Bankers Trust Co. v. Hall
| Decision Date | 30 June 1947 |
| Docket Number | 15338. |
| Citation | 116 Colo. 566,183 P.2d 986 |
| Parties | BANKERS TRUST CO. v. HALL. |
| Court | Colorado Supreme Court |
Rehearing Denied July 28, 1947.
Error to District Court, City and County of Denver; Joseph J Walsh, Judge.
Action by S.D. Hall, individually and as executor of the estate of J. N. Hall, deceased, against the Bankers Trust Company for money had and received on rescission of a contract to purchase mortgage notes from defendant. Judgment for plaintiff, and defendant brings error.
Reversed and remanded for a new trial.
William V. Hodges, Harold D. Roberts, and Robert E More, all of Denver, for plaintiff in error.
Fred S. Caldwell, Frederick Sass, and Benjamin Griffith, all of Denver, for defendants in error.
This is an action at law for money had and received upon rescission as distinguished from a suit in equity for rescission. The parties are here in reverse order of their position in the trial court, and we will hereinafter refer to them as they appeared therein.
The case was first Before us in Hall v. Bankers Trust Company, 101 Colo. 449, 74 P.2d 720. The trial court had previously dismissed the original complaint, after demurrer had been filed, on the ground that limitations and laches appeared on the face thereof. We held that the amended complaint set forth substantially that the plaintiff did not discover the fraud until 1934 (although the transaction of which complaint is made occurred in 1921), and that it was at the time of such discovery, or the rescission, that the moneys could for the first time be said to be moneys received for the use of plaintiff, and that the defense of laches could not be raised by demurrer but must be affirmatively plead.
In the subsequent trial on the merits, a verdict was returned for the plaintiff and, upon reviewing the proceedings therein (Bankers Trust Co. v. International Trust Co., 108 Colo. 15, 113 P.2d 656), we reversed the judgment in favor of plaintiff and remanded the cause for further trial because of the admission of improper evidence offered on behalf of plaintiff. On the subsequent trial the jury returned a verdict for plaintiff in the sum of $26,825, and to review the judgment entered therein the case is Before us for the third time.
The salient facts giving rise to the litigation are as follows: In January, 1921, the Bankers Trust Company, a Colorado corporation, published a prospectus concerning a $75,000 note issue executed by the Park Range Live Stock Company, secured by first mortgage on two large cattle ranches--Three Forks Ranch in Routt county, Colorado, and Willow Creek Ranch in Moffat county, Colorado. This note issue was guaranteed personally by A. R. Reader and E. W. Reader, president and secretary respectively of the Park Range Live Stock Company. Notes of various denominations, totalling $75,000, were sold to various investors by the Bankers Trust Company--the loan being thus known as a split loan, not being sold as a unit to one investor. In 1923 the noteholders of this loan, together with other customers of the Bankers Trust Company, were notified by that company that it was winding up its affairs and going out of business. In January 1924 the noteholders were advised that the Park Range Live Stock Company had defaulted in its interest payment, and in February 1924 they were notified that the Readers' bank had failed and that taxes for the year 1922 and subsequent years on the ranches had not been paid. In January 1924 the noteholders also were told that the July 1923 interest had been advanced by the Bankers Trust Company, and they were asked to decide 'whether further time should be devoted toward a settlement along the lines indicated, or foreclosure should be started at once.' A majority of the noteholders requested that the mortgage be foreclosed and that the Bankers Trust Company act as trustee for the noteholders. Rose, one of the noteholders interested in this action, and the one who was instrumental in interesting other noteholders involved in bringing this action, was advised of the situation in July 1924.
No other party but the trustee having bid for the property at the foreclosure sale, sheriff's deed issued to the Bankers Trust Company a year later conveying to it the two ranches. In 1926 these ranches were sold by the Bankers Trust Company to Mr. Frank B. Toole for $100,000. Mr. Toole made a number of payments under his contract to purchase, and then, in 1930, defaulted. Payment under the Toole contract were turned over to Dr. Hall and such of his assignors as had advanced money for foreclosure expenses. Rose subsequently endeavored to find a purchaser for the property, but was unable to do so, and in October 1933 he and the other noteholders were advised that in the 'last five years our agricultural sections have been practically impossible to operate ranches or farms without financial loss.'
