Denton v. Detweiler
| Decision Date | 27 May 1927 |
| Docket Number | 4486 |
| Citation | 44 Idaho 343,256 P. 946 |
| Court | Idaho Supreme Court |
| Parties | D. M. DENTON, Respondent, v. D. F. DETWEILER, ELMER AMAN, L. G. HILL, S. N. PITTULLO, J. A. CROM, PETER ERICKSON, H. MURPHY, and FRANK DEKLOTZ, Appellants, and TIMES PRINTING & PUBLISHING COMPANY, Intervenor and Appellant |
CORPORATIONS-EVIDENCE INSUFFICIENCY OF-CORPORATE STOCK-PURCHASERS NOT LIABLE FOR DEBT.
1. In action to recover alleged balance due on purchase price of certain stock sold to defendants by plaintiff's agent evidence held insufficient to support finding that there was any balance due thereon.
2. In absence of agreement by purchasers of corporate stock to assume indebtedness of seller on note for use and benefit of corporation as part of consideration for stock purchased from plaintiff, defendants are not liable therefor.
APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. William A. Babcock, Judge.
Action on contract. Judgment for plaintiff. Reversed.
Judgment and order reversed, with costs to appellants. Petition for rehearing denied.
Sweeley & Sweeley, for Appellants.
"In an action for damages for the breach of a contract the complaint must contain two essential elements: first, that the breach of the contract occurred and this breach must be specifically averred in unequivocal language." (Sutherland, Pleading and Practice, sec. 230; Moore v. Besse, 30 Cal. 570; People v. Central Pacific R. R. Co., 76 Cal. 29, 18 P. 90; Curtiss v. Bachman, 84 Cal. 216, 24 pac. 379.)
"A party suing upon a contract to pay money must show breach of the contract or his complaint states no cause of action; therefore it is held that the complaint must in such case allege the nonpayment of the money claimed under the contract." (Richards v. Traveler's Ins. Co., 80 Cal. 505, 22 P. 939; Barron v. Frink, 30 Cal. 486; Morgan v. Menzies, 60 Cal. 341; Du Brutz v. Jessup, 70 Cal. 75, 11 P. 498; 21 R. C. L., p. 493, sec. 57.)
"The complaint must not only state a complete cause of action against the defendant but it must also show a right of action in the plaintiff." (21 R. C. L., p. 482, sec. 46.)
"The defect in a complaint caused by a failure to state facts sufficient to constitute a cause of action is not cured by a verdict or judgment." (Richards v. Insurance Co., supra; Buckman v. Hatch, 139 Cal. 53, 72 P. 445; Bell v. Thompson, 147 Cal. 689, 82 P. 327.)
The shares of stock in the corporation represented by the increase were illegally issued to the respondent, as they were treasury stock belonging to the corporation and no money was paid, property delivered or labor or services rendered therefor. "No corporation can issue stock or bonds except for labor done, services performed or money or property actually received; and fictitious increase of stock or indebtedness shall be void." (Const., art. 11, sec. 9.)
The jury should have been required to return a verdict upon the claim of the intervenor set up in its pleading and a new trial should have been granted as to the whole action, for a trial as to the omitted issues could not well be had without danger of complication with other matters. (20 R. C. L., p. 221, sec. 7; Ann. Cas. 1913B, p. 365, note.)
No written agreement on the part of appellants to pay the alleged debt of $ 3,000 to the Edmond State Bank was shown and evidence of any verbal agreement could not be received and such agreement could not be enforced. (C. S., sec. 7976.)
E. M. Wolfe and C. Wilkins, for Respondent, cite no authorities on points decided.
JOHNSON, Commissioner. Varian, Brinck, CC., Wm. E. Lee, C. J., Givens, Taylor and T. Bailey Lee, JJ., concurring.
JOHNSON, Commissioner.--
This action was commenced by plaintiff against the defendants to recover an alleged balance due on the purchase price of certain capital stock in the corporation intervenor. Plaintiff claimed that said purchase price was $ 13,000, of which the defendants had paid $ 11,000, leaving a balance due of $ 2,000. Intervenor set up title in it to said stock, and prayed for judgment against defendants for $ 15,000, and against plaintiff for $ 2,000. Verdict for plaintiff for $ 2,444.10. Defendants and intervenor appealed from the judgment and from an order denying a motion for a new trial.
There is no conflict in the evidence that one Turner K. Hackman was employed by the plaintiff as his agent for the purpose of negotiating the sale of this stock. The sale was made by the said Hackman to the defendants. The defendants had no direct communication with the plaintiff. Their dealings were entirely with the plaintiff's agent. The agent fixed the price. The agent received the purchase price from the defendants, and turned over to them the stock. He testified that the price he made in offering to sell the stock to the defendants was $ 10,000. He said that they never assumed or agreed to pay the $ 3,000. The defendants testified that all they agreed to pay was $ 10,000, and that they never assumed or agreed to pay the $ 3,000. The agreement as to the sale of the stock was not reduced to writing, and the...
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