192 Ind. 502 | Ind. | 1922
This was an action by appellee against appellant to recover damages because of the fact,' as alleged in the pleadings and found by the court, that the secretary of appellant corporation fraudulently issued to himself a certificate for 100 shares of stock in that corporation after all the authorized stock had been issued and sold to others, and deposited such fraudulent certificate with appellee as collateral security for a note of himself and his partner, given in renewal of a prior note, and then failed to pay the debt evidenced by súch note. The court made a special finding of facts and stated a conclusion of law thereon in favor of appellee, to which appellant excepted. A judgment in conformity with such conclusion was rendered in favor of appellee for $8,668 and costs. Appellant has assigned as error that the trial court erred in its conclusion of law upon the facts found.
The court found specially that (a) before the certificate in question was executed all of the stock which the charter of appellant corporation empowered it to issue had been issued and sold, and was owned by individuals other than said Wocher, that without the knowledge or consent of any other officer or director of appellant corporation Wocher took a blank certificate from its stock book, filled it out in his own favor for 100 shares of the preferred stock, signed it as secretary, procured the president to sign it by falsely stating that it was in renewal of two certificates previously issued to him (which the court finds he had theretofore sold and assigned), and delivered the certificate thus obtained to appellee as collateral security for a note then executed in renewal of other notes given for a debt which he and his partner had previously owed for nearly seven years; (b) that said Wocher did not then nor thereafter own any stock whatever in the appellant corporation; (c) that when said Wocher took the blank certificate, filled it out, signed it as secretary, and procured the president to sign it, and when he hypothecated it with appellee as collateral security, he was not acting within the scope of his agency as secretary-treasurer of appellant company, but as an individual in the private business of himself and his partner; and (d) there was no finding that the stock certificate in question, nor genuine shares of preferred stock (even if it were valid) had any value whatever, nor did the court find anything as to the property, earnings or indebtedness of appellant corporation.
Since the court found against appellee upon the material allegations of its first and second paragraphs of complaint, they need not be further considered.
The remaining question is whether the facts alleged in the third paragraph of the complaint, or enough of them to make out a cause of action for the recovery of the damages awarded, were found by the trial court. In addition to alleging the execution of the renewal note for $6,000, with interest and attorney fees, the assignment of the stock certificate as collateral security for payment of the note, that the shares of stock were worth $10,000, that the debt was due and unpaid and the makers of the note were insolvent, that appellant had been requested to assign the shares on its books and issue to appellee a new certificate for them, but refused
The 'first paragraph of the answer was a general denial. The second paragraph alleged, in substance, that appellant was a corporation organized under the laws of Indiana for the purpose of buying, holding and selling real estate, with a capital stock of $150,000, of which $50,000 was preferred stock, divided into 500 shares of the par value of $100 each; that at the time the stock certificate in question was signed by the officers of appellant company, and was assigned to appellee as collateral, and at the time the renewal note sued on was executed by Wocher and his partner, said William F. Wocher was secretary and treasurer of appellant, and the directors were three other men, including the president, whose name, as president, was signed to said stock certificate; that long prior to that time all of the shares of the common and preferred stock had been sold and issued, and none of them were owned by appellant or by said Wocher; that Wocher and his partner for nearly seven years had been indebted to appellee, and the appellee was pressing them for additional security; that as treasurer said Wocher had possession of appellant’s stock certificate book and corporate seal; that without the knowledge' of appellant or of any officer or director of said corporation, said Wocher took from the stock certificate book Certificate Number 20, filled in the blanks with his own name and for 100 shares, impressed the seal of appellant corporation upon it, signed it as treasurer of said company, and delivered it to appellee as security for his antecedent debt; that appellee knew it was dealing with said Wocher solely in respect to his own private indebtedness, and not in respect to any
By its special finding, including what has been heretofore set out, the court found most of the facts alleged in the third paragraph of complaint, except that it did not find the value of the stock certificate nor of any shares of stock, nor that either had any valué at all, and did not find that appellant issued the stock certificate in question, but found, on the contrary, that it was surreptitiously issued by William F. Wocher, for his own purposes, and used in his own private business, after he had taken the blank from the stock certificate book without the knowledge or consent of any officer or director of appellant corporation other than himself, filled out the blanks in favor of himself, and induced the president, by false statements, to sign it, and that in so doing, and in hypothecating it,’ he was not acting within the scope of his agency as secretary-treasurer of the appellant company, but when' he so hypothecated it was acting as an individual in respect to the private business of himself and his partner; and it did not find that appellee had no “means of knowledge” that Wocher’s representations concerning the certificate of stock and his ownership of the shares it purported to represent, were false, nor find that it could not have learned
Of the facts alleged in the answer the court further found that Wocher was secretary-treasurer and a director of the appellant corporation; that the man who signed the stock certificate in question as president of the appellant was its president; that the two and another were its directors; that Wocher had formerly owned 100 shares of stock therein, represented by two certificates for 50 shares each, but had-sold and assigned them, though they had not been transferred on the books of the corporation, and that Wocher procured the signature of the president by falsely stating that he had surrendered those two certificates for cancellation, and was taking out the certificate for 100 shares which the president sighed, in exchange for those two certificates; that the debt to appellee, in treble the amount of the note sued on, had been incurred by Wocher and his partner, in 1908, of which all but $9,000 had been repaid before the execution of the renewal note which the assignment of said unauthorized certificate .was made to secure; that at the time the certificate was so issued by Wocher to himself and assigned to appellee, the appellee had requested Wocher and his partner to give it additional collateral; that at the time said renewal note for $9,000 was given and said false certificate was assigned to appellee “it was common rumor in the city of Indianapolis that John Wocher & Bro. (said Wocher and his partner) were very much embarrassed and in failing circumstances;” that appellee and Wocher were transacting their separate business, which long antedated the organization of appellant corporation, when the assignment was made, and appellee “knew they were dealing .with William F. Wocher in respect to his own private business and * * * a then-existing indebtedness of John Wocher and Bro. to said (appellee) and made no
It thus appears that, of the facts stated in the third paragraph of complaint as constituting appellee’s alleged cause of action, it failed to establish: (a) That the appellant corporation issued the stock certificate which appellee held as collateral; or (b) that such certificate, or the shares of preferred stock in appellant corporation which it purported to represent, were of a value equal to the debt for which they were assigned as collateral security, or had any value at all — while appellant established, of the facts pleaded in its answer; (c) that it had no power, as a corporation, to issue the certificate of stock in question; (d) that the same was wrongfully issued and negotiated without authority from appellant’s board of directors, and assigned to appellee by the secretary-treasurer of appellant corporation, in tile transaction of his individual business with appellee, in which appellant had no interest, as security
For lack of a finding that “said shares at the time of said assignment and at all times since have been of the value of $10,000” (or at least a sum equal to the damages awarded) appellants’ exception to the conclusion of law that appellee was entitled to recover from appellant the sum of $8,668 was well taken, and should have been sustained. Value in that amount not being shown, appellee was not entitled to recover the sum awarded.
And whatever effect the alleged false representations by Wocher might have to estop Wocher from denying that he was the owner of 100 shares of preferred stock, evidenced by the certificate in question, they could not estop appellant unless Wocher acted as its authorized agent in making them. The express finding that he did not, but that when he abstracted the certificate from appellant’s preferred stock certificate book and, filled in
The complaint having failed to charge negligence on the part of appellant in employing Wocher as secretary, or in permitting him to obtain the blank stock certificate, affix the seal to it, and issue it to himself, we do not consider nor decide the questions argued by counsel as to whether or not a corporation might incur liability by its negligence in-such matters.
The special finding of facts found against the plaintiff (appellee) on some of the material allegations of each paragraph of its complaint, which it was bound to establish in order to recover.
The court is of the opinion that justice requires a retrial of this case. The judgment is reversed, with directions to grant a new trial.