Galvin v. Mac Mining & Milling Co.

14 Mont. 508 | Mont. | 1894

Per Curiam.

In this action plaintiff alleges sale and delivery by him, and purchase by defendant, of seven thousand four hundred and sixty-eight shares of the capital stock of the defendant company, of the reasonable value of two thousand three hundred and forty dollars and forty cents, but that defendant has failed to make payment therefor; wherefore judgment is demanded for recovery of that sum. And for a second cause of action plaintiff alleges a transaction whereby he claims defendant became indebted to him in the sum of one thousand two hundred and twenty-six dollars, with certain interest thereon, by reason of defendant having assumed and agreed to pay plaintiff’s promissory note for that amount, which he and another had executed and delivered to Henry Klein. It appears this note provided for attorney fees, to be recovered, in case its payment was enforced by action at law, by the legal holder thereof; and; in addition to the demand for twelve hundred and twenty-six dollars and interest, plaintiff demands an attorney’s fee of sixty dollars, presumably (but not expressly by allegation) predicating such demand' upon a condition in said note that, if payment thereof was enforced by an action at law, reasonable attorney fees for prosecuting such action should be recovered also.

As to this second cause of action it is admitted that defendant, before filing its answer, had fulfilled its obligation to pay the principal and interest of said note, but in its answer denies liability for any attorney fee for prosecuting plaintiff’s action to compel it to pay said note. The question concerning this attorney fee is therefore the only point, respecting the second cause of action, involved in this appeal. As to this attorney fee it is plain that the defendant company is not liable therefor. It was not directly a party to said note, but in the arrangement between plaintiff’ and defendant the latter agreed to pay the note, and, not having paid the whole thereof when this action was brought, plaintiff assumed that he could, by this action, compel defendant to pay him the amount of said note, together with reasonable attorney fees for prosecuting his action to enforce such payment. Before the action came to trial, however, and before answer, defendant paid the amount of said note to the holder thereof. It is not shown that defendant had agreed to pay attorney fees for prosecuting an action at law to compel it to pay said note, and we are, without hesitation, of opinion that defendant is not liable for such demand. (Lang v. Cadwell, 13 Mont. 458.)

As to the first cause of action, for the recovery of the reasonable value of said stock, it appears that plaintiff relied upon the fact that defendant had tortiously assumed, held, and converted said stock to his own use, and therefore plaintiff alleges purchase thereof by defendant, on the theory that he could waive the tort, and sue as upon contract for purchase. Defendant specifically denied every allegation of plaintiff’s complaint relating to the sale and purchase of said stock. It was developed on the trial that said stock had been placed in the custody of defendant’s secretary, with an assignment indorsed thereon, transferring the same to A. McLain, under the condition that the same, with other stock, might be purchased by the latter on or before a certain date fixed, on payment of a certain sum per share. That, such arrangement having expired, or been entirely revoked, leaving plaintiff’s stock in the possession of the secretary of said company, subject to plaintiff’s withdrawal or control, the plaintiff went to the secretary of defendant, and obtained his shares of stock, and indorsed thereon an assignment thereof to D. Galvin, and left the same in the hands of said secretary, explaining to him that plaintiff was about to borrow a sum of money from D. Galvin, and proposed to assign and place said stock as security for such loan. That he expected D. Galvin to arrive on a train, and consummate the loan and delivery of the security, and, in order to facilitate the transaction, as D. Galvin would have but a few' moments to devote thereto, plaintiff had made this indorsement of assignment in advance of consummating such loan. That, as appears to be conceded, the loan in question was not consummated at all, and thereafter plaintiff called upon the secretary of defendant, and sought to obtain possession of his shares of stock, but defendant’s secretary, as appears, did not deliver the same, saying there would be some new blank certificates of stock in possession of the company in a few days, and that when the same arrived he would issue plaintiff a new, clean certificate, representing his shares, in lieu of the old ones which had been indorsed by the assignments above mentioned. Being agreeable to that suggestion, it appears plaintiff’ left his stock in the custody of the secretary for some time; and, as appears from the testimony of plaintiff, in the mean time said secretary personally sought to purchase said stock from plaintiff, but such purchase was not effected. That after said certificates of stock had remained in possession of said secretary for some time, plaintiff démanded the delivery thereof to him, but the secretary refused to deliver the same to plaintiff, saying, “ You have no stock in this company.” On this state of facts plaintiff based his right to recover from defendant the reasonable value of said stock; and defendant appears to have undertaken to defend and justify the action of its secretary on the ground that, the plaintiff having made said indorsements on the certificates in contemplation of transferring them to D. Galvin as security for a loan, the secretary was justified in withholding said certificates of stock from plaintiff until D. Galvin reassigned them, or ordered their delivery to plaintiff. On this theory of defense the action was tried, and instructions were given to the jury, and the jury found against defendant, in effect finding that its attempted defense or justification of its secretary’s action was not well founded. Considering the theory of defense, and the evidence introduced in the action, we think the verdict of the jury is well supported.

