Page images
PDF
EPUB

(75 N. H. 154)
KIDD et al. v. NEW YORK SECURITY &
TRUST CO. et al.

(Supreme Court of New Hampshire. Rocking-
ham. Jan. 5, 1909.)

1. JUDGMENT (§ 713*)—MATTERS CONCLUDED -GENERAL DECREE-FRAUD.

Where there was a general decree for defendants, in a suit to set aside a transfer of assets of a corporation to one of them on the ground of fraud and conspiracy, and there was conflicting evidence upon the question of fraud, the decree includes a finding that the transfer was not the result of fraud and conspiracy on defendants' part.

[Ed. Note.-For other cases, see Judgment, Dec. Dig. § 713.*]

2. EQUITY (8 427*)-DECREE-CONFORMITY TO SPECIAL FINDING.

In an action by stockholders of a corporation to set aside a transfer of the assets of the corporation to a defendant trust company on the ground of fraud and conspiracy, a special finding that the taking of certain assets of the corporation by defendant trust company was intentionally concealed from plaintiffs by defendants until after suit was brought, to prevent plaintiffs from taking measures to prevent the consolidation of the corporation with the trust company, was not inconsistent with a general decree for defendants dismissing the suit, where it was not found that defendants were successful in carrying out their purpose, or that if plaintiffs had known of the proposed transfer, they would have taken steps to prevent consol

idation.

[Ed. Note.-For other cases, see Equity, Dec. Dig. § 427.*]

[blocks in formation]

A corporation may ratify an unauthorized transaction of its agents by the unanimous acquiescence of its stockholders, as well as by a vote of the majority in a corporate meeting.

[Ed. Note. For other cases, see Corporations, Dec. Dig. § 426.*]

4. EQUITY (§ 431*)—DECREE-MATTERS CON

CLUDED.

6. EQUITY (§ 427*)-SPECIAL FINDINGS--CON

STRUCTION.

The special finding that plaintiffs knew of the contract the month after it was authorized, but did not know its scope, could not be construed to mean that they did not know that the director was receiving a special benefit thereunder, in view of another special finding that plaintiffs considered the contract advantageous to them, and expected it to be carried into effect.

[Ed. Note. For other cases, see Equity, Dec. Dig. § 427.*] 7. APPEAL AND ERROR (§ 1097*)—REVIEW— SUBSEQUENT TRANSFERS-SCOPE OF REVIEW -QUESTIONS OF LAW DECIDED ON FORMER TRANSFER.

Parties not content with the decision of the Supreme Court on a transfer of the case should apply for a rehearing under rule 10, and they cannot have the same questions of law re-examined on a subsequent transfer, especially where equity and justice do not require it, as where, in a suit to set aside contracts on the ground of fraud and conspiracy, the grounds for reexamination are highly technical, and it is found that the contracts were not unconscionable and not procured by fraud.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4358-4368; Dec. Dig. § 1097.*]

Transferred from Superior Court, Rockingham County; Peaslee, Judge.

Bill by Charles G. Kidd and others in behalf of themselves and others against the New York Security & Trust Company and others. There was a decree of dismissal, and the case was transferred from the superior court on plaintiffs' exceptions. Exceptions overruled.

Bill in equity, by the owners of all the preferred stock of the Massachusetts Construction Company, Incorporated, in behalf of themselves and all other stockholders of the corporation, to set aside a transfer of the assets of the corporation to the New York In an action by stockholders to set aside a Security & Trust Company, on the ground transfer of the corporation's assets to a trust of fraud and conspiracy, and for an accountcompany on the ground of fraud and conspiracy, held that there was evidence tending to show ing. The case is the same as that reported in that all the stockholders acquiesced in a pro- 72 N. H. 273, 56 Atl. 465, 66 L. R. A. 574, vision of the contract with the trust company and 74 N. H. 160, 66 Atl. 127, and the facts for the transfer, which gave a personal interest in the contract to a fellow stockholder and di- found and evidence reported upon the prerector who voted at the directors' meeting in vious transfers are made a part of this case. favor of the contract, and whose presence was After the case was remanded, it was reargued necessary to a quorum of the board, so that the in the superior court upon the evidence prefact will be taken as found; a general decree having been rendered for defendants which car-viously reported, the decree against the trust ries the presumption that all facts were found company was set aside, a decree dismissing which were necessary to sustain it, and of which there was evidence.

