Anglo-Colombian Development Co. v. Stapleton

• Decision Date: 02 May 1927
• Docket Number: No. 4501.,4501.
• Citation: 57 App. DC 209,19 F.2d 683
• Parties: ANGLO-COLOMBIAN DEVELOPMENT CO., Limited, v. STAPLETON.
• Court: U.S. Court of Appeals — District of Columbia Circuit

57 App. DC 209, 19 F.2d 683 (1927)

ANGLO-COLOMBIAN DEVELOPMENT CO., Limited, v. STAPLETON.

No. 4501.

Court of Appeals of District of Columbia.

Submitted March 9, 1927.

Decided May 2, 1927.

W. C. Sullivan, of Washington, D. C., for appellant.

G. E. Hamilton, J. J. Hamilton, G. E. Hamilton, Jr., Edmund Brady, and H. R. Gower, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, Associate Justice, and GRAHAM, Presiding Judge of the United States Court of Customs Appeals.

MARTIN, Chief Justice.

An appeal from a decree dismissing a bill for an accounting brought by appellant as plaintiff below. The following are the controlling facts as disclosed by the record:

The Anglo-Colombian Development Company, Limited, an English corporation, a subsidiary of the Consolidated Goldfields of South Africa, Limited, was formed for the purpose of acquiring land, options over mining rights and mining concessions, in Colombia, South America, and for operating the same especially for gold and platinum, and on March 17, 1911, the company entered into a written agreement with Daniel Casey Stapleton, since deceased, whereby Stapleton was appointed agent of the company in Colombia, with the stipulation that he should devote so much of his time and attention to the affairs of the company as the company's business should require. The employment was to begin on March 18, 1911, and was to continue until determined by either party by giving not less than six months' notice to the other party.

Immediately after the execution of the contract, Stapleton went to Colombia, and entered upon his duties as the company's agent, remaining there during the course of his employment, except for trips from time to time to England, the United States, and Panama. His duties as agent required the supervision of the plaintiff's operations at various points in Colombia, including remote regions in the interior, especially in obtaining land, stock in other companies, options on mineral rights, concessions from the government of Colombia, and the preservation and protection of all such properties and rights. The Colombian government at various times had granted to other parties rights to some of the properties which had been granted to the company, and it was one of Stapleton's duties to try to protect and enforce the company's rights under such circumstances.

The company had its headquarters in London, an office and representative in New York, and an office in Colombia, as well as a store and several camps there. Its active field operations were conducted in Colombia; other persons than Stapleton being in direct charge of the engineering operations, there being also an assistant manager, with a bookkeeper and other assistants or clerks, in the Colombian office, and the store and camps of the company. Stapleton's activities were such that he was seldom at headquarters.

The company's business in Colombia was financed, in part at least, through an account conducted in its name with a New York bank, and the company gave a power of attorney to Stapleton, empowering him to draw upon this account for any money for the time being standing to its credit there, and to hold and use the same for the purposes of the company. In the course of the business Stapleton issued checks upon the New York bank account in payment of labor, supplies, etc., and also at times for cash purporting to be for use by him in the company's business. These checks were returned, when paid, to the company's bookkeeper in Colombia, and the amounts were then charged by the bookkeeper to the proper accounts. In respect to the checks issued by Stapleton for the cash to be used directly by him, the bookkeeper would often be unable to make appropriate entries until instructed by Stapleton as to the uses made of the funds thus drawn. From the beginning of his employment Stapleton was remiss in making such reports, and the company repeatedly complained to him because of his failure to regularly report the uses made of such withdrawals. Until such withdrawals were explained to the bookkeeper they were charged to Stapleton's account, or to a suspense account pending explanations; these accounts continually showed large debit balances.

In the year 1916, the company passed from the control of the Goldfields Company to the South American Gold & Platinum Company, although the company's corporate existence was continued as before. The transfer was made as of November 30th of that year, and at that time the aforesaid account charged to Stapleton showed an overdraft of more than $40,000, and the suspense account about $20,000. No more checks were charged to Stapleton's account after the transfer, and no further instructions or explanations were given by him as to the uses made of the funds already charged. The new company demanded such explanations, but Stapleton, who had returned to this country, stated that he was unable to report upon the items without seeing the canceled checks, which were then in the office in Colombia. Soon afterwards informal notice was given to Stapleton of the ending of his employment as agent, and on March 26, 1917, formal written notice to that effect was served upon him....