Holmes v. Durant Nursery Co.
| Decision Date | 28 May 1935 |
| Docket Number | Case Number: 25075 |
| Parties | HOLMES v. DURANT NURSERY CO. |
| Court | Oklahoma Supreme Court |
¶0 1. Appeal and Error - Theory of Defense First Raised on Appeal not Considered.
A theory of defense not raised in the pleadings nor relied upon at the trial will not be considered upon appeal.
2. Pleading - Specific Statements of Facts Controlling Over General Statements.
Specific statements of facts as the basis of a cause of action or defense control general statements, whether they be or be not regarded as conclusions of law.
3. Corporations - Issue of Stock to Subscriber Giving Unsecured Note to Another in Part Payment for Real Estate Conveyed to Corporation Held not in Violation of Constitution Requiring as Consideration "Property Actually Received."
Issuing stock to a subscriber who gives his unsecured note to another corporation for his pro rata part of the value of real estate conveyed by the second corporation to the one issuing the stock in consideration for the stock, does not violate section 39, article 9, of the Constitution. Such note is supported by a legal and valuable consideration.
4. Licenses - Transaction by Which Several Subscribe for Stock in Corporation for Purpose of Buying Platted Property to Form City Addition Held not Amenable to Blue Sky Law.
In a case in which several people in a community enter into an agreement to subscribe for stock in a corporation to be organized for the purpose of buying platted property adjacent to their city, annexing same to the city, and selling the lots therein, their transaction does not come within the terms of chapter 49, Act of 1919, requiring a license from the State Issues Commission.
Appeal from District Court, Bryan County; Porter Newman, Judge.
Action by Durant Nursery Company against Howard Holmes on promissory note. Judgment for plaintiff, and defendant appeals. Affirmed.
C.C. Hatchett, for plaintiff in error.
Utterback & Stinson and Priscilla W. Utterback, for defendant in error.
¶1 This is an appeal from a judgment of the district court of Bryan county. The parties will be referred to as they appeared in the trial court, the defendant in error as plaintiff, and the plaintiff in error as defendant.
¶2 Plaintiff instituted suit against the defendant on a promissory note, on which the defendant was the maker and the plaintiff the payee. The petition is the usual pleading on a past-due promissory note. The defendant answered by qualified general denial, and pleaded further that he received no consideration for the note, saying that at or prior to the date of the note the plaintiff owned certain real estate adjoining the city of Durant; that the plaintiff or its officers caused to be formed a corporation known as the Sunset Heights Really Company; that the plaintiff through one of its officers represented and warranted to the defendant that the new corporation would receive a conveyance of the real estate owned by the plaintiff; that same would be platted into town lots and annexed to the city of Durant as an addition thereto; that the note was given in payment of subscription of stock for the new corporation; that the plaintiff failed and refused to convey the real estate to the new corporation; that no stock was ever issued to the defendant. For these reasons, that the consideration for said note wholly failed. As a further defense the defendant pleaded that the selling of stock in the new corporation was in violation to chapter 49 of the Act of 1919, being sections 2270 to 2285, C. O. S. 1921; that no license was obtained from the State Issues Commission to sell said stock; therefore, that plaintiff could not recover on said note.
¶3 By specific allegations the defendant alleged three reasons for the failure of consideration: (a) That the plaintiff failed and refused to convey the real estate to the Sunset Heights Realty Company; (b) that no stock was ever issued or delivered to the defendant; and (c) that the selling of the stock in the Sunset Heights Realty Company was in violation of chapter 49 of the Act of 1919. He thus limited his defense to these three matters. To this answer the plaintiff filed a reply consisting of a qualified general denial and pleading further that the defendant in writing subscribed for stock in the new corporation, attaching a copy of the written instrument as an exhibit; that the stock was issued in the new corporation in consideration of the real estate owned by plaintiff and conveyed by warranty deed to the new corporation; that the note was given to the plaintiff and not the new corporation, and was given for the defendant's proportionate or pro rata part of the value of the real estate conveyed to the new corporation; that the defendant gave his note to the plaintiff in the sum of $1,000; that thereafter payments were made upon said note by the defendant, and at a later time the renewal note was given, which was the one on which suit was instituted. With the issues thus joined, the case was tried before the court, a jury being waived.
