Baines v. Coos Bay, R. & E.R. & Nav. Co.

• Decision Date: 24 March 1902
• Citation: 68 P. 397,41 Or. 135
• Parties: BAINES v. COOS BAY, R. & E.R. & NAV. CO. et al. [1]
• Court: Oregon Supreme Court

68 P. 397

41 Or. 135

BAINES v. COOS BAY, R. & E.R. & NAV. CO. et al. ^[1]

Supreme Court of Oregon

March 24, 1902

Appeal from circuit court, Coos county; J.W. Hamilton, Judge.

Action by W.E. Baines against the Coos Bay, Roseburg & Eastern Railroad & Navigation Company and another. From a judgment in favor of the defendants, the plaintiff appeals. Reversed.

This is an action on two promissory notes, for $4,000 each, dated April 18, 1894, alleged to have been made, executed, and delivered for a valuable consideration to the plaintiff by the defendant corporation. The complaint is in the usual form, setting out the notes in haec verba, from which it appears they were each signed, "The Coos Bay, Roseburg &amp Eastern Railroad & Navigation Company, by R.A. Graham General Manager." The answer denies, upon information and belief, the execution of the notes by the corporation and sets up, among other defenses, the following: "(1) That at the time the two promissory notes in complaint set forth were made, executed, and delivered, as in complaint alleged, the defendant corporation was not indebted to the plaintiff in any amount whatever, but that at said time the defendant R.A. Graham was indebted to the plaintiff in the amount stated in said two notes, and the said two notes in complaint mentioned were made, executed, and delivered in pursuance of a fraudulent conspiracy made and entered into by and between the plaintiff and the defendant R.A. Graham, in order that it might be made to appear that the amount of said two notes was a debt of the defendant corporation instead of a debt of the defendant R.A. Graham; that the plaintiff was duly elected, qualified, and acting director of the defendant corporation from the 19th day of August, 1890, the date when the defendant corporation was organized, until the 29th day of December, 1893, and well knew that the defendant corporation was not indebted to him in any amount whatever and that the defendant R.A. Graham was indebted to him the amount of said two notes in complaint set forth, and in order to enable the defendant R.A. Graham to cheat and defraud the defendant corporation. (2) That from the 19th day of August, 1890, until about the 1st day of January, 1900, the defendant R.A. Graham was director and general manager of the defendant corporation, and while so acting as director and general manager of the defendant corporation the defendant R.A. Graham paid to the plaintiff upon said two notes in complaint set forth the amount of money in complaint alleged to have been made, and paid upon said two notes other sums of money not mentioned in complaint, but how much this defendant corporation does not know and is unable to state, but whether or not said sums of money so paid by the defendant R.A. Graham upon said two notes was paid out of his own funds or paid with money belonging to this defendant corporation this defendant is unable to state. (3) The defendant corporation further alleges that, after the making of the two promissory notes in complaint set forth, the defendant R.A. Graham sold, assigned, and transferred to the plaintiff real and personal property as payments upon said two notes in complaint set forth, the description of which this defendant corporation does not know and is unable to give; but the defendant corporation states and alleges that the defendant R.A. Graham has fully paid, satisfied, and discharged the said two promissory notes in complaint set forth, by the payments in complaint alleged to have been made, and by other cash payments, and by real and personal property sold and transferred to plaintiff as aforesaid, and the said two notes have been fully paid, and there is nothing due the plaintiff thereon, and that this suit is instituted and prosecuted in aid of the fraudulent conspiracy above mentioned, made and entered into between the plaintiff and the defendant R.A. Graham, with the view to try and collect as much money as possible from this defendant upon said two notes for the benefit of the defendant R.A. Graham." A motion to strike out this separate defense, on the ground that it is inconsistent with the denials, together with a demurrer thereto, having been overruled, the plaintiff filed a reply denying the new matter in the answer, and upon the issues thus made a trial was had before a jury. At the close of the testimony, the jury, by direction of the court, returned a verdict in favor of the defendants, and from the judgment rendered thereon the plaintiff appeals.

J.W. Bennett and T.S. Minot, for appellant.

Geo. H. Williams and J.C. Flanders, for respondents.

BEAN C.J. (after stating the facts).

There were practically only two questions argued in this court: First, it was contended that Graham, as the general manager of the defendant...