67 Ga. 675 | Ga. | 1881
The defendants in error filed their bill in equity against the Southwestern Railroad Company to recover fifty-three shares of the stock of. said company or the value thereof, with inte'rest or dividends thereon from the first of February, 1872, which they allege is due them by defendant under the following contract made by them and accepted by said defendant:
“Macon, Georgia, November 28th, 1871.
To the President and Directors of the Southwestern Railroad C0771-pa7iy:
Gentlemen — We hereby agree to finish the'Vicksburg and Brunswick Railroad from Eufaula to Clayton,-Alabama, as follows :
To cover over all the truss bridges,-finish up. the grading with ditches, etc.,, complete all the track in good order, to, Clayton, and build a substantial biick warehouse at Clayton 35 by 70 feet, on plan used on Central Railroad, with necessary depot grounds attached, put up one water tank with fixtures complete, at the place designated by Mr.' Powers, and when the road is -in that condition approved by Virgil' Powers, superintendent, we will then transfer- and deliver to the-Southwestern Railroad .Company, the preferred eight per cent, stock of the said Vicksburg and Brunswick Railroad Company to the extent of four thousand four hundred shares of the par value of one hundred dollars each, receiving for the same stock of the Southwestern Ráilroad of the par value of one hundred dollars per share, at the rate of one hundred and fifty shares per mile of road finished to Clayton. " '
Your obedient servants, Shorter, Papot & Co.”
“Whereupon it was resolved-that the Company hereby accept the above proposition of Messrs. Shorter; '. Papot &. Co., and that the president and superintendent of the company carry out the details, subject to the approval of the board of directors of the Central Railroad and Banking Company of Georgia.
John T. Boifeuillet, '
Secretary and Treasurers
That on the 1st February, 1872, said Southwestern Railroad issued to said> Ketchum &'Hartridge.scrip for its stock amounting to 2,430 shares by the order of complainants under said contract.
That on the 1st April, 1872, the Southwestern Railroad Company also issued its scrip for 200, and on the 15th May, 1872, scrip for twelve shares. It also issued to Eli S. Shorter, by direction of complainants, 250 shares of its stock, and to I. C. Plant, 225 shares of its stock, -making the whole amount which said company transferred to complainants or their order under said contract, 3,117 shares, valued at $311,700.00, which is all that complainants, or either of said firm of Shorter, Papot & Co., have received from said company under said contract.
■ That the number of said shares which the firm of Shorter, Papot & Co. was entitled to receive under said contract was 3,170. Complainants did not discover until within the last six months that said company had failed; to transfer or issue their additional fifty-three shares to which said firm was entitled, and very soon after discovering the error complainants called the attention of the president of the Southwestern-Railroad Company thereto, and requested that it should be rectified, who refused to do anything in the premises. The fifty-three shares of undelivered stock as claimed is of the value of $5,300.00.
That the Southwestern Railroad Company not only received the 4,400 shares of stock on or about the 1st Febru
The complainants claim that the Southwestern Railroad Company is indebted to them to the extent of fifty-three shares of its stock or its value at $100.00 per share, besides interest or dividends thereon -front 1st of February, 1872, and this bill is filed to have this accounted for, waiving discovery. This bill was filed 17th February, 1875.
The defendant, by its answer filed 20th December, 1875, admits making the contract as stated in complainants’ bill. That the complainants constructed or finished a part of the Vicksburg and Brunswick Railroad between Eufaula and Clayton, Alabama, twenty-one miles and 458 feet over, and for which complainants were entitled to or would have been entitled to, had they waited until the completion of .their, contract,, 3,162 98-100 shares of Southwestern Railroad stock at the value of $316,298.00, but said firm, by reason of its embarrassments and necessities, induced the defendant to advance to said firm of Shorter, Papot & Co., a large portion of said stock long before the completion of the contract, on condition that said firm would allow defendant interest at the rate of eight per centum per annum, that being the dividend which defendant was then paying on its stock, and also the legal rate of interest in the state of Alabama where said work was being done, on such advances, from the time the same was made until the contract was completed; and on this new agreement said firm of Shorter, Papot & Co. gave their order in favor of Ketchum & Hartridge, of Savannah, on 24th January, 1872, on this defendant, for 2750 shares of its stock, as an advance on said agreement and to pay them, Ketchum & Hartridge, the balance due to them on this new agreement, said firm having previously to this date issued and delivered to said Ketchum
To Ketchum & Hartridge on 29th November, 1871, . 2430 shares..
