92 W. Va. 519 | W. Va. | 1922
This suit is the outgrowth of the suit of J. S. Wallace vs. The Eclipse Pocahontas Coal Company and others, heard here upon an appeal by the plaintiff from the decree of the circuit court giving him partial relief, but denying him the full relief prayed for, which he decided he was entitled to, reversing the decree below and remanding the cause for further proceedings to be had in accordance with our decree. The opinion delivered here will be found reported in 83 W. Ya. 321, to which reference may be made for a statement of the nature of the case and the issues presented and decided.
In brief, that suit was to secure specific performance of a contract between Wallace and the defendants, Perkins, Weller, Griffith and O ’ Keefe, promoters and organizers of The Eclipse Pocahontas Coal Company for the purchase of a lease for coal alleged to belong to Wallace, and which had been transferred by them to said company.
Instead of the decree below, our conclusion was to reverse that decree and to adjudge in accordance with the terms
The final decree of the court, upon the remand of the cause was in the alternative either that the defendant The Eclipse Pocahontas ¡Coal Company and the defendant Perkins, Weller, Griffith and O’Keefe should turn over to Wallace one hundred and ninety shares of the stock of the corporation within a specified time, or that they pay to him the sum of $20,-103.58, the ascertained value thereof, with interest and the costs of the suit.
The stock not being forthcoming within the time specified by the decree, the evidence shows Wallace sued out an execution against the corporation and the individual defendants against whom the decree was pronounced, which was levied not only upon the plant and property of the corporation, but also upon the property of the individual debtors, and in the case of the defendant O’Keefe, the plaintiff in the present case, process of garnishment was also issued and the wages due him from the Norfolk and Western Railway Company were thereby attached.
To relieve the stress of circumstances thus created, the defendant Stover, president and general manager of the defendant corporation, not succeeding in getting the co-defend: ants to contribute a sum sufficient to pay off the amount of said decree, as proposed by him raised the money upon the
To relieve them and their property, the plaintiff here and his co-defendants in the decree, as plaintiff swears, assigned and turned over to Stover their shares of stock in the corporation, which in the case of 0 ’Keefe amounted to seventy shares of the par value of seven thousand dollars, with the understanding that within .a certain time' stipulated they might redeem the same by paying to Stover $3,000.00 each, which -said Stover determined would pay the proportionate amounts which the said four individual defendants agreed they should contribute to the payment of said decree, Stover’s proposal further being that the company should pay the residue of the decree, then amounting to something over nine thousand dollars.
Stover swears that in accordance with this proposal the plaintiff O’Keefe first proposed to surrender fifty shares of his stock, but -later yielded to Stover’s demand for seventy shares or all his holdings in the companj’", which he assigned to Stover and took from' him finally a release of the decree, and did not afterwards redeem the stock from Stover. Subsequently Stover sold the stock so obtained from O’Keefe for $8,750.00, or at the fate of $125.00 per share; and the object of the present suit was to recover that sum from defendant company and Stover.
On the trial below, after all the evidence had been introduced, the defendants interposed a demurrer thereto, and there was a conditional verdict by the jury, subject to the law applicable to the facts, fixing the plantiff’s damages at $8,-750.00, the amount realized by Stover from the sale of said seventy shares of stock.
Thé judgment on the demurrer now .complained of by The Eclipse Pocahontas Coal Company was that the demurrer of the defendant Stover be sustained but overruled as to it, and thereon that the plaintiff recover from said company, not the full amount of the verdict, but instead the sum of $4,020, 71, with interest thereon from January 31, 1920, and costs.
To get a proper view of the issues involved, the pleadings 'should perhaps be considered. The original declaration contained the common counts without bill of particulars, and a special count. Before the trial, however, plaintiff was permitted to add two additional special counts. The theory of the first count was that on the organization of The Eclipse Pocahontas Coal Company the defendant Stover became a stockholder, took' part in the organization and' was elected president and general manager, and took full control thereof ; that upon the transfer to it of said léase, said corporation agreed to assume and pay all liabilities of the corporation including the liability to said Wallace; but that as soon as Stover obtained control of the company, he repudiated said contract with Wallace. And it is further alleged that after Wallace obtained his decree against said company, Perkins, Weller, Griffith and O’Keefe, Stover purchased the same and caused execution thereon to be sued out and levied upon the property of the plaintiff,, and that .plaintiff in order to re--lieve his property and prevent it from being sold thereunder, was required to pay to Stover a large sum of money, to-wit, $10,000.00.
The theories of the two additional special counts were substantially alike and in part the same as the first count. But in addition the first of these two averred that upon the institution of the suit of Wallace -against said company and the promoting shareholders, said company by its president reaffirmed its said promises and obligations, and agreed that it would take full charge of said suit on behalf of all defendants, pay all expenses, and hold plaintiff and his co-defendants harmless, but that disregarding its said promises, said company and said .Stover had entered into an agreement and understanding to cheat and defraud plaintiff and to avoid its obligations and promises, and in furtherance thereof it was arranged that the decree of Wallace should be acquired
The additional matter of the last count is like the second, except that it omits the averments of fraud and conspiracy to defraud the plaintiff by the purchase of said judgment by Stover.
