Sigua Iron Co. v. Greene

• Decision Date: 13 June 1898
• Citation: 88 F. 207
• Parties: SIGUA IRON CO. v. GREENE.
• Court: U.S. Court of Appeals — Second Circuit

88 F. 207

SIGUA IRON CO. v. GREENE.

United States Court of Appeals, Second Circuit.

June 13, 1898

The action was brought by plaintiff, a West Virginia corporation to recover a balance unpaid on some stock in said company which it claimed to have been owned by defendant. The following outline of the facts and history of the case sufficiently indicates the points discussed in the opinion infra: In the early part of the year 1890 a number of persons known as the 'Sigua Syndicate" had obtained and held an option on certain mining property,-- the legal title seems to have been in one E. D. Smith, as trustee,-- and for the purpose of taking over and operating such property the plaintiff corporation was formed in April, 1890. Its authorized capital stock was $5,000,000. Of this $1,000,000 was treasury stock. $1,000,000 was issued full paid, and $3,000,000 was issued 65 per cent. paid. By an agreement known as the 'Sigua Syndicate Agreement' all of the stock of this company was underwritten. The several signers agreed to transfer the option and leasehold to the company for said $5,000,000 capital stock, to return $1,000,000 of the full-paid stock to the company to be held as treasury stock for company purposes, and to take the number of shares set opposite their names, both of full paid and of 65 per cent. stock. All rights to any stock secured to the subscribers under this agreement were divided into 30 equal (syndicate) shares, and defendant subscribed, through E. D Smith, his agent, duly authorized to make such subscription, for one-half share. In due course the shares of stock coming to defendant under this agreement were issued to him. All assessments thereon have been duly paid in money or services, and no claim by reason of his holding such shares has been made against him. Some of the subscribers to the Sigua Syndicate agreement, being of the opinion that they were taking more of the stock than they cared to hold, formed a pool to dispose of such surplus of 65 per cent. paid stock. Of course, no one wished to part with the full-paid stock. The object was presumably to get rid of possible liability for future calls. E. D. Smith was one of this pool. He contributed 1,250 shares, the whole number of shares in the pool being 10,000, which was one-third of the total number of 65 per cent. paid shares to be issued by the company. These 10,000 shares were put in Smith's hands by the members of the pool, to be disposed of. It turned out that considerably less than half of this pool of 10,000 shares was thus disposed of. The balance, of course, remained the property of the original subscribers, and was subsequently placed, or ought to have been placed, in their names on the books of the company. The fundamental question in dispute here is whether 400 of these 10,000 shares was disposed of to the defendant, or whether its original holder is still the owner, and liable for any unpaid balances thereon. The agreement by virtue of which it is contended that defendant engaged to take said 400 shares, and touching them, to become a stockholder in the company, is as follows: 'Agreement of purchase of Sigua Iron Company Stock. Capital stock, $5,000,000. Par value, $100 per share. $1,000,000 of capital stock to be left in the treasury of the company.

'We, the undersigned, hereby agree with the Sigua Syndicate to purchase from them, at $35 per share, the number of shares (of the par value of $100 each), set opposite our names, respectively, the same being 65 per cent. paid, and liable to further calls and assessments to the extent of 35 per cent., said 35 per cent. being payable 1/10, or 10 per cent., thereof, on call, and the remainder as required, probably at the rate of 1/10, or 10 per cent. of said 35 per cent., every two months, or a proportionate part in case of over-subscription: Number Amount

'Name. Address. of Shares. to be Paid.

