Glass v. Basin & Bay State Min. Co.
| Decision Date | 27 June 1904 |
| Citation | 77 P. 302,31 Mont. 21 |
| Parties | GLASS et al. v. BASIN & BAY STATE MIN. CO. |
| Court | Montana Supreme Court |
Commissioners' Opinion. Appeal from District Court, Jefferson County; M. H Parker, Judge.
Action by James Glass and another against the Basin & Bay State Mining Company. Judgment for defendant, and plaintiffs appeal. Affirmed.
T. J Walsh, for appellants.
Toole & Bach and Ira T. Wight, for respondent.
The lower court sustained defendant's motion for a judgment on the pleadings, and plaintiffs appeal.
The determinative question is, does the complaint state a cause of action? It alleges the corporate capacity of the defendant, and states that on or about the 15th day of August, 1895, the plaintiffs, then being the joint owners of 1,425 shares of the capital stock of the defendant, at the instance and request of the defendant deposited with the treasurer of the defendant 1,400 shares of said capital stock, of the par value of $140,000, and of that actual value in money, "to be sold by the defendant, and the proceeds thereof to be used by the defendant in paying its debts and liabilities, as well as its current expenses, in consideration whereof the defendant then and there agreed" that the plaintiff James Glass should hold the offices of vice president, trustee, and general manager of the defendant until the mining, concentrating, and smelting business of the defendant should be in successful operation and that the plaintiff Alexander J. Glass should have and hold the offices of trustee and treasurer of the defendant until the business of the corporation should be in successful operation as aforesaid; that there was no other consideration moving the plaintiffs to deposit the said stock with the defendant; that the business of the defendant has never yet been in successful or other operation, but that the defendant, in violation of its agreement, on or about the 20th of October, 1899, ousted and ejected plaintiffs from said offices, and ever since has refused and now refuses to permit the plaintiffs to have, hold, or enjoy the same, by reason whereof the consideration whereby the defendant secured the stock "has, through the wrongful acts of the defendant, wholly failed"; that the defendant has sold and issued all of the stock to other stockholders, and disposed of the same; that the defendant has wholly failed and refused, and now does fail and refuse, to redeliver the stock to the plaintiffs, or to pay the plaintiffs the value thereof, although often requested so to do by the plaintiffs. Other allegations in the complaint are immaterial to this inquiry. The plaintiffs pray for the recovery of the possession of the stock, or for the sum of $140,000, the value thereof, in case delivery cannot be had, and for costs of suit.
At the outset we are called upon to determine, if possible, the nature of the action. In attempting to do so, we shall bear in mind that, under the Code procedure, distinct forms of action are abolished. The only question is, does the complaint state a cause of action? It is the substance of the pleading, and not its legal verbiage, which must determine the question. Though the Code has abolished all forms of action, and provides that there shall be but one form of civil action for the enforcement or protection of private rights and the redress or prevention of private wrongs (Code Civ. Proc. § 460), yet the distinctions between the different causes of action still obtain--the reasons underlying them are still the same--and the plaintiff may not recover beyond the case stated by him in his complaint. Bixel v. Bixel, 107 Ind. 534, 8 N.E. 614, and cases cited.
From the relief prayed for, it would seem that the pleader intended this action for one in claim and delivery, which is an action to recover specific personal chattels, wrongfully taken and detained, or wrongfully detained, with damages for the wrongful detention. Fredericks v. Tracy, 98 Cal. 658, 33 P. 750. The gist of the action is the wrongful detention of the property. Hynes v. Barnes, 29 Mont.--, 75 P. 523. The value of the property is recoverable only when a delivery of the specific property cannot be had. Hunt v. Robinson, 11 Cal. 262; Riciotto v. Clement, 94 Cal. 105, 29 P. 414. In such an action it is necessary to state that the plaintiff has either a general or special ownership in the property, with the right to its immediate possession, at the time of the commencement of the action. Fredericks v. Tracy, supra; Affierbach v. McGovern, 79 Cal. 269, 21 P. 837; Williams v. Ashe, 111 Cal. 180, 43 Pac 595; Holly v. Heiskell, 112 Cal. 174, 44 Pac 466; Bank of Woodland v. Duncan, 117 Cal. 412, 49 P. 414; Melton v. McDonald, 22 Am. Dec. 437; Noble v. Epperly, 6 Ind. 414. The rule stated in First National Bank v. McAndrews, 7 Mont. 150, 14 P. 763, is inaccurate, as inspection will show.
