184 P. 190 | Utah | 1919
Lead Opinion
This is an action to recover the value of 10,000 shares of the capital stock of the defendant mining company which plaintiff alleges, defendants wrongfully converted to their own use.
The complaint, in substance, alleges that plaintiff is the owner of said shares of stock by purchase from one R. E. Campbell on the 1st day of May, 1917, and that plaintiff at all times thereafter was entitled to have said shares issued to him by the defendant company; that plaintiff on the said first day of May, 1917, and thereafter on the twelfth day of the same month, demanded of said defendant company that it issue to him said shares of stock, which said company refused and ever since has refused to do; that on the fifteenth day of May, 1917, the individual defendants, who constituted the board of directors of the defendant company, by resolution directed the president and secretary of said company not to issue said shares of stock to plaintiff; that the defendants were then in possession of said stock, and by the resolution aforesaid converted the same to their own use, to plaintiff’s damage in the sum of $3,000, the value of .the said stock.
Defendants, for want of information sufficient to form a belief, deny that plaintiff is the owner of the stock, or that he purchased the same from Campbell, or that plaintiff is entitled to its possession, or that defendants converted the same, or that the stock is of the value of $3,000, or that plaintiff sustained damages in said sum or at all.
Further answering, defendants, in substance, allege that in 1915 all of the stockholders of defendant company entered into an agreement with one George E. Hemphill, whereby they
The trial court found for the plaintiff against the defendant company and entered judgment for damages. The action as to the other defendants was dismissed. Defendant company appeals, and assigns as error the order of the court, overruling its motion for a nonsuit, the admission of evidence over plaintiff’s objection, and insufficiency of the evidence to sustain the findings.
The evidence tends to show the following facts: That Fred Alkire was the original owner of the stock in question; that as evidence of ownership he held a certificate of the company therefor, certifying that he owned 10,000 shares oE stock subject to a pool agreement that the said stock was not to be issued until May 1, 1917; that in May, 1916, Alkire transferred the stock to E. E. Campbell by indorsement and
“Lehi, Utah, Hay 27, 1916.
“This- is to certify that R. E. Campbell is the owner of ten thousand shares of the capital stock of the Earl-Eagle Mining Company, and that said stock, by pool agreement, is directed not to be issued, sold, transferred, bartered, or otherwise disposed of until May 1st, 1917.
“[Signed] Earl-Eagle Mining Company,
“By W. E. Evans, Secretary.’’
Campbell kept the certificate in his possession until about May 1, 1917, and then “turned it over” to the plaintiff, with the following indorsement thereon:
, “Earl-Eagle Mining Company,
“Lehi, Utah, May 1, 1917.
“Please issue my 10,000 shares of Earl-Eagle to the order of George Baglin.
“[Signed] R. E. Campbell.”
It also appears from the evidence that plaintiff is a mining stockbroker of Salt Lake City; that Campbell was absent from the state, and some time in the latter part of April, 1917, wrote the plaintiff informing him that he had a pool certificate for 10,000 shares of Earl-Eagle stock; that the pool expired May 1, 1917; that he desired to sell the stock, and inquired if plaintiff could sell it for him after May first. Plaintiff answered saying that he could. It further appears, from the testimony of both plaintiff and Campbell, that Campbell transferred the stock to plaintiff without consideration and without intending it as a gift. The only consideration moving Campbell to indorse the certificate and send it to plaintiff, as shown by the evidence, seems to be that Campbell desired to sell the stock and plaintiff assured him that he could sell it. It also appears from the evidence that plaintiff made formal demand upon the company that the stock be issued to him, and that the company refused to issue it until certain alleged conflicting claims were adjusted. Whether or
Certain evidence admitted in proof of the market value of the stock was vigorously contested by the defendants, and its admission as evidence assigned as error. These questions, as far as may be necessary, will receive consideration before concluding these remarks. ,
At the close of the evidence for the plaintiff, defendants moved for a nonsuit on the following grounds: ■
“That there is no proof that the complaining party, the plaintiff, was the actual owner or owner at all of the stock that he attempts to sue for; or that he was entitled to any rights or privileges of an incorporator; or that there is no proof that the corporation was in any way, or the individuals in any wise, liable for refusal to issue the stock at the time that the' alleged conversion is complained of;
"That there is no evidence of a conversion in the record whatever made by the plaintiff, for the reason that there is no evidence whatever showing that the corporation or any of the defendants in any wise attempted to exercise any ownership or control as owners over the stock which the plaintiff alleges he made demand for; and there is no evidence that the corporation or these directors in any wise attempted to pass upon the ownership oi; the title to the stock; or that they ever denied that any particular person was the owner of the stock. There is no evidence of damages whatever in this case, under the rules of law, on which the court could find any damage accruing to the plaintiff in this action.”
