Clarke v. Lexington Stove Works

• Citation: 72 S.W. 286
• Parties: CLARKE v. LEXINGTON STOVEWORKS.
• Decision Date: 25 February 1903
• Court: Court of Appeals of Kentucky

72 S.W. 286

CLARKE v. LEXINGTON STOVEWORKS.

Court of Appeals of Kentucky.

February 25, 1903

Appeal from circuit court, Fayette county.

"Not to be officially reported."

Action by the Lexington Stoveworks against George Clarke. Judgment for plaintiff in accordance with a peremptory instruction by the court, and defendant appeals. Reversed.

Geo. C Webb and Webb & Farrell, for appellant.

A. M Baker, for appellee.

SETTLE J.

Appellee Lexington Stovworks, is a corporation engaged in the business of manufacturing and selling stoves in the city of Lexington this state. Appellant, George Clarke, subscribed for 25 shares, $100 per share, of its capital stock, on which he paid, in obedience to the calls therefor, as much as $980; but, failing to pay the remainder due on the stock, suit was instituted against him by appellee in the Fayette circuit court for the sum of $1,519.50, which was alleged to be the balance due of the amount subscribed by him; and for this sum personal judgment was asked against appellant, in addition to which appellee claimed a lien on his stock, which it sought to enforce. Appellant filed an answer, to which a demurrer was filed and sustained. An amended answer was then filed, and a demurrer sustained to the answer as amended, whereupon a second amendment was filed to the answer, and a demurrer was again filed to the answer as amended, but overruled. The answer, as thus amended, admits the subscription of $2,500 to the capital stock of appellee by appellant, and the payment of $980 thereof, but denies that appellant owes the $1,519.50 balance sued for, and avers that he is entitled to further credits of $700 and $460, respectively, which appellee had agreed to allow him, but failed to do so; that after payment of the $980, and when demand was made for $875 of the $1,519.50 still owing by appellant, he, being unable to raise the money to pay it, advised one Snyder, appellant's general manager, who was collecting sums due on subscriptions to its capital stock, that he owned a paid-up policy of $2,500 in the Mutual Life Insurance Company of New York, payable to his estate at his death, which then had a loan value of $700, and a cash surrender vaule of $1,160, and that by agreement between himself and Snyder, as appellant's general manager, the latter took possession of the policy, with an assignment thereof signed by appellant in blank, and also took of him a note for $700, which was signed and indorsed by appellant, and made payable to his order; and Snyder agreed, further, to negotiate for him a loan of $700 on the note and policy, which sum was to be applied as a credit on the $875 then due on appellant's stock. The answer further avers that Snyder, as such general manager, sent the note and mortgage to a man in Philadelphia, Pa., or to some other person, who procured the money thereon, or still held the note and policy, neither of which was ever returned to him (appellant), and that, by the acts of Snyder as general manager, he had been deprived of the policy, and by reason thereof suffered the loss not only of the $700, its loan value, but also the further sum of $460, which, together with the $700, constituted the cash surrender value thereof. Appellant asks credit for these sums on the amount due on his stock subscription to appellee. After the filing of the reply, which denied all of the averments of the answer, the case was tried, by order of the lower court, before a jury, on the issues of fact raised by the pleadings; and upon the conclusion of appellant's proof the jury, under a peremptory instruction from the court, found for the appellee, whereupon judgment was rendered for appellee for the full amount claimed by it, with costs, and, appellant's motion for a new trial having been overruled, he prosecutes this appeal.

Upon the trial, appellant and two other witnesses testified in his behalf, and in addition the minutes of a number of meetings of appellee's board of directors were read in evidence. The following facts were substantially proved on the trial (1) That appellant in May, 1896, was owing appellee $875 of his stock subscription, and that Snyder, as an officer of appellee company, was insisting upon its payment; (2) that appellant was then the owner and in possession of a paid-up policy of insurance in the Mutual Life Insurance Company of New York, of $2,500, which had a loan value of $700, and a cash surrender value of $1,160, which policy was delivered to Snyder: (3) that Snyder made an arrangement with appellant whereby money was to be raised on the policy, and for that purpose he caused him to execute his note payable to himself, and indorsed by him, and to execute an assignment of the policy as collateral security for the note, and that the note was also delivered to Snyder with the policy; (4) that Snyder took the note and policy, and disposed of them to some third party, and thereafter wrote letters in which he set up a claim to the...