Barker v. Montana Gold, Silver, Platinum & Tellurium Min. Co.

• Decision Date: 21 March 1907
• Citation: Barker v. Montana Gold, Silver, Platinum & Tellurium Min. Co., 89 P. 66, 35 Mont. 351 (Mont. 1907)
• Parties: BARKER v. MONTANA GOLD, SILVER, PLATINUM & TELLURIUM MINING CO. et al.
• Court: Montana Supreme Court

89 P. 66

35 Mont. 351

BARKER v. MONTANA GOLD, SILVER, PLATINUM & TELLURIUM MINING CO. et al.

Supreme Court of Montana

March 21, 1907

Appeal from District Court, Cascade County; J. B. Leslie, Judge.

Action by Violet Barker against the Montana Gold, Silver, Platinum & Tellurium Mining Company, T. C. Power, A. C. Gormley, and others. Judgment for plaintiff. From an order denying their motion for a new trial, the company and defendants Power and Gormley appeal. Remanded, with directions to modify, and new trial granted nisi.

A. C Gormley, for appellants.

Sam Stephenson, for respondent.

BRANTLY C.J.

This action was brought by plaintiff, the respondent, to obtain a judgment compelling the defendant company, by its president and secretary, T. C. Power and A. C. Gormley, to issue to her a certificate for 133,317 shares of its capital stock. The complaint was filed on April 26, 1905. The plaintiff alleges in substance, that she purchased this number of shares from one T. E. Collins on August 22, 1903; that at that time the stock stood in the name of one J. T. Armington and one J. C E. Barker, being included in certificate No. 571, theretofore issued to them for 300,051 shares; that, though issued to them, the said Collins in fact owned 133,317 of the shares represented by the certificate, and they held these shares in trust for him; that, prior to the bringing of the action, she surrendered the certificate to said Power and Gormley, properly indorsed, and demanded the transfer to be made to her, but that her demand was refused. Armington and Barker were made parties defendant for the purpose of having them set forth any interest they might have in the stock. They suffered default by failing to appear. The defendant company and its president and secretary, in their answer, admit the demand of plaintiff and their refusal to make the transfer and issue the shares, but deny that Collins was then, or ever had been, the owner of 133,317 shares, or any of them. They also allege the following special defenses: (1) That the stock in controversy was a part of a purchase made by Armington and Barker from J. T. and E. J. Anderson, who had been at one time the owners thereof; that Armington and Barker were at the time directors of the company and, respectively, its secretary and president; that the consideration for the stock was paid out of the moneys in the treasury of the company and belonging to it, and that by reason of this fact the stock became the property of the company, and was acquired and held by Armington and Barker as trustees for its benefit: (2) that in no event did plaintiff acquire the title to the stock by her purchase from Collins, for the reason that it at no time stood in the name of Collins on the books of the company, as is required by its by-laws; (3) that one David L. S. Barker, and not the plaintiff, is the real party in interest; (4) that plaintiff's claim is barred by her laches; and (5) that plaintiff is estopped by her conduct from asserting her claim. Upon these defenses there was issue by reply. The court made findings of fact and conclusions of law in favor of the plaintiff, and directed judgment to be entered accordingly. The cause is before this court on appeal by the company and Power and Gormley from an order denying them a new trial.

