Bird v. Connecticut Power Co.

• Decision Date: 02 July 1957
• Citation: 144 Conn. 456,133 A.2d 894
• Court: Connecticut Supreme Court
• Parties: Viggo E. BIRD v. The CONNECTICUT POWER COMPANY et al. Supreme Court of Errors of Connecticut

Page 894

133 A.2d 894

144 Conn. 456

Viggo E. BIRD v. The CONNECTICUT POWER COMPANY et al.

Supreme Court of Errors of Connecticut.

July 2, 1957.

Morgan P. Ames, Stamford, with whom, on the brief, was Clifford R. Oviatt, Jr., Stamford, for appellant (plaintiff).

Cyril Coleman, Hartford, with whom, on the brief, were H. Bissell Carey, Jr., Hartford, and Edmund W. O'Brien, New London, for appellees (defendants).

Before BALDWIN, O'SULLIVAN and WYNNE, JJ., and KING and MURPHY, Superior Court Judges.

WYNNE, Associate Justice.

The plaintiff instituted this action to recover pension payments alleged to be due from the defendants. Upon the trial of the case to the jury, the court directed a verdict in favor of the defendants. The plaintiff has appealed, assigning as error the direction of the verdict, the refusal to set it aside, and certain rulings on evidence which, in the view we take of the case, have become academic.

Considered in the light most favorable to the plaintiff, the evidence would have justified the jury in finding the following facts: The defendant Hartford Electric Light Company, hereinafter called Light, is a public utility furnishing electricity to Hartford and its environs. The defendant Connecticut Power Company, hereinafter called Power, is a public utility supplying gas and electricity to various parts of Connecticut. Administratively, the two companies have worked closely together. As of 1939 their employees exceeded 6,000 in number.

The plaintiff, who became sixty-five years of age on April 29, 1950, is presently working the year round as an accountant for his son-in-law, the owner of a large estate in Europe. The accounting is so arranged that the plaintiff is able to perform it while spending six months in Cos Cob, where he lives with another son-in-law, and six months abroad. The plaintiff was born in Denmark. He was graduated from the Massachusetts Institute of Technology in 1908. He entered the employ of Stone and Webster, an organization which managed public utilities, and after approximately a year in office work became assistant superintendent of the Fall River Gas Works, a Stone and Webster enterprise. In 1910 he became superintendent. During that year he was married. In 1913 he became, at a salary of $3,000 a year, manager of the New London division of Power, at that time another Stone and Webster enterprise. In 1920 Stone and Webster sold all of its holdings in Power to Light. In 1922 the plaintiff became general manager of Power with an office in New London. He was given the title of assistant to the president. Samuel Ferguson was then president of Power and also of Light. While in New London, the plaintiff was elected treasurer of the First Congregational Church and was appointed superintendent of its Sunday school.

The plaintiff became a director of Light in 1926 and of Power in 1929. In the latter year he was appointed executive vice president of Light and moved to Hartford. In 1933 in became president of Power and in 1935 president of Light. In each instance he succeeded Ferguson, who became chairman of the board of directors of each company. The plaintiff received steady advances in salary until by 1939 his salary from Light was $28,000 a year and from Power, $12,000. He also received $5,000 a year as treasurer of the New London Northern Railroad Company, an organization totally distinct from the defendants. The plaintiff worked closely with Ferguson, who continued to act as chief executive officer even after the plaintiff had become president of both defendants. Ferguson concerned himself chiefly with pensions and financial matters, and the plaintiff with employee and public relations and the problems of general management. All officers of both companies looked to Ferguson for guidance and leadership.

Until at least 1929, the plaintiff, his wife and four children lived a happy, active life. And until that year his health and mental outlook were good. While he was living in New London, one of his close friends was his neighbor Edward S. Harkness, a wealthy philanthropist. In 1928 the plaintiff gave his savings of $10,000 to a broker to invest in the stock market. When the financial crash of 1929 occurred, the plaintiff was wiped out and became in debt to the extent of $224,000. He borrowed from various banks to cover this indebtedness, using as collateral securities wrongfully taken from the First Congregational Church in New London and from the New London Northern Railroad Company. At the end of October, 1929, he disclosed his financial condition to Harkness, who lent him $224,000 so that he could repay his bank loans and restore the securities he had converted. He committed himself to repaying Harkness at the rate of $24,000 a year, although his total annual income at that time was only $33,000. His life after he was elected president of Light entailed heavy expenses which he could not afford. His conscience troubled him and he withdrew into a shell, becoming close to a nervous wreck. He was unable to sleep, lost his appetite and was very depressed. As a result of paying $24,000 a year to Harkness, the plaintiff went into debt again. He again resorted to the use of the securities of the railroad company to facilitate his personal bank loans and again began to play the market in the hope of making sufficient profit to pay off his debts. Whenever the auditor of the railroad was due to examine its securities in connection with the annual audit, the plaintiff would sell the securities which he had purchased with the proceeds of the bank loans secured by the securities of the railroad. This enabled him to repay the loans, retrieve from the banks the converted securities and return them to the safe deposit box of the railroad to be checked by the auditor. Then when the audit had been made, the plaintiff would once more take the securities of the railroad, borrow again from the banks upon hypothecating those securities, and use the proceeds in the market. This procedure continued from 1932 until 1939.

In 1939 Ferguson told the plaintiff that he had been advised that there was something wrong with the securities of the railroad. The plaintiff admitted that he had taken them and used them as collateral for personal loans. He then said to Ferguson: 'Sam, now that it has all come out, I want to do everything I can to save these companies trouble * * *. Of course there will be publicity, even though I have never touched a cent, not one red cent belonging to either company. There will be publicity and I'm willing to do anything you want me to do. If you want me to resign, I'll resign from both companies right now, but I want your...