Ramsey v. Timayenis

Headnote

Arrest—Fraud—When vacation of order proper.

The vacation of an order of arrest based on an alleged procurement of moneys by fraud and deceit is proper where it is shown that such moneys were advanced by the plaintiff with intent to go into business with defendant, and that several months after it is claimed that the alleged fraud was discovered, plaintiff wrote to defendant, expressing confidence in his ability and the success of the business and asking assistance in an emergency, without reference to such alleged fraud.

Appeal from order vacating an order of arrest.

The order of arrest was granted upon the ground “ that the •action is brought to recover damages for the wrongful conversion of personal property and money obtained by fraud and deceit, and received by the defendant, as agent of the plaintiff, in a fiduciary capacity.” It is admitted that the defendant received from the plaintiff the sum of $4,052, and a note for $365 mentioned in the complaint. The facts which plaintiff attempted to establish were that defendant represented to plaintiff that he was making 55 per cent net profits on the sales in his business, and requested the plaintiff to take an interest therein. This plaintiff declined

to do at that time, but stated that as soon as he could make certain financial arrangements he would consider the proposition, provided defendant’s books, upon examination, verified his statements as to profits. Subsequently, the defendant requested plaintiff to furnish money for the purchase of certain book-plates, and it was thereupon arranged that the defendant, as plaintiff’s agent, should purchase these plates for the plaintiff with the plaintiff’s money ; that if the plaintiff should conclude to take an interest in the defendant’s business the plates could be turned in as cash, at their cost price ; that if he should determine not to take an interest in the business they should be sold, and the plaintiff reimbursed from their proceeds. That thereafter plaintiff furnished certain specified sums of money, amounting to $4,052, which was done in each case upon the statement and representation of defendant that certain plates had been furnished, and were ready for delivery, and that the money was needed to pay for them. That not only were the statements as to the profits of the defendant’s business false, and made with a fraudulent intent, but the money which the plaintiff gave to the defendant for the specific purpose of paying for the plates was none of it used for that purpose, and although he had represented to the plaintiff that the money was to be used, and had been used, for the purchase of sixteen specific sets of plates, upon examination only seven sets of plates were found to have been purchased during the time, and those were paid for, not with the money of the plaintiff, but with the notes of the Minerva Publishing Company, and those seven sets of plates belonged to the Minerva Publishing Company. The money which the plaintiff paid was converted by the defendant to his own use. Defendant’s affidavit showed that he had known plaintiff three years. That in June, 1891, plaintiff called at defendant’s place of business (which was the office of the Minerva Publishing Company, a corporation, of which defendant was general manager, and most of the stock of which defendant owned) to inquire concerning the Judd Publishing Company, in which last company plaintiff stated that he had been invited to invest $100,000. Plaintiff claimed to be worth from $300,000 to-$400,000. Defendant said he knew nothing about the Judd Publishing Company, and stated to plaintiff that if he had $100,000 to invest he could not do better than to put it in his company (the Minerva Publishing Company). Defendant then stated to plaintiff that he was cramped for money in his business, and at the end of the interview borrowed $250 of plaintiff, which, with $5 bonus, he returned on June 15th. Thereafter several interviews were had between the parties, during which defendant informed plaintiff fully of the condition of the company’s business ; that its capital of $10,000 was insufficient for its needs, and that he had had to borrow $20,000 from one D. Jannopoulo, of St. Louis, for which the company’s notes had been given, secured by a pledge of defendant’s stock; and that he felt confident that if he could obtain $75,000 additional capital he could greatly extend the business, and make it pay 20 to 25 per cent profit, where it was only paying 15 per cent as it then stood. That thereupon

a verbal agreement was made between them, under which plaintiff began to pay money to the defendant. That on July 17, 1891, and after plaintiff had made two payments to defendant (one on July 14, 1891, of §233, and one on July 16, 1891, of §664) defendant wrote plaintiff a letter, which is as follows:

“ New York, July, 17, 1891.

“ My Dear Eamsey : Have the kindness, at your earliest convenience, to send me a letter stating terms and conditions upon which you will join me in business. While I fully understand the terms and conditions which we have discussed together many times, I desire to have everything in writing, as your letter may facilitate the settlement that I will have to make with Mr. Jannopoulo.

“ Yery truly yours, T. T. Timayenis.”

Then defendant wrote in reply a letter dated July 20, 1891, which is as follows:

“New York, July 20, 1891.

