17 Utah 213 | Utah | 1898
The plaintiff is a stockholder of the Ajax Mining Company, and brought this action against the company and its board of directors, in behalf of himself and the- other stockholders, to reclaim, and compel restitution into, its treasury, of 44,800 shares of the capital stock of the company. At the trial the court entered a decree in favor of the defendants, dismissing the action. Thereupon the plaintiff appealed.
It is alleged in the complaint, substantially, that the company was organized under the laws of Utah about October 22, 1894; that the plaintiff owned 115,000 shares of its capital stock; that defendants Knox, Kyan, Lowe, King, Nebekor, Boyle, and Robinson, at the time of bringing this suit and for nine months previous thereto, constituted the board of directors; that, upon demand made,
Referring to that contract, and the terms thereof, the witness Daly, who said he had seen the contract and made a memorandum of it, testified as follows: “The contract was made between Henry M. Ryan and Wilson I. Snyder and Henry Shields. The substance of the contract was that Ryan agreed to purchase the claim of Snyder and Shields against the Ajax Company, and pay therefor the sum of $20,000, by giving a mortgage on the property of the Ajax Company for that amount, including the claims of Burke and Salisbury, and the claim due Knox and Ryan, with a proviso that, if Ryan could get the other claimants to throw off $4,000, Snyder and Shields also offered to throw off $4,000; leaving $20,000 secured by a mortgage in favor of Snyder and Shields. The contract was guaranteed by John Nelligan in words as follows:
“State oe IlliNois, j County of Cook. j '
Henry M. Ryan, being first duly sworn, deposes and says that he is one of the defendants in the above entitled action; that affiant did state in court, during the hearing •of this cause, that a copy of the original contract had disappeared from his table in his apartments in the Knuts-ford Hotel, Salt Lake City, but that, to the best of his belief, he had a copy in the safe of said hotel, and that he would make search for said copy, and produce it that afternoon in court; that he did find the instrument
H. M. Evan.”
The one from respondent Boyle reads:
•“ State of Illinois, ) County of Cook. j ‘
“Lawrence P. Boyle, being first duly sworn, deposes ■and says that he is one of the defendants in the above-entitled action; that affiant has read the affidavit made this day by Henry M. Ryan in the above-entitled cause, •and attached hereto; that he did receive certain papers from said Ryan, among which was, as affiant believes, a certain document which purported to be a contract between Wilson I. Snyder, of Park City, Utah, and the said Henry M. Ryan, which contract, affiant believes, related to the sale of certain shares of stock, to wit: about 44,000 shares of the Ajax Mining Company to said Henry M. Ryan; that said Ryan had recently requested affiant to let him have said contract; that affiant had duly searched
La WHENCE P. Boyle.”
It seems no further evidence was introduced concerning the missing contract, or its terms and conditions, but judgment of dismissal of the action was entered. It was clearly the right of the appellant to be permitted to inspect the contract, and to introduce it in evidence, if it could be produced; and the respondent Ryan had no right to suppress it, or a copy thereof, as is indicated in his affidavit. Ryan said in his affidavit, as will be observed, “that he did find the instrument referred to, but that, upon reading the same, was unable to state that it was a true and correct copy of the original contract;” and"'the only excuse he gives for refusing to produce that instrument is that his attorney advised him that, if it were not a true and correct copy, it could not be used in evidence. Was it the prerogative of his attorney to pass upon the admissibility of that instrument? Can a client shield himself behind such advice, under the circumstances of this case? We think not. If such a practice were tolerated, the gates to fraud would soon be wide open. If such were the law, instruments of the greatest importance in any case could be suppressed, and their introduction in evidence prevented, at the mere will of the party having them in custody, and his attorney. In this case the court regarded the contract in question of sufficient importance
We are of the opinion that the respondent Ryan, during the trial of the cause, with reference to the contract in Question, did not act with the fidelity which the law requires of a director, and are not convinced that complete justice was done, and therefore a new trial must be granted. Although we have examined the voluminous, record with care, we intentionally, in the absence of that contract, refrain from expressing an opinion as to what result is indicated by the evidence. Nor do we deem it important to discuss any other question presented. The case is reversed, and the cause remanded, with directions to the court below to grant a new trial.