Guaranty Mortg. Co. v. Wilcox

• Citation: 218 P. 133,62 Utah 184
• Decision Date: 19 July 1923
• Docket Number: 3919
• Court: Supreme Court of Utah
• Parties: GUARANTY MORTGAGE CO. v. WILCOX

218 P. 133

62 Utah 184

GUARANTY MORTGAGE CO. v. WILCOX

No. 3919

Supreme Court of Utah

July 19, 1923

Rehearing Denied September 7, 1923.

Appeal from District Court, Second District, Weber County; J. N Kimball, Judge.

Action by the Guaranty Mortgage Company against M. E. Wilcox. Judgment for defendant on the counterclaim, and plaintiff appeals.

AFFIRMED.

Halverson & Pratt, of Ogden, for appellant.

L. J Holther and C. R. Hollingsworth, both of Ogden, for respondent.

FRICK J. WEBER, C. J., and THURMAN and CHERRY, JJ., GIDEON, J., concurring.

OPINION

FRICK, J.

The plaintiff commenced this action in the district court of Weber county against the defendant to recover upon a promissory note. In its complaint plaintiff, in substance, alleged that in June, 1921, the "defendant subscribed for, and agreed to purchase, 50 shares of 7 per cent. preferred stock, each of the par value of $ 100;" that said stock was delivered to him, in consideration for which he executed and delivered to the plaintiff a promissory note for $ 5,000, payable $ on a date named, and $ 1,000 on the 15th day of December, 1921, and an equal amount in each year thereafter until the whole $ 5,000 was fully paid, with 7 per cent. interest per annum. The note also contained various other provisions, among which, that in case the principal or interest should not be paid when due, the unpaid portion should bear 10 per cent. interest; that, in the event just stated, the holder of the note might declare the "entire principal" due and proceed to collect the same, and in that event could also collect 10 per cent. as an attorney's fee; that the stock purchased as aforesaid should be pledged to the plaintiff as security for the payment of said note. It was also alleged that the defendant had failed to pay said note, or any part thereof, except the sum of $ 265.60, by reason of which plaintiff has exercised its right to declare the whole amount of said note due and payable, together with interest at the rate of 10 per cent. per annum; that plaintiff is also entitled to attorney fees in the sum of $ 500, for all of which it prayed judgment.

The defendant answered the complaint admitting the execution of the note sued on. In his answer, however, he pleaded the whole transaction, and, among other things, set up the written agreement between plaintiff and defendant for the purchase of said preferred stock. We shall hereafter refer to that agreement. The defendant also, with great particularity, set up the defense of fraud and misrepresentation, which he alleged induced him to purchase said stock, and to execute and deliver the note sued on.

In view of the conclusions reached, and for the reasons hereinafter appearing, it is not necessary to here set forth the acts of fraud, etc., relied on as a defense.

The defendant also set up as a defense to the action that the plaintiff had failed to comply with what is known as the "Blue Sky Law," of this state, in that it had failed to obtain permission or a license from the State Securities Commission to sell said preferred stock.

Defendant also pleaded a counterclaim for the recovery back of said sum of $ 265.60, which he alleged he had paid plaintiff on said note.

Defendant therefore prayed that the note in question be declared void; that the same be canceled, and that he recover judgment for the amount last above stated, and that the plaintiff recover nothing in this action.

The case was tried to the court, which, at the conclusion of the trial, in substance, found as follows:

That in June, 1921, plaintiff was "engaged in soliciting through its agents subscriptions to its unsubscribed and unissued capital stock, which was divided into preferred and common; that on June 20, 1921, plaintiff solicited the defendant's subscription for 50 shares of its said preferred capital stock, and on said day, as the result of said solicitation, the defendant executed and delivered to the plaintiff an instrument in writing, in the words and figures following to wit:

"'Subscription Agreement.

"'The Guaranty Mortgage Company. Incorporated under the Laws of the State of Utah. Capital Stock $ 500,000.

"'I hereby agree with the Guaranty Mortgage Company of Utah to subscribe for fifty shares of 7 per cent. preferred stock of the said company, and agree to pay $ 100.00 per share (par value). Payments to be made as follows: Dec. 15, 1921, $ 1000.00, and a like amount on same dates each year thereafter until paid.

"'This security is issued by permission of the Securities Commission of Utah, which does not endorse or recommend the purchase thereof.

