Case ID: nys_7/html/0140-01.html
Source: Caselaw Access Project
Author: {"author": "Landon, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Kraft v. Coykendall et al.
    
    
      (Supreme Court, General Term, Third Department.
    
    September 21, 1889.)
    1. Contracts—Proof.
    Plaintiff sought the recovery of money which he alleged he had loaned to a corporation through F., its president. The latter claimed that the money was advanced in pursuance of an agreement to purchase of him a controlling interest in the stock, of the corporation, and that plaintiff not being able to raise the required amount, the arrangement was abandoned, and a settlement was had. A receipt in full of all plaintiff's claims against the.president was shown. Plaintiff denied that the receipt was given for any part of the money sought to be recovered, but he was not corroborated; and, while P.’s character was impeached, his testimony was corroborated by other witnesses. It also appeared that subsequent to the alleged loan a meeting of the trustees of the corporation was held, at which plaintiff, who was a trustee, was present, and negotiations were entered into by a third party to secure control of the corporation, and pay its debts; that a list of the debts of the corporation was handed to such third party, in which no claim was mentioned as due to plaintiff; that the latter asserted no such claim; and that the negotiations-were completed in reliance npon such list. Held, that a judgment for plaintiff could not he sustained.
    2. Same.
    At the time of the arrangement entered into between plaintiff and F., the latter had pledged more than one-half of the entire stock of the corporation for debts, and it was part of the arrangement, as F. testified, that he should obtain stock enough to enable him to transfer a majority of it to plaintiff. Held, that the stock-transfer hook was admissible to show the date of the transfer of stock to F., which-he alleged he had purchased in pursuance of the agreement.
    Ingalls, J., dissenting.
    Appeal from judgment on report of referee.
    Action by John E. Kraft against Samuel D. Coykendall and others. Judgment was given for plaintiff, and defendants appeal.
    Argued before Learned, P J„ and Landon and Ingalls, JJ.
    
      Lawton & Stebbins, for appellants. William Lounsbery, for respondent.
   Landon, J.

I think this judgment should be reversed upon the facts. The action is to recover $2,175, alleged by the plaintiff to have been loaned by him in June, July, and August, 1876, to the Freeman Printing & Publishing Association, a corporation of which the defendant Haight was then trustee, and of which the two defendants Coykendall became trustees, October 14, 1876. The defendants failed to file in January, 1877, the report required by the statute, and the plaintiff, having failed upon judgment and execution to-collect the amount from the association, seeks recovery of the same in this action as a penalty.

The question at issue is whether the $2,175 which the plaintiff advanced to one Fowks, who was the president of the association, was advanced on its credit or in pursuance of an undertaking on the part of the plaintiff to buy of Fowks a controlling amount of stock of the association. The plaintiff testified t-lxat lie advanced the money to Fowks upon the credit of the association, and upon Fowks’ request in its behalf. Fowks testified that the association was financially embarrassed. That the plaintiff, representing that he desired to obtain control of it, said he could raise money enough from political and other friends to enable liim to do it if Fowks would sell him the stock. This Fowks promised to do, and thatthe money was advanced to him by plaintiff upon that arrangement. That, the plaintiff not raising money enough, the arrangement was abandoned, and Fowks and the plaintiff settled on the 30th of October, 1876, when the plaintiff gave him the receipt in full, of which the following is a copy:

“Rondout, N. Y., Oct. 30th, 1876.
“In consideration of the transfer to me of 5 shares of stock in the Freeman Printing and Publishing Association, and the sale to me of 4 shares in the same, now held by me by power of attorney in blank, and the surrender to me of my note for $1,850 by Horatio Fowks, 1 hereby acknowledge full satisfaction of all claims that may be due from said Fowks, of any kind whatsoever, to date. John E. Krafts.”

The plaintiff denies that the*receipt was given for any part of the $2,175, but alleges it had reference wholly to other transactions. Tiie plaintiff is not corroborated. Fowks’ character is impeached, but his testimony is corroborated by that of S. D. Coykendall and Haight, and by uhe circumstances. The circumstantial corroboration is very full and conclusive. To present the details of this corroboration would be to summarize the defendants’ points,—a labor which we omit. Independently of Fowks’ testimony, we think it appears, and should have been found as a fact, that on the 14th day of October, 1876, a meeting of the trustees of the association was held. The plaintiff was then a trustee, and was present. The defendant S. D. Coykendall was not a trustee, but was present at the meeting, and was in negotiation with the trustees to •take control of the association, and pay its debts. The plaintiff’s co-trustees, in the presence of the plaintiff, there presented said Coykendall with a list purporting to be a full list of all the debts of the association, Ho claim of the plaintiff, or debt due from the association to him, was contained in said list, .and this the plaintiff well knew, and he did not otherwise make any claim. Said Coykendall, relying upon the truth of said list, completed the negotiation aforesaid, and in pursuance of it the plaintiff and another trustee then resigned, and S. D. Coykendall and his appointee, the defendant George Coykendall, were elected trustees in their places. The plaintiff made no claim to :tlie defendants that the association was indebted to him until after the omission to file the annual report in January, 1877. These facts, which we deem .clearly established, estop the plaintiff from asserting now the claim which he suppressed then.

We think the defendant was entitled to read from the stock transfer book .of the association the entries therein of the transfer of certain stock from D. S. Hasbrouck to Fowks. The fact was not in dispute that at the time of the arrangement between Fowks and the plaintiff, under which plaintiff undertook to raise and advance money to Fowks, Fowks was the owner of about five-sixths of the entire capital stock; that the association was embarrassed; •that Fowks had pledged more than one-half of the entire stock to the defendant S. D. Coykendall, to secure him for loans both to the association and to Fowks. Fowks testified that it was part of his arrangement with the plaintiff that Fowks should obtain stock enough to enable him to transfer the majority of it to plaintiff. Fowks testified that he bought $1,500 of stock of Hasbrouck, in order to have enough to carry out his arrangement with plaintiff, and also procured a release from Coykendall of some of the stock pledged to him. Fowks, upon his cross-examination, was unable to give the date of the transfer of stock from Hasbrouck to himself, or an exact account of other transfers made about the same time. The defendant, in order to corroborate Fowks, and show the exact dates and transfers, offered to read from the stock transfer book of the association. The offer was overruled, and the evidence excluded. This book was not simply a narrative of the transaction, but was the transaction itself in writing, and hence admissible. Krafts was made a .trustee of the association and its general manager, on the 8th day of July, .1876, after he had advanced $1,525 of the $2,175 in question. This fact corroborates Fowks’ version. The transfer book shows that Hasbrouck transferred $1,500 of stock to Fowks four days later. Hasbrouck resigned as trustee, to make the vacancy which was filled by the election of the plaintiff. The transfer and its date, the resignation and election, all fitted in with Fowks’ version of the arrangement. Other transfers of stock appeared upon the book, consistent with Fowks’ version. As a record of the business of the corporation it was presumably known to a trustee and stockholder who had the right of access to the book, and opportunity to examine it. Blake v. Griswold, 103. N. Y. 429, 9 N. E. Rep. 434. The judgment is reversed, referee discharged, and a new trial granted; costs to abide the event.

Learned, P. J., concurs. Ingalls, J., dissents.