No. 3660 | Colo. | Apr 15, 1898
delivered the opinion of the court.
The foregoing statement of facts furnishes a complete answer to the contention of the plaintiff in error. It is seldom
That Hardy’s execution of the stockholders’ agreement of February 1, if untainted with fraud, operated as a payment •and cancellation of his notes, is admitted. The only fraud •charged is that Chaney and Duncan fraudulently procured his signature to that agreement. Whether he has a cause of ¡action against them is not a question here, and we need not 'determine it. In entering into this stockholders’ agreement the stockholders were acting in their individual capacity as ¡stockholders. It is true that the company was a party to the •agreement, though merely a nominal one, and the only thing it had to do was to give its formal consent as a corporation •to the plan of reorganization and to carry out the directions •of the stockholders therein contained.
In securing plaintiff’s signature to this agreement Chaney •and Duncan, who were but two of the five directors, were not acting for the board, or the stockholders. They did not pretend so to act, and Hardy knew that they had no such authority to make any promises, or to hold out to him any inducements, other than those contained in the stockholders’ agreement which was signed by the other stockholders of which all were advised.
But if Chaney and Duncan could be considered as the representatives of the company, Hardy was just as much its representative as they were. And if it be conceded that they have perpetrated a fraud upon him, he himself is guilty of a fraud upon his other associates in concealing from them, when it was his duty to speak, knowledge of a transaction had between him and two other stockholders. In concealing from Trathen and Manhire, his two former co-owners, and all the stockholders, except Duncan and Chaney, joint wrongdoers, knowledge of this agreement with Duncan and Chaney, one of whose provisions contemplated that he should retain his notes against the coinpany until this separate agreement should be
Whatever may be said as to Hardy’s remedy (if any) against Chaney and Duncan, his equities under his trust deed securing his notes are junior to the equities of all the other stockholders, and to the company, and to the rights of the present holder of this note, who bought it from an innocent holder, in good faith, and for a valuable consideration, and (although after maturity) without any knowledge of the alleged fraud.
An additional point is made by plaintiff in error that there is a defect of parties plaintiff in that Solomon Favinger, the beneficiary under tlie trust deed to foreclose which this suit is brought, was not made a party plaintiff. This was the ground of a special demurrer, wMch was overruled; and the ruling cannot now be questioned by Hardy for several reasons : first, Swigart is the trustee of an express trust, and is authorized to maintain tMs action under section 5 of the civil code; were this not so, the fact that, after the demurrer was overruled, defendant Hardy answered and went to trial
Upon the entire record we are satisfied that the findings and decree of the court below are in all respects right, and the judgment is accordingly affirmed.
Affirmed.