99 Neb. 509 | Neb. | 1916
Some time prior to October, 1909, this plaintiff, being the owner of 201- shares of the face value of $100 each of the capital stock of the Underwriters Insurance Company, placed the same in the hands of Burns, a stock broker, for sale. Afterwards Burns sold the stock for $75 a share. Soon afterwards, the stock was sold to one Montgomery for $110 a share. Plaintiff began this action in the district court for Douglas county against William C. Sunderland and Sherman Saunders, alleging that Sunderland was a stockholder, director and president of the Nebraska Underwriters Insurance Company, and that "he, acting • through and joining with Saunders, fraudulently purchased the plaintiff’s stock for $75 a share to enable them to transfer the whole capital stock to Montgomery at $110 a share. She asked for a judgment against the defendants for the difference between $75 and $110 a share. Sunderland answered that the facts in the petition failed to state a cause of action against him, coupled.
The defendants contend that the evidence is .not sufficient to support the verdict; that the verdict and judgment are contrary to law, and that the court erred in certain instructions given to the jury.
The briefs are not a compliance with rule 12 (94 Neb. XI). The parties do not agree as to the evidence, and, in making their respective statements as to the substance of the evidence, they do not always refer “with particularity by question and page to the evidence in the record supporting the contention made.” The latter part of the rule, relating to the statement of the propositions of law relied upon and the authorities supporting them, is not carefully observed.
Sunderland and Saunders were partners, carrying on a business distinct from that of the insurance company. The plaintiff’s husband was recently deceased, and in his lifetime he had been the owner of this stock and somewhat interested in the affairs of the company, and for several years no dividend had been paid to the plaintiff on her stock. This was all the information that the plaintiff-had in regard to the probable value of the stock, and because she was receiving no dividends thereon she thought it- was necessary to sell the stock. She authorized the broker to sell it at $75 a share. She testified that some time before the transaction complained of she had conversation with the president, Sunderland, in regard to the dividends, but was given no information in regard to. the condition of the company nor the probable value of the
The defendants contend that the evidence will not warrant the finding that Sunderland and Saunders were interested in the purchase of plaintiff’s stock. Mr. Love testified that he was himself trying to get a controlling interest in the company, and evidently desired the jury to believe that he bought plaintiff’s stock with that in view, and that when he found he could not succeed in getting a controlling interest in the company he sold a one-half interest in the stock to Mr. Saunders for the price that he had paid plaintiff. He testified that he sold a half interest in the stock to Saunders, and said that he would have
It is insisted: “The defendant Sunderland might have lawfully purchased tfie plaintiff’s stock himself or through an agent or in any other manner, regardless of his information at the time of purchase, so long as he was not guilty of actively misleading her in respect thereto.” This court in Barber v. Martin, 67 Neb. 445, stated the following as a general proposition of law: “The general manager of a corporation, in effectuating a sale of the entire capital stock of his company, acts as the agent, of all the stockholders, and he cannot receive and retain a secret compensation from the vendee for effectuating the con
The supreme court of Kansas has had occasion to discuss quite at large a similar question, and declares the law to be: “The managing officers of a corporation are trustees not only in relation to the corporate entity and the corporate property, but they are also, to some extent and in many respects, trustees for the corporate shareholders. * * * The fact that the directors and managing officers of a corporation are quasi-trustees for the stockholders does not prohibit them from dealing with the latter. The only restriction is that in such dealing their conduct be fair, open, and above reproach. Because of the trust relation and the better opportunity afforded for acquiring information, before any director or managing officer of a corporation, having a knowledge of the condition of its affairs, can rightfully purchase the stock of one not actively engaged in the management, he must inform such stockholder of the true condition of affairs.” Stewart v.. Harris, 69 Kan. 498. As applied to the facts in that case, the court approved of the following language in the instructions of the trial court: “You are instructed that the president, or other managing officer of a corporation doing business as a bank, stands in relation of a trustee to all the stockholders who are not themselves engaged in the entire management of the bank, and. be
Other courts have refused to state the rule as strongly for the plaintiff as this. The supreme court of Georgia considered a case in one respect more nearly identical with the case at bar. That court declared the rule to be: “Where a director purchases shares from a stockholder at 110, concealing the fact that there is a contemplated sale of the entire plant of the company, which makes the stock worth 185, the concealment of such material fact entitles the shareholder to rescind the sale, or to other appropriate relief.” Oliver v. Oliver, 118 Ga. 362. Mr. Justice Lamar in the opinion of the court discusses very clearly the relation which a director bears to any regular stockholder: “But the fact that he is trustee for all is not to be perverted into holding that he is under no obligation to each; the fact that he must serve the company does not warrant him in becoming the active and successful opponent of an individual stockholder with reference to the latter’s undivided interest in the very property committed to the direc
If the jury in the case at bar believed that the president and manager of the corporation had found an opportunity to dispose of all the stock of the corporation at a price beyond'its supposed value, and had disposed of' his stock at that price, knowing that the purchaser expected to take all of the remaining stock, and through his partner and a third person procured the stock of the plaintiff at a much less price with the purpose and intention of disposing of the same as he had already disposed of his OAvn, knowing at the time that the stockholder from whom he so purchased was not familiar with public transactions, Avas AAdiolly unacquainted with the condition of the corporation, the value of the stock or the opportunity to sell the same, the jury would be justified in finding a verdict for the plaintiff.
The objection that the stock was not really worth more than the plaintiff obtained for it does not appear to have any merit. The condition was the same as though the president had ascertained that the property of the company could be sold at such a price- as to make the value
There is perhaps a slight variance between the allegations of the petition as amended and the proof, but this slight variance is not made a subject of discussion in the briefs, and under the circumstances the case should be determined upon the evidence as submitted to the jury. The instructions of the court to the jury are severely criticised. It may be said that these instructions do not as clearly present the case to the jury under the evidence as might be desired; but, so far as we have observed, any defect in the instructions in that regard would not result in prejudice to the defendant, but rather to the plaintiff herself. The instructions given by the court are quite lengthy and somewhat involved, and the proper limits of this opinion will not admit of a detailed discussion of them. It does not appear from the record that the defendants offered proper instructions setting forth their theory of the case.
We have found no error in the record that requires reversal, and the judgment of the district court is
Affirmed.