Hurst v. American Ass'n

• Decision Date: 01 March 1899
• Citation: 105 Ky. 793,49 S.W. 800
• Parties: HURST et al. v. AMERICAN ASS'N, Limited. [1]
• Court: Kentucky Court of Appeals

49 S.W. 800

105 Ky. 793

HURST et al. v. AMERICAN ASS'N, Limited. ^[1]

Court of Appeals of Kentucky.

March 1, 1899

Appeal from circuit court, Bell county.

"To be officially reported."

Action by the American Association, Limited, against E. Hurst and others, to enjoin a sale under execution. Judgment for plaintiff, and defendants appeal. Reversed.

Tinsley & Faulkner and J. D. Black, for appellants.

G. W Saulsberry, for appellee.

BURNAM J.

Plaintiff alleges that it is a foreign corporation organized under the laws of Great Britain; that the sale which it seeks to enjoin is under an execution which issued against Alex A. Arthur trustee, and J. M. Brooks, security, on a sale bond executed by them as purchase money of a tract of land sold under a decree of the Bell circuit court, belonging to the heirs of Robert George; that at this sale, on August 5, 1890, the property was purchased by Fish and Percival, and that these parties failed to comply with the terms of the sale, and afterwards transferred the benefit of their bid to Alex A Arthur, trustee, who executed the two bonds as purchase money for the property, each in the sum of $10,827.25, dated February 5, 1891, and upon one of these bonds the execution sought to be enjoined was issued. It further alleges that it had no connection with the purchase of this property; that "Alex A. Arthur, trustee, was not acting for it in any capacity whatsoever with reference to the said lands, but was acting for himself, and for persons other than the plaintiff; *** that while said Alex A. Arthur did, from time to time, purchase property with the money of this plaintiff, and take the title to himself in the name of Alex A. Arthur, trustee, yet the said Alex A. Arthur was at the same time acting in a similar capacity for divers other corporations and persons, using their money for the purchase of property, and taking the title for their benefit into his own name as Alex A. Arthur, trustee; and that the said Alex A. Arthur, at the date of the execution of the bonds, had no right to bind plaintiff by the execution of said sale bonds." The defendants, by way of answer, allege, in substance, that at the date of the sale of the lands under the decree of the Bell circuit court, and at the date of the transfer of the bid of Fish and Percival, Alex A. Arthur was the general agent of plaintiff in the development of the city of Middlesborough, and many other enterprises connected therewith; that he made the purchase in question for appellee, and that he had frequently exercised similar powers for plaintiff theretofore, and had been held out by it to the public as having such power and authority, and that appellee was bound by his acts.

It appears that from the uncontradicted testimony of Alex A Arthur that he was the general manager of the appellee corporation from the fall of 1887 to the winter of 1891, and that he had full power "to buy, sell, and give away land." to make contracts, and generally to perform for appellee, in the United States, the duties and acts commonly performed by a board of directors; that this power was confided to him by the stockholders and board of directors in London, England, when he was first appointed to the position of general manager, and that his authority was never questioned, and that he exercised this general authority for appellee until December, 1891; that appellee corporation desired to own the George lands, and that the board of directors had on two previous occasions directed their purchase, but that he did not buy them, only because the price was too high, but that he considered their ownership so important to the welfare of the company that a short time previously to the execution of the bonds in question he again brought the matter of the purchase of this property to the attention of the board of directors at a meeting held in the city of London, England, and that they, after a careful consideration of the matter, directed that H. F. Pollock, the managing director in London, and he (Arthur) should promote the formation of a new company, in connection with certain parties in Glasgow, Scotland, to be known as the Scottish Middlesborough Land Company, for the express purpose of purchasing the George lands; that, after a clear and full understanding with the association board and with its managing director in London (Pollock), he (Arthur) instructed the company's local attorney, Easton, to purchase the George lands in his name as trustee, to be held until the organization of the Scottish Middlesborough Land Company, at which time the property was to be turned over, and be finally paid for by the new company, and that in the meantime he was to make the first payment on the land; that it was necessary to have an intermediary in the deal, because the price of the land was to be added to so as to embrace the expenses of the promotion of the Scottish Middlesborough Land Company, to refund advances made by the American Association, to pay fees and cover profits in which others were interested, and to make provision for the payment to appellee corporation of the $10,000 which it was to get out of the deal. He testifies that it was clearly understood by the directors of appellee corporation that the purchase was to be made so as to prevent a loss of the opportunity to acquire the property, and the directions to Easton to make the purchase were all made during his absence in London, and that upon his return to Middlesborough he reported the whole transaction to Malcolm, the assistant manager, and Carey, the cashier, of appellee corporation, and to the attorneys of the company. This witness testifies that there was no difference whatever between this deal and other transactions of a similar character, promoted and carried out by him in the...