82 A.D. 242 | N.Y. App. Div. | 1903
Lead Opinion
The' plaintiff company having shown that the defendant through its vice-president had received at his instance from the plaintiff moneys from its treasury which were actually used for the payment of the taxes due on defendant’s, building, had sustained the burden resting upon it and the referee was justified in his conclusion in its favor, The contention is made, however, that the judgment should be reversed for errors committed to the prejudice of the defendant in rulings upon évidencé.
The defendant sought to prove that Mr. Price and Mr. Stout, the latter being principal owner of the plaintiff company, and both being large stockholders in the defendant' company, were desirous of preventing the foreclosure of the mortgage held by the Mutual Life Insurance. Company upon the St. James Hotel property which was the largest and principal asset of the defendant company, and that on their own account and for their own benefit and gratuitously
With respect to all this class of evidence it seems to us that it was entirely incompetent, immaterial and irrelevant, because this action was not for an accounting between Mr. Stout and Mr. Price, but was an action at law between the plaintiff corporation and the defendant corporation to recover moneys lent. If an accounting between Mr. Stout and Mr. Price could have any material bearing on the issues presented, it was herein made to appear by uncontradicted evidence that all their differences with respect to stock and borrowed money were adjusted and settled prior to the trial before the referee, and upon that basis Mr. Stout was released from any and all claims which Mi'- Price might have had against him growing out of their relations as officers, stockholders or persons otherwise interested in either of the two corporations. In any aspect, therefore, whether the taxes were as the result of an agreement paid out of the moneys which belonged to Mr. Price and Mr. Stout jointly before they were placed in the defendant’s treasury, had no relevancy to the issue as to whether or not the plaintiff loaned to the defendant. It could make no difference nor was it any concern of the defendant whose moneys were deposited in the bank account of the plaintiff. It was conceded that the payment of the taxes was an obligation which rested on the defendant. It was also shown that it was the plaintiff’s cheek which paid the taxes and, so far as it was necessary to show that the money had actually gone into the plaintiff’s treasury and from what source it was received, this clearly appeared from the cross-examination of Stout.
The most that could be claimed of such evidence is that it might have had a tendency to prove as matter of defense that the plaintiff was not the real party in interest. If it had been proved, however, that originally the money borrowed from Mrs. Price had been so
It was further contended that it was erroneous to ■ exclude evidence upon the question of whether or not Mr. Stout, as vice-president of the defendant, had power or authority to borrow the money. If the claim had been made that he -had special authority and that was a crucial point in the case, such evidence would be. relevant. Mr. Stout, however, did not claim, express authority, but insisted that as an officer of the company and pursuant to the resolution which gave him charge and management of the St. James property, he had implied authority to do all things necessary, including the borrowing of money to pay taxes so as to avoid foreclosure and save and protect the property for the benefit of the defendant. Whether he had such power did not depend upon any specific authority to negotiate the loan, but turned upon whether, by virtue of his position as vice-president of the company and manager of this particular property under the resolution which gave him general powers in connection therewith, he was, authorized and justified for the benefit of the defendant in making the payment so as to bind it. The exclusion of the evidence, therefore, bearing upon the question of specific authority, we think, was proper.
The other points of the appellant we have examined, but find no reason therein presented calling for a reversal. •
Van Brunt, P. J., and McLaughlin, J., concurred; Ingraham and Hatch, JJ., dissented.
Dissenting Opinion
I think this case was tried upon a wrong theory; that competent and material evidence was excluded, and for that reason there should be a new trial. The allegation of the complaint is that “ on or about the 11th day of July, 1900, this plaintiff loaned to the defendant at its special instance and request the sum of forty-two thousand seven hundred and forty-nine and 10/100 dollars ($42,749.10), which sum the defendant agreed to pay upon demand to the plaintiff, with interest at six .per cent;” and it is for this sum that the plaintiff has .recovered judgment. This allegation the defendant denies, and alleges as a separate defense that at the time mentioned in the complaint one James N. Stout was vice-president of the plaintiff corporation and also vice-president and owner of a number of shares of stock of - the defendant corporation; that certain taxes for- the year 1899 on the St. James Building, the property of the defendant, were paid by Bruce Price and the said James N. Stout with money belonging to them; that the money paid by the check of the St. James Company to the receiver of taxes on or about the 11th day of June, 1900, for the taxes for the year 1899 on the said St. James Building, amounting to the sum of $42,749.10, was money belonging to the said James N. Stout and said Bruce Price, and not the property of the said St. James Company.
It was entirely upon the evidence of James N. Stout that a loan by the plaintiff to the defendant was sought to be established. He testified that at. the time of the transaction in question he was the vice-president of the plaintiff 'and also of the defendant; that Stout and Price were the owners of all the stock of the plaintiff corporation ; and owned a large proportion of the stock of the defendant corporation; that the plaintiff had erected a building, called the St. James Building, upon Broadway, in the city of New York, and subsequently had conveyed it to the defendant corporation by a deed dated February 28, 1899, and recorded March 24, 3899; that the taxes upon this property for the year 1899 were not paid by the
“R. Y., July 11th, 1900. Received of the St. Jámes’ Company its check of even date on Second Rational Bank of R. Y. City to the order of ‘Receiver of Taxes’ for the sum of Forty-one thousand one hundred eighty-seven ($41,187.60) dollars 60/100 same to be used to pay the taxes overdue on the St. James’ Bldg. Bway & 26th St., and the amount returned to the St! James’ Company on demand with §% interest.
“ THE SECURITY TRUST & LIFE IRS. CO.
