Court Opinion

ID: 7193883
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:00:02.848057+00
Date Added: 2024-06-11T16:16:15.752289
License: Public Domain

*90On Application itor Rehearing.
Manning, J.
The single feature in the opinion attacked in the application for rehearing is that denying the defendants’ demand of $350,000, alleged to be owing by the plaintiffs for 3500 shares of the capital stock of the bank. The defendants allege that this stock was subscribed for by order of the plaintiffs, to be put in the name of Palmer, their agent, and was transferred by their instructions to these persons, Jackson 200 shares, Conery 200, Keller 100, Wing 100, Musgrave 2500, and 400 shares -were left in Palmer’s name. Musgrave’s shares were afterwards transferred to Louis Crossley and Edward Crossley for Jno. ■Crossley & Sons — that on July 1, 1874, Palmer drew a cheque on the bank for $350,000 in payment of this stock, and this cheque has never been paid — that the bank was then insolvent to the knowledge of Palmer and the plaintiffs, and that the latter are therefore responsible for the .stock and owe the bank $350,000.
The plaintiffs say this stock was not subscribed for by them nor by Palmer for them, but for himself, and to carry out his own plans and purposes, and after he had so acquired this stock, the plaintiffs bought •2500 shares of him in good faith, in due course of business and upon Palmer’s representation that he was the owner of it and that it was full paid stock.
The whole argument of the defendants in controversion of this position of the plaintiffs is that it is in conflict with the allegations of the plaintiffs’ answers to their demand in reconvention, and that these answers are inconsistent each with the other, and that the plaintiffs are bound by their judicial admissions.' Then assuming that the fact of subscription by the Crossleys is proved, or rather admitted, they insist that the law is that the liquidators of the bank can enforce rights and claims that the bank could not, because they represent creditors of the bank.
Upon the question of fact, the Crossleys in one of their answers al'lege their purchase of the stock from Palmer in good faith and for a valuable consideration, and on his representation that it was fully paid for and he was the owner of it, and deny explicitly any subscription therefor, but this is said to be inconsistent with and contrary to their allegation in their supplemental answer, that the stock was not paid for. There is no inconsistency. In their answer in chief, they allege that Palmer represented it as full paid, and in the supplement that it wqs not in fact full paid, and both allegations are true.
The bauk owed Palmer over $400,000 in June, 1874, and he owed the •Crossleys. They had deposited with the bank, at Palmer’s instance, *91$50,000, and afterwards advanced $100,000 to it, and gave it a letter of credit for $100,000 additional, of wliicli only something over $20,000 was used. The directors issued additional stock and it was agreed that Palmer’s credit at the bank, or $350,000 of it, should be converted into this stock in Palmer’s name, and it was done. Afterwards the Crossleys bought of Palmer 2500 of these shares. The bank paid Palmer its debt to him or the largest part of it with this stock, and he sold 2500 shares of it and extinguished his debt to the Crossleys ])ro ■tanto. The resolution of the directors explicitly states what was to be done and it was done, as was thus stated. It would have been insanity, as.the opinion says, for the Crossleys to have acted otherwise. They had tried and were trying to prop up the bank and were assured by its president they could do it successfully. They lost money in the effort and it failed. Of all those who were deluded by the misrepresentations of the bank president of its condition, none suffered so disastrously as the Crossleys.
Upon the question of law the liquidators cannot enforce an obligation when none exists. Unless the Crossleys did the acts that are charged to have created the obligation, or made judicial admissions that bind them to the consequences of such admissions, they cannot be held liable as charged, and a review of the opinion of the Court and •comparison of it with the evidence in the record shews that it rightly refused judgment against the Crossleys as the defendants demand.
The rehearing is refused.