[Ed. Note. For other cases, see Equity, Dec. Dig. 431.*]

5. EQUITY (§ 427*) — Decree - INCONSISTENT FINDINGS.

the bill as to all the defendants, without costs, was entered, and certain additional facts were found. The plaintiffs excepted to the decree dismissing the bill, to additional facts found, and to the refusal of the court to make certain rulings and findings special

Streeter & Hollis and Roger F. Sturgis, for plaintiffs. Sargent & Niles, Burnham, Brown, Jones & Warren, and Hornblower, Miller & Potter, for defendants.

The contract providing a yearly salary of $6,000 for the director, reasonably intelligently requested by them. men could not have understood otherwise than that he was given a personal interest in the contract, and if the conclusion that they did so understand, presumably embraced in the general decree, be inconsistent with a special finding that plaintiffs knew of the contract the month after it was authorized by the directors, but did not understand its scope, the special finding is not supported by the evidence to that extent. [Ed. Note.-For other cases, see Equity, Dec. Dig. § 427.*]

BINGHAM, J. The questions presented upon the previous transfer of this case related to the validity of the decree of the su

under the contract of November 12th, was intentionally concealed from the plaintiffs by the defendants until after the bill was filed, for the purpose of preventing the plaintiffs from taking measures to prevent the consoli

This brings us to a consideration of the plaintiffs' seventeenth request, wherein they asked the trial court to rule and find that "the contract of December 28th is not binding for lack of a qualified quorum of directors." This request was denied. The plaintiffs now contend that by the ninth clause of the contract of December 28th it appears that Lovell was to receive an annual salary of $6,000 for two years from the trust company, for services he was to render in furthering the purposes of the traction company, which would give him a per

perior court in favor of the plaintiffs, based upon certain findings of fact and rulings of law, to the effect that the trust company's letter of January 3, 1902, was not an acceptance of the Connecticut company's proposal contained in the instrument of Decem-dation"-if supported by the evidence, comes ber 28, 1901, but a modification of it and the to nothing; for, if such was the defendants' submission of a counter proposal which was purpose, it is not found that they were sucnot accepted by the Connecticut company un- cessful in carrying it out, or that, if the plaintil after December 31, 1901; that after that | tiffs had known of the proposed transfer, they date the Connecticut company was a mere would have taken steps to prevent consolidaagency of the trust company, and incapacitat- tion. They took no action of this nature ed from contracting with it; that the trust when they learned of the contract of Decemcompany consequently stood with relation to ber 28th; and the trial judge may have very the plaintiffs, who are preferred stockhold-properly concluded, when he made the geners in the Connecticut company, as trustee, eral decree dismissing the bill, that they and bound to account to them as such, and would have pursued the same course with refnot according to the instrument of December | erence to the contract of November 12th. 28th. But this court, after an extended consideration of the questions, held that the rulings of the superior court, read in the light of the facts upon which they were based, were erroneous, and that the decree for the plaintiffs should be set aside; that it did not appear but that the Connecticut company was an independent agency and free from the control of the trust company down to December 31st, when its board of directors authorized its president and secretary to sign the instrument of December 28th, which they then in fact signed; that the trust company's assent was given January 3d, when its officers sign-sonal interest in the contract antagonistic to ed the contract; and that the proposition of the trust company contained in its letter of January 3d, relating to the high tension service, if ever legally assented to by the Connecticut company, was not a modification of the contract of December 28th, but collateral to it. The case was then sent back to the superior court for a determination of the question whether the contracts of November 12th and December 28th were procured through the fraud and conspiracy of the defendants; that being the only question raised by the pleadings and left open upon the record. This question was afterwards argued in the superior court upon the evidence originally submitted, and thereupon the trial justice set aside the former decree, entered a decree dismissing the bill as to all the defendants, and made certain findings of fact in addition to those previously reported. He did not specifically find that the contracts of November 12th and December 28th were not procured through fraud, but the general decree was in favor of the defendants; and, as there was evidence upon the question of fraud, and it was conflicting, the decree includes a finding that the contracts were not the result of fraud and conspiracy on their part. Allen v. Association, 72 N. H. 525, 57 Atl. 922; Concord Coal Company v. Ferrin, 71 N. H. 331, 51 Atl. 283, 93 Am. St. Rep. 496; Allard v. Hamilton, 58 N. H. 416; Noyes v. Patrick, 58 N. H. 618. The special finding upon which the plaintiffs lay particular stress-that "the taking of the E. H. & A. division from the

that of the Connecticut company, and would therefore disqualify him as a director in authorizing the contract in behalf of that company, and that the records of the directors' meeting of December 31st, at which the contract was authorized, disclose that his presence was necessary to constitute a quorum of the board, that he participated in the meeting, and voted in favor of the contract, and that it is therefore void or voidable, though capable of confirmation. State v. Richmond, 26 N. H. 232, 238; 1 Mor. Corp. § 524. This question was not raised upon the former transfer of the case, although the facts upon which the contention is now based were then presented by the record. Nor does it appear that Lovell's interest in the contract was urged or suggested as a reason for his disqualification as a director at the hearing before the trial judge, after the case was remanded; but, if it was, and the denial of the request was based upon a finding of fact and ruling of law, then the legal question herein insisted upon may not exist. That a corporation may ratify the unauthorized transaction of its agents by the unanimous acquiescence of its stockholders, as well as by the vote of the majority in a corporate meeting, would seem not to be open to question. 1 Mor. Corp. § 525. Consequently, if there was evidence from which it could have been found that the plaintiffs, who owned all the preferred stock, and Lovell, who owned all the common stock, acquiesced in the provision of the contract to which objection is

the fact is to be taken as found; for the general decree carries the presumption that all facts were found necessary to sustain it, and of which there was evidence. Dusseault v. Association, 74 N. H. 407, 68 Atl. 461, and cases above cited.

It is clear that acquiescence on the part of Lovell could have been found from the fact that he was a party to the contract and the chief beneficiary under the provision here in question. As to Kidd it appears that his counsel was shown the instrument of December 28th seven days after it was executed by the trust company; that on that date he wrote Kidd and inclosed a copy of the agreement; that he called Kidd's attention to the particular provision relating to the employment of Lovell at a salary of $6,000 a year for two years, and congratulated him upon the prospect of his receiving "some income" from Lovell because of the salary and the probable payment of "regular dividends upon the preferred stock of the Connecticut company." And as to Whitcomb it appears that in January, 1902, he knew of the contract of December 28th, considered it advantageous to him, and expected the trust company would carry it into effect; that he became a director in the traction company at an early date, took part in the directors' meeting of that company January 21st, when the trust company's proposition for a sale to the traction company of the securities received from the Connecticut company was acted upon, and in other ways recognized the validity of the agreement. From this, and other evidence of similar import, and the fact that no objection was raised by Kidd or Whitcomb for over six years after they were fully informed about the provision giving Lovell a personal interest in the contract. it reasonably could have been concluded that they, as well as Lovell, were satisfied with, and acquiesced in, the provision. This conclusion is not inconsistent with the special finding that the plaintiffs "never assented to a sale by the trust company to the traction company"; for the sale or contract to which this finding relates is the supposed contract or sale of December 28th, as modified by the trust company's letter of January 3d, and not the contract or sale by the Connecticut company to the trust company which we are now considering. And if the finding that "the plaintiffs knew of the contract of De

