Sommerville v. Greenhood
| Decision Date | 22 November 1922 |
| Docket Number | 4917. |
| Citation | 210 P. 1048,65 Mont. 101 |
| Parties | SOMMERVILLE v. GREENHOOD ET AL. |
| Court | Montana Supreme Court |
Appeal from District Court, Missoula County; Theo. Lentz, Judge.
Action by W. H. Yerrick against Henry Greenhood and others. From an adverse judgment and from an order denying his motion for new trial, the named defendant appeals. Plaintiff dying after appeal, R. S. Sommerville, his administrator, has been substituted as respondent. Reversed, with directions.
Hall & Pope and Thomas N. Marlowe, all of Missoula, for appellant.
Russell Madeen & Clarke, of Missoula, for respondent.
This is an action for damages for conversion of a stock of wines liquors and cigars, furniture and fixtures of a wholesale and retail liquor business in the city of Missoula. William Steinbrenner, Henry Greenhood, and F. H. Elmore were made parties defendant at the time of the commencement of the action, and later the First National Bank of Missoula was also made a party defendant.
After issue joined a trial was had in December, 1919, resulting in a judgment of nonsuit as to the defendants Steinbrenner Elmore, and the First National Bank, and a mistrial by reason of the disagreement of the jury as to the defendant Greenhood. The second trial was had in June, 1920, resulting in a verdict for the plaintiff, Yerrick, and against the defendant Greenhood in the sum of $8,959.67 and interest, upon which judgment was rendered for principal and interest in the sum of $13,190.57, and for costs of suit in the sum of $685.84. Defendant Greenhood appeals from the judgment and from an order denying his motion for a new trial. Since the appeal has been perfected the respondent W. H. Yerrick has died, and his administrator has been substituted as respondent.
The amended complaint contains the usual allegations common to an action in conversion. The separate answer of the defendant Greenhood, after denying the conversion, alleges, in substance and effect, that in the month of July, 1914, plaintiff, being seriously sick, was confined in the St. Patrick's Hospital in the city of Missoula; that he was deeply involved financially and unable to pay his obligations, and in order to bring about an extension and to prevent his business from being sold out, and the forfeiting and cancellation of his license as a liquor dealer, in the months of July and August, 1914, he caused to be incorporated under the laws of the state of Montana the "Yerrick Liquor Company," and the defendants William Steinbrenner and Henry Greenhood were solicited to act with him as incorporators and directors thereof; that plaintiff, through his attorneys, prepared articles of incorporation for incorporating the Yerrick Liquor Company, and signed and acknowledged the same on the 31st day of July, 1914, and caused the same to be filed in the office of the county clerk and recorder of Missoula county, Mont., on the 8th day of August, 1914, and later caused the same to be filed with the secretary of state; that plaintiff immediately after said incorporation, for a valuable consideration, sold, transferred, and delivered to the Yerrick Liquor Company his entire stock of goods, wares, and merchandise, and the Yerrick Liquor Company thereupon assumed the outstanding obligations, liabilities, and indebtedness of W. H. Yerrick personally, and proceeded to operate the business which had theretofore been owned and conducted by Yerrick as his individual business; that thereafter it was discovered that the corporation could not be operated at a profit so as to pay off its indebtedness, and thereupon defendants William Steinbrenner and Henry Greenhood resigned as directors, and the plaintiff caused to be elected in their place and stead Eddie Randall and Bert Breeding; that in the meantime plaintiff, Yerrick, was restored to his health and returned to his home and personally assumed the management and conduct of the Yerrick Liquor Company, and ran the same as a one-man corporation; that thereafter, to wit, on the 18th day of January, 1915, at a meeting of the directors of the corporation, at which meeting Yerrick acted as president, and Bert Breeding acted as secretary, by resolution passed by the vote of all the directors, there was authorized a general deed of assignment of all the company's property to one Louis Schramm, for the benefit of the creditors of the company, by reason of the insolvency of the corporation, pursuant to which, on the 19th day of January, 1915, the corporation made, executed, and delivered a general deed of assignment to Louis Schramm; that said trust was accepted by Schramm, and the assignment was filed in the office of the county clerk and recorder of Missoula county on January 19, 1915; that thereafter, and on the 21st day of January, 1915, plaintiff, Yerrick, as president of the Yerrick Liquor Company, and for and in its behalf, made, verified, and caused to be filed an inventory and appraisement, in which was set out all the creditors of the Yerrick Liquor Company and an inventory and appraisement of all the property of the corporation; that the assignee thereupon entered upon the discharge of his duties and took full possession and control of the property, converted the same into money, and paid to the sundry creditors of the corporation, which included all the personal creditors of Yerrick, out of the proceeds realized from the sale of the property, 32 1/2 per cent. of their several claims; that the property claimed by the plaintiff to have been converted by the defendant to his damage was the same property which was sold to the Yerrick Liquor Company; that all acts and things done by the Yerrick Liquor Company during the time that Greenhood was a director of the same were done with the full knowledge, consent, and approval of Yerrick and at his instance and request and for his use and benefit; and that Greenhood derived no profit whatever from said transactions or any of the same, and never asked or received any compensation for any service performed by him while he was such director, and all things done by him were for the purpose of assisting W. H. Yerrick.
