Biering v. Ringling

• Decision Date: 03 November 1925
• Docket Number: No. 5685.,5685.
• Citation: 74 Mont. 176
• Parties: BIERING et al. v. RINGLING.
• Court: Montana Supreme Court

74 Mont. 176

BIERING et al.

v.RINGLING.

No. 5685.

Supreme Court of Montana.

Sept. 28, 1925.

On Motion for Rehearing Nov. 3, 1925.

On Motion for Rehearing.

Appeal from District Court, Gallatin County; B. B. Law, Judge.

Action by Hans Biering and another against Richard T. Ringling. Judgment for plaintiffs, and defendant appeals. Affirmed.

Herbert D. Bath, of Bozeman, James F. O'Connor, of Livingston, and D. M. Kelly, of Butte, for appellant.

C. E. Carlson and W. S. Hartman, both of Bozeman, for respondents.

STARK, J.

This is an action in tort, wherein the plaintiffs seek to recover from the defendant damages alleged to have been sustained by them as the result of a conspiracy entered into between the defendant and another for the purpose of depriving them of their property and gaining possession and control thereof for himself.

In the complaint it is alleged that in the year 1921 the Taylors Fork Cattle Company, a Montana corporation, which will be hereafter referred to as the Taylors Fork Company, was the owner and in possession of a large amount of real estate, leases of real estate, and grazing permits for the running of sheep on the Gallatin and Madison National Forests, all having a capacity for the pasturage and grazing of 27,000 head of sheep, and in addition thereto owned a large amount of personal property, but was not possessed of sufficient live stock to stock the same so as to produce revenue therefrom, all of which properties had a value, above indebtedness on the same, of more than $500,000.

The capital stock of this corporation consisted of 500 shares, 496 of which were owned by plaintiffs, who for more than 20 years had been partners in the live stock business, and the other four shares were held by persons other than plaintiffs for the purpose of making up the board of directors. This corporation was used by plaintiffs merely as a convenient agency for carrying on their partnership business, and all of the property standing in the name of the corporation was in truth and fact the property of plaintiffs as partners.

It is alleged that the defendant, knowing the condition of plaintiffs' ownership of the capital stock of said corporation, their ownership of said properties, and the value thereof, entered into a conspiracy with one Lester P. Work, with whom he had been associated in business for many years as partner or otherwise, to defraud the plaintiffs of their property and gain possession and control thereof for himself.

In brief, the scheme of the defendant and his coconspirator, Work, as stated in the complaint, was to induce the plaintiffs to join with him in the organization of a corporation to engage in the ranching and live stock business, with a capital stock of $500,000, upon the understanding and agreement that plaintiffs would cause the Taylors Fork Company to transfer to it all of its properties, of which plaintiffs as partners were in fact the owners, in consideration of one-half its capital stock, and that the defendant, for the remaining half of said capital stock, should turn over to the corporation 12,000 head of good, young, merchantable ewes, and then finance the corporation to the extent that it would be able to stock its properties to their full capacity of 27,000 head of sheep, and, after having effected the organization of such corporation and having secured the transfer of the plaintiffs' properties to it, to finance the corporation in such a way as to freeze the plaintiffs out and secure their stock.

The complaint says that this new corporation was organized under the name of the Southern Montana Live Stock Company (which will be hereafter referred to as the Southern Montana Company); that, relying upon the defendant's promises and agreements, and believing that he would keep and perform the same, plaintiffs caused their properties to be transferred and conveyed to it by the Taylors Fork Company, and received therefor one-half of its capital stock, less 7 shares, which were issued to other persons for organization purposes; that defendant transferred a band of between 11,000 and 12,000 sheep to it, and received capital stock of the Southern Montana Company equal to that received by the plaintiffs.