cember 28th in the following January, but did not understand its scope" is capable of being construed as inconsistent with the conclusion that they must have known that this provision gave Lovell a personal interest in the contract, the special finding is to that extent not supported by the evidence; for, as reasonably intelligent men, they could not have understood otherwise. But it seems that this finding is not to be so broadly construed, in view of the further finding that the plaintiffs "considered the contract of which they knew [the instrument of December 28th] advantageous to them, and expected the trust company to carry it into effect." As the plaintiffs considered the contract advantageous to them, and knew and acquiesced in the provision in Lovell's behalf, they cannot now avail themselves of this objection.

The only remaining question relates to the plaintiff's' request to be reheard upon the precise questions that were decided when the case was here upon the previous transfer. As to this it may be said that if the plaintiffs were not content with the former decision, they should have seasonably applied for a rehearing in accordance with the tenth rule of court. Not having done so, they are now concluded by the long-established practice of this court that questions of law once decided will not be re-examined upon a subsequent transfer, especially where equity and justice do not require it. Bell v. Woodward, 47 N. H. 539; Id., 48 N. H. 437; Bell v. Lamprey, 58 N. H. 124; Carter v. Jackson, 58 N. H. 156; Ashuelot R. R. v. Elliot, 58 N. H. 451; Plaisted v. Holmes, 58

N. H. 620; Preston v. Insurance Co., 59 N. H. 49; Amoskeag Mfg. Co. v. Head, 59 N. H. 332; Weare v. Deering, 60 N. H. 56; Hed64 L. R. A. 811; Olney v. Railroad, 73 N. H. ding v. Gallagher, 72 N. H. 377, 57 Atl. 225, 85, 59 Atl. 387. The grounds upon which the plaintiffs desire a re-examination of these questions are highly technical; and, as it is found that the contracts were not unconscionable, and were not procured through fraud, justice does not require the adoption

of such a course.

Plaintiffs' exceptions overruled.

PEASLEE, J., did not sit. The others concurred.

CAMPBELL v. CAMPBELL et al. (Supreme Court of Rhode Island. Feb. 17, 1909.)

Action by Elisha J. Campbell against George E. Campbell and others. Verdict for defendant, and plaintiff petitions for new trial. Continued.

Green, Hinckley & Allen, for petitioner. James Harris and Irving Champlin, for respondents.

PER CURIAM. The first three grounds relied upon by the petitioner in support of his petition for a new trial are not sustained by a preponderance of the evidence.

Upon the fourth ground, which charges an abuse of judicial discretion on the part of the justice who presided at the trial, the court desires an affidavit from the witness Bradford Campbell, setting forth the testimony which he could properly have given in rebuttal, to be filed on or before March 1, 1909, and the case will be assigned to March 10, 1909, for further hearing upon the effect of the exclusion thereof.

rendered and reported in 29 R. I. 112, 69 Atl. 294. The declaration was sustained by proof at the trial of the case. The judge made no reversible error in his rulings or charge, and we cannot say that the damages awarded by the jury are excessive.

For these reasons the exceptions of the defendants must be overruled, and the case is remitted to the superior court, with direction to enter judgment on the verdict.

On Rehearing.

PER CURIAM. The defendant's application for a rehearing presents no new matter for consideration. It restates arguments that were fully presented at the hearing of the case, which have been duly appreciated. We see no reason to change our former decision. The application is therefore denied.

17,

WEEKS v. FLETCHER et al. (Supreme Court of Rhode Island. Feb. 1909. On Rehearing, Feb. 25, 1909.) DAMAGES (§ 132*)-PERSONAL INJURIES-EXCESSIVE DAMAGES.

