Desmond v. Pierce

185 Wis. 479 | Wis. | 1925

Lead Opinion

Eschweiler, J.

Upon the trial no oral testimony was given other than that of plaintiff and Ambrose Tighe on her behalf, and the most material evidence was embodied in writings. The situation thus presented was therefore to be disposed of as a matter of law by the court, and there were no issues for a jury.

The plaintiff, Miss Desmond, seeks to enforce specific performance of the writing of June 15, 1922, so far as it purported to give her the right to have from defendant on demand after January 1, 1923, a specified amount of money for 100 shares of the preferred stock of the Pierce Oil Corporation, of which 100 shares she was recited to be the owner.

We think that upon this record such relief should be denied upon two grounds: first, because she was not a real party in interest; and second, because the ostensible contract of June 15th was justifiably rescinded by defendant for a substantial failure of consideration or breach.

The first of these grounds is not presented in appellant’s brief, nor was it specifically urged before the court below. It was, however, alleged in the answer in various forms and was therefore an issue in the case and before the court by defendant’s several motions for judgment, prior to and after verdict, and, under our statutes, being an element necessary to support the judgment ordered for the plaintiff, must be deemed to have been determined by the trial court in plaintiff’s favor, no specific finding in that regard having been made. In the furtherance of justice, also, we deem it proper for consideration.

The plaintiff had no money invested in this stock at any time. Her. employer, Tighe, was the sole actor in all of the transactions concerning it. On his adverse examination before trial he stated that he was responsible for this investment and will make it good to anybody that happens to have money in it, but on the trial he took occasion to say that by such statement he meant only that it was his moral, not legal, obligation. He testified as a witness, was permitted to make lengthy statements in the court below, prepared the brief, and participated in the argument here.

The documentary evidence discloses that Tighe’s individual promissory note of October 29, 1919, was the basis for his check of the same day by which this stock was purchased. The stock then purchased was, at his direction and for his convenience, registered in plaintiff’s name. His note was paid by December 2d. At that time, then, under the evidence, Tighe was the legal owner of the stock. Between January and July, 1920, Tighe invested the trust funds existing under the will of Mrs. Gotzian,. and in his control, in this stock. As the stock was thus paid for from time to time, the respective certificates were indorsed by Miss Des-mond1 taken by Tighe as trustee, and ultimately all of them were in the receptacle set aside exclusively for the securities of that trust and carried as an asset of the trust, as is so testified to by Tighe.

By such indorsement and transfer of possession of the stock Miss Desmond, as a matter of law, was deprived of all title and color of title. This is so whatever may have been the intention of Tig'he in so arranging it or whatever may have been the fancied convenience in having trust property in the assumed power of disposal by a third person and from whom, as in this case, no written declaration of trust was taken as a safeguard to such trust fund.

As to such shares of a kind so generally dealt in on the stock market and requiring for convenience that title to and right to sell shall appear on the face thereof, the indorsement in blank and delivery, in the absence of certain exceptions none of which appear here, passed absolute and complete title.

Such is the rule in the Standard Uniform Stock Transfer Act (sec. 183.01, Stats.). Such is the rule by universal custom. National S. D. Co. v. Hibbs, 229 U. S. 391, 395, 33 Sup. Ct. 818; Union T. Co. v. Oliver, 214 N. Y. 517, 523, 108 N. E. 809; Clews v. Friedman, 182 Mass. 555, 66 N. E. 201.

Having thus divested herself of title and color of title in favor of the trust fund, plaintiff could not be reclothed with title or color of title except by some appropriate subsequent act by some one having authority so to do, and no such act is shown. She was not made a trustee of any express trust for such trust fund in any possible view of the situation.

Upon the issues raised and the facts presented, Miss Desmond had no standing in court as a plaintiff and the action should be dismissed on that ground.

On the other feature of the case, the incontrovertible facts embodied in the writings are set forth in the. foregoing statement and present this situation:

Tighe calls the attention of the Pierce Oil Corporation to his proposed action regarding the preferred stockholders. Defendant Pierce prefers to have Tighe as a friend rather than enemy, and so informs him. It is then proposed that Tighe and his New York associate divorce themselves from all allegiance to any possible adverse interests that might arise on account of the other preferred stockholders and make themselves free to accept a retainer and perform legal services for compensation on behalf of the same corporation. Tighe notifies defendant that he is so at liberty, except as to the owner of the 100 shares, by his letter of June 5th. The 100 shares of-stock were then worth in the market about $45 per share. Defendant, in consideration of Tighe’s placing himself in such position that he may serve a new master, is willing to and agrees to pay about $60 per share more for the 100 shares than it is then worth in the market.

Tighe draws the contract for the sale and purchase of the 100 shares at $105 per share and accrued dividends, but malees therein no express reference to the consideration for the making of such contract. The consideration, however, is the proper subject of inquiry and is disclosed by written statements of Tighe to be as above stated.