¶4 At the trial one of the officers of the plaintiff and a bookkeeper of the plaintiff testified orally. Plaintiff introduced in evidence the agreement to purchase stock signed by the defendant and 19 other subscribers; introduced the charter of the corporation of the Sunset Heights Realty Company, the certificate of stock issued to the defendant by the Sunset Heights Realty Company for ten shares, par value $1,000, warranty deed from the plaintiff to the Sunset Heights Realty Company, conveying the real estate mentioned in the pleadings, check made payable to the defendant or bearer issued by the Sunset Heights Realty Company for $455.50, marked canceled and paid, and note for $544.50, being the note on which the suit was instituted.
¶5 It was established by oral testimony that the plaintiff owned platted property adjacent to the city of Durant; that the officers of the plaintiff and the defendant and 19 other citizens entered into an agreement by the terms of which the plaintiff was to take the necessary detailed steps to procure the issuing of a charter to the Sunset Heights Realty Company, with a capital stock of $40,000; that plaintiff was to convey the real estate valued at that amount to the new corporation; that in consideration therefor the entire amount of authorized stock should be issued, the defendant and the 19 other citizens subscribing for certain numbers of shares. The defendant gave to the plaintiff his promissory note in the sum of $1,000. Certificate of stock in the new corporation was issued to the defendant and said certificate was held by the plaintiff as collateral security for the payment of the note. After the new corporation was organized, the real estate was 'annexed to the city of Durant as the Sunset Heights addition. Lots were sold and at a certain time distribution was made to the various stockholders. Defendant's distribution amounted to $455.50. Check was issued payable to the defendant, or bearer, for this amount. The plaintiff deposited the check and gave the defendant credit for that amount on his note. Twenty-seven months thereafter the defendant paid the interest to date and gave a new note for the remaining amount. This is the note on which the suit was instituted. The stock which was not issued to the 20 individuals was issued to two officers of the plaintiff as trustees. The defendant understood all that was done, how the entire transaction was handled, and was familiar with the entire dealings.
¶6 The only evidence offered on the part of the defendant was the testimony of Wm. M. Franklin to the effect that the Sunset Heights Realty Company did not comply with chapter 49, Act of 1919, being sections 2270 to 2285, C. O. S. 1921 (later repealed), being popularly referred to as the Blue Sky Law, creating the State Issues Commission. The defendant himself did not testify.
¶7 The court gave judgment for the principal of the note with interest and attorney's fees.
¶8 The case is properly before this court on petition in error with case-made attached.
¶9 The defendant has briefed the case in this court, raising two points: First, that an unsecured note was given for the purchase price of stock in a corporation; that the issue of stock under such circumstances is void; therefore, that there was no consideration for the giving...
To continue reading
Request your trial
-
Lakota Oil & Gas Co. v. City of Casper
...65; Brogan v. State (Wis.) 252 N.W. 566; Little v. Union Oil Co. (Calif.) 238 P. 1066; Jones v. Hall (Mont.) 300 P. 232; Holmes v. Nursery Co. (Okla.) 45 P.2d 698. Specific provisions of a written instrument govern allegations with reference thereto. Kirtman v. Upkins (La.) 135 So. 612; Pat......
- Holmes v. Durant Nursery Co.
-
John Deere Plow Co. v. Owens
... ... to the court below nor on one that is not argued in the ... briefs in this court. Holmes v. Durant Nursery Co., ... 172 Okl. 385, 45 P.2d 698; Drum Standish Commission Co ... v. First ... ...
-
Mohoma Oil Co. v. Ambassador Oil Corp.
...the basis of a cause of action control general statements, whether they be or be not regarded as conclusions of law. Holmes v. Durant Nursery Co., 172 Okl. 385, 45 P.2d 698. In addition to the specifically alleged facts in the third cause of action, we should consider those established matt......