Smith v. Pendleton

8 R.I. Dec. 225

• Court: Superior Court of Rhode Island
• Decided: March 1, 1932
• Docket: No. 1657
• Status: Published

Opinion

DECISION.

CARPENTER, J-.

For many years prior to the transaction out of which this action developed, the Wilcox Fertilizer Company operated a plant in Mystic, Conn. All of the stock was owned by several brothers by the name of Wilcox. Some few months prior to the transaction forming the basis of this suit, the Wilcox brothers had deceased, and thereupon a majority of the stock came into the control of James M. Pendleton, the defendant, then President of the Wilcox Fertilizer Company.

Mr. Pendleton took it upon himself personally to sell the stock of the Wilcox Fertilizer Company and offered the same for sale. In reply to the offer of Mr. Pendleton to sell the stock, one J. Waterman Wilcox bid two hundred and seventy-five (275) dollars a share (as will appear by telegram of October 17, 1928). This offer was accepted 'by defendant, provided $10,000 was paid down (as appears by telegram of October 18, 1928). To secure $10,000 to make down payment, J. Waterman Wilcox, representing himself to have full and ample authority, bargained to sell a part of the assets of the Wilcox Fertilizer Company to the plaintiff, J. Howard Smith, for $60,000, and received $10,000 as a down payment which was paid to James M. Pendleton by J. Waterman Wilcox as down payment for purchase of stock of the Wilcox Fertilizer Company by J. Waterman Wilcox. Mr. Wilcox’s option on the stock was to expire October 27, 1928, at noon. (Deft’s Ex. No. 7). Wilcox represented to Smith that the sum he (Smith) was to pay was to be paid over to Pendleton, who was to deliver proper deeds of assets purchased by Smith.

For plaintiff: Boss & McMahon. For defendant: Herbert W. Rath-bun.

On the 26th day of October, 1928, Mr. Smith appeared in Mystic with the balance of the money to be paid by him and there he was met by Wilcox, who accompanied him to Westerly where they met Pendleton in the Westerly Branch of the Industrial Trust Company, of which" Pendleton is manager. At this time .Smith ascertained the true nature and facts of the affair. He ascertained that Wilcox could not raise the money to carry out his agreement to buy stock. He requested Pen-dleton to deed him property purchased by him from Wilcox or return his money. Mr. Pendleton replied that he was a hard-boiled trust officer, and said it would be necessary for him to call up some person in Providence. A short time afterwards Pendleton agreed to return the deposit of '$10,000 to Smith if he would have Wilcox surrender his option and also have Wilcox deliver certain formulae. Pendle-ton advised .Smith that he had a better offer for the stock. Smith complied with the demands of Pendleton. Pendleton advised Smith that he was very busy and could not then attend to the matter of payment to him of the money but that he would send 'Smith a check the following Wednesday.

Pendleton denied that he had ever agreed to return or pay Smith ten thousand (10,000) dollars and denied that he had made any agreement at all with Smith.

Smith was corroborated in many things by Wilcox and his evidence as to the contract was corroborated by Wilcox.

The denial of Pendleton did not impress the Court as being the truth. This Court finds from the evidence and circumstances that James M. Pen-dleton, the defendant, entered into a contract with J. Howard Smith to pay him, or return to him, ten thousand (10,000) dollars if Smith would secure for him (Pendleton) cancellation of an option for purchase pf stock of Wilcox Fertilizer Company from J. Waterman Wilcox and also secure from said Wilcox certain formulae for making fertilizer. Smith obtained the cancellation of said option and obtained for him said formulae. Pendleton did not return or pay said money, therefore this Court renders decision for plaintiff in the sum of ten thousand (10,000) dollars with interest from October 28, 1928, amounting to two thousand dollars. Total amount of decision $12,000 and costs.