“ I. C. Plant, 8th December, 1871........225 “
“ Eli S. Shorter, 4th December, 1871,......250 “
“ Ketchum & Hartridge, 18th January, 1872, and for balance due when contract should be completed, . 210 “
Total,...............3115 “
And afterwards, on the faith of this new agreement as to interest,, defendant issued to Ketchum & Hartridge
On 1st February, 1872, 2430 shares; par value . . . $243,000 00
On xst February, 1872, (I. C. Plant, order,) 225 shares, par value................ 22,500 00
On 1st February, 1872, Eli S. Shorter, 250 shares, par value.............. 25,000 oo>
On 1st April. 1872, Ketchum & Hartridge, 200 shares, par value.............. 20,000 00
On 15th May, 1872, Ketchum & Hartridge, 12 shares, par value.............. 1,200 oo>
In all 3117 shares, par value .... $311,700'00
On which was due for interest, according to agreement, and which was allowed defendant, . . 4,526 65
$316,226. 66f.
Leaving due said firm a balance....... 71 44
$316,298 10
Which small balance of $71.44 was allowed by said complainants to defendant for some unfinished work of the firm on the road that defendant did for them.
By this arrangement said firm received the whole dividend on said 31x7 shares so issued, declared on 1st June,
Subsequently the Central Railroad Company was made ■a party defendant and filed an amended answer by way of cross-bill, alleging that it was the real party to carry into •effect the agreement and interested therein as the lessee of Southwestern Railroad Company. “ That the agreement to pay complainants 150 shares .of the stock of the Southwestern Railroad Company for each mile of the Vicksburg and Brunswick Railroad when finished from .Eufaula to Clayton, was done by defendants' solely to secure the control of said Vicksburg and Brunswick Railroad and to run it at their will and discretion in connection with said Southwestern Railroad, which it was then and now is connected with, free of all encumbrances and debts whatever.'' “The 4,400 shares of stock transferred by complainants being the majority of stock in said road, and its possession and ownership enabled defendants to control said road.” “That complainants.to induce said contract assured the defendant, through its officers and agents, that they had the right to make this transfer, and that said Vicksburg and Brunswick Railroad Company was absolutely free from all debts and subject to no claims or liabilities whatever, and on the faith of these representations the contract was made and executed and stock of the Southwestern Railroad delivered as stated.’ Defendant alleges said representations were false, in
To this answer and cross-bill, Papot filed- an answer, “ That he made agreement with the Southwestern Railroad Company, approved by the Central Railroad, referred to in cross-bill. That at time of agreement he said nothing about the indorsement of the Barbour county bends, nor did he, to the best of his recollection, say theVicksburg and Brunswick Company was free of debt,” etc., etc. The defendants further amended their cross-bill, charging “that the whole inducement for them to make the purchase of 4,400 shares of theVicksburg and Brunswick Railroad Company, was the representation made by complainants that said shares were a majority of the stock of said company, and the purchase would enable them to control the same, and that there were no outstanding liabilities or debts of said Vicksburg and Brunswick Railroad Company that would interfere with the title, use or control of said company, and on the faith of these representations the purchase was made,” “ charges the contrary was true, that the indorsement on said bond indebtedness existed ; that suits have been instituted on said bond indorsements, judgments recovered and'said railroad sold and purchased by defendants, by reason of which defendants have been wronged and damaged, and the transaction with complainants was fraudulent and void.”
On the issues set forth in the pleading, the case proceeded to trial, and under, the evidence and charge of the
We do not deem it necessary to encumber this opinion and judgment by considering each of the twenty-seven grounds of error assigned in this motion for a new trial, as it is not requisite so to do in the view we take of this case.
(7.) Because the court erred in charging the jury as follows : “Defendants file their answers and admit the contract ; say the same was made and accepted, and the work done, with a small exception, and the railroad received it, and the stockof the Vicksburg and Brunswick Railroad was received under the contract,.-having been transferred to defendants; but they say that complainants should not recover — 1st, “For the reason .that they accepted the railroad before the railroad had been entirely completed; that they did some work in completing the same, and for which they should pay them,” because the same is a misstatement and a total misconception of. the defendants’ defence.
(8.) Because the court erred in charging the jury — 2nd, “ That the stock of the Southwestern Railroad Company was transferred before the completion of the railroad, and that this was done under a contract between the parties, and that under this agreement the accruing dividends on the stock so transferred, which would accrue up to the time of completing and accepting the railroad, as finished, was to be allowed and accountedior in a final settlement; and defendants say that the dividends accruing on the stock so issued before the completing and accepting the railroad would amount to as much as the claim*688 of complainants, and they therefore say that complainants should not be allowed to recover/’ because the same does not fairly and fully state the defence of defendants, either as pleaded or proved.