This action was commenced by Dr. J. N. Hall, as the owner of a $2,000 note and as assignee of $17,000 additional notes. The complaint was filed February 11, 1935. The course of the litigation from that point has already been outlined. To this must be added the fact that the twenty-year charter of the Bankers Trust Company expired in 1940. The jury returned its verdict on November 8, 1941. The judgment of the trial court, herein under review, became final May 2, 1942. March 8, 1943, a transcript of record and praecipe for writ of error were filed; and March 24, 1943, a motion to quash the duly-issued writ was filed. May 13, 1943, we granted the motion to quash. Subsequently we granted a petition for rehearing and, after briefs had been filed, we vacated the order dismissing the writ of error with leave to re-present at the time of final arguments.
The argument of counsel for plaintiff follows the theory that the charter of the Bankers Trust Company having expired in 1940, the corporation is no longer in existence; that the suing out of a writ of error in this court, directed to the trial court, is in the nature of a new proceeding; that a new suit cannot be instituted by a nonexistent corporation; that section 66, chapter 41, '35 C.S.A., contains a provision vesting title to property of a defunct corporation in the directors. We believe that this argument fails to give proper recognition to section 68 of said chapter which provides that 'The dissolution * * * of corporations * * * shall not take away or impair any remedy given against such corporation, its stockholders, or officers, for any liability incurred previous to its dissolution.' Rule 111(a), R.C.P. Colo., provides, inter alia, a writ of error shall lie from the supreme court to a final judgment of any district, county or juvenile court. Counsel for plaintiff elected to proceed against the corporation, rather than against the surviving directors, and obtained judgment against it after its charter had expired. We believe plaintiff is now estopped from objecting to the corporation appearing here by writ of error. Furthermore, to deny defendant a right of review in this court from a judgment obtained in a trial court would, in our opinion, violate the provisions of both state and federal Constitutions relating to equal protection of the laws and due process. In Singer & Talcott Stone Co. v. Hutchinson et al., 176 Ill. 48, 51 N.E. 622, the Supreme Court of Illinois, under a statute identical with ours, ruled that a dissolved corporation against whom a judgment had been obtained might sue out a writ of error to review a judgment rendered against it, even though that was technically the institution of a new suit, and that no repeal of a code provision--similar to ours--was intended. We have cited the Singer case, supra, Lucifer Coal Co. v. Buster, 64 Colo. 179, 171 P. 61, and believe it should be followed in the instant case. We accordingly adhere to our former ruling, and permanently vacate the order dismissing the writ of error.
Subsequently counsel for plaintiff filed a second motion to dismiss on the ground that Hall had been served in his individual, and not in his representative, capacity. The Bankers Trust Company thereupon, showing that through inadvertence the original summons had not disclosed that Hall was being served as executor, moved that an alias summons be issued, and we granted that motion.
A third motion to dismiss the writ of error, based upon the ground that the writ of error was not issued by this court within the statutory period, is now Before us. In Catlin, Adm'r, v. Vandegrift, 58 Colo. 289, 144 P. 894, we approved the rule, that until the motion for a new trial is determined a judgment is not final. That case has never been overruled and was followed in numerous cases up to and including that of Neighbors of Woodcraft v. Hildebrandt, 96 Colo. 552, 45 P.2d 899, where we held that the time of the adverse ruling on the losing party's motion for a new trial marks the date when the judgment becames final for the prosecution of a writ of error. We do not believe that our new rules of procedure have disturbed this ruling, and accordingly hold that in this case the writ of error was prosecuted in due time.
We now come to the specifications of error.
The second specification of points is: 'The court erred in refusing to give to the jury defendant's tendered instructions Nos. 16 and 22.' These two tendered instructions relate to fraud. The shorter, No. 22, reads as follows: ...
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