77 W. Va. 778 | W. Va. | 1916
This.writ of error is to a judgment against a corporation in favor of one of its directors, a former president thereof, for money he claims to have advanced or loaned to it, directly and indirectly, while he was its president and general manager. A short time before his retirement from the management of the company, he, as president, executed in the name of the company, a note to himself for the amount he claims, $2,568.90. His declaration contains common counts for said sum and a special count on the note. Defense was made under pleas of non est factum, as to the note and non assumpsit.
On the ground of alleged surprise and inability fully to make the defense it claims to have, occasioned by failure and refusal of the plaintiff to deliver up to it, or produce for use in the trial, books and papers relating to his transactions with the corporation and material and relevant to the issue raised, the defendant moved for a continuance and excepted to the action of the court in overruling the motion. If this exception is well taken, it will be unnecessary to consider other assignments of error, for the evidence on a new trial may be radically different from that found in the present record.
The corporation was chartered and organized in 1908, for the purpose of taking over and operating a tract of coal land, of considerable size, which the plaintiff had purchased. For and in consideration of $65,000.00- of the capital stock at its par value, he conveyed the land to the company, and about $24,500.00 of additional- stock was sold to other persons, among -whom were a brother, Thos. J. Flanagan, a brother-in-law, John P. Crosby, John F. Butler and C. D. Rishel. These four gentlemen and the plaintiff were made directors and they elected the plaintiff, James P. Flanagan, president and general manager, Thos. F. Flanagan treasurer and John P. Crosby secretary. From the organization of the company until April 1, 1913, and possibly longer, the plaintiff had the general management and control thereof. Within that period, three mines were opened and operated to some extent, on the property, at considerable expense. How much coal was
All the facts above stated do not appear in the evidence adduced on the motion for a eontiuanee; but that evidence proceeds upon the theory of obscurity and uncertainty as to the items of indebtedness, recognized and admitted by the bill of particulars. In that paper, the plaintiff himself declares his inability to itemize his account against the company. He may not have repeated the declaration in his testimony in oppostion to the motion, but it is significant that he neither qualified nor retracted it. He also virtually admitted a commingling of the corporate and his personal transactions. The documentary evidence of the amounts he claims to have advanced consists of entries made only in pocket memorandum boobs, which he regards as private and has withheld on that ground, memoranda made on numerous checks drawn on his personal bank account, showing payments to and for the company and entries in a book he made up in 1912, “by transcription or reentry from the alleged private boobs. Nothing has been produced except the book made up in 1912 and the checks, and access to them was not permitted until the day before the trial. He admitted the book so made up and produced did not show the amount
The plea of non est factum was a denial of the validity of the note. In passing upon the motion for a continuance, the court was bound to take notice of the possibility of impeachment of the note and failure to sustain the allegation of an account stated, and consequent necessity of reliance upon right to recover items under the common counts for money lent and money had and received, in which event the original entries would be matters of vital importance, in view of the plaintiff’s confessed inability to give the dates of the alleged advancements or loans. Another potent factor in the case, disclosed by the evidence adduced on the motion, was the confidential relation subsisting between the parties at the dates of the alleged loans, imposing upon the plaintiff duty to render an account of his transactions with the company as well as one showing its transactions with third persons effected or conducted by him, for and on its behalf. Note books not kept primarily as books of the company, but containing entries for and against the company, were at least pro tanto company books, in the absence of any other books of original entry kept for it, and he was- bound to produce them and accord to the company such use thereof as would aid it in the effort to ascertain and vindicate or protect its rights. As an agent and trustee of the corporation, he could not contract with himself, in the technical sense of the term, as he might have done with a stranger, for the use of money or anything else. Such of his personal funds as he paid into the company’s bank account or used in paying its bills, were not loaned. They were mere expenditures by him for his principal in the execution of his agency. Of course the law would raise an implied promise to pay or refund such advancements, but they could not be, strictly speaking, due by express contract between the principal acting by its agent and the agent himself, if
It further appears that a mandamus proceeding against the plaintiff, to compel him to turn over all books and papers of the company to its new board of directors and officers, was pending, and that he was withholding the books of original entry, on the theory of his individual ownership thereof.
We are clearly of the opinion that it was the duty, of the court, in view of the possibility of necessity of a judicial settlement of the agency account, in the action, disclosed by the statq of. the pleadings, to sustain the motion for a continuance.
Hence, the judgment will be reversed, the verdict set aside and the ease remanded for a new trial.
Reversed and remanded for new trial.