156 Iowa 734 | Iowa | 1912
The note in question bears date March 8, 1908, and is for $500. It is known in this record as Exhibit A. Another note for a like amount was executed by the defendant to the same payee at the same time, which is known in the record as Exhibit 1. These notes were executed in purported payment for ten shares of corporate stock to be issued in the corporation known as the Underwriters’ Agency Company. This company was a going concern, which had been originally capitalized at $15,000. The defendant had become a stockholder .therein about a year prior to the transaction considered herein. Previous to March 28, 1908, the defendant had become the owner of two blocks of stock of five shares each issued upon the original capitalization. Shortly before March 28, 1908, it had been voted to increase the capitalization to $25,000, and thereby to issue and sell $10,000 additional stock. It was a part of this issue for which the defendant bargained at the time of the execution of the note in suit. The purpose of the corporation was to conduct a life insurance agency, and for that purpose it took over the business already existing, of T. H. Oorrick. Leading business men of tried sagacity looked upon it with favor, and became stockholders therein. Corrick was its secretary and .treasurer and general manager. It paid enticing dividends at ten percent, and won the affections of its stockholders, and then died. We have only to do herein with the transactions relating to the notes of.March 28, 1908, one of which is in suit herein, although the evidence in the record takes a somewhat-wider range. We will direct our attention to the particular defenses set up in the order above stated.
I. Section 1641-b of the Code Supplement is as follows :
Capital stock — how issued — executive council to fix value. That from and after the passage of this act no corpo*737 ration" organized under the laws of the state of Iowa, except building and loan associations as defined and provided for in chapter thirteen, title 9 of the Code shall- issue any capital stock or any certificate or certificates of shares of capital stock, or any substitute therefor, until the corporation has received the par value thereof. If it- is proposed to pay for said capital stock in property or in any other thing than money, the corporation proposing the same must, before issuing capital stock in any form, apply to- the executive council of the state of Iowa for leave so to do. Such application shall state the amount of capital stock proposed to be issued for a consideration other than money, and set forth specifically the property or other thing to be received in payment for such stock. Thereupon, it shall be the duty of the executive council to make investigation, under such rules as it may prescribe, and to ascertain the real value of the property or other thing which the corporation is to receive for the stock;, and shall enter its finding, fixing the value at which the corporation may receive the same in payment for the capital stock; and no corporation shall issue capital stock for the said property or thing in a greater amount than the value so fixed and determined by the executive council.
The transaction was had between Corrick and the de-, fendant.: The consideration for the note was an agreement to issue and deliver stock at par value in the corporation, and a certain further agreement on the part of Corrick personally which will be deferred to later.
*739 Agreement between T. H. Oorrick and P. L. Fulton as follows: Oorrick agrees to sell one thousand dollars ($1,000.00) of stock in Iowa Underwriters’ Agency Co., owned by Fulton within thirty days from this date at .par and will take up and deliver to Fulton two notes of five hundred dollars ($500.00) each, dated March —, 1908, payable to Corrick. Fulton to have .dividends at 10 percent per annum .on stock from July 1, 1908, to date of sale and to pay interest on the notes according to the terms thereof. ... In the event that Oorrick fails to sell said stock, he agrees to buy same and pay for same on above terms and conditions. (Signed) P. L. Fulton. T. H. Corrick.