“ Jambs R. Stout,
• “ jr p»
So far as appears, no one except Stout knew of this receipt until the trial, when he produced it and introduced it in evidence. The transaction was entirely managed and controlled by Stout 'in his capacity as vice-president of both corporations. He claims no special authority on behalf of the defendant to borrow this money; ’ and although. the company had a president who was the principal executive officer of the corporation, and a board of directors who were responsible for the management of its affairs, the transaction was carefully concealed from all of its directors, officers and employees no entry being made in any of its-books showing either, the receipt or the payment of the money. The money never went into the defendant’s bank account,, or appeared in any way as a transaction of the defendant corporation. Stout swears that it was his money, and states in a general way that he was indebted to the plaintiff' in a large amount and paid -the money to the plaintiff on account of that indebtedness, but the foundation of such an indebtedness was not at
Considering the circumstances under which this alleged loan was created, the fact, that the money that paid these taxes was deposited in the bank to the credit of the plaintiff upon the day the payment to the receiver of taxes was made by Stout without any authority from any of the officers of either the defendant or the plaintiff, and the fact that Stout acted for both parties in furnishing the money to the plaintiff, in drawing the money from plaintiff’s bank, and in paying it for the benefit of the defendant to the receiver of taxes, neither of the parties was absolutely bound by the apparent condi
It was proved that subsequent to the payment of these taxes Stout and Price had a dispute in relation to their accounts and the management of the defendant corporation; that Stout had been removed as an officer and director of the defendant corporation; that he then had a settlement with Price, in which their accounts were settled ; that Price had conveyed to Stout his interest in the stock of the plaintiff corporation ; and it was after this transaction, for the first time, that Stout presented this claim against the defendant corporation and insisted on its payment. There was also evidence tending to show that at the time- this payment was made, the. plaintiff corporation had substantially gone out of business and had no assets; and Price testified that he conveyed his stock to Stout Upon the statement of Stout that the company had no assets and that its stock was of no value.
Now, in endeavoring to prove that the plaintiff never had the money except as a mere matter of convenience in paying the taxes; that the money was never the money of the plaintiff corporation, but was in effect money that had been contributed by Stout and Price or Mrs. Price for their joint enterprise and for the benefit of the defendant; and that the payment of this .money had been settled for on the accounting between Price and Stout, facts which if true would, as I view it, have been a defense to the action to recover as for a loan of money, the learned referee, upon the objection of the defendant, excluded most material and important evidence, as he seemed to have thought that as long as the money had been actually in the bank account of the plaintiff, and a check of the plaintiff used to pay these taxes, all evidence as to-the source from which the money had been received by- the plaintiff was entirely immaterial and the defendant was liable. Stout had testified,
“ I have waited a few days before answering your letter of last Thursday, hoping to be able to give you some definite information regarding your money. The best that I can say now is that $20,000 of it is safe ; had it not been for the fact that we paid last year’s taxes, the remaining $40,000.00 would be reasonably secure. As it stands now, that is in jeopardy, but it is by no means lost tO US; * * *”
If the payment of these taxes had jeopardized Mrs. Price’s money, that payment could not have been made with the money of the plaintiff. Stout was then asked, “ You testified yesterday that you purchased Mr. Price’s stock in the St. James Company; is that correct ? ” to which he answered, “ Substantially so.” He was then asked when he purchased it, which was objected to, and the objection sustained. He further testified that in the latter part of February, 1901, Mr. Price and he had an accounting which involved the affairs of the St. James Company. Counsel for the defendant then stated : “ I propose to show that Mr. Price and Mr. Stout in their accounting of the affairs, involving all of the affairs of the St. James Company, and during that accounting Mr. Stout submitted to Mr. Price the accounts of the company’s affairs and the affairs of the company were closed up, and any assets or liabilities of that company as of that time — ” when the referee interposed, “I don’t think it is competent; ” to which the defendant excepted. He was
Mr. Pattison, who was the president of the defendant, was called and testified that he never heard of this loan j that Stout did not at any time call his attention to the fact of the loan; that he was at the office of the defendant during the time of this transaction ; that Stout had several times stated that there were no liabilities of the defendant company, and that the witness.was in Hew York on the ninth day of July and presided at a meeting of the directors on that day, and was in Hew York every week. Mr. Price was then called as a witness and was asked questions which tended to show that this money used to pay these taxes was money contributed by himself and his wife and Mr. Stout for that purpose, but his' testimony was all. objected to by the plaintiff and excluded by the referee. He was asked whether he knew who it was that paid the taxes on the St. James Building for the year 18.99, which was objected to and the objection sustained. He was also asked whether he had an accounting with Mr. Stout in the month of February or March, 1901, which was objected to and the objection sustained. He was asked whether he had a conversation with Mr. Stout in reference to the payment of the taxes at the time of their payment, and what Stout said before the payment, which was objected to and the objection sustained. He was then asked if the taxes for the year 1899 on the St. James Building were paid by the St. James
All the evidence offered by the defendant to prove the actual facts as to the ownership of the money that Stout deposited in the name of the plaintiff, and then as an officer of the plaintiff loaned to the defendant, he acting as an-officer of the defendant in making the loan, and that such money had been advanced by Price and Mrs. Price to Stout for the purpose of their joint undertaking and was with the consent of all three used to pay these taxes, was excluded.
If Stout, acting for himself and the others interested in the defendant corporation, had applied money which had been contributed by those interested in the corporation to be used for its benefit or for their joint adventure in relation to it, and had applied such money with the consent of those contributing it to relieve this defendant of the obligation to pay these taxes, and subsequently, on
I think the judgment should be reversed.
Hatch, J., concurred.
Judgment affirmed, with costs.