Robertson v. Business Boosters' Country Club

• Decision Date: 15 November 1923
• Docket Number: 3 Div. 621.
• Citation: 98 So. 272,210 Ala. 460
• Court: Alabama Supreme Court
• Parties: ROBERTSON v. BUSINESS BOOSTERS' COUNTRY CLUB.

98 So. 272

210 Ala. 460

ROBERTSON v. BUSINESS BOOSTERS' COUNTRY CLUB.

3 Div. 621.

Supreme Court of Alabama

November 15, 1923

Rehearing Denied Dec. 20, 1923.

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Action in assumpsit and trover by the Business Boosters' Country Club against W. T. Robertson.From a judgment for plaintiffdefendant appeals.Reversed and remanded.

Horace Stringfellow, of Montgomery, for appellant.

W. P McGaugh and Hill, Hill, Whiting & Thomas, all of Montgomery, for appellee.

SAYRE J.

Plaintiff, appellee, declared on the common counts and in trover, thereby seeking to charge defendant with the full amount of funds, or bank checks, received by him while president of plaintiff corporation and expended under his direction and authority in the drilling of an oil well, or what the parties in interest hoped might prove to be an oil well.Plaintiff appears to have had judgment for the full amount of the checks received by defendant, plus interest to the date of judgment, less $400, the checks for which proved worthless.Trial was had before the judge without a jury, and the assignments of error go to the general merits of plaintiff's case.

In both forms of action, general assumpsit (Traweck v. Hagler,199 Ala. 666, 75 So. 152) and trover ( McGowin v. Young, 2 Stew. 276), it is competent for the law court to administer justice according to the principles of equity.

It is not denied that defendant expended the funds received by him in the business of drilling a well as in the beginning of the enterprise all parties concerned intended they should be expended; but during the progress of the work differences arose between plaintiff corporation and defendant, who, until then, was president and general managing officer of the corporation, and these differences eventuated in the suit under consideration.Without regard to the causes of these differences, defendant's contention, sufficient to dispose of the entire controversy, if sustained, is that the funds in dispute came into his hands as a trustee for the individuals from whom they came, not as an officer of plaintiff corporation, and therefore that he is not accountable to the plaintiff for them; but our judgment is that this contention cannot be sustained.

The facts are that plaintiff corporation had been organized with an authorized capital stock of $50,000 for the purpose of maintaining and operating an amusement and recreation park, a swimming pool, and some other such things, and "to develop the natural resources of Alabama, and to acquire by purchase, deed, or gift, or assignment, interest in mineral rights, timber lands, and oil and gas rights and leases."Then, less than $5,000 of the stock having been subscribed, and the affairs of the corporation languishing, defendant was induced to buy stock and become president of the corporation, after which defendant and other shareholders solicited subscriptions to stock, for which checks were given, payable to "W. T. Robertson, president," with the express understanding and agreement that the fund thus raised, the fund in controversy, was to be applied solely to the drilling of an experimental oil well, for which use and application of the fund the subscribers accepted defendant's personal assurance, but it was also understood and agreed that, if not enough money was raised "to begin drilling," the checks were to be returned to the subscribers.The checks, so given, were by defendant deposited in bank to his credit as "trustee" on December 8, 1921.We think it is to be inferred, perhaps, that the judgment against defendant for the full amount thus made available to his order proceeded upon the theory that by his deposit of the checks to his credit as "trustee"defendant was guilty of a wrongful conversion, which, without regard to its subsequent application, rendered defendant personally liable to plaintiff for the full amount of the deposit.But the trial court, if it proceeded upon the stated theory, was in error.

Defendant was president and in fact managing officer of plaintiff corporation.From the undisputed evidence no inference can be drawn save that the checks were given for stock in plaintiff corporation, and defendant's testimony is that they were given for the purpose of financing the drilling of an oil well under plaintiff's charter.These facts constituted the fund realized from the checks the property of plaintiff,...