One with a life expectancy of about 16 years and an earning capacity of about $15 a week was injured. He sustained a permanent injury to his skull, which affected his eyesight and hearing. He would never be able to do any hard work, and age would tend to aggravate the trouble. His earning capacity had been greatly reduced. Held, that a verdict of $7,000 was not excessive.

[Ed. Note.-For other cases, see Damages, Cent. Dig. §§ 372-385; Dec. Dig. § 132.*]

Exceptions from Superior Court, Providence and Bristol Counties; Charles F. Stearns, Judge.

Action by Stephen P. Weeks against Charles Fletcher and others. There was a verdict for

plaintiff, and defendants bring exceptions. Overruled, and cause remitted, with directions for judgment.

This was an action for personal injuries. Plaintiff, having a life expectancy of about 16 years and an earning capacity of about $15 a week, was injured. He sustained a permanent injury to the skull. He would never be able to do any hard work, and age would tend to aggravate the trouble, which had affected both his eyesight and hearing. The trial occurred two years after the injury, and since the injury plaintiff had only averaged $1 a week as photographer, while before he had averaged from $8 to $10 a week. He obtained a verdict for $7,000.

See 29 R. I. 112, 69 Atl. 294.

Albert B. Crafts, for plaintiffs. Vincent, Boss & Barnefield and Cyrus M. Van Slyck, for defendant.

(82 Vt. 69)

CALDBECK v. SIMANTON. (Supreme Court of Vermont. St. Johnsbury. Feb. 13, 1909.)

1. ARREST (§ 15*)—GROUNDS-FRAUD CHARGE -SUFFICIENCY.

Where a declaration alleged that plaintiff bargained with defendant for the purchase of a diamond, that defendant sold him the diamond for a certain price by falsely and fraudulently warranting that it was a perfect stone, when in fact it was defective, and that defendant thereby "falsely and fraudulently deceived him," but did not allege that defendant knew that the representation was false, the action was founded on contract, since the law raises no presumption of knowledge of falsity from the mere fact that the representation was false, and service by arrest was unauthorized.

[Ed. Note.-For other cases, see Arrest, Cent. Dig. 88 40-43; Dec. Dig. § 15.*]

2. DISMISSAL AND NONSUIT (§ 57*)-DEFECTS IN PROCESS.

Where a writ issued as a capias on which defendant's body was arrested set up defendant state, this was a sufficient determination of resas of a certain town in a given county of the idence for the purpose of defendant's motion to dismiss the case on the ground that the action

was founded on contract.

[Ed. Note.-For other cases, see Dismissal and Nonsuit, Cent. Dig. § 133; Dec. Dig. § 57.*]

Exceptions from Caledonia County Court; Willard W. Miles, Judge.

[blocks in formation]

David E. Porter and Simonds & Searles, PER CURIAM. The law governing this for plaintiff. Harland B. Howe and Herbert case is contained in the opinion heretofore W. Hovey, for defendant.

For other cases see same topic and section NUMBER in Dec. & Am. Digs. 1907 to date, & Reporter Indexes

MUNSON, J. The plaintiff declares, in substance, that he bargained with the defendant for the purchase of a diamond, and that the defendant sold him the diamond for a certain price by "falsely and fraudulently warranting" it to be a perfect stone, when, in fact, it was not a perfect stone, but defective in certain respects stated, and that the defendant thereby "falsely and fraudulently deceived him." The service was by arrest, and the case stands on a motion to dismiss. The defendant argues that no scienter is alleged; that the declaration is in case for a breach of warranty; that there could be no recovery without proving the warranty; and that this conclusively determines that the action is founded on contract. No point is made distinguishing be tween the counts.

kins, 1 Doug. 17. Since then assumpsit and case have been recognized as concurrent remedies for breach of warranty. Williamson v. Allison, 2 East, 446; Beeman v. Buck, 3 Vt. 53, 21 Am. Dec. 571; 19 Enc. Pl. & Pr. S2, and cases cited.

Closely connected with the subject of warranty is that of deceit by fraudulent representations. The two grounds of liability are entirely distinct, but both may be developed by one affirmation. The evidence may make the affirmation either a deceit or a warranty, or both. The allegations of a declaration charging deceit by means of a false warranty, and of one charging a deceit independent of warranty, are in other respects substantially the same, as is indicated by the first counts of the forms in 2 Chitty, 687, 688. If the allegation of knowledge in a declaration In 2 Chitty's Pleading, 279, there is a form following the first count of the first of these for declaring in assumpsit on a warranty, forms be treated as surplusage, the case beand at page 679 there is one for declaring comes an action of tort for a breach of warin tort on a warranty. The latter form is ranty. This treatment of a declaration so the one used here. The two forms were framed was sanctioned in Williamson v. Aljoined in one declaration in Dean v. Cass, 73 lison, before cited, and that case has since Vt. 314, 50 Atl. 1085, and the second was been generally followed. The recognition of held to be in tort and improperly joined with assumpsit and case as concurrent remedies the first. So the declaration before us may for breach of warranty, and the decision in be classed, without special examination, as Williamson v. Allison regarding the scienin form a declaration in tort. In pursuing ter, have led to the adoption of forms conthe inquiry further it will be well to have in fessedly designed to enable the plaintiff to mind the nature of a warranty, and the recover for a breach of warranty or for dehistory and characteristics of the remedies ceit, as the case might develop. A short decpermitted for a breach of it. The ordinary laration, framed in this double aspect, was warranty relates to the condition of the used in Beeman v. Buck, 3 Vt. 53, 21 Am. property at the time of the sale. Such a war- Dec. 571; Vail v. Strong, 10 Vt. 457; West ranty, if broken at all, is broken when made. v. Emery, 17 Vt. 583, 44 Am. Dec. 356; GoodeThe breach consists in the fact that the prop-nough v. Snow, 27 Vt. 720; Pinney v. Andrus, erty is not as it is stated to be. The war- 41 Vt. 631. This declaration, given in full ranty may be made merely as an assumption of a contract obligation, or it may be deceitfully made with a knowledge of its falsity. In either case it is made to induce the purchase. Personal actions are either for breaches of contract or for wrongs unconnected with contract; assumpsit being in the first class, and case in the second. Chitty, 97. The original action on the case, permitted in suits for which the established forms were not adapted, was not similar to the present action of assumpsit, but resembled rather the present form of a declaration in case for a tort. Chitty, 99. It was at first difficult to distinguish assumpsit from case; and the early decisions in actions on warranties were made before the boundary between the two remedies was well defined. Note to Chandelor v. Lopus, 1 Smith Lead. Cas. 178. The practice of declaring in tort for warranty broken originated in this early period; and the remedy then adopted continued in almost exclusive use until the middle of the eighteenth century. As late as 1778, Lord Mansfield considered an action of assumpsit for a breach of warranty so peculiar that he reserved the question of its sufficiency; and this method of declaring was then

in the case first cited, avers that the defendant deceitfully sold the property by warranting it to be as described, "well knowing" it to be otherwise. The first count of the form in 2 Chitty, 687, before referred to, is a more formal declaration of the same character. This form was followed in Harlow v. Green, 34 Vt. 379, and was apparently the basis of the declaration in Whitton v. Goddard, 36 Vt. 730. The direct allegation of knowledge contained in the phrase "well knowing" or its equivalent is ordinarily employed in declarations which claim a recov ery on the ground of deceit, and its absence from the declaration used here is the basis of the defendant's claim.

The plaintiff claims that a sufficient averment of knowledge is contained in the form used. The inclusion of this form under the general marginal heading of "deceit" is of little consequence, especially in view of the early history of the subject. It is not probable that Mr. Chitty considered the allegations sufficient to show knowledge; for in subsequent forms for deceitfully selling property by falsely and frauduently warranting it the usual scienter is employed. The concluding averment that the defendant thereby

« PreviousContinue »