The trial court overruled the motion. Appellant took exception, and relies upon the exception as grounds of reversal.
The points raised by the exception are (1) that the evidence fails to establish plaintiff’s ownership of the stock; (2) that there is no evidence of conversion, and (3) that there is no evidence of damage. If any one of these propositions is true, the court erred in denying the motion.
Appellant, under the first proposition, contends that plaintiff, in view of the evidence, was not the owner of the stock, and was therefore not the real party in interest.
Comp. Laws Utah 1917, section 6495, with certain exceptions which are immaterial here, provides that “every action must be prosecuted in the name of the real party in interest. ’ ’
Plaintiff himself testified on cross-examination that his relation to the stock was that of broker. He referred to Campbell as his client, and also stated, in effect, that the damage sustained by the loss of an opportunity to sell the stock would be that of his client, and not his own, except his loss of a broker’s commission.
Testimony as to whether or not there was a consideration for the assignment was admitted over respondent’s objection. The position of respondent in respect to the question is that it is immaterial what the consideration was, or whether there was any consideration at all, inasmuch as the assignment conferred upon him the legal title to the stock.
This contention seems to be supported by the highest authority on code remedies. Pomeroy, Code Remedies, section 70, also remedies and Remedial Rights, section 132, state the proposition as follows :
“Analogous to the subject discussed in the proceeding paragraph is the question whether an assignee, to whom a thing in action has been transferred by an assignment which is absolute in its terms, so as to vest in him the entire legal title, but which, by means of a contemporaneous and collateral agreement, is, in fact, rendered conditional or partial, is the real party in interest. It is now settled by a great preponderance of authority, although there is some conflict, that if the assignment, whether written or verbal, of anything in action is absolute in its terms, so that by virtue thereof the entire apparent legal title vests in the assignee, any contemporaneous, collateral agreement by virtue of which he is to receive a part only of the proceeds, ‘and is to account to the assignor or other person for the residue, or even*580 la to thus account for the whole proceeds, or by virtue of which the absolute transfer is made conditional upon the fact of recovery, or by which his title is in any other similar manner partial or conditional,’ does not render him any the less the real party in interest; he is entitled to sue in his own name, whatever collateral arrangements have been made between him and the assignor respecting the proceeds. The debtor is completely protected by the assignment, and cannot be exposed to a second action brought by any of the parties, either the assignor or other, to whom the assignee is bound to account.”
If this is a sound exposition of the law, the question is, does it apply to the facts in the instant case? Here the certificate relied on as evidence of Campbell’s title is absolute in form. The indorsement or assignment to plaintiff authorizes the issuance of the stock to the order of plaintiff. The assignment on ‘ its face is positive and unqualified. It is true there was a collateral agreement or understanding by which it was understood that plaintiff ivas to procure the issuance of the stock by the defendant company to himself or order, and dispose of it for the benefit of Campbell, less plaintiff’s commission as broker. ’We have stated this collateral understanding in the broadest terms possible under the evidence, so as to give appellant the benefit of every fact that might lend support to its contention.
There can be no question as to the assignability of the stock. There can be no question as to the assignment itself, as far as the instrument relied on is concerned. It is trae it does not purport to be given for a consideration, but that was a matter with which the defendants could have no possible concern. The defendants were completely protected as against any action upon the part of Campbell, and that was the only concern they could have so far as relates to the form of the, assignment. This brings the case clearly within the principles enunciated by Pomeroy in the language above quoted and the. cases cited in the note.
