Boldt v. Motor Securities Co.

• Decision Date: 02 July 1923
• Docket Number: 10673.
• Citation: 74 Colo. 55,218 P. 743
• Parties: BOLDT v. MOTOR SECURITIES CO.
• Court: Colorado Supreme Court

218 P. 743

74 Colo. 55

BOLDT v. MOTOR SECURITIES CO.

No. 10673.

Supreme Court of Colorado

July 2, 1923

Rehearing Denied Oct. 1, 1923.

Error to District Court, City and County of Denver; Henry J Hersey, Judge.

Action by the Motor Securities Company against Ben Boldt. Judgment for plaintiff, and defendant brings error and applies for a supersedeas.

Supersedeas denied, and judgment affirmed.

John D. Milliken and F. T. Johnson, both of Denver for plaintiff in error.

J. H Burkhardt, of Denver, for defendant in error.

BURKE J.

These parties appeared in reverse order below and are hereinafter referred to as there. Plaintiff brought this action to recover on two promissory notes, of $800 each, given it by defendant, as it says, for 10 shares of its capital stock. At the close of all the evidence each party moved for judgment, whereupon the trial court discharged the jury and gave judgment for plaintiff, to review which this writ is prosecuted by defendant, and he now asks that it be made a supersedeas.

One of the defenses was that these notes represented a mere loan of credit to plaintiff, were to be returned canceled at maturity, and the stock was simply security for their return. Defendant also attempts to plead fraud, misrepresentation, and deceit. The plea is probably bad, but plaintiff took no advantage thereof, and the evidence thereon was conflicting. All questions of fact must be resolved in favor of the judgment. Defendant complains because certain questions were not submitted to the jury. His own motion for a directed verdict, added to that of plaintiff, disposes of this direction. They constitute a waiver of his right to go to the jury on the facts. Cascade Auto Co. v. Petter, 72 Colo. 570, 212 P. 823.

Before judgment defendant orally amended his answer to conform to the proof. That amendment was in substance an admission that the notes sued on were given for stock purchased. After judgment, and by leave of court, the amendment was withdrawn over the objection of plaintiff. This condition of the record suggests another interesting point, which we ignore, because not argued.

The only real question presented is a constitutional one. Defendant contends that the transaction was void under a constitutional prohibition, and for that reason plaintiff cannot recover:

'No corporation shall issue stocks or bonds, except for labor done, service performed, or money or property actually received, and all fictitious increase of stock or indebtedness shall be void.' Section 9, art. 15, Colo. Const.

We do not find that this section, as applied to the facts before us, has been construed in this jurisdiction. It is found in the Constitution and statutes of many states, and they are not in harmony as to its meaning. It seems that Texas Delaware, and Alabama construe it as making absolutely void the issuance of stock in exchange for unsecured promissory notes. Western Nat. Bank v. Spencer (Tex. Com. App.) 244 S.W. 123; Washer v. Smyer, 109 Tex. 398, 211 S.W. 985, 4 A.L.R. 1320; Lofland v. Cahall (Del. Sup.) 118 A. 1, 6; Terrell v. Warten, 206 Ala. 90, 89 So. 297; Ala. Nat. Bank v. Halsey, 109 Ala. 196, 19 So. 522. California, South Dakota, and other states hold the contrary. P. Trust Co. v. Dorsey, 72 Cal. 55, 12 P....