It is then alleged that all of the agreements and promises made by the defendant were made as inducements to the plaintiffs to part with their property, and were so made by him fraudulently, deceitfully, and without any intent on his part to keep and perform the same, and as a part of the general scheme arranged between him and Work to defraud the plaintiffs of their property. It is said that the plaintiffs wholly failed to keep his agreement to finance the corporation to the extent of the capacity of its properties for running 27,000 head of sheep, and many acts of fraud, mismanagement, oppression, and deceit on the part of the defendant and his coconspirator are then set forth. It is claimed that by reason of them, and without fault on the part of plaintiffs, after about two years' operation of the corporation, its stock had become valueless; all that originally was owned by plaintiffs had been acquired by the defendant without consideration to them, and thereby the defendant and his coconspirator had accomplished their purpose.

The formal allegations of the complaint were admitted by the defendant's answer, but issue was joined upon all the allegations of conspiracy and fraud.

The cause was tried to a jury. At the close of the plaintiffs' testimony, defendant made a motion for a directed verdict in his favor, which was denied, and he thereupon rested his case without the introduction of any evidence. The jury returned a verdict in favor of plaintiffs, upon which a judgment was entered. Defendant moved for a new trial, which was denied, and he has appealed from the judgment.

In the beginning we are confronted with a contention on the part of respondents that the bill of exceptions embraced in the record cannot properly be considered by the court on account of irregularities and defects in its preparation and settlement. This bill is a proper subject of adverse criticism. As it appears in the transcript on appeal, it takes up nearly 1,300 printed pages, many hundreds of which could readily have been eliminated by any proper effort at abbreviation, and the task of reviewing it thereby greatly lightened; but we cannot disregard the bill on this account.

An inspection of the record discloses that the judgment was entered on July 14, 1924, and motion for new trial made in due time, which was denied on September 5, 1924; that on August 6th an order was made by the court granting defendant 60 days in addition to the statutory time in which to prepare and serve his bill of exceptions on appeal to the Supreme Court. Under the statute, the defendant was entitled to 15 days after September 5th in which to prepare and serve his proposed bill of exceptions, and the 60 days additional granted by the court on August 6th carried this time beyond November 8th, the date upon which the proposed bill was actually served and delivered to the clerk for the judge. Under these conditions we are obliged to hold that the objections to the consideration of the bill of exceptions must be overruled.

Counsel for defendant have made twelve specifications of error in their brief, the first three of which raise but two questions for consideration, namely: (1) Whether the complaint states facts sufficient to constitute a cause of action; and (2) whether there was sufficient evidence to justify the court in submitting the case to the jury.

The remaining specifications of error, 4 to 12, inclusive, relate to instructions given by the court. Since these specifications wholly ignore the requirements of subdivision (b), § 3, of rule 10 of this court, and counsel for defendant made no effort to correct the defect after their attention was called to it in plaintiffs' brief, they will not be considered. Brockway v. Blair, 53 Mont. 531, 165 P. 455;Cornner v. Hamilton, 62 Mont. 239, 204 P. 489.

In support of their contention that the complaint does not state facts sufficient to constitute a cause of action in favor of the plaintiffs, defendant in the first place presents the argument that it was contrary to public policy for the plaintiffs to carry on their partnership business in the name of the Taylors Fork Company. This contention need not be considered. The method in which the Taylors Fork Company carried on its business prior to the time of the transactions between the plaintiffs and the defendant is not the subject of inquiry here.

The complaint alleges that the plaintiffs, as partners, entered into an agreement with the defendant to procure the conveyance to the Southern Montana Company of all of their property and business, held in the name of the Taylors Fork Company, and that they complied with their agreement in that behalf. No question of public policy is involved.

It is next contended that the damages, if any, sustained by plaintiffs, could only be recovered in an action brought in the name of the Taylors Fork Company. Before entering upon a consideration of this contention, it is proper to consider the allegations of the pleadings in reference to the ownership of the shares of capital stock of the Taylors Fork Company, concerning which there is a considerable amount of discussion in the briefs.

In the complaint it is alleged that the plaintiffs owned 496 of the 500 shares of this stock, and that the other 4 shares were held by persons other than the plaintiffs for the purpose of making up the number of directors required by law; but it is not expressly alleged that the plaintiffs were in reality the owners of these 4 shares, although an inference to that effect might be drawn from the complaint as a whole.

In the first section of his answer the defendant says that he has not sufficient knowledge or information to form a belief as to these allegations of the complaint, and therefore...