Telman v. Galles

• Decision Date: 28 December 1936
• Docket Number: No. 4148.,4148.
• Citation: 41 N.M. 56,63 P.2d 1049
• Parties: TELMANv.GALLES.
• Court: New Mexico Supreme Court

41 N.M. 56

63 P.2d 1049

TELMAN

v.GALLES.

No. 4148.

Supreme Court of New Mexico.

Dec. 28, 1936.

Appeal from District Court, Bernalillo County; Harry P. Owen, Judge.

Suit by John Telman against H. L. Galles. From a judgment in favor of the plaintiff, the defendant appeals.

Affirmed.

Creditor of corporation, who because of promise of principal stockholder of corporation to pay corporation's debt to creditor, failed to file claim with receiver of corporation so that claim against corporation was lost, had cause of action, not within statute of frauds, against principal stockholder, who was also principal stockholder of purchasing corporation.

John F. Simms and Augustus T. Seymour, both of Albuquerque, and Wilson & Watson, of Santa Fe, for appellant.

Rodey & Dickason, of Albuquerque, for appellee.

BRICE, Justice.

After considering appellant's motion for a rehearing herein, the original opinion was withdrawn and the following substituted:

From a decree in favor of the appellee (plaintiff below) for $1,200 upon a charge of fraud and deceit, the appellant (defendant below) has prosecuted this appeal.

It is alleged in the complaint that appellee made an offer in writing to purchase an automobile from the New Mexico Motor Corporation, of which appellant was president and principal stockholder, a copy of which is attached to the complaint. At the same time he delivered to the corporation his automobile to be sold for not less than $1,200, which amount was to be applied to the price of the new car to be selected by appellee. That his automobile was sold for $1,200. That subsequent to the making of the contract the New Mexico Motor Corporation had been placed in receivership by order of the district court of Bernalillo county, N. M., and all of the assets of the corporation sold to Galles Motor Corporation (of whom appellant is president and principal stockholder) for a price equal to all the claims filed and approved in the receivership case, and that the receiver had been discharged. That appellant promised and agreed to pay to appellee the amount of his claim against the New Mexico Motor Corporation if appellee would not file it with the receiver for allowance. That such promise was made with the intent to deceive and defraud the appellee, for appellant's own personal gain, in that appellant did not intend to fulfill it at the time it was made. That appellee relying upon such promise did not file his claim with the receiver, which he would have done but for appellant's fraudulent promise made for the purpose of keeping the amount of the claims against the receivership as low as possible so that appellant could profit personally as principal stockholder in a new corporation organized to take over the assets of the New Mexico Motor Corporation. That the assets of the old corporation were sufficient to pay appellee's claim in full if it had been filed. That by reason of the fraud and deceit of defendant and by reason of the representations made by defendant, which representations were made with the intent to deceive plaintiff and prevent him from filing his claim upon which promises and representations plaintiff relied, plaintiff has been damaged in the amount of $1,200.

The defense as alleged in the answer was to the effect that the motor corporation had offered to deliver to the appellee an automobile as specified in the contract, “and demanded that the plaintiff pay the balance due thereon, which the plaintiff failed and refused to do, and thereupon, the New Mexico Motor Corporation, after waiting more than ten days from and after notice to the plaintiff that the automobile was ready for delivery, canceled the plaintiff's order, and retained his deposit as liquidated damages in accordance with the terms and provisions of said contract.” That thereafter the appellee had notified said corporation he would not claim any interest, right, or title in such deposit; that appellee knew the limitation of time within which claims could be presented against the receiver in question and without in any manner being deceived or misled by the appellant the appellee elected not to file his claim with the receiver, and as a result it was not presented to the court within the time allowed and was barred by the action of the court after the conclusion of the time within which claims might be presented.

At the close of the plaintiff's (appellee's) testimony at the trial in the district court, the defendant (appellant) moved the court for a dismissal upon the ground “that there has been no evidence introduced upon which this suit for fraud and deceit could be maintained.” This motion was overruled, and appellant refusing to introduce testimony, decree was entered as stated.