"'Dated this 20th day of June, 1921.

"'Agent, Collins & Denson. Name, M. E. Wilcox.

"'Make your remittance payable to the Guarantee Mortgage Company.'"

It is also found that, in consideration of the foregoing agreement, defendant executed and delivered the promissory note sued on, and that plaintiff on said day issued a certificate for said stock in the name of the defendant--

"and held the same as a pledge to secure the payment of said note as therein provided; that plaintiff, between May 6, 1921, and August 31, 1921, had no license from the State Securities Commission of the state of Utah authorizing or permitting it to sell, or offer for sale, shares of its preferred capital stock, or any part thereof, or to solicit subscriptions to its said capital stock; nevertheless, during said time the plaintiff had solicited and obtained subscriptions from other persons."

The next three paragraphs of the findings relate to the misrepresentation and fraud set up in defendant's answer, all of which are found against his contentions, and are of no importance, as will hereinafter appear.

The court, however, also found that on the 3d day of January, 1922, defendant had on deposit with the plaintiff the sum of $ 265.60, which it had applied as part payment of said note.

Pursuant to the foregoing findings, the court made the following conclusions of law:

"That on June 20, 1921, the plaintiff was an investment company within the meaning of chapter 17, Laws of Utah, passed at the special session of the Legislature held in 1919, as amended by chapter 131 of the Laws of Utah, 1921, and the transaction between the plaintiff and the defendant was a sale by the plaintiff to the defendant of its said shares of preferred capital stock; that by reason of the fact that plaintiff had not been authorized or licensed by the State Securities Commission of the state of Utah to so dispose of its capital stock, the contract of subscription entered into by the defendant, and the promissory note given by him to the plaintiff for said 50 share of 7 per cent. preferred stock of the plaintiff were, and are, null and void; that said note should be surrendered to the defendant and canceled; that said Certificate No. 195 for 50 shares of the preferred capital stock of the plaintiff, so issued by the plaintiff to the defendant, should be surrendered to the plaintiff and canceled; that the defendant is entitled to judgment against the plaintiff for the sum of $ 265.60, with interest thereon at the rate of 8 per cent. per annum from the 3d day of January, 1922, and defendant should recover his costs herein."

Judgment was entered accordingly, from which this appeal is prosecuted by the plaintiff upon the judgment roll without a bill of exceptions.

The assignments of error assail the court's conclusion of law and judgment.

Plaintiff's appeal being upon the judgment roll, the defendant, without taking a cross-appeal, prepared, and the court settled and allowed, a bill of exceptions, in which are contained all of the evidence produced, and all of the proceedings had at the trial, and which bill he has filed in this court.

Defendant has assigned cross-errors, and to sustain the same relies upon the evidence and proceedings as they are made to appear from the bill of exceptions aforesaid.

Plaintiff's counsel have interposed a motion to strike the bill of exceptions, and also the assignment of cross-errors, upon the ground that plaintiff's appeal is based upon the judgment roll alone, and in view that defendant has not taken a cross-appeal; "that said bill of exceptions constituted no part of the record on appeal, and no alleged errors based thereon may be considered on this appeal."

The motion to strike the bill of exceptions, for the reasons urged by counsel, is manifestly without merit. Our statute (Comp. Laws Utah 1917; § 6969) authorizes any party to an action to prepare and have settled and allowed a bill of exceptions. The right is not limited to the party who appeals. As pointed out in Railroad v. Board of Education, 35 Utah 13, 99 P. 263, our appellate procedure contemplates but one record on appeal which is transmitted to this court. True, a party may appeal upon the judgment roll alone, and may assign such errors as he may deem proper. If, however, the adversary party thinks that appellant's alleged errors are without merit, in view of all of the proceedings had at the trial, why may he not prepare, and have settled and allowed a bill of exceptions in which all of the facts and circumstances upon which the trial court acted, and upon which it based its judgment, are disclosed.

Our statute clearly states, and this court has so frequently held, that it has become elementary, that no judgment shall be reversed, unless upon the whole record it is made to appear that a substantial right of the complaining party has been invaded or disregarded. It might well be that, upon the judgment roll alone, error might be made apparent, which, from a consideration of all of the proceedings, it would, nevertheless, easily be made to appear that the alleged errors are entirely without merit.

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