(9.) The court erred in charging the jury: “Defendants again allege and charge that the prime consideration in making and entering into the contract was the purchase of a controlling interest in the Vicksburg and Brunswick Railroad, free from encumbrances, by the purchase of a majority of its stock, and that they were assured that the railroad was free from all debt, claim or lien; and they say that there was outstanding a large debt over said road, and under which the road has been sold. They charge that this was a fraud, and that the same did in law relieve them from any further obligation to perform their part of the contract.
“These are in substance the statement and pleadings of the parties. These allegations are not evidence except as to admissions made — the rules of law about which I will give you before concluding the charge.”
Because, 1st, the charge does not fully state the defence in the particular referred to. The defendants’ claim was that the complainants represented to them that there were no debts outstanding against the Vicksburg and Brunswick Company that would impair or defeat their right .to control the road, and that these said complainants, in the said negotiation for the purchase, suppressed the existence of these debts of which they well knew, and defendants did no t, on the faith of which representation and their belief that no such debts existed, the trade was consummated ; that such representation and suppression was false and fraudulent, and in consequence the contract or obligation of defendants was annulled, and complainants could .not recover.
Is this assignment of error well taken ? Were the issues made by the pleadings fairly and fully submitted to the jury by the court? The answer of the defendants “admits the contract as stated in bill, that the complainants
Ketchum & Hartridge, February 1st, 1872, . . . , 2430 shares
I. C. Plant, February 1st, 1872, ........225 shares
E. S. Shorter, February 1st, 1872........250 shares
Ketchum & Hartridge, April 1st, 1872, ...... 200 shares
Ketchum & Hartridge, May 15th, 1872,..... 12 shares
In all,............... 3117 shares
Of the par value of..........■ . . . $311,700.00
On which was due for interest......... 4,526.65
According to agreement...........$316,226.66
Leaving due said firm a balance of . ...... $7144
Which balance was allowed by complainants to defendants for some unfinished work of the firm on said road.”
This was the contract that defendants alleged they made with complainants, and one of the defences on which they relied for recovery. Did the court present fully and truly this issue to the jury? The court charged the jury “that the stock of the Southwestern Railroad Company was transferred before the completion of the railroad, and this was done (as alleged) under a contract between the parties, and,
The error the court committed was in instructing the jury that the contract between the parties was “that complainants were to account for accruing dividends on the stock up to the time of completing and finishing the road, on a final settlement,” whereas the contract set up by defendants was that complainants were to allow defendants 8 per cent, interest from the time the advancements of stock were made up to the completion of the road on all stock so advanced before the road was completed.
To account for all dividends accruing on said stock from the 1st of December, 1871, when the dividends began to accrue, up to the completion of the road, would be a very different contract (and a much larger sum) than an agreement to pay interest at 8 per cent, from the date of the advancements of stock up to the completion of the road. Yet the court instructed the- jury the first wás the contract on which defendants relied, when in truth the last was the one which they set up in their answer and to which their proofs applied. This error is the more damaging to defendants when taken in connection with the further charge given by the court, at the request of complainants’ counsel, as follows: “ Under a contract to sell or transfer stocks which is silent as to dividends, the stocks carry the accruing dividends with them ; of in other words, dividends follow the stock and belong to the transferee.” For defendants to sustain the contract that complainants were to account for dividends (as charged by the court) on stock transferred, the proof would have to overcome this legal presumption “ that dividends on stock transferred belong to the transferee, ” whereas on a con
As to the other alleged defense given in charge by the court to the jury, as set forth in the seventh ground, “that complainants should not recover for the reason that the defendants did some work in completing the same for which they should pay them,” we do not find, from an inspection of the record, any such defence set forth in the pleadings of the defendants below. The defendants insisted, and so alleged, that by the issue of the stock of the Southwestern Railroad Company, as set forth in the answer, and the amount due them as interest on said stock for advancing the same before the contract was completed, under an agreement to that effect with complainants, and the finishing of a small balance of work by defendants on said road which complainants agreed to give them credit for, the whole contract was fully satisfied and discharged by the defendants, and they owed complainants nothing.
Also because the court erred in charging the jury: .
“Even if Mr. Papot, one of the complainants, did tell*692 Gen. Holt that the Vicksburg and Brunswick Railroad Company owed no debts, and it turned out that said company had indorsed bonds of Barbour county, Alabama, this would not avail as .a defence to this bill, unless it has been proved that the road was sold to pay the indebtedness thus created. Proof that the road had been sold by the United States marshal, without proving that it was sold under a judgment or judgments in favor of the holder or holders of these bonds, or some of them, or the coupons of some of these bonds, is no defence to this bill, and ought not to prevent your finding for complainants.’
Which the court qualified as follows:
“ Unless you find from all the evidence in the case that such sale was made on account of indorsements or debts or claims of the Vicksburg and Brunswick Railroad Company in existence at the time the stock was transferred by defendants to complainants.”
