Pothier v. Reid Air Spring Co.

• Decision Date: 19 September 1925
• Court: Connecticut Supreme Court
• Parties: POTHIER v. REID AIR SPRING CO.

130 A. 383

103 Conn. 380

POTHIER v. REID AIR SPRING CO.

Supreme Court of Errors of Connecticut.

September 19, 1925

Appeal from Superior Court, New Haven County; L. P. Waldo Marvin Judge.

Action by Victor Pothier against the Reid Air Spring Company to recover on a loan, and for money claimed due plaintiff on account of contract of sale or return of stock of defendant company. From a judgment directing a verdict for the defendant, plaintiff appeals. New trial ordered.

Allegation that plaintiff loaned money to defendant and received stock as security, and that payment was refused when due, is sufficient to recover for indebtedness despite allegation of tender back of security claimed to be void, since nature of collateral was immaterial.

The plaintiff alleges in the first count of this action that on April 28, 1923, he loaned to defendant $540, payable August 1, 1923, and received therefor as security six shares of the capital stock of defendant; that on August 1, plaintiff demanded of defendant payment of this sum and offered to return to the defendant the security aforesaid; and that defendant failed to pay him the above amount. In the second count it is alleged as follows:

(1) On April 28, 1923, the plaintiff placed in possession of the defendant, through its president and agent, the sum of $540 and received from the defendant, through said president and agent, six shares of stock in the defendant corporation, together with a written statement, a copy of which is as follows:

" New Haven, Conn., April 28, 1923.

The Reid Air Spring Company has this day sold to Victor Pothier six shares of the Reid Air Spring Company's capital stock, par value $100 per share, and hereby agrees to purchase the said six shares from said Victor Pothier for $540 on August 1, 1923, providing the aforesaid Victor Pothier decides to sell said shares. The Reid Air Spring Company,

Edward Reid, Pres."

(2) That on August 1, 1923, plaintiff requested return of the $540 and offered to return the shares of stock; (3) that since then plaintiff has at all times been ready to return the shares, but defendant has refused to pay him this sum " claiming that the president had no authority to make said writing set forth in paragraph 1 of said complaint" ; (4) that defendant retains and refuses to return to plaintiff the sum received by it from him.

The answer is a general denial of all allegations of both counts of the complaint, and further alleges a sale by defendant to plaintiff of six shares of its stock for which plaintiff paid $540, and also: (5) The defendant expressly denies the right and authority of any of its officers or agents to make any such agreement as set forth in paragraph No. 1 of the second count of the amended complaint.

At the conclusion of the hearing the trial judge directed a verdict for the defendant, and afterward denied a motion to set the same aside, and judgment was rendered thereon.

By agreement of the parties and consent of the judge a summary of the evidence adduced at the trial was made and is printed in the record instead of a full reproduction. The plaintiff offered evidence as follows:

The defendant was a corporation, organized in 1922 under the laws of the State of Connecticut, and located in the city of New Haven, engaged in making air springs for automobiles. At no time was the defendant insolvent. No dividend was ever paid. During the early part of April, 1923, the plaintiff requested employment of the defendant, and then he and the president and treasurer of the defendant had a few discussions as to the employment of the plaintiff, who expressed his desire to learn the mechanism of the air spring then manufactured by the defendant, and to become the distributor of these air springs in the state of California. The plaintiff was told by these officers of the company that, while it was not a requirement that the state distributors hold stock, yet it was preferable. Early in the month of April, 1923, the plaintiff entered into the employment of the defendant and remained in its employ working as a mechanic on the air springs until November 1, 1923.

Between the early part of April, 1923, and April 28, 1923, the plaintiff was approached on a number of occasions by the president and treasurer of the defendant and requested by them to purchase some of its stock. This the plaintiff declined to do, stating that he had no funds available. These officers then requested the plaintiff to make a loan to the company of about $500 for a period of three months, and a few days later the plaintiff reported that he could borrow the money from his mother, and would loan the defendant the sum of $500, provided that he was given security. These officers then agreed to give the plaintiff, for security, six shares of stock in the company at $90 per share. The loan was increased to $540 to cover the value of the six shares of stock. On April 28, 1923, the plaintiff delivered to the president of the company the sum of $540, with the understanding that there was to be delivered to the plaintiff, as security for the loan, six shares of stock, together with the written instrument hereinbefore printed and known as Exhibit C; and that on August 1, 1923, when the loan was repaid, the certificate of stock was to be canceled. The president delivered the $540 to the treasurer, which went into the treasury of the defendant. On April 28, 1923, Exhibit C was delivered by defendant's president to the plaintiff, and on May 8, 1923, a certificate for six shares of stock of the company.

During the period of the actual employment of the plaintiff in the company there was no further discussion of the plaintiff going to California as the distributor of air springs for the company. On August 1, 1923, the plaintiff offered to return the certificate of stock to the president and treasurer of the defendant company, and the plaintiff requested these officers to repay the loan. They explained to the plaintiff that the company was not then financially able to repay the loan, and requested him to wait until September 1. On September 1, 1923, the plaintiff again requested repayment of the loan and offered to return the certificate. This was at the office of the company, and the plaintiff's conversation was with the president. The president informed the plaintiff that the company was just as bad off then as it was on August 1, and requested a further extension of one month. The plaintiff again waited, and at the expiration of one month again offered to return the stock and requested repayment of the loan. The loan was not repaid. At all times from August 1, 1923, and during the trial the plaintiff was ready and willing to return the certificate.

Upon the trial the defendant offered evidence as follows:

Early in April, 1923, the plaintiff called at the office of the defendant company, and asked the president of the company for employment, stating that he had been discharged by the Westinghouse Air Spring Company, and that he wanted to learn the mechanism of the Reid air spring and become the distributor of them for the company in the state of California. The president told the plaintiff that it was desirable that distributors become stockholders. The plaintiff again called on the president, and the latter agreed to put him to work on the assembling bench. He went to work for the defendant company about the first week in April, 1923, and was laid off this employment on November 1, 1923.

While the plaintiff was employed by the company the president introduced him to the treasurer, and the plaintiff stated to the treasurer that he desired to buy some of the defendant company's stock. The plaintiff desired to become a stockholder because he feared that some one else would get the territory. The treasurer told the plaintiff that the par value of the stock was $100 per share, but that he would let him have six shares for $540. The plaintiff agreed to purchase six shares of stock. On April 28, 1923, the plaintiff delivered the sum of $540...