Sutherland v. Wickey

• Decision Date: 17 June 1930
• Parties: SUTHERLAND, ALIEN PROPERTY CUSTODIAN, v. WICKEY ET AL.
• Court: Oregon Supreme Court

289 P. 375

133 Or. 266

SUTHERLAND, ALIEN PROPERTY CUSTODIAN, v. WICKEY ET AL.

Supreme Court of Oregon

June 17, 1930

In Bank.

Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.

Action by Howard Sutherland, as Alien Property Custodian for the United States of America, against Edward W. Wickey and others. Judgment for plaintiff, and defendants Dow C. Walker and August Wemme separately appeal.

Affirmed.

See also Wemme v. Hurlburt, 289 P. 372, Walker v Sutherland,289 P. 387.

Plaintiff became Alien Property Custodian in December, 1925, and held that responsible office thereafter and during all the time covered by the transactions hereinafter mentioned. In the sale of the capital stock of the E. Henry Wemme Company defendant Edward W. Wickey was attorney for plaintiff. Defendant Dow V. Walker was during said time and for a long time prior thereto secretary of the E. Henry Wemme Company an Oregon corporation, and as such represented plaintiff in the management of the stock in that corporation. Walker was intrusted with the proxy of plaintiff and voted the 46 shares of the capital stock held by plaintiff at the stockholders' meetings. August Wemme was one of the beneficiaries of the will of his brother E. Henry Wemme deceased, and as such was the owner of 20 shares of the capital stock of the E. Henry Wemme Company and also held 6 other shares of that stock either by purchase or as trustee for unnamed principals. Said defendant Wemme was also attorney in fact for two sisters and one brother who lived in Germany whose interest in the E. Henry Wemme Company was confiscated by the United States of America during the war. The 46 shares of the capital stock owned by plaintiff was the property so confiscated. Defendant Wickey had been for some time prior to the events recorded in the instant action at law an attorney of plaintiff and his predecessor in interest, but had severed that connection as a general employee and was retained by plaintiff to assist in the liquidation of the stock owned by plaintiff in the E. Henry Wemme Company. As such attorney he was sent to Portland, Or., to negotiate for the sale of the capital stock owned by the custodian, plaintiff herein. Instead of selling the stock, said Wickey is alleged to have devised a scheme for purchasing said stock and consummated that scheme by the aid and assistance of his codefendants. When knowledge of the facts came to plaintiff, he caused this action to be instituted for the purpose of collecting from defendants the loss he sustained by reason of the conduct of defendants resulting from the purchase by defendant Wickey of said stock. Defendants Walker and Wemme are charged with aiding and assisting said Wickey to purchase said stock. Plaintiff sued for $67,545.80.

The jury returned a verdict for the full amount demanded, and a judgment was entered against all three of the defendants for that amount. Defendant Wickey has not appealed. The other two defendants have appealed separately. Defendant Walker demurred to the amended complaint on four grounds, namely: First, plaintiff did not have capacity to sue; second, defect of parties plaintiff; third, that the court was without jurisdiction of the subject-matter; and, fourth, that the complaint does not state facts sufficient. Alleged errors Nos. 2-7 are based on the admission of testimony over his objection. Alleged errors Nos. 10-13 are based on the court's ruling sustaining objections to testimony proffered by said defendant Walker. Alleged error No. 14 is based on the court's denial of defendant Walker's motions for an involuntary nonsuit and directed verdict in his favor. Alleged errors Nos. 15-25 are based on instructions given to the jury by the court and duly excepted to by defendant Walker. Alleged errors Nos. 27-32 are based on the court's order refusing to give certain instructions requested by said defendant Walker.