■ It is insisted that the -charges given in the tenth and seventeenth grounds (here grouped together for more convenient consideration) were error — not applicable to the facts of the case, and calculated to mislead the jury. The character of the stock transferred and its power in the hands of a holder to control the Vicksburg and Brunswick Railroad property were questions equally open to both parties, and about these there was no question. But whether the company owed debts or the property was encumbered with charges that might defeat the title, the rights bargained for, or impair the use intended, was a very difficult question, and one that was peculiarly in the knowledge of the one, and not supposed to be in that of the other. The misrepresentation here alleged, or even the suppression of the fact (if established by proof), was such a fraud as vitiated the sale, if the party imposed upon so sought, or would defeat a recovery under it, if attempted to be enforced. Code, §§3172-8, 2634.
We do not think, as charged by the court, that it was necessary to entitle the defendants to relief to show that
“Under a contract to sell or transfer stocks which is silent as to the dividends, the stocks carry the accruing dividends with them, or in other words, the dividends follow the stock and belong to the transferee.” It is true this is a correct proposition in law, but it did not apply to the contract set up by defendants, though in full accord with the erroneous issue submitted by the court to the jury as one of the grounds of defence. Defendants did not claim that complainants were to account for the ac*694 cruing dividends on the stock-advanced, which seefns to have been the view of the court, but complainants were to pay interest on the shares of stock advanced from the date of advancement to the completion of the work.
The error of this charge was that it involved the same mistaken view of the defence in the case which the court had previously given, as in the last ground. It withdrew the attention of the jury from the true issue made by defendants on this subject, and substituted one not disclosed by the record.
This charge, we think, was error. The letter, of W. S. Holt, president, in which the statement appeared and on which the court instructed the jury, was legal and competent evidence, as ruled, when this' cause was before this court heretofore, as appears in 59 Ga., 342, and the effect and weight of that letter as evidence was a question for the jury, and not for the court. 60 Ga., 188; 57 Ga., 13;
9. Because the verdict of the jury is contrary to the following charge given by the court, at the request of the defendants, in writing:
“That while it is true that all stock on its transfer carries to the transferee all earnings or accrued dividends up to such transfers, yet if from the evidence it was the contract that the Southwestern Railroad Company should deliver to Shorter, Papot & Co. one hundred and fifty shares of the stock of the Southwestern Railroad Company for each mile of the Vicksburg and. Brunswick Railroad from Eufaula to Clayton when such road was fully completed to the satisfaction of Virgil Powers, then said company, by such contract, was not bound to deliver any stock whatever to Shorter, Papot & Co. until said road was fully completed and so reported by said Virgil Powers, and then only such stock of said company as should be bearing dividends from the date of the maturity or completion of said contract.”
In the absence of satisfactory proof of any agreement between complainants and defendants as to advancing stock by defendants to complainants before the completion of the road, and for complainants to pay interest thereon, and resting-alone upon the, written contract between the parties of date of November 28th, 1871, we are inclined to think the charge last given embraces the true rule of liability of the parties to the contract.
If complainants agreed to complete this road between Eufaula and Clayton,' Alabama, for defendants, and further agreed to transfer 4400 shares of stock in said road to defendants, and in consideration thereof defendants agree to issue to complainants shares of stock in the Southwestern Railroad Company of the par value of $100
The respondents below, by the terms of the contract of 28th November, 1871, were to pay one hundred and fifty shares of stock per mile at the time Powers said the road was complete. And if by inadvertence, mistake, or a misunderstanding between the parties the dividends were turned over with the stock, and this is clearly made to appear, then these dividends s.iould be accounted for by complainants.
Tested by this rule, was the verdict in accordance with the charge given ? The complainant, Papot, on the stand as a witness, agreed to abide the measurement of the road as reported by Powers, the superintendent. The measurement of Powers made the road twenty-one miles and 457 feet, making the sum in money $316,298.00, at $15,000 per mile, the extent of the defendants’ liability.
The evidence shows there were paid' in shares of stock 3,117, at par value $311,700.00; dividends on 3,117 shares of stock from 1st December, 1871, at eight per cent, up to the date when the road was completed, say 1st April, 1872, as testified to by Papot — four months — amounts to $6,325.96., which added to the amount paid, $311,700, makes the sum complainants have received in stocks and dividends $318,025.96, when the whole liability of defen
As this case will be remanded for another hearing, we forbear to express any opinion as to whether the verdict is against the evidence, as set forth in the last ground of the motion, but we think it is clearly against the last charge above recited, and that the principles of equity and justice will be promoted by ordering a new trial.
Let the judgment of the court below refusing a new trial be reversed.