Assuming that the doctrine enunciated by Pomeroy is supported by the weight of judicial opinion, of which we have no doubt, we feel compelled to hold that the assignment
Respondent calls our attention to the following Utah eases: Wines v. R. R. Co., 9 Utah, 228, 33 Pac. 1042; Fritz v. Western Union T. Co., 25 Utah, 263, 71 Pac. 209; Anderson v. Yosmite M. Co., 9 Utah, 420, 35 Pac. 502; Culmer v. Clift, 14 Utah, 286, 47 Pac. 85; Mundt v. Comm. Bank, 35 Utah, 90, 99 Pac. 454, 136 Am. St. Rep. 1023; also two California cases, Tuller v. Arnold, 98 Cal. 522, 33 Pac. 445, and Dollar v. International Banking Corp., 13 Cal. App. 331, 109 Pac. 499.
In support of its contention that plaintiff is not the real party in interest, appellant cites and relies on the following: Bliss on Code Pleading (3d Ed.) section 45; 23 Am. E. Enc. Law, 932; 15 Enc. Pl. & Pr. 710; Williams v. Whitlock, 14 Mo. 559; Gruber v. Baker, 20 Nev. 453, 23 Pac. 858, 9 L. R. A. 302; Robbins v. Deverill, 20 Wis. 148; Chew v. Brumagen, 13 Wall. 504, 20 L. Ed. 663; Black’s Law Dictionary, 997; Skews v. Dunn, 3 Utah, 186, 2 Pac. 64; Tripler v. Mt. Pleasant C. & S. B., 21 Utah, 313, 61 Pac. 25.
Appellant quotes an excerpt from Bliss on Code Pleading, supra, as follows:
“Tlie real party in interest is tlie party who is to be benefited or injured by tbe judgment in the case. It will be observed that the statute provides the action must be prosecuted in the name*582 of the real party in interest, and, of course, if the defense can show that the plaintiff or plaintiffs are not the real parties in interest,' the action- must fail.”
On referring to tbe volume cited, we find it is not a quotation from the text but from the note. The language is taken from the opinion of the court in Eaton v. Alger, 57 Barb. (N. Y.) 179. The language is very pointed, and certainly supports appellant’s contention; but inasmuch as the case was afterwards overruled by the New York Court of Appeals (Eaton v. Alger, 47 N. Y. 345), and a contrary doctrine announced, reference to the-case as authority for appellant was, to say the least, an unhappy selection. Ye have examined all of the authorities relied on by appellant on this particular question, and read them with more than ordinary care. We are nevertheless, of the opinion that it cannot be successfully urged that plaintiff in this case is not the real party in interest.
As to whether or not the conduct of the defendants in respect to the transaction constituted a conversion of the stock but little need be said. The refusal by a corporation tb issue stock to one entitled thereto may or may not constitute conversion. It all depends upon the character of the excuse the corporation has for not issuing the stock. In Coray v. Peery Irr. Co., 50 Utah, 70, 166 Pac. 672, a recent decision by this court in an action for refusing to issue a certificate of stock we held that the complaint of plaintiff, to which a demurrer had been sustained by the trial court, stated a good cause of action, and reversed the judgment on that ground. In Munclt v. Bank, supra, a case to compel the transfer of stock on presentation to the corporation of a duly indorsed certificate, this court sustained the action, and affirmed a judgment in favor of plaintiff.
The Mundt Case is of interest in another connection. The opinion defines the relative rights of the corporation and the owner of an indorsed certificate demanding transfer of the stock. It shows the duty and responsibility of a corporation in that regard, and also the duty and right of the corporation under certain circumstances to refuse to make the
The third and last proposition relied on by appellant in its motion for a nonsuit presents a more serious question. Assuming there was a conversion of the stock, was there any substantial evidence of damage? Plaintiff himself was the only witness who testified on that subject prior to a motion for nonsuit. He testified that he was a broker; had been for several years on the Salt Lake Mining Exchange; that he had transacted business in other cities through other brokers; that the Earl-Eagle stock was listed on the Boston curb; that he followed the market both in Salt Lake and Boston during the month of May, 1917; that he knew what the market quotations were during that month in Salt Lake City; that he also knew what the quotations were on the Boston curb; that there were no sales during May on the Salt Lake exchange; that he attended the meeting of the stock exchange every day and heard brokers offer bids for the stock; that the market quotations as he knew them on the Salt Lake stock exchange were from 12 to 15 cents bid, and the stock offered at 30; that that condition continued for several months.