His letter of July 1st, siupra, is a clear and unequivocal repudiation of his newly assumed obligation; its recital of a then recognition on his part of a present and continuing obligation as attorney to the preferred stockholders contradicted his former statement that he was free of that relationship. If Tighe did not, prior to June 15th, in contemplation of possible retainer by defendant or the Pierce Oil Corporation, divest himself of all professional obligations concerning the corporation with the stockholders other than the owner of the 100 shares, then there was an absolute and complete failure of consideration. If he did so dissolve such professional relationship prior to June 15th and then renew it, there was an absolute and complete breach on his part of the contract. Either was ample justification for defendant’s declared rescission of July 8th.

The transaction between Tighe and defendant was an entire one, part found in one writing, the rest thereof in other writings, and it must stand or fall as one transaction, not several, and upon all the writings and not one alone.

Assuming, therefore, that this action could be brought by Miss Desmond for herself or Tighe upon the writing of June 15th, nevertheless the justifiable and express rescission thereof by defendant is an absolute bar to a recovery.

By the Court. — Judgment reversed, and cause remanded with directions to dismiss the complaint.

---

Dissenting Opinion

Owen, J.

{dissenting). I cannot agree to a dismissal of the complaint upon either ground mentioned in the opinion. The legal title to this stock was in the plaintiff as trustee. She was entitled to maintain this action in her own name. Sec. 2607, Stats.; Allen v. Kennedy, 49 Wis. 549, 5 N. W. 906. Whether she ever parted with title to this stock was a question not litigated at the trial. While there are allegations in the answer denying that she is the real party in interest, the whole tenor of the answer is to the effect that Mr. Tighe was the owner of the stock. At no time during the trial was it suggested to the court that the plaintiff did not have a sufficient interest in the stock to maintain the action, nor was there any request made for a finding of the jury upon this question. I cannot agree that the evidence that plaintiff had parted with her title to the stock is so clear as to justify such a conclusion on the part of this court in the absence of a finding thereon by the lower court. The evidence satisfies my mind that Mr. Tighe never owned any interest in the stock. It is true that he borrowed the money with which the purchase was completed in the first instance. It is clear, however, that he did not purchase the stock as a personal investment. It appears that he was a trustee of numerous funds and that this stock was purchased with the idea of investing such funds therein as they might accrue. He borrowed the money with which to make the original investment, but the loan was speedily paid as these trust funds were made available. The entire transaction was a transaction for the benefit of the trust funds under the administration of Mr. Tighe as trustee, and I am well satisfied that there was never at any time any thought on the part of Mr. Tighe that he had any personal interest in the stock.

It is said in the opinion that the title passed from the plaintiff when she indorsed the certificates in blank and they were placed in the deposit box of the Gotzian estate. I apprehend that such a transaction does not amount to a transfer of title unless it be accompanied with an intent to pass title. While it is held that the title passed from the plaintiff, it is not stated to whom it did pass. If the bare circumstance of indorsing a certificate of stock and delivering it to another constitutes a transfer of title, then the holder of stock parts with his title whenever it is hypothe-cated as security for a loan. Being of the opinion that the mere delivery of a certificate of stock indorsed in blank does not pass title to the stock in the absence of an intent to accomplish that purpose, I cannot agree that the evidence in this case is so clear that this court should so adjudge in the absence of a finding by the trial court.

If, as I think, Mr. Tighe had no beneficial interest in the stock at the time of the negotiations between him and Pierce, then it matters not whether his contract with Pierce was breached. As I view this case, Mr. Tighe was really acting not for himself but for clients. To protect their interests he threatened litigation against the oil company. Mr. Pierce was not only desirous of avoiding this litigation, but he evidently sought to tie the hands of Mr. Tighe so that he could not embarrass the company by any future litigation. He proposed to do this by retaining Mr. Tighe as his attorney, and in order to place Mr. Tighe in a position where he could accept such a retainer he entered into the agreement which was the subject of this suit. By the agreement of Mr. Pierce to buy the plaintiff’s stock, Tighe was placed in a position to serve Pierce should his services be desired. This was the inducement to Pierce to buy the stock. Whether Tighe breached any agreement he had with Pierce is immaterial so far as this plaintiff is concerned. The agreement between Pierce and Tighe was an independent agreement, and the breach of that agreement cannot affect the agreement between Pierce and Desmond, and I think that would be true even though Tighe was the beneficial owner of the stock as trustee. His agreement to serve Pierce in his professional capacity was a purely personal agreement, entirely separate and distinct from his capacity as trustee, and his agreement made in his personal capacity cannot affect a separate and independent agreement made in his trust capacity, though Pierce might have been induced to enter into the one in order to accomplish the other.

For these reasons, rather briefly stated, I dissent.