Defendant August Wemme bases his appeal on the following alleged errors: (1) The court's refusal to direct a verdict in favor of defendant Wemme; (2) the court's refusal to allow defendant Wemme to show that he had sent $32,000 out of the $140,000 received by him for the stock to the German legatees; (3) exception was taken to certain instructions given by the court to the jury regarding the duty and scope of agency as applied to the instant case; (4) admission in evidence of a letter designated Plaintiff's Exhibit J; (5) admission of evidence of the reasonable value of the property belonging to the corporation, E. Henry Wemme Company; (6) the refusal to admit the testimony of defendant Wemme in his own behalf of certain information alleged to have been given by him to defendant Wickey; (7) the contention that plaintiff is not the real party in interest; (8) admission of certain letters in testimony which the defendant Wemme claims not to have any relevancy to the issues involved; (9) the contention that the court went outside of the issues in his instructions to the jury; (10) the contention by the defendant Wemme that the Alien Property Custodian was not the owner of the stock involved in this controversy; (11) that the burden of proof was put on the defendant unlawfully in one of the instructions; (12) defendant Wemme's contention that Wickey, his codefendant, was confused in his capacity as agent and that of buyer; (13) and (14) are based on alleged improper instructions given by the court to the jury; (15) is a contention that a principal can choose to sell to one who is or has been his agent; (16) is based on the contention of defendant Wemme that he had made a full disclosure to plaintiff and his agent of the transactions with Wickey and was therefore not liable. Other errors are based on instructions requested by defendant Wemme and refused by the court. Such discussion of the alleged errors as may be helpful in giving the reasons for our decision in this case will state more in detail contentions of both appellants.

BEAN J., dissenting.

G. E. Hamaker and A. D. Leedy, both of Portland, for appellant Walker.

Thomas Mannix, of Portland, for appellant Wemme.

John R. Latourette, of Portland, for respondent.

COSHOW, C.J. (after stating the facts as above).

Wickey, not having appealed, is conclusively deemed to be satisfied with the judgment. His failure to appeal is tantamount to a confession that he converted the property as alleged in the complaint. Coast Engine & Machine Works v. Barbee, 130 Or. 159, 279 P. 264, decided July 16, 1929.

Both parties have challenged the sufficiency of the complaint. The complaint alleges the capacity of plaintiff; the incorporation of the E. Henry Wemme Company; the seizure of the stock in said corporation belonging to the alien legatees; the principal property belonging to said corporation, alleging the value thereof and consequently the approximate value of the shares of stock of which plaintiff owned 46 shares as Alien Property Custodian of the United States; the appointment of defendant Wickey as attorney at law and his authority and commission to sell the interest of plaintiff in said E. Henry Wemme Company at its market value; the purchase of said stock by said defendant Wickey with the co-operation and help of defendants Walker and Wemme; the allegation of the conspiracy by the defendant with detailed statement of the scheme whereby the 26 shares of defendant Wemme were purchased for the sum of $140,000, far above its market value, in order to procure from defendant Wemme consent to sell the 46 shares owned by plaintiff at the price of $2,200 a share, far below their market value; the plan and work of defendants in aiding defendant Wickey to purchase said stock. The complaint concludes with this allegation: "That the fair market value of said stock of this plaintiff at the time of the conversion aforesaid, was the sum of $3,842.30, per share, or a total fair market value of $168,745.80; that the amount paid to plaintiff was the sum of $101,200.00, and that plaintiff has been damaged in the sum of $67,545.80, being the difference in the fair market value of said stock and the amount received by him."

No motion was made to make the complaint more definite and certain or to question its sufficiency, but appellants demurred as stated above. No extended discussion is necessary to hold that the complaint states sufficient facts to constitute a conversion on the part of defendant Wickey and that he was abetted, aided, and assisted in the commission of said tort by defendants Walker and Wemme. It is apparent from the brief statement given above that the complaint alleges conversion and the grossest kind of fraud on plaintiff by the defendant Wickey with the help and support of his codefendants.

It is contended by the appealing defendants that plaintiff was without capacity to sue. There is no merit in this contention. Plaintiff is the holder and owner of the stock under the Trading with the Enemy Act (50 USCA Appendix). He is an express trustee and as such is authorized by the law of this state to sue in his own name. Or. L. § 29.

The contention that there is a defect of parties is also without merit. That contention is based upon the fact that the three German legatees are in law the owners of the capital stock held by plaintiff, and as such are the real parties in interest. The stock belongs to the United States and stands in the name of plaintiff as the Alien Property Custodian. Central Union Trust Co. of New York v. Garvan, 254 U.S 554, 569, 41 S.Ct. 214, 65 L.Ed. 403; Commercial Trust Co. v. Miller, 262 U.S. 51, 43 S.Ct. 486, 67 L.Ed. 858. The German citizens, who eventually may become the owners of the 46 shares of stock by the grace of Congress and sufferance of the United States of America, do not and did not at the...