At this point several papers, marked plaintiff’s Exhibits C to H, inclusive, were identified by the witness. They purported to be daily statements of stock transactions on the Boston curb from May 1 to May 7, 1917. The exhibits were offered in evidence of market value. Defendants objected on the grounds that' they were incompetent, irrelevant, immaterial, and hearsay and had not been properly identified. Ob
In this connection an excerpt quoted by appellant from the Case of Vogt v. Cope, 66 Cal. 31, 4 Pac. 915, is strikingly in point:
“There was nothing to show, or tending to show, how or in what manner the ‘reports of sales’ were made up; where the information they contained was obtained; or whether the quotations of prices made were derived from actual sales, or otherwise. In the absence of some such proof, the ‘reports of sales’ offered by the plaintiff were incompetent, and the court below was right in its ruling.”
See, also, Whelan v. Lynch, 60 N. Y. 469, 19 Am. Rep. 202; Fairley v. Smith, 87 N. C. 367, 42 Am. Rep. 522; Norton v. Willis, 73 Me. 582; G., H. & S. A. Ry. Co. v Hillman (Tex. Civ. App.) 118 S. W. 158.
The evidence showed there were no sales whatever made on the Salt Lake Exchange. The fact that bids were made on different dates all'the way from a quarter of a cent to twenty-five cents per share, and offers to sell on other dates from twenty to sixty cents per share, and no bids and offerings to sell on the same day, affords no evidence of market value
If we treat the motion for nonsuit as having been waived, and consider the evidence offered by the defendants, it can afford the plaintiff no consolation.. Mr. Geo. E. Hemphill, selling agent of the Earl-Eagle Mining Company, had a contract with the company to sell 400,000 shares. He lived in Boston two years before coming to Salt Lake City. He testified he was engaged in the business of stock broker and mining, was acquainted with the company’s mining property, and was president and manager of the company. When in Boston he was in touch with the Boston Exchange. The curb reports are authorized, but not guaranteed. They are made up by some authorized agent of sales during the day. The witness stated that he personally maintained the Boston market as to Earle-Eagle stock. He directed the buying and selling price. The stock on the market was treasury stock under his control. The personal stock was all pooled. The witness controlled the market in the way to create interest and publicity. It seems .to have been a case of playing both ends against the middle, a species of “flim-flamming” and “thimble-rigging,” to fleece the innocent public, especially the exceedingly numerous type of whom it is said one is “bom every minute.”
We search the record in vain for a line of competent substantial evidence that -throws any light whatever upon the question of actual market value. Notwithstanding these manipulations to stimulate a market and keep it alive, the bottom dropped entirely out of the market, as far as the Earl-Eagle stock was concerned, as. soon as the first assessment was levied. It is not our intention to discredit the stock or the property itself. It may have had more or less merit; but this court would be doing an injustice, both to the people of the commonwealth and to the stranger within our gates, if, when such a case is brought before us, we should refrain from expressing our views in unmistakable language.
We are of the opinion there was no competent evidence of
The judgment is reversed, at respondent’s cost.
Rehearing
ON APPLICATION FOR REHEARING.
The court unhesitatingly concedes that the opinion handed down in this case is vulnerable to one or more of the objections urged against it by respondent in his application for rehearing.
In deciding the motion for a nonsuit, and determining that there was no evidence of damage, the court inadvertently overlooked the fact that respondent ,was at least
In its reply to the application for a rehearing appellant makes formal application for leave to amend its assignment of errors as to insufficiency of the evidence, and presents a motion for that purpose. The motion is vigorously opposed by respondent on the grounds that the application was not made in time, and no excuse whatever is offered for the delay. The
Both the parties have been exceedingly diligent in collating authorities in support of their respective contentions in respect to this question, and while we have not deemed it necessary to consider the ease in the light of authority, because of the utter lack of any showing of diligence or excusable neglect, still, as the question is one of practice and of great importance, especially to the legal profession, we cite the principal authorities relied on by each of the parties.