The reply to the separate answer of the defendant Greenhood alleges, in substance and effect, that at all times in the answer mentioned the plaintiff was ill, sick, diseased, and disabled in body and mind, nigh unto death, and confined in St. Patrick's Hospital, or at his rooms at Missoula, under the constant care of a physician and nurses, and by reason of his illness and the mental pain and suffering then undergone by him he was during all of said times, and particularly at the times alleged in the answer and at the time of the execution and filing of the articles of incorporation and execution of bill of sale, delirious, out of his mind, and totally unable to know or understand or appreciate the effect, purpose, or consequence of any matters transpiring before him; that none of the matters and things and alleged transactions were done or performed by plaintiff or by his authority or with his knowledge or consent; and that the alleged acts and transactions were not the acts of plaintiff.
There is much contradiction in the testimony, but an endeavor will be made to state in a general way some of the principal facts of the several transactions surrounding Yerrick and his business affairs so far as they may be involved in this suit, from the time he entered the hospital until the commencement of the action, so far as possible, basing the statement either upon those things which may be considered as conceded or proven, and, as to those matters concerning which the testimony is in conflict, to state wherein there is contradiction. The record is voluminous, consisting of 837 pages of printed matter, and the evidence was not put in with much regard to logical sequence of events, making an accurate statement of the facts most difficult.
The plaintiff, a man 70 years of age and in poor health, for a considerable period of time prior to and on the 1st day of July, 1914, owned and was engaged in the wholesale and retail liquor business in the city of Missoula, in a building leased from one William H. Houston. The retail part of the business, the saloon, was conducted on the first floor, and the stock of goods from which the plaintiff sold at wholesale, was kept in the basement. On the second floor the plaintiff conducted a rooming house, and he personally occupied one of the rooms as sleeping quarters and as a sort of a private office. He kept some of his business papers in this room and some in the safe in the front part of the saloon. An inventory was taken of his stock of wines, liquors, cigars, furniture and fixtures, commencing on January 1, and concluding about January 10, 1914, by an accountant, A. L. Davis, who also, from the time of its completion to June 14, 1914, kept the plaintiff's books of account.
On July 1, 1914, plaintiff entered St. Patrick's Hospital as a patient, where he remained continuously until November 20 1914, much of the time being seriously ill, and some of the time delirious and unable to transact business. At the time he entered the hospital he had in his employ two bartenders, Eddie Randall and Bert Breeding. His rooming house portion of the business was conducted by one Eva Randall, the wife of Eddie Randall, one of his bartenders. It does not appear that any particular person was left in charge of any part of his business. He owed some debts, the exact amount not being shown; one item of indebtedness being for rent due William H. Houston, owner of the building in which he conducted his business. He was considerably behind in his rent. He was also indebted to the First National Bank of Missoula, with which bank he was doing his banking business, on a past-due note. ...
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