B. D. Greene 50 Broadway. 1,000 35,000

I. L. Pierson. Care Adolph

Boissevain & Co., Amsterdam. 500 17,500

Robert Fleming, Care Maitland,

Per E. D. S. Phelps & Co.,

New York. 500 17,500

W. M. Chauvenet. St. Louis,

709 Pine St. 100 3,500

Samuel Bell, Jr. 208 So. 4th St. 100 3,500

H. M. Sill. Schwl Lave, Gtn. 100 3,500

W. W. McKee Catasauqua. 200 7,000

J. W. Fuller. '

Chas. H. Audon. 100 3,500

A. P. Berlin,

Per E. D. S. Slatington, Pa. 100 3,500

F. F. Vandervoort. Phg., Pa. 100 3,500

M. E. Olmstead,

Per E. D. S. Harrisburg. 200 7,000

Paul Thompson. 206 So. 4th St. 50 1,750

E. J. Collins. Bullitt Building 100 3,500'

The Sigua Syndicate did not sign this agreement, nor, so far as appears, was it or any agreement to sell ever signed by any of the members of such subsyndicate or pool. All of these transactions occurred before any certificate of stock had been made out by the company. On July 8, 1890, three certificates were made out to E. D. Smith, trustee,-- two each for 10,000 shares full paid, and one for 29,995 shares 65 per cent. paid, and were issued to him on that day. Thereupon, and on the same day, he delivered back two of these (one of the 10,000 share certificates and the 29,995 share certificate), indorsed with a statement to whom the shares should be transferred. Transfers were thereupon made upon the books of the company, and stock certificates prepared in conformity to such list. Two certificates were made out in the name of defendant, covering his half share under the original syndicate agreement, and, in addition, one for 600 and one for 400 shares.

It will be observed that defendant's name is subscribed to the agreement of purchase for 1,000 shares. He accepted 600 of these, took stock certificate therefor, and, so far as appears, has responded to any calls thereon. It is as to the balance only-- 400 shares-- that dispute has arisen. The defendant admits his signature to this document; his contention, briefly stated, being that he signed upon an express understanding with the representative of the sellers that he was to take only such part of the 1,000 shares as he could find outside purchasers for; that he notified Smith, the representative of the seller, and also notified the president of the company, that he had been able to place only 600 shares, and would take only that quantity, and that his contention as to the number of shares of stock which should be thus allotted to him was, so far as he knew, always acquiesced in by the company. He insists that he did not know these 400 shares had ever been transferred to him on the books, and that he never authorized or acquiesced in such transfer.

Upon the first trial of the action the case went to the jury, and plaintiff recovered verdict for the full amount. Upon appeal to this court judgment was reversed. The opinion is reported, but not in full, as Greene v. Iron Co., in 22 C.C.A. 636, 76 F. 947. ^[1] Upon the new trial two specific questions were put to the jury and upon their answers being received verdict was directed for defendant

Howard A. Taylor, for plaintiff in error.

L. Laflin Kellogg, for defendant in error.

Before LACOMBE and SHIPMAN, Circuit Judges.

LACOMBE Circuit Judge (after stating the facts).

Before discussing the merits of this appeal, it will be well to dispose of a point of practice which was presented upon the argument. Plaintiff in error insists not only that upon the whole case it was entitled to a direction, but also that, if that be not so, there were disputed questions of fact which the court improperly took from the jury, and itself decided. Defendant in error insists that plaintiff in error is in no position to raise this objection. The point is thus stated in defendant's brief:

'Where, at the close of the evidence on a trial, both parties ask the court to direct a verdict in their favor, and the court directs a verdict for one side, to which the other excepts, but makes no request to go to the jury, it will be held that the parties have thus treated the case as presenting questions of law only, and, there being evidence to support the ruling, the judgment should not be assailed by showing that there were questions of fact arising on the evidence.'

In support of this proposition are cited Provost v McEncroe, 102 N.Y. 650, 5 N.E. 795; Sutter v. Vanderveer, 122 N.Y. 652, 25 N.E. 907; Daly v. Wise, 132 N.Y. 306, 30 N.E. 837; Board v. Beal, 113 U.S. 227, 5 S.Ct. 433; Robertson v. Edelhoff, 132 U.S. 614, 10 Sup.Ct. 186. The circumstance that a party, at the close of the case, moves the court to direct a verdict in his favor, does not, of course, operate to waive any right he may have to go to the jury. Such motion may be made, and most often is made, upon the theory that some controlling proposition of law would require a decision in the party's favor, although some or all of the disputed questions of fact were decided in his adversary's favor. But, if the court be not convinced as to the soundness of his proposition of law, he is none the less entitled to have his hearing before the triers of the facts upon any disputed material issues of fact in the case, unless in some way or other he waives his right, or leads the court to suppose that he concedes there is no material fact in dispute. In the supposititious case stated above, where both sides move for a direction, and one motion is granted and the other denied, and the defeated party takes an exception only, without any suggestion that there is some material fact in dispute that should go to the jury, the court is entitled to assume that he concedes there is nothing material for the jury to pass upon. But the case at bar is a very different one from that to which the authorities are cited. The proofs being closed, both sides moved for the direction of a verdict, but the court denied both motions. Two...