Appellant cites the following cases: United States v. Pena
In reply to these cases respondent cites the following: Harrison v. Harker, 44 Utah, 541, 142 Pac. 716; Swanson v. Sims, 51 Utah, 485, 170 Pac. 774; Bristol, Plaintiff in Error, v. City of Chicago, Defendant in Error, 21 Ill. 605; Louisville R. R. Co. v. Smoot, 135 Ind. 220, 33 N. E. 905, 34 N. E. 1002; Baldwin v. Sutton et al., 148 Ind. 591, 47 N. E. 629, 1067; Gladding v. Union R. R. Co., 25 R. I. 122, 54 Atl. 1060; Hanover F.I. Co. v. Johnson, 26 Ind. App. 122, 57 N. E. 277; Marks v. Taylor, 23 Utah, 152, 63 Pac. 897; Genter v. Conglomerate Mng. Co., 23 Utah, 165, 64 Pac. 362; Wasatch Irr. Co. v. Fulton, 23 Utah, 466, 65 Pac. 205; Van Pelt v. Park, 18 Utah, 141, 55 Pac. 381; O. S. L. v. Russell, 27 Utah, 457, 76 Pac. 345; Houtz v. U. P., 35 Utah, 220, 99 Pac. 997; Herriman Irr. Co. v. Keel, 25 Utah, 96, 69 Pac. 719; Jenkins v. Mammoth Mining Co., 24 Utah, 513, 68 Pac. 845; First National Bank v. Brown, 20 Utah, 85, 57 Pac. 877; France v. S. L. & O. Ry., 31 Utah, 302, 88 Pac. 1; Firman v. Bateman, 2 Utah, 268; State v. Campbell, 25 Utah, 342, 71 Pac. 529; S. P. L. A. & S. L. R. R. v. Board of Education, 35 Utah, 13, 99 Pac. 263; Blue Creek L. & L. Co. v. Anderson, 35 Utah, 61, 99 Pac. 444; Morris v. Salt Lake City, 35 Utah, 474, 101 Pac. 373; Bowe v. Stilwell, 39 Utah, 377, 117 Pac. 876; Vance v. Heath, 42 Utah, 148, 129 Pac. 365; Connell v. O. S. L. R. R., 51 Utah,
Notwithstanding the inadvertence of the court and the errors in the opinion above referred to, it does not necessarily follow that respondent is entitled to á rehearing of the cause. If the order reversing the judgment and remanding the cause was, nevertheless, right, the application for rehearing should be denied.
The opinion recites the fact that certain exhibits were admitted in evidence over appellant’s objection as to their competency. The particular grounds of the objection and the alleged infirmities of the evidence are stated in the opinion, and need not be repeated here. The opinion cites many cases tending to show that such matter is incompetent as evidence. The court was of the opinion that the exhibits should not have been admitted. We held, in effect, that the admission of the documents was prejudicial error. Respondent referred us to no eases whatever in support of his contention' prior to. the opinion. In his application for rehearing he refers to many eases which bear more or less upon the question, some of which go far towards lending support to the contention that in certain eases price lists, trade journals, and even newspaper reports, may be admitted in evidence as tending to prove market value. We believe, however, that in every ease cited the documents admitted or relied on were either assumed to be authoritative and properly identified or proven to be so to the satisfaction of the court. The contention here is that the authority of the exhibits admitted and their genuineness as reports of actual sales were not satisfactorily established by extrinsic evidence, and that in any event .the matter was hearsay. We think this contention of appellant has not been overcome by anything offered by respondent. The fact that it appears in this very case that the purported sales and purchases, or offers to sell and purchase, were manipulated and controlled by the same person, and that such things could and do happen, tend to show the ex
We doubt if any of the .cases cited support the contention of respondent when applied to the facts of this particular case. If they do, we are not inclined to follow them as against the better reasoned cases cited in the opinion.
It follows, therefore, that the opinion heretofore rendered should be and is modified in accordance with the views herein expressed, and that the application for a rehearing should be denied.