[1] The rule, which applies under such condition of the record, has been often stated by this court. The real facts may be different from those which bound the district court; but in making his motion to dismiss, appellant rested his case on the question of law, viz., considering only plaintiff's testimony together with all reasonable inferences that could be deduced therefrom, in a light most favorable to the plaintiff, had a case been made that would support a decree? The district court and this court are bound by the rule.

From the testimony so considered, we deduce the following facts: In May, 1931, the appellee entered into an agreement with the New Mexico Motor Corporation to purchase a La Salle or Cadillac automobile, and as a part of the purchase price delivered to that corporation his secondhand automobile which was accepted at $1,200. The appellee not being financially able to pay the balance of the consideration at the date agreed, the time for closing the transaction was extended until appellee should be able to pay the balance. The written contract provided, among other things: “This order is not binding upon you (referring to the New Mexico Motor Corporation) until accepted in writing signed by H. L. Galles, president.” The order was never accepted in writing, but appellee's car was delivered to and accepted by the New Mexico Motor Corporation, sold by it for $1,200, and this money retained by it. The contract also provided: “In case the automobile cannot be delivered as specified, the deposit shall be returned to the undersigned, and thereupon all obligations hereunder shall cease. *** In case the undersigned does not pay the balance of the full purchase price within 10 days after notice that the automobile is ready for delivery, you may cancel this order and retain the deposit as liquidated damages.”

On the 4th day of May, 1933, the appellant filed a suit against the motor corporation, alleging in his complaint that he was its president and principal stockholder (in fact, his counsel stated in oral argument that he owned all the stock except qualifying shares for directors); that it was insolvent; and prayed for the appointment of a receiver to wind up its affairs. To this action the corporation immediately filed an answer admitting the allegations of the complaint, and on the same day an order was entered appointing a receiver of that corporation's property. In the order it was provided that the 10th day of June, 1933, should be the limit of time within which creditors could present claims for allowance against such corporation. Before the time for filing claims had expired, appellant agreed to pay appellee's claim if appellee would not file it with the receiver. The appellee, relying on this agreement and believing appellant would pay the claim as promised, did not file it, with the result that it was barred by the order of the court, mentioned. Appellant told appellee he had stated to some federal officials that appellee had no claim to any of the assets of the receivership and gave as a reason for not wanting the claim filed that if it was filed it would “put me in a kind of bad position because I told the Government Revenue Officers you did not have anything coming as far as that claim was concerned.” Stating further to appellee, “You don't have to file your claim with the receiver, I will take care of you myself.” The assets of the corporation were sold at private sale to the appellant, the consideration being that he would pay all the claims allowed against the corporation and the expense of receivership.

The assets of the corporation were transferred to a corporation organized and dominated by appellant (in which he owned the majority, if not all, of the stock, probably the latter), and the receiver thereupon was discharged; after which appellant again stated he would take care of appellee's claim and thus redeem his promise; but later denied legal liability and refused payment. The inventory of the receivership showed assets of the corporation of a value in excess of $37,000, with approximately $25,000 debts; claims of $20,500 of which were filed and approved. Of approved claims, $18,500 were claimed by a bank, and these were bought by appellant for about $7,500; so that really the $37,000 in listed assets were taken over by appellant through the medium of a new corporation for about $10,000. About $14,000 of the bank's claim was listed as a disputed item, but the evidence does not indicate the nature of the dispute. Other facts and inferences will be mentioned in the opinion.

[2] If appellee had a valid claim against the corporation, it was lost by reason of his failure to file it with the receiver; there being ample assets to take care of it.

The contract provided: “In case the automobile cannot be delivered as specified, the deposit shall be returned to the undersigned, (appellee) and thereupon all obligations hereunder shall cease.”

It is a reasonable inference that when the corporation was placed in receivership for insolvency, it could not deliver the automobile, and therefore appellee's claim against the receiver, according to the terms of the contract, was the return of the $1,200.

[3] Appellant suggested...