DeVilliers v. Atlas Corporation

• Citation: 360 F.2d 292
• Decision Date: 14 June 1966
• Docket Number: No. 8400.,8400.
• Parties: W. Rodney DeVILLIERS and Orco Corporation, Appellants, v. ATLAS CORPORATION, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

360 F.2d 292 (1966)

W. Rodney DeVILLIERS and Orco Corporation, Appellants, v. ATLAS CORPORATION, Appellee.

No. 8400.

United States Court of Appeals Tenth Circuit.

May 9, 1966.

Rehearing Denied June 14, 1966.

W. Rodney DeVilliers, Albuquerque, N. M., pro se.

John A. Guzzetta, New York City (Simpson, Thacher & Bartlett, H. Robert Limmer, New York City, and Grantham, Spann & Sanchez, Albuquerque, N. M., were with him on the brief), for appellee.

Before MURRAH, Chief Judge, and LEWIS and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

After trial to the court without a jury, appellee-plaintiff Atlas Corporation recovered judgment for $441,500 against appellant-defendant DeVilliers and for $11,048.62 against appellant-defendant Orco Corporation. The claims against DeVilliers concerned withdrawal of funds by him from the assets of a corporation of which he was an executive officer. The claim against Orco was for overcharges for transportation of uranium ore by truck. Jurisdiction is based on diversity.

DeVilliers appeared pro se and also represented Orco, a corporation which was owned and controlled by him and of which he was the chief officer. The status of DeVilliers as a lawyer is uncertain. He is not admitted in the Court of Appeals for the Tenth Circuit. We repeat our holding in Flora Construction Co. v. Fireman's Fund Ins. Co., 10 Cir., 307 F.2d 413, 414, certiorari denied 371 U.S. 950, 83 S.Ct. 505, 9 L.Ed.2d 499, that a corporation can appear in a court of record only by an attorney at law. Nevertheless we have examined the unnecessarily long and complicated record to determine the right of both DeVilliers and Orco.

The evidence of the parties was in sharp conflict. The trial court disbelieved DeVilliers. Determination of the credibility of witnesses is a function of the trial court — not of the appellate court. We are convinced that, with one hereinafter noted exception, substantial evidence sustains all the findings of the trial court and we accept them.

Atlas Corporation is a successor by merger to Hidden Splendor Mining Company which was successor by prior merger to Rio de Oro Uranium Mines, Inc. DeVilliers was president and director of Rio from its incorporation in 1955 until March, 1957, when Hidden Splendor acquired sufficient Rio stock to give it control of that company. DeVilliers then became senior vice-president and chief executive officer of Rio. In October, 1959, Rio was merged with Hidden Splendor and DeVilliers was made senior vice-president of Hidden Splendor and chief executive officer of the operations that had previously been carried on by Rio. The merger of Hidden Splendor with Atlas occurred after the events with which we are concerned.

Between August 19, 1958, and October 9, 1959, DeVilliers, while acting as chief executive officer of Rio, caused ten checks totaling $375,000 to be drawn on Rio and to be made payable to his order. He admittedly applied the proceeds for his own benefit. DeVilliers claims that the checks were in payment of an interest owned by him in a property known as the San Mateo Dome. Whatever his title to this property may have been, DeVilliers produced no document transferring that title to either Rio or Hidden Splendor. No corporate authorization for the action appears in the minutes of either company. The trial court found on competent and substantial evidence that no "corporate authorization, approval, ratification or any justification whatever, either formal or informal," was given for the issuance of the checks and that this situation was known to DeVilliers when he caused the checks to be drawn and applied the proceeds for his own purposes. Neither company received any consideration for the $375,000 and neither knew or had reason to know of the issuance of the checks until the fact was disclosed by a January 30, 1960, letter from an independent accountant engaged in auditing the books and records of Rio.

When Hidden Splendor acquired the Rio stock, the agreement for acquisition executed by DeVilliers and others represented that Rio had no liabilities or obligations to its officers for any amounts of cash "whether for compensation or otherwise" except an expense account owing to DeVilliers. The agreement also provided for the resignation of the Rio officers and directors. DeVilliers was then rehired by Rio at a yearly salary of $18,000. At various times thereafter DeVilliers, without corporate authority approval or ratification, caused his salary to be raised first to $24,000 yearly and then to $30,000 yearly with each increase retroactive to the organization of Rio in April, 1955. The retroactive increases were first brought to light by the aforementioned auditor's letter of January 30, 1960.

On March 11, 1960, DeVilliers met with officials of Hidden Splendor and Atlas. He did not deny the issuance and receipt of the checks for $375,000 or the receipt of the retroactive salary increases. An agreement was prepared and executed. After reciting "differences and misunderstandings" between DeVilliers and Hidden Splendor as described in a February 23, 1960, letter from the auditors and the resolution of those differences on the basis therein set forth, it stated that DeVilliers and Hidden Splendor agreed that no sale of the San Mateo Dome interest had been made by DeVilliers to Hidden Splendor or Rio and that DeVilliers shall pay to Hidden Splendor $440,000 to be evidenced by a note. Payment of the note was to be secured by certain collateral to be furnished by DeVilliers within 10 days. The collateral was never supplied.

On April 5, 1960, DeVilliers wrote Floyd B. Odlum, the chief executive officer of Hidden Splendor who had signed the March 11 agreement on its behalf, saying in effect that Odlum had agreed to furnish the funds necessary to meet the note and that if the funds were not made available "it would be necessary that I repudiate and disaffirm the note and security agreement of March 11, 1960." On April 12, 1960, Odlum replied that the assertion relating to the provision of funds was "unbelievable" and that he understood that DeVilliers was "repudiating and disaffirming the promissory note and agreement of March 1, 1960." From our reading of the record we agree with Mr. Odlum's characterization of DeVilliers' position as "unbelievable."

The district court held that the March 11, 1960, agreement was an executory accord which DeVilliers did not satisfy. We concur. An executory accord is "an agreement for the future discharge of an existing claim by a substituted performance."¹ When the executory contract is fully performed as agreed, there is an accord and satisfaction and the previously existing claim is discharged.² For DeVilliers to maintain his position he must show that the March 11 agreement was intended to discharge the prior obligation and take its place.³ If the debtor breaks the executory accord, the creditor has the alternative of enforcing the original duty or the subsequent contract.⁴

DeVilliers cites many authorities on the effect of a completed settlement. They are not pertinent. We have here no...