Morgan v. Brower

• Decision Date: 21 December 1886
• Citation: 77 Ga. 627
• Parties: MORGAN et al. v. BROWER.
• Court: Georgia Supreme Court

77 Ga. 627

MORGAN et al. v. BROWER.

Supreme Court of Georgia.

December 21, 1886

October Term, 1886.

1. Where one owned all the shares of stock in a bank which owed no debts, and he was proceeding to wind up its business, when certain others solicited a transfer of the charter to them in order that they might do a banking business, and under advice of counsel as to how it could be done without liability on his part, he transferred all the stock to such other persons without any consideration therefor, and the bank transferred to him all of the assets and property belonging to it, he giving notice of the transfer of the stock under §1496 of the code, and thereupon the new owners of the stock paid in more than the amount of the property before the transfer and proceeded to do a banking business, subsequent creditors of the bank, who became such after the notice of the transfer of the stock was published, and who did not know of or rely on the conduct of the original stockholder, had no right of action against him, he having acted in good faith throughout the transaction.

2. Evidence was admissible for the purpose of showing the real character of the transaction, its bona fides and the circumstances surrounding it.

Fraud. Corporations. Stock and Stockholders. Debtor and Creditor. Evidence. Before Judge BRANHAM. Floyd Superior Court. March Adjourned Term, 1886.

The following is added to the report contained in the decision This bill was originally brought by Samuel Morgan against Brower. The Bank of North America and F. A. Laidley & Co. were made parties complainant, alleging that they were creditors of the bank. The complainants claimed that Brower had rendered himself liable to them. They prayed that he be required to account for all the property received by him from the bank, and decreed to be liable for the value thereof.

The jury found for the defendant. The complainants moved for a new trial on twenty-two grounds. It is not necessary to set out all of them, many being similar in character. The following, together with the note appended thereto by the court, will show the points made:

(3.) Because the court allowed A. T. H. Brower to testify as follows: " Col. Samuel said that he could get a charter but further said, as this would be of no further use to me as I was going out of the business, that he would like for me to transfer it to him. I told him I didn't know whether I could do so without liability to me. He represented to me that he was going to do a large business; would bring in stronger men and do a larger business than we had done. . I told him I would submit it to my attorney in the matter, Col Alexander, and if he said it could be done without liability to me, I would then do it as a favor, no consideration being asked." -The complainants objected to this testimony on the ground that it was hearsay, irrelevant to the issue and prior to the written contract between the parties.

(9.) Because the court allowed C. G. Samuel to testify as follows " I did negotiate a trade with Capt. Brower and purchased from him the Bank of Rome building for Messrs. Frost & Panchen and myself. I told Capt. Brower, before the trade was executed by the delivery of title, but after the trade had been verbally agreed on as to price and terms, that I had agreed to join Messrs. Frost and Panchen in their banking business if they could get a charter to work under, and that I had a friend, who had means, that would take stock in a bank with a charter to work under, but would not in a private bank, and that Mr. Panchen requested me to know of him if he had any objections to our company's organizing under his charter. He replied he had no further use for the charter-did not consider it of any value, and as we had bought the building, if he could let us have the charter without incurring any responsibility, we could have it. After consulting his attorney, he met me and remarked his attorney said he could let us have the charter without incurring any responsibility, provided he had no interest or connection whatever in the new organization; he further remarked, as you know, I am disgusted with banking in Rome; I am not likely to have any interest in another. He further said, my attorney will draw up such paper to make the transfer of the charter as is required to protect me, and then I will make you a present of it. He said he would not sell it." -Complainants objected to this evidence on the ground that it was hearsay, irrelevant, immaterial and in contradiction of the written contracts afterwards entered into, and the court overruled the objections and admitted the evidence.

(10.) Because the court allowed T. W. Alexander to testify as follows: " He (Brower) told me that Samuel wanted the charter and of his willingness to let him have it if he could do so without incurring any risk. I told him that he could do it; and for the purpose of transferring the charter, I suggested the plan and he adopted the plan of transferring the shares of the stock. It was not intended to transfer anything to them except the bank building and a few articles of office furniture, perhaps, mentioned in this paper. I never suspected that Brower or Samuel was seeking to conceal anything from the public, but the entire transaction, as it appeared to me, was honestly, fairly and openly conducted. There was nothing concealed about it; everything was put in writing and that notice put in the paper." -Same objection as stated in preceding ground.

(11.) Because the court charged the jury thus: " Among other questions for your decision will be, what was the contract between Frost, Samuel & Co. and the defendant, Brower?" -Complainants insist that, inasmuch as all the contracts between the parties were in writing, it was error to leave it to the jury to decide what the contract was, and that it was the duty of the court to construe the contract and writings.

(12.) Because the court, in charging the jury, said: " It is not controverted that Brower sold them the bank building at $7,600.00." - Complainants say this charge was against the evidence, and was a declaration of what had been proved, in the opinion of the court.

(13.) Because the court stated to the jury in the charge: " Nor is it controverted that Brower, on the 20th of February, 1879, transferred all the stock of the bank, 1,000 shares, to them (Frost, Samuel & Co.)." -Complainants did contend that 293 shares had been transferred on the 1st of February, 1879, and did insist on that fact as a badge of fraud.

(14.) Because the court in charging the jury, said to them: " The transfer of the stock reads as follows: ‘ For value received I hereby sell, transfer and assign to Frost, Samuel & Co. - shares of stock within mentioned, and authorize - to make the necessary transfer on the books of the bank.

‘ Witness my hand and seal this 20th day of February, 1879.

A. THEW H. BROWER,

Witnessed by D. ADAMS. President.'

" This endorsement stands upon the five certificates of stock held by the defendant, Brower, aggregating 1,000 shares, or all of the bank's stock." - Complainants insist that the court was mistaken in the above charge.

(15.) Because the court charged the jury thus: " The written papers, by their terms, make a sale and transfer of the stock by Brower to Frost, Samuel & Co., " ‘ for value received,’ paid for in part by allowing Brower to retain the property of the bank, or by a transfer and assignment thereof to him by Frost, Samuel & Co. But you are authorized to take into consideration the oral evidence bearing on these parts of these instruments, to-wit: On the words ‘ for value received’ in the written transfers of the stock, and on the words " ‘ retain’ and ‘ transfer and assign’ in the papers signed by Frost, Samuel & Co., and all the oral evidence in connection with the written, and determine for yourselves what was the consideration of the transfer of the stock, and what was the contract and agreement of the parties in relation to this entire transaction." -Complainants insist that this charge allowed the jury to consider the oral evidence and to set up a contract and agreement in contradiction of the writings, and that there was no ambiguity which was not fully explained by the writings, and that all the oral...