The defendants’, joint and several pleas on which issue was joined, were non-assumpsit and a special plea marked No. 3; and the defendant Stover individually tendered and filed special plea No. 2. The latter was a plea of the statute of frauds, to the effect that the alleged promise and undertakings on Ms part were for the debt, default and misdoings' of another, which not being in writing signed by him or by his agent, were not binding on him, etc. Special plea Nó. 3, the joint and several plea of both defendants, was in the nature-of a plea in estoppel, to the effect that plaintiff and his co-defendants in the Wallace case were estopped by their respective answers and by their testimony therein, denying that in fact there was any such contract as Wallace alleged, or any contract entered into by them with him, whereby the latter was to have any interest in -the property and stock of the said company; and that plaintiff was concluded and estopped in this case from affirming anything to the contrary. General replies were made to each of said special pleas, including the plea of non-assumpsit, and issues were joined thereon.
The first proposition affirmed and relied on by counsel for plaintiff in error for reversal, is that the fraud against Wallace was that of the four promoting stockholders including O’Keefe, and that one of these could not, by himself or by agreement with Stover, cast upon the company the burden 'of the Wallace contract, on the principle that an officer or agent of a corporation can not contract on behalf of the
Admitting this legal proposition, we think it'is of little importance, for there is no evidence justifying the concluson that the company actually agreed with defendant and others to assume the obligation incurred to Wallace, except' the bare fact of accepting the lease, not directly from Wallace, but from the coal company with which Wallace had dealt therefor. There is nothing in the minutes of the meetings of stockholders or directors evidencing any such contract, either at the organization of the company or afterwards, and after Wallace instituted his suit, except the bare fact that counsel was employed to defend that suit. The burden was upon the plaintiff to prove the contract as alleged. And even if the company was legally liable to Wallace as decreed, this was not an adjudication as between the company and the promoting stockholders, of the equities between them and the company.
Nor is there any evidence^ in the case justifying the conclusion of court or jury that any conspiracy existed between the defendant company and Stover, to defraud or exact money unlawfully or wrongfully from plaintiff. Stover was a stranger to the record in the Wallace case, and was not bound by the decree. He had a duty as president to protect the company and its property, not only in his own interest, but in the interest of plaintiff and others as stockholders. The company was without funds to pay off the decree and relieve its property from the execution, and the plaintiff had no money, as he admits, to meet and pay the decree or his proportionate share thereof. Stover, after appealing to plaintiff and his codefendants for help, failed. He then raised the money individually, paid Wallace and took an assignment of the decree to himself personally for his protection. What was there in law or equity to deny him
Stover, though standing in the position of a stranger to the judgment, was not a mere volunteer. His relationship to the company as president imposed upon him some duty and right to protect it and its stockholders. But there was no more obligation upon him to pay the decree personally than there was upon any other stockholder or director. Where one standing in such relationship to a corporation, or where a* co-debtor or co-surety pays the creditor and takes an assignment of the debt and lien, he becomes subrogated to' all the rights of the creditor and may keep the judgment and lien alive and enforce it for his protection. Neely v. Jones, 16 W. Va. 625; 15 R. C. L. 780, §234; Nelson v. Webster, (Neb.), 68 L. R. A. 513, and note; Bush v. Wadsworth, 60 Mich. 255; Redington v. Cornwell, 90 Cal. 49; American Bonding Company v. Mechanics’ Bank, 97 Md. 598, 99 Am. St. Rep. 466, and note; Gatewood v. Gatewood, 75 Va. 407. In the case last cited the court distinguishes the case of one who discharges a mortgage and takes an assignment thereof and that of one who pays off a mortgage simply to protect his own interest. Judge Staples says: “Assignment is the act of the parties, and depends generally upon intention.” In Bush v. Wadsworth, supra, payment of the debt was made by the president- of the corporation under circumstances and for purposes very similar to those involved here; and it was held that his payment did not discharge the debt, nor change his equities. In Lidderdale v. Robinson, 2 Brock. 159, Fed. Case No. 8337, affirmed in 12 Wheat, 594, Chief Justice Marshall held that where a person has paid money for which others were responsible, the equitable claim which such payment gives him on those, who were so responsible shall be clothed with the legal garb with which the contract he has discharged was invested.
Assuming that the defendant company was primarily liable, and that the four promoting stockholders stood in the relationship of sureties, how can these facts, if true, change or affect the contractual relations between Stover and O’Keefe? The primary liability of the company imposed a burden upon all stockholders, and of course reduced the actual value of the stock pro tanto; and if the stock, as then supposed, was valueless on the market, Stover had only the physical assets of the company to look to as security for his payment to Wallace. Stover, in the beginning, proposed to the four promoting stockholders rendered liable by the decree in favor of Wallace, to take their stock and allow them within the time stipulated to redeem the same upon payment to him of the stipulated sum of $3,000.00 each. One, perhaps all of them except O’Keefe, availed themselves of this -option. O’Keefe declined. And even after O’Keefe’s assignment to Stover, the latter reaffirmed this proposition and expressed his intention, if the unexpected happened, to- do thfe equitable thing by all of them; but in the face of O’Keefe’s evidence of the original agreement, does this voluntary statement, not a part of the actual contract and never accepted, furnish the basis of any liability on the part of Stover to pay O’Keefe any part of the proceeds of the sale of the stock so assigned to him in full discharge of all liability of O’Keefe on the
Being unable to find any legal basis in pleading or proof upon which to sustain the judgment, it becomes unnecessary to consider the question of fraud presented by counsel as grounds for denying plaintiff relief.
Our conclusion is that the law on the defendants ’ demurrer to the evidence is for both defendants, and that said demurrer should be sustained. And the judgment here is that the judgment below in favor of the said Stover be affirmed, but
Affirmed in part; Reversed in part.