The complaint fails to allege these necessary facts. However, it does show affirmatively that, when the action was begun, the defendant had sold and disposed of the stock. This alone would be fatal to the action as one in claim and delivery, for it is essential for the plaintiffs to allege and prove that at the commencement of the action the defendant wrongfully detained the possession of the property from them. Riciotto v. Clement, supra; Henderson v. Hart, 122 Cal. 332, 54 P. 1110; Gardner v. Brown, 22 Nev. 156, 37 P. 240; Herzberg v. Sachse, 60 Md. 426. "It is the condition and situation of things when the suit is commenced which furnish the grounds for the action." Aber v. Bratton, 60 Mich. 357, 27 N.W. 564, and cases cited: Burt v. Burt, 41 Mich. 82, 1 N.W. 936. Whoever has the possession of the property to be replevied, and unlawfully detains it, is the proper person to be sued. Rose v. Cash, 58 Ind. 278. It is clear that, from what the complaint fails to show and does show, it does not state a cause of action in claim and delivery.
Does it state a cause of action in conversion? To recover in such an action, the plaintiffs must show a general or special ownership in the chattels, and a right to their immediate possession, at the time of the wrongful taking by defendant. Wetzel v. Power, 5 Mont. 214, 2 P. 338; Sawyer v. Robertson, 11 Mont. 416, 28 P. 456; Reardon v. Patterson, 19 Mont. 231, 47 P. 956; Babcock v. Caldwell, 22 Mont. 460, 56 P. 1081; Harrington v. Stromberg-Mullins Co., 29 Mont.--, 74 P. 413. The complaint makes no such showing, and it fails to state that the defendant has converted the property. "A conversion is any unauthorized act which deprives a man of his property permanently or for an indefinite time." Union S. Y. & T. Co. v. Mallory S. & Z. Co., 157 III. 554, 41 N.E. 888, 48 Am. St. Rep. 341. "Any distinct act of dominion wrongfully exerted over one's property in denial of his right, or inconsistent with it, is a conversion." Cooley on Torts, 428.
Was the sale and disposal of the stock by the defendant unauthorized or wrongful? The complaint answers the question in the negative. It recites that plaintiffs deposited their stock with defendant to enable the latter to pay its debts and current expenses. The defendant sold and disposed of the stock, and presumably applied the proceeds to the purposes intended when the stock was received from the plaintiffs. No other conclusion can be drawn from the wording of the complaint. And it does not appear but that these acts were done while the plaintiffs were holding the offices mentioned in the contract, and actively assented thereto.
Having determined that the complaint neither states a cause of action in claim and delivery nor in conversion, we will look to it to see whether plaintiffs may recover upon the contract. The plaintiffs concede the contract to be void, but do not indicate upon what ground they make such concession. In examining the subject, we find that section 431 of the Civil Code provides that the directors of a corporation must be elected annually by the stockholders or members. By the contract pleaded, it was agreed that the plaintiffs should be trustees (directors) until the business of the defendant should be in successful operation. Over four years elapsed and yet it is alleged "that the business of the defendant has never yet been in successful or other operation." Section 2240 of the Civil Code reads: "That is not lawful which is (1) contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals." It thus appears that this contract is void and unlawful, as being directly contrary to an express provision of law, in so far as it provides for the plaintiffs to succeed themselves as trustees indefinitely; and, in so far as it provides that the plaintiffs shall have a like tenure of the offices of general manager and treasurer of the corporation, it is within the inhibition of the second and third provisions of section 2240. Similar contracts have frequently been declared void as against public policy. West v. Camden, 135 U.S. 507, 10 S.Ct. 838, 34 L.Ed. 254; Noel v. Drake, 28 Kan. 265, 42 Am. Rep. 162; Guernsey v. Cook, 120 Mass. 501; Noyes v. Marsh, 123 Mass. 286; Woodruff v. Wentworth, 133 Mass. 309; Forbes v. McDonald, 54 Cal. 98; Wilbur v. Stoepel, 82 Mich. 344, 46 N.W. 724, 21 Am. St. Rep. 568. In Swanger v. Mayberry, 59 Cal. 91, the court said: ...
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