleby. Kelly set up affirmatively, by way of a separate answer, that, of the six hundred shares of stock issued to respondent on the formation of the corporation, two hundred shares thereof were held in trust by the respondent for him, and that, by the terms of the trust, he was entitled to receive from the respondent, at any time on demand, a transfer to him of the stock. A reply was filed to the affirmative answer of Kelly denying each and every allegation therein contained.

The action was tried by the court sitting with a jury.

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Bluebook (online)
188 P. 481, 110 Wash. 403, 1920 Wash. LEXIS 535, Counsel Stack Legal Research, https://law.counselstack.com/opinion/proctor-v-appleby-wash-1920.