“My Dear Timayenis: Your letter of July 17th at hand, and contents noted, and in reply will say: I will give you twenty-nine thousand dollars for forty-nine per cent of the Minerva Publishing Company, and you to retain fifty-one per cent yourself, and the officers of the company to be divided between you and I as we may decide at the proper time; providing you will secure for yourself Mr. Jannopoulo’s interest in the company, and become individually responsible for the same, we to become responsible for all debts of the company, and release Mr. Jannopoulo from all liabilities. When you have done this, then I will come in, and take the management of the finances and supply the same, to your entire satisfaction. You to have charge of whatever branch of the business you wish, and if the company should grow as fast as I think it will, with your and my best efforts, I will loan the company what money it may want up to fifty thousand dollars, at six per cent, until such time as you want to pay me back. Trusting this will give you all the assurance you need of my good faith, and encourage you in the good work you are now doing, I am, Eesp’y yours, P. N. Eamsey.

“ 32 West 30th St.”

Upon a copy of this letter defendant wrote: “Accepted. T. T. Timayenis”—and the contract was complete. Thereafter, plaintiff continued his payments under this contract, and every dollar of the money was used in the business. The plaintiff continued his payments until September 4, 1891. During all this time he was at the company’s office at least four times a week. He knew that the plates purchased were being used to print from. He asked for and received copies of the books printed from them. Defendant specifically denied making any of the statements, .representations, or promises claimed by plaintiff, either in regard to the plates, the bfloks, or the business. As to the note for §365, the proceeds of which plaintiff claims defendant has con

verted, and which plaintiff says “ has been paid in full ” by him, defendant alleged that plaintiff gave the note because he was short of cash; that defendant discounted it with H. H. Brock-way ; that when it fell due, on November 21,1891, plaintiff could not pay it, and requested defendant to take it up. As defendant was liable on it as indorser, defendant, on December 6, 1891, gave plaintiff $300 to pay on the note; plaintiff agreeing to add sixty-five dollars, and take it up. On December 7,1891, plaintiff paid Brockway the $300, which defendant had given him, and on July 12, 1892, plaintiff paid twenty-five dollars more on the note, and the balance of it is still unpaid. After September 4, 1891 (the time when plaintiff claims to have discovered the alleged frauds and misrepresentations of defendant), defendant went to St. Louis, at plaintiff’s request, and obtained a written agreement from D. Jannopoulo, (who held the company’s notes, and also owned some stock), which is set forth in the record, and by which Jannopoulo agreed to wait until October 20th before disposing of his stock; and on defendant’s return to New York, and on September 21, 1892, he wrote a letter to plaintiff, in which he stated the success he had with Jannopoulo, and asked plaintiff to not disappoint him in regard to the $10,000 which plaintiff had promised to pay him before he went. On February 3, 1892, being five months after the discovery of the alleged fraud, plaintiff wrote a letter to defendant, which is as follows:

“New York, February 3, 1892.

“ My Dear Timayenis: It is with regret I am compelled to wi'ite this request to you to help me out of my difficulty at this time, for I suppose your business is growing as fast as ever, and ready cash is in great demand with you, as well as with myself. But you have the advantage of me, because you can get around to attend to matters yourself. But, with me being sick as long as I have, as you well knew, and having to depend upon some one else to do everything, there is a great shrinkage and loss; and as I have not sold any of my houses yet, and not being able to get the large one done, on account of my sickness, I am in a big hole, and come to you, as a brother mason, to get you to help me out, and I am sure you will do so with all your heart. I am sorry I could not raise more money last season to put in to help you make your business a great success, for I have faith in your ability, as a scholar, to make the Minerva Publishing Company one of the greatest publishing houses in this country. And now, Timayenis, as a mason, I come to you, as a brother mason, for help, and you must stand by me. Now, if you cannot give me any cash, give me the notes of the Minerva Publishing Company for six thousand dollars, one-half for three months, and one-half for four months; and I can get them discounted at my bank, and give yoti part of the money back for the use of the company. Make out the notes to Mr. jannopoulo or to your order, and he or you indorse them. If, they were made out to Jannopoulo, and he indorses them, there would be no trouble to get them renewed here when they become due if you wanted to. Now, T.,

for God sakes, help me this time, and some day I will come to your help, like a brother.

“ I am respectfully yours,

“ P. K Ramsey."