Before this contract was entered into and on June 16, 1908, the present plaintiff had become the owner of the note in suit, claiming to have purchased the same in duo course. In pursuance of the contract, Corrick surrendered' to the defendant the $500 note (Exhibit 1), and paid him $500 in cash, which is the face of the note in suit. He also paid purported dividends on the stock at 10 percent. The note in suit bears interest at 1 percent. Defendant’s testimony in reference to this transaction is set forth in his own abstract as follows:
. After this agreement was made Corrick paid me $500 in cash, and took up and sent to me one of my notes for $500, and afterwards when the settlement in March, 1910, was made, he paid to me and my brother $1,000 in cash and gave us a note signed by himself and wife for $1,228. The note which my brother had given Mr. Corrick was for $500. To make the matter clear I gave him the first note about the last of April, 1901, the second note on January 21,. 1908, and two notes on March 28, 1908. For the first -two notes, I received two certificates of stock for $500 each, and at the time of the contract in September, 1908, he gave me his personal check for the dividends that was supposed to be standing on the books in my name which I had not received, and this was on the dividends due me on the entire $2,000 investment up to July 1, 1908. After that contract he sent me $500 in cash*740 and returned one of the second $500 notes. I still held two certificates of stock which I had received and continued to get dividends on that stock until the final settlement in March, 1909, except about $25 in dividends which I had not received, but which went into the final settlement. The $1,000 paid in the final settlement as shown by ‘Exhibit 4’ was also to cancel the indebtedness from Corrick to my brother, W. A. Eulton, on a note for $500' which he had given for stock that he had never received. When I and my attorney were here to see Corrick in September, 1908, about the stock certificates which I had not received, Cor-rick represented that the new stock certificates had not yet been issued, but that it was on the books all right, and I would get it in a few days. The question of dividends came up because I had not received the dividends on the stock which I held, and he said it had been overlooked by the bookkeeper, and he would give me his personal check, which he did, for some $48 or $50. He drew the check to himself and endorsed it.
This testimony is set forth a little more fully in the amended abstract of appellee. The foregoing, however, is sufficient to make it appear that the defendant received back from Corrick the full equivalent of the note in suit less the accrued interest at 1 percent for six months, or, as he estimates it, $25 in dividends. Upon this showing the agreement entered into by Corrick both at the time the note was given and also in September was breached to the extent of $18 to $28. Such a breach is not available to the defendant as a defense of total want of consideration. Whether the -defendant could have interposed a counterclaim to this extent and substantiated the same as against the plaintiff we need not determine. The only defense pleaded at this point is the defense of total failure of consideration. -His own testimony is fatal to such defense; and the court properly withdrew it.
The defendant’s testimony in support of these allegations is as follows: “When I bought this last stock, Corrick told me that he would keep those notes right in the safe of the Iowa Underwriters’ Agency Company. I believed his statements that he would do so, and that he "would return the notes and pay the premiums as he said he would; and he told me that I would not want to sell him the stock back because I would want to keep it as it would pay at least 20 percent by that time. I- did not have any reason to think that he was not making me a truthful proposition, and I believed what he told me at the time.” Some other representations are claimed to have been made at a previous purchase of stock. It will be noted that the representations above quoted from the defendant’s testimony relate to no existing fact. Standing alone, these are mere promises or expressions of opinion for the future. Such promises may sometimes form a part of known false representations, but there is no attempt in this record to give
These can not be litigated here, nor has any attempt been made by the pleadings to bring them into the litigation. We must therefore ignore them.
IV. Appellee has moved to dismiss the appeal for failure of appellant to serve notice of appeal upon guarantor defendants against whom judgment was entered. Considerable argument is devoted' to this motion. It is sufficient to say that the same motion was submitted in advance of the submission of the case. It was then overruled and the ruling announced. We have seen no reason for a change of view and the former ruling will be adhered to.
V. Appellant has moved to strike a purported amendment to the transcript and an amended abstract by appellee. The appellee claims that through oversight the original transcript filed in the district court failed to incorporate a statement appearing in the original notes to' the effect that at the close of all the evidence the plaintiff moved for a directed verdict. After the filing of appellant’s abstract here, the shorthand reporter of the trial court filed with the clerk of such court an amendment to his transcript setting forth the additional record' and certifying that it
VI. Some specific errors in relation to the admission of testimony are urged by the appellant: If these specifications were sustained, they would avail nothing to the defendant. The rulings were wholly without prejudice in view of our conclusions already announced, and we will not undertake to pass upon them as abstract propositions.
That the trial court should withhold ruling upon the motion to direct a verdict upon a reopening of the evidence and should then rule thereon at the close of all the evidence was a matter of mere form and order, and was clearly within the discretion of the court,
Moreover in view of our finding that the defenses of the defendant had all failed under the testimony, a judgment against him was inevitable, and the formality of the procedure at this point could not be prejudicial to him.
The judgment below must be — Affirmed.