From the evidence introduced by the parties, the court found, substantially, as follows: That on May 9, 1896, the defendant company, by its duly-authorized officers, and under the seal of the corporation, issued to J. T. Armington and J. C. E. Barker its certificate, bearing No. 571, for 300,051 shares of the capital stock of the corporation, which by its own provisions was transferable upon the books of the company upon surrender thereof, properly indorsed; that, while such certificate on its face purported to be owned by the defendants J. C. E. Barker and J. T. Armington, as a matter of fact 133,317 shares represented by it were owned at all times from its issuance and delivery up to August 22, 1903, by T. E. Collins, subject, at the date last mentioned, to a lien of some nature, held by Lavina A. Collins, the wife of T. E. Collins, and was held in trust by Barker and Armington for Collins, with the understanding that it should be transferred to him on demand; that on August 22, 1903, said Collins represented to the plaintiff that he was the owner of the 133,317 shares represented by the certificate, that he was entitled to sell the same and have it transferred on the books of the company, and that thereupon the plaintiff, for a valuable consideration, purchased said 133,317 shares from Collins, as well as the interest of Lavina A. Collins, and that thereupon Barker, Armington, and Collins indorsed the certificate by indorsement showing the interest that she had purchased from Collins, so that she might have the shares transferred on the books of the company; that, after this indorsement was made, the certificate was delivered to her with the full consent of Collins and his wife, and that she has ever since then been, and now is, entitled to have the same transferred on the books of the corporation and to have issued to her a certificate for said 133,317 shares; that, prior to the institution of this action, the plaintiff surrendered the certificate to the corporation and demanded of the officers of the corporation, said Power and Gormley, that they cancel the same and reissue to her a certificate for 133,317 shares, but that they wrongfully refused, and still wrongfully refuse, to cancel the certificate and reissue said number of shares to her; that the stock is reasonably worth five cents per share; that Barker and Armington, at all times after the issuance and delivery of said certificate to them, recognized the ownership of T. E. Collins therein, and held the 133,317 shares as his trustee; that there is no evidence that J. C. E. Barker, J. T. Armington, and T. E. Collins, or any of them, used the moneys belonging to the defendant company for the purpose of purchasing said stock, or any part thereof, or for the purpose of paying the purchase price, or any part thereof, or that they used any money belonging to the company for that purpose, and that they purchased the stock with their own money; that the plaintiff, Violet Barker, purchased said 133,317 shares of stock from Collins, and paid therefor a valuable consideration, and that she did this without notice of any right, claim, title, or interest of the defendant company to such shares or any of them; and that the plaintiff has not been guilty of laches in the prosecution of her suit, is not estopped by any act on her part from the prosecution thereof, and that her action is not barred by the statute of limitations.

Upon the request of the defendants, the court made further supplemental findings, substantially as follows: That the certificate of stock No. 571 for 300,051 shares, of which plaintiff claims title to 133,317 shares, after issuance to Armington and Barker, was held by the Anderson brothers as collateral security for the balance of the unpaid purchase price thereof, until final payment some years after the sale; that, at the time of the purchase of the stock, Barker and Armington were, respectively, the president and secretary of the defendant mining company, and continued to hold these offices until the stock was fully paid for; that, at the time of the purchase of said stock by Barker, Armington, and Collins from the Anderson brothers, it was understood and agreed that the same should be paid for out of moneys which the purchasers might derive from the operation of the company's mines.

1. Contention is made that the evidence is insufficient to justify the findings, and particularly the finding that the stock in controversy was purchased by Armington, Barker, and Collins with their own moneys and not with moneys belonging to the company. The transaction by which the stock was acquired took place on May 9, 1896. At that time Barker and Collins were directors of the company; Barker being its president, and E. J. Anderson its secretary. E. J. Anderson and his brother, J. T. Anderson, owned 400,051 shares, and also an undivided one-sixth interest in the Ripple, Raven and Avalanche lode claims, situate in Cascade county. The Anderson brothers on that date sold to Armington and Barker all their shares of stock and their interest in the claims mentioned, for a consideration of $20,000, to be paid as follows: $6,000 in cash, $5,000 on or before July 3d; $5,000 on or before September 3d; and $4,000 on or before November 3, 1896. For the deferred payments notes were executed, to bear interest at 12 per cent. per annum after maturity. Of the stock 100,000 shares were transferred on the books and delivered immediately to Armington and Barker. The remaining 300,051 shares were, under a written agreement entered into on that day, retained by the Anderson brothers as security for the payment of the notes, as was also the title to the interest in the mining claims mentioned, with a stipulation as to the latter, however, that, upon payment of the note due on July 3d, a conveyance of the claims should be made. Collins was to have a one-third interest in the purchase, and, after it was made, he signed the notes, though he did not sign the agreement. It was understood and agreed by Armington, Barker, and Collins that the notes should all be paid out of moneys derived from ores taken from the property belonging to the company; they at that time owning a one-half interest in a lease of some claims belonging to it, having purchased this interest from others, presumably strangers to the company, who had therefore leased from...