67 Colo. 322 | Colo. | 1919
Lead Opinion
Opinion by
The plaintiffs brought suit in the District Court of Las Animas county against the Colorado Life Insurance Company and Plested, receiver thereof, stating two causes of action and praying the court to ascertain the exact sum due the receiver on a certain note of $12,000, and that upon the payment of such sum the receiver cancel and surrender the note and the mortgage securing the same.
The first cause was based upon alleged fraud in procuring the note, and the charge was that misrepresentation had been made as to the affairs of the defendant company, stock in which constituted the consideration for one-half the note. The second cause of action was upon neglect or wrongful conduct of the corporation itself, and the receiver, in failing- to collect certain notes due the corporation. The. case was 'tried to the court. Upon the evidence of the first cause of action the court found there was no fraud. As to the second cause of action, the court held the facts alleged to be immaterial, excluded testimony concerning the same, and entered a decree for the defendants.
The testimony for the plaintiffs showed that in April 1912, agents of the corporation persuaded the plaintiffs to subscribe for 2,000 shares of stock in the company at $3 per share and to borrow of the company $6,000 and in consideration thereof to give their note for $12,000 dated April 25th, 1912, payable ten years after date, secured by mortgage of even date, on a large amount of ranch land in Costilla county.
The company never did any insurance business. The money, proceeds of the stock which was sold, was wasted, if not worse, and the company shortly became insolvent. No part was paid of the $100,000 required by statute to be paid to the commissioners of Insurance. The plaintiffs
Their delay was too great to permit rescission.
The court’s holding concerning the second cause of action we think is correct.
However, we think that portion of the note the consideration for which was stock in the proposed company never became and could not become the property of the company until $100,000 had been deposited with the commissioner of insurance as required by §3117 R. S. 1908. In Greiger v. Salzer, 165 Pac. 240, this court held that the commissioners appointed under that statute were charged with the express duty as trustees to collect the subscription price of stock, preserve it, pay $100,000 of it to the commissioner of insurance and turn the rest over to the company when the company began business; but that if they failed to pay the $100,000 over to the commissioners of insurance, the proposed company could never become a company to do business, and in such case the commissioners must pay back to the subscribers all the money they had received from them. If follows from this, and indeed the opinion in Greiger v. Salzer expressly says, that the subscription price of stock is the property of the commissioners and not of the company; and it further follows that the receiver has no interest in that part of this note the consideration of which was stock, — and, since it is the price of stock in a proposed company which has never come into existence, — it must be returned to the
We do not overlook the fact that the note is made directly to the company, but, under Greiger v. Salzer, the company must be regarded as no more than the agent of the commissioners.
The judgment is reversed, with directions to issue the injunction, above suggested, forthwith, and to proceed in accordance with this opinion.
Garrigues, C. J. and Scott, J. concur.
Rehearing
On Petition for Rehearing.
The defendant's in error move for a rehearing upon the ground that the decision of the court is upon a cause of action or a theory of the case not raised or suggested in the, court below.
We do not think the point is well taken. We have merely suggested relief not contemplated below. The facts shown in the complaint and in the proofs compel the conclusion that the funds provided by subscription were the property of the commissioners appointed under the statute. It is these facts that determine the relief to be granted. Drake v. Bank, 44 Colo. 49. We think, however, that the defendants in error are right in their claim that the Company and the Receiver have, as cestuis qui trustent, an interest in the note, and we do not wish to deprive them of the power of protecting that interest.
The defendants in error request us, if we do not grant the rehearing, to make certain directions as to what should be done by the court below. We cannot do this, because in order “to a complete determination of the controversy,” the commissioners must be brought in, and they have a right to be heard upon the questions which it is suggested we should determine now, including the question whether one dollar per share or the whole purchase price of the stock or how much should be deducted from the note. The injunction, required in our former opinion, should be until 'the amount justly due on the note is determined and until the further order of the court.
• The decree is reversed and the cause remanded for proceedings not inconsistent with these opinions, and, to the extent here indicated, the former opinion is modified.
On motion for rehearing; rehearing denied and opinion modified.