Teeple v. Hawkeye Gold Dredging Co.
| Decision Date | 11 February 1908 |
| Citation | 114 N.W. 906,137 Iowa 206 |
| Parties | E. E. TEEPLE, Appellee, v. HAWKEYE GOLD DREDGING CO., Appellant |
| Court | Iowa Supreme Court |
Appeal from Hardin District Court.-- HON. J. H. RICHARDS, Judge.
ACTION at law to recover the money value of certain shares of the capital stock of the defendant company, to which plaintiff claims he was entitled, and which defendant refused to issue to him. There was a directed verdict in favor of plaintiff and defendant appeals.-- Reversed.
Reversed.
Crissman & Sargent, for appellant.
Albrook & Lundy, for appellee.
As conceded in the pleadings of both parties, the defendant is a corporation organized under the laws of the province of British Columbia, Dominion of Canada. The answer fixes the time of its organization as of date May 19, 1904, and this is nowhere questioned in the record. In his petition plaintiff alleges that in May, 1904, he entered into an oral contract with one B. B. Bliss, a representative of the defendant company, by the terms of which he, plaintiff, was to sell stock of the company, and for every ten shares sold by him he was to become entitled to, and the company was to issue to him, one share of stock. And he says that, acting under said agreement, he sold a sufficient number of shares to entitled him to 8,150 shares as and for his compensation. He alleges repeated demands, both oral and in writing, for the issuance of the stock to him, and that such demands have been refused. The writings referred to are set out in the petition, and consist of letters written by plaintiff to officers of the company, and answers thereto received. It is admitted in the petition, in effect, however, that in September, 1905, there was sent to plaintiff by the president of the company shares to the number of eight thousand, one hundred and fifty, evidenced by four certificates, but it is alleged that such certificates bore upon their face a typewritten indorsement in substance that the same should not be entitled to participate in the assets of the company in case of liquidation until all stock paid for in cash had first been paid in full. And plaintiff says that he returned such stock, saying in his letter of transmittal that "the same don't seem to fill the bill, and believing you have no right to restrict as to character of the stock." The value of the eight thousand, one hundred and fifty shares is alleged to be $ 1,222, and judgment is demanded for that sum.
The answer is in one count, and for convenience of reference we shall attach numbers to our statement of the matters of fact pleaded: (1) Denial is made of authority in Bliss to make any contract for the employment of plaintiff; and it is denied that he, Bliss, had authority to contract on behalf of the defendant company for the sale or issuance of any of the shares of its capital stock. (2) It is alleged that in August, 1904, it became known to the managing officers of defendant and to plaintiff that the funds and assets of the company had been misappropriated and dissipated in large part, and the records of the company relative to its assets and to the persons who were members and shareholders, and as to the names of persons who had subscribed for shares, were so wanting and indefinite as to require long and tedious investigation of its affairs in order to determine the rights of persons entitled to and claiming shares, and to determine claims made against the company, and that said investigations continued of necessity until in March, 1905, all of which was well known to the plaintiff. That prior to March 11, 1905, no register of members of the company had been made, nor had there been made any allotment of shares, but that on that date shares were issued and allotted to the members of the company, and a register made as required by the memorandum and articles of association of the company, a copy of which is attached; that the companies act of the province of British Columbia requires that every company keep a register of its members, in which shall be entered names, addresses, the amount of the holdings, etc. (3) It is denied that plaintiff became entitled to shares of defendant company for services rendered in the number of eight thousand, one hundred and fifty shares, or any other number, and had no right or interest in any other share of defendant company until on or about April 27, 1905; that on or about the said day the claim of plaintiff for shares for alleged services theretofore rendered was granted, and shares allotted and allowed to him in the number of eight thousand, one hundred and fifty, which shares were then duly placed to the credit of plaintiff in the register of members of said defendant company, and which said designated shares have ever since said time and do now appear on said register of members in the name of plaintiff; that plaintiff has ever since said time continuously been the owner of same and entitled to all the rights and privileges relative thereto, the same as other shareholders of defendant company; that during said time plaintiff has been entitled to the direction and control of said shares, which he has during said time exercised. (4) In addition to a general denial, it is denied that any demand had ever been made upon it by plaintiff for the issuance to him of shares of stock. The writing of the letters set out in the petition is admitted, but it is denied that the same constitute a demand such as to entitle plaintiff to maintain this suit. (5) It is denied that after shares were granted and allotted to plaintiff, and his rights thereto determined and the same credited to him on its register of members, as provided in its articles of association, plaintiff demanded same, or that any such demand therefor was refused by defendant, and defendant denies that plaintiff is entitled to damages by reason of the alleged demand and refusal, or to the relief demanded in his petition. (6) It is admitted that the first certificates issued to plaintiff contained an indorsement as alleged in the petition, but the fact is alleged to be that the said indorsement was erroneous, and made by mistake, and that, within a reasonable time after being notified of the erroneous indorsement, other stock was issued to plaintiff as in another paragraph of the answer stated. (7) Defendant further states that on or about the 10th day of February, 1906, certificates for the said eight thousand, one hundred and fifty shares were duly issued by defendant company and tendered to plaintiff; that it still is ready and willing to deliver said certificates, as provided in its articles of association, to plaintiff, and hereby makes the offer thereof and tenders the same in court.
On motion of plaintiff the second, fourth, and sixth matters of defense pleaded were stricken out. In response to a motion for more specific statement, defendant further answered, pleading that the indorsement appearing in typewriting on the first certificates when issued was discovered to be a mistake about October 4, 1905, and that other certificates for said eight thousand, one hundred and fifty shares were issued on or about February 10, 1906.
Plaintiff filed a reply in which he pleaded that subsequent to the organization of the defendant company, and with full knowledge, it ratified the acts of Bliss, and received and made use of the proceeds of plaintiff's labor, and retained the same, and is now estopped, etc.
I. Defendant complains of the striking out of its answer the several divisions thereof designated in the foregoing statement. We think there was no error in so far as the second division is concerned. It will be observed that the allegation of the petition is of services rendered the company; there was no intimation until the filing of the reply that the services were rendered in connection with the promotion of the company and before its organization. And on no assumption could the fact that, after the service was rendered, the company found itself involved in internal difficulties and dissensions, be made the groundwork of a defense to plaintiff's claim; it being otherwise liable. Moreover, it is no part of the allegation that there was any difficulty respecting the stock claimed to have been sold by plaintiff. And, if the allegation were otherwise, confessedly the tangle had been straightened out long before December 28, 1905, the date on which this action was commenced.
The fourth division of the answer should not have been stricken out. One of the letters written to plaintiff -- being one of those set out in the petition -- bearing date May 19, 1905, advised him that his claim for stock had been allowed. It was no part of the duty of defendant's officers to carry the stock to plaintiff and place it in his hands. And if, after the allowance and notice, plaintiff did not present himself and request the issuance and delivery of the stock, he should not be permitted in an action of this character to recover of defendant a money judgment based upon the market value of the stock, and this would seem to be true on plainest principles.
The sixth division of the answer should not have been stricken out. It should be borne in mind that what we have designated as "divisions" of the answers are not in form pleaded as separate counts, so that fairly enough, in determining what force and effect should be given one matter alleged, we may take into consideration all the other matters pleaded in the answer. Proceeding on this theory, we have as the substance of the answer that, while denying the authority of Bliss to bind the company by contract, still the claim of plaintiff for stock in payment for services was given recognition by the company in April, 1905, and an allotment of the number of shares...
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