Alaska & Chicago Commercial Co. v. Solner

• Decision Date: 06 June 1903
• Docket Number: 922.
• Citation: 123 F. 855
• Parties: ALASKA & CHICAGO COMMERCIAL CO. v. SOLNER.
• Court: U.S. Court of Appeals — Ninth Circuit

123 F. 855

ALASKA & CHICAGO COMMERCIAL CO. v. SOLNER.

No. 922.

United States Court of Appeals, Ninth Circuit.

June 6, 1903

Charles F. Hanlon and O. D. Cochrane, for appellant.

Bruner Bros. and Elwood Bruner, for appellee.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY District Judge.

This is a suit in equity to set aside and cancel certain conveyances of real estate situate in Nome, Alaska, which were executed by William J. Bauerle, and delivered to appellee, and to recover damages for $15,000. Did the court err in dismissing the bill and rendering judgment for the defendant? What are the facts?

Appellant is a corporation organized and existing under and by virtue of the laws of Illinois, and engaged in the merchandise business at Nome, Alaska. It owned two lots, with buildings thereon, in which it had a stock of merchandise and groceries. The value of the real estate is alleged to be $10,000, and of the stock of merchandise $15,000. In the answer it is alleged that the real estate is of the value of only $4,000, and the merchandise of the value of $4,000, and no more. The question as to the value of the property need not be discussed. It is proper, however, to say that there was as much testimony offered upon this point to sustain the averments in the answer as there was to sustain the averments in the complaint.

From the record it appears that on March 17, 1901, a meeting of the board of directors of appellant was held, and the following resolution adopted:

'Whereas William J. Bauerle, our present secretary and treasurer, is about to go to Nome for the purpose of investigating and regulating the affairs of his company: Therefore it is resolved, that full power be, and the same is hereby vested in said William J. Bauerle to revoke any and all powers of attorney that may have heretofore been given by this company, and to appoint in the name of this company such attorney in fact for the purpose of managing the affairs of this company and exercising such other powers as are mentioned and conferred in a certain power of attorney heretofore granted to Paul Heinze, and also in a certain power of attorney heretofore granted to Herman Heinze, as in his judgment he may deem best. * * * Said William J. Bauerle is also authorized, in the name of this company, to commence suits or actions at law or in equity or otherwise, as to him may seem best. * * * He is also authorized to remove all officers of this company, and to appoint new officers, and in general to do everything which may be proper or needful in the successful management of said company's affairs.'

Bauerle arrived at Nome about the 1st of August, 1901, and immediately took charge and management of appellant's business. The affairs of the corporation were not found to be in a prosperous condition. It owed the Bank of Cape Nome about $2,300 (of which bank appellee was the cashier and general manager). Bauerle was dissatisfied with the situation, and decided to close out the business of the corporation. Herman Heinze, who had been the agent of the corporation, and was its vice president, made no objection to the sale, but manifested a desire to purchase the property for himself. He informed Solner that Bauerle had offered him the whole property for $5,000, and applied to Solner for a loan of that amount of money to enable him to buy the property. The loan was declined. Bauerle then called upon Solner, and offered him the property for $5,000. The property was examined and purchased by Solner for $5,000. Bauerle received the money, and then paid the debt due the bank. On August 17th Bauerle executed deeds for the real estate and a bill of sale for the personal property, and in the presence of Heinze put Solner in possession thereof. The title to one of the lots stood in the name of appellant, and the title to the other lot was in the name of William J. Bauerle, but, as a matter of fact, known to Solner, it was simply held in trust for the corporation. The deed to one lot was executed and signed, 'The Alaska and Chicago Commercial Co., (Seal) per William J. Bauerle, (Seal) Sec., Treas. & Mgr.' The other deed was signed by William J. Bauerle. Both deeds were witnessed by H. A. Day and Herman Heinze. On the day the deeds were executed, an agreement was drawn up between William J. Bauerle, the party of the first part, and N. B. Solner, the party of the second part, as follows:

'That whereas, the said party of the first part has this day made, executed and delivered to said party of the second part, certain conveyances of real estate and personal property, belonging to the Alaska and Chicago Commercial Company, a corporation of the State of Illinois, which conveyances are somewhat questionable for want of sufficient authority on the part of said William J. Bauerle to execute the same for and on behalf of said corporation: Said party of the first part hereby agrees, in consideration of the acceptance of said conveyances by said party of the second part in the transaction this day closed, to attend to the proper execution and delivery of deeds of conveyances by said company in due and proper form to the real estate, on or before October 1st, 1901. * * *

'Witnesses:

William J. Bauerle. (Seal.)