Certain instructions of the court to the jury are complained of as being inconsistent. On the theory of the defense interposed by defendant, and on the facts shown, these instructions are entirely correct, and are favorable to defendant. Nor do we think the point that certain instructions are inconsistent is well taken. They merely set forth alternative views which might be adopted in the case, according to the conclusion which the jury reached from the testimony, and properly leave the jury in an attitude to adopt one or the other of such conclusions from the evidence.

The point is raised by appellant that there is a fatal variance between the proof and the allegations of the complaint, because the complaint alleges a sale of personal property described, and seeks to recover the reasonable value thereof but the proof shows a tortious taking and conversion. The complaint is in the nature of assumpsit upon contract of sale and purchase, but the proof discloses a tortious assumption, detention, and unwarranted refusal to deliver said stock to plaintiff on his demand therefor; and these facts, together with the implication which the law draws therefrom, are relied upon to support the complaint alleging a sale. No variance can be maintained on such a situation. The authorities at common law, and also those relating to code procedure 'and remedies, hold that a declaration in assumpsit is supported by proof of the wrongful taking and conversion of personal property; but there is a line of cases which confines the right of election to waive the tort, and sue and recover the value of the goods converted, as if sold to the wrongful taker, to cases where the latter had himself disposed of the property. This distinction has received very careful consideration and extended discussion by courts of last resort, and we think the great weight of reason and authority, especially of decisions under the reformed procedure, disregard that distinction as immaterial in cases where the owner of the goods sues to recover the reasonable value thereof, on the very-proper and rightful assumption that the taker proposed not to take the same without compensation to the owner, but to pay him the reasonable value thereof. If, however, the action was not for the reasonable value alone, but to recover for money had and received to the use of the owner by the wrongful taker through the sale of the goods, the plaintiff ought certainly to allege and prove the sale and amount received, because that shifts the measure for accounting from that of the reasonable value to the proceeds actually received by the wrongful taker through the sale of the goods. (Bliss on Code Pleadings, 2d ed., §§ 13,153; Pomeroy’s Remedies and Remedial Rights, §§ 567-73, and cases cited.)

It is also urged by appellant that tlie evidence is insufficient to support the verdict, because there is no evidence showing a sale by defendant of the property converted. This not being an action for money had and received by defendant through the sale of goods wrongfully taken from plaintiff, and it not being necessary to allege a sale, the point that the verdict is not supported because of want of proof of sale is not available in this action, for the reasons just shown.

It was urged in the closing argument on behalf of appellant (but not made a point in the brief of its counsel) that defendant could not be held liable for the conduct of its secretary in the matters herein involved, on the ground that the secretary had no authority to involve the company in the implied purchase of said stock; that such acts were not within the realm of his duties as such secretary, or within the scope of his authority as such officer. This seems to the court to be an important question in view of the evident relation and duties of a secretary to a corporation; and very likely such a defense would have been decisive of this case, so far as the defendant company was concerned, had it been interposed. But plainly no such defense was interposed at all in this action, and the argument of such a proposition on this appeal is entirely inconsistent with the defense interposed as disclosed by the record. Therefore, inasmuch as defendant appears to have undertaken to espouse the conduct of its secretary, and justify his action in this respect, although it may have been outside of his authority or duty in his relations with defendant, still, if defendant wished to adopt and defend his conduct complained of in this action, and rest its defense solely upon that ground throughout the trial, and in presenting the motion for new trial, and in presenting the case on this appeal, in the brief and argument of its counsel, until the closing, we see no reason why the defendant should not be allowed to adopt its secretary’s action as its own, and as within the scope Of his authority, and the liability which follows.

It is proper to further remark that it is exceedingly doubtful that a corporation, without special authorization, can become purchaser of its own stock, which has been sold and outstanding in the hands of individual stockholders. It may, however, commit damage by wrongfully preventing a stockholder from having the use and benefit of his stock. But, as before remarked, the corporation in this case appears, as far as can be ascertained from the record, not to have relied upon such grounds of defense. We may, therefore, very properly presume, for the purposes of this action, that all concerned in the corporation—officers and stockholders—concurred in adopting the conversion of said stock by its secretary as their own act. If that be the case, it includes all who have any rights involved. A principal may adopt as his own the unauthorized act or transaction of an agent; and, having taken that position in defense of a suit, he' could not afterwards, on appeal, be heard to deny the agent’s authority.

The foregoing remarks upon this view of the case are made in order that this case may in no manner be regarded as affirming that an incorporated company may be held liable under such circumstances, if the proper defense were presented, repudiating the transaction, as well as the authority of its officer to bind it therein.

Órdered that judgment be modified, by disallowing recovery of attorney’s fee on the second cause of action; otherwise judgment affirmed.

Modified.

All concur.