Giesen v. London & Northwest American Mortg. Co.

• Citation: 102 F. 584
• Decision Date: 30 April 1900
• Docket Number: 1,339.
• Parties: GIESEN v. LONDON & NORTHWEST AMERICAN MOTOR CO., Limited.
• Court: U.S. Court of Appeals — Eighth Circuit

102 F. 584

GIESEN v. LONDON & NORTHWEST AMERICAN MOTOR CO., Limited.

No. 1,339.

United States Court of Appeals, Eighth Circuit.

April 30, 1900

This action was brought by the London & Northwest American Mortgage Company, Limited, the defendant in error, and an English corporation, against Peter Joseph Giesen, the plaintiff in error, to recover the sum of $2,919.90 exclusive of interest; said sum being the amount, in the aggregate, not including interest, of six calls or assessments on 100 shares of its capital stock, that had been levied, with the approval of an English court, in the course of a proceeding pending therein to liquidate the affairs of the plaintiff company. The case depends for its decision upon a special finding of facts made by the trial court, from which we extract the following findings In the year 1885 Albert Scheffer, A. E. Hendrickson, and E J. Hodgson, of St. Paul, Minn., became interested with certain residents of London England, in the promotion of an English corporation to be organized for the purpose of carrying on a loaning business. The funds were to be raised in part by subscriptions to the stock of the corporation, but principally by the sales of its debentures in Great Britain. The principal place of business of the corporation was to be in London, but its funds were to be loaned in the state of Minnesota and other adjoining states, through the sole agency of said Scheffer, Hendrickson, and Hodgson, who were to contribute at least $100,000 towards the enterprise. Pursuant to this scheme the plaintiff company was organized on March 17, 1886, under and pursuant to the provisions of any act of parliament of the kingdom of Great Britain and Ireland, which was approved on August 7, 1862, and subsequently amended and, together with its amendments, is generally known as the 'Companies Acts, 1862 to 1890.' After the company was organized a contract was entered into on October 14, 1886 between it and said Scheffer, Hendrickson, and Hodgson, of St. Paul, Minn., whereby it was agreed that the latter should be the advisory board and agents of the plaintiff company in America, and should continue to act as such advisory board and agents so long as they conducted the business to the satisfaction of the directors, or so long as it should be for the interests of the shareholders, of which the directors were to be the sold judges. Said Scheffer, Hendrickson, and Hodgson were to have power to negotiate loans for the plaintiff company, but were not to make loans to an amount exceeding 2,000 pounds without consulting the board, and were not to loan upon any property more than 50 per cent. of its value. The directors of the plaintiff company agreed to remit from time to time to said agents, or to place to their credit in a bank in St. Paul, Minn., such sums of money as said agents might require immediately for investment; and said agents were to be held jointly and severally responsible for the care of said money until it was loaned, and the securities therefor were duly delivered and recorded. Pursuant to this agreement said Scheffer, Hendrickson, and Hodgson, as agents for the plaintiff company, and under the title of 'advisory board,' carried on the mortgage-loan business of the plaintiff at the city of St. Paul, Minn., until some time between June 1, 1892, and October 1, 1892, when they resigned. Their duties as such agents consisted in making loans for the plaintiff company upon real-estate security, and in collecting the interest and principal due thereon. They also solicited subscriptions to the capital stock of the plaintiff company, and one of said agents, to wit. E. J. Hodgson, acted as secretary of the advisory board, and conducted most of its correspondence. All loans made or collected by the board were reported monthly to the plaintiff's office, in London. The only books which said agents kept, pertaining to the plaintiff's business, were a cash book and a loan register, transcripts from which books were regularly forwarded to the home office. Said advisory board never assumed or held itself out to the defendant or to the public as possessing the power to issue or transfer any shares of the capital stock of t e plaintiff company. On or about April 1, 1886, the defendant, Giesen, at the solicitation of Albert Scheffer, subscribed for 100 shares of the capital stock of the plaintiff company, which were of the par value of 10 pound sterling each; and that number of shares of stock were duly allotted to the defendant, and the defendant's name was duly entered upon the stock register of the plaintiff company as the owner of the shares so subscribed and allotted. The defendant paid to the plaintiff company on account of said stock the sum of 2 pound sterling on each share thereof, or, in the aggregate, 200 pound sterling. On August 25, 1887, a certificate for said 100 shares of stock was duly issued by the plaintiff company, and the same was delivered to and accepted by the defendant. On the back of this certificate was a printed indorsement to the effect that no transfer of said shares would be registered unless accompanied by the certificate. No transfer of said shares has ever been entered upon the books of the plaintiff company, and the defendant since April 21, 1886, has appeared in the plaintiff's register of members as the owner and holder of said 100 shares of stock. In the month of August, 1889, the defendant sold his stock to Albert Scheffer, one of the advisory board, and indorsed his name in blank on the back of the aforesaid certificate, and delivered the same to Scheffer, receiving therefor the sum of $1,000. Some two years later, on or about October 16, 1891, the defendant, at the request of said Scheffer, executed and delivered to a company which was known as the American Mortgage & Security Company, which was a corporation organized under the laws of the state of Minnesota, an instrument in writing whereby he bargained, sold, assigned, and transferred to it the aforesaid 100 shares of stock in the plaintiff company; but no new consideration was paid to the defendant upon the execution of the last-mentioned assignment. Said written assignment last aforesaid was not stamped, nor has it since been stamped, with a revenue stamp, such as is required by the English stamp acts to entitle said transfer to registration upon the books of the plaintiff company. Under English laws the registration of said transfer without the proper revenue stamp would have subjected the officer registering the same to a penalty. The defendant, Giesen, never applied to the plaintiff company, nor to any officer thereof, to have the aforesaid transfer of his stock registered upon the books of the plaintiff company. The only notice that was ever given by the defendant to the plaintiff company of the sale of his stock, except such as was given to the plaintiff's agents, as aforesaid, who composed its advisory board in the city of St. Paul, with a notice given by a letter written at St. Paul on June 20, 1894, which letter was written after proceedings to liquidate the affairs of the plaintiff company had been taken, and after an assessment of 1 pound per share had been levied upon shareholders in the course of said proceedings. In the month of November or December, 1891, the American Mortgage & Security Company transmitted by mail to the plaintiff company the aforesaid written assignment of the defendant's stock, for the purpose of having the same transferred upon the plaintiff's books; but the plaintiff company immediately returned the same to the sender, and refused to record the transfer, for the reason that the fee for making such transfer, which was authorized by the plaintiff's articles of association, had not been paid. No fee was in fact tendered by the American Mortgage & Security Company for making said transfer, and no further effort was made to obtain a transfer upon the company's books. Moreover, the assignment of the stock was not stamped, as...