'Herman Heinze.

'H. A. Day.'

The testimony shows that all of the transactions between William J. Bauerle and appellee were conducted openly, under a knowledge of all the facts. The good faith of the transactions as between them is not questioned upon this appeal, although alleged in the complaint to be fraudulent as against the corporation. From the evidence there is no 'room or reason' to believe that any fraud was committed. The argument of appellant is directed solely to the point of 'want of authority' on behalf of William J. Bauerle to execute the deeds and make the sale of the personal property. A few days after the transfer of the property Solner sold the personal property to one Shirk for the sum of $4,000. Mr. Heinze asked Solner to deed the property to him under the promise that he would pay the $5,000 within a year. He never made any offer on behalf of the corporation, nor did he, on behalf of the corporation, make any demand for the return of the property. On the 27th day of August, 1901, William J. Bauerle, by virtue of the power given him in the power of attorney from appellant, bearing date May 17, 1901, substituted and appointed Herman Heinze 'to do, perform, and execute every act and thing which I could do in, by, and under the same, as hereinbefore enumerated, as well for me as being the true and lawful attorney and substitute of the said Alaska and Chicago Commercial Company, hereby ratifying and confirming all that the said attorney and substitute hereby made and appointed shall lawfully do or cause to be done in the premises by virtue hereof and of the said letter or power of attorney,' and a few days thereafter departed from Nome. On September 5, 1901, Heinze commenced this suit on behalf of appellant. The whole case, so far as appellant is concerned, rests upon the testimony of Herman Heinze. The record shows that appellee sought to obtain the testimony of the officers of appellant, especially of William J. Bauerle, the secretary, treasurer, and managing agent thereof, and of Michael Bauerle, the president and one of the principal stockholders thereof; but without avail. Mr. Heinze, upon his examination in chief, was asked if he had ever received any communication from the board of directors of appellant since the commencement of the suit, and replied that he had not. The tender only applied to the real estate, as the stock of merchandise had been disposed of by Solner prior to the commencement of the suit.

Touching the matter of tender, we think the record shows, by a preponderance of evidence at least, that appellant never made any tender of the amount paid by Solner before the commencement of the suit, or at any time thereafter. On his examination on behalf of appellant Mr. Heinze, in reply to questions answered as follows:

'Q. Mr. Heinze, did you at any time prior to the commencement of this action offer to repay to Mr. Solner the amount of money which he had paid to Mr. Bauerle in this transaction? A. Yes, sir. * * * On the 19th of August, 1901. Q. Immediately after the sale? * * * A. The sale was made Saturday, and I offered this on Monday. Q. State what occurred at that time. A. Well, Mr. Solner came in-- in the office of the store building-- and I made out a line on a scrap of paper, and I said, under the circumstances the sale was made, I offered to pay him the $5,000 back. Q. What did he say? A. He turned right short off, and said, 'No, I am going to keep it now."

On his cross-examination, in reply to the question, 'How did you make the offer?' he said:

'I called Mr. Solner in the office behind the partition in the store. * * * It told on that paper that I am able to raise $5,000 and pay him the money back.'

This testimony falls far short of establishing the fact that the so-called tender was made on behalf of the appellant. It implies an offer on behalf of Heinze. He does not pretend that he got the money-- $5,000-- from the corporation. That it was an offer made on his own behalf is testified to by Mr. Solner:

'Q. Has any portion of the (money) ever been offered to be returned to you by an agent of this company? A. No, sir. Q. Has any (one) offered to return you any portion of that money? A. Mr. Heinze, I think, asked me if I would deed back the property to him if he would pay $5,000 within a certain time-- I think it was a year; I am not positive as to that. I do not remember what he said. At any rate, he asked me if I would deed the property to him; * * * if I would turn the property over

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