Court Opinion

ID: 3516341
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:27:38.812717+00
Date Added: 2024-06-11T14:19:10.910166
License: Public Domain

* Corpus Juris Cyc. References: Evidence, 22 C.J., p. 209, n. 77. Joint Stock Companies, 33 C.J., p. 855, n. 42 New.
Appellee was plaintiff below, and sued the appellant on subscriptions to stock in an oil company. Appellant subscribed to certain shares of stock in the Seven States Oil Company, and paid a portion of the purchase money and gave notes for the balance. The contract guaranteed on the part of the Seven States Oil Company a dividend of one per cent. per month. During the life of the Seven States Oil Company certain dividends were made and checks issued to the appellant, which he received and cashed as dividends, varying in amount. Afterward the Seven States Oil Company became financially embarrassed and was placed in bankruptcy. The referee in bankruptcy gave the trustee power to sue a large number *Page 49 
of persons on the subscriptions to the stock; among them being the appellant.
Prior to the bankruptcy, the Seven States Oil Company had taken the stock issued to the appellant as collateral security for his notes and were in possession of the stock, and, the notes becoming past due, gave written notice to the appellant that, unless he paid the notes, the stock would be canceled and later sold to pay the notes, but there is no showing that the stock ever was sold or canceled or what became of it.
The appellant sought to prove, by letters from another oil company to some of the subscribers to the stock of the Seven States Oil Company that it had merged with the Seven States Oil Company and had taken over its stock and would issue its own stock in payment for the subscription to the stock in the Seven States Oil Company. One witness introduced testified that she had exchanged her stock in the Seven States Oil Company for stock in the other oil company. This evidence was objected to and excluded by the trial court.
We are satisfied with the rulings of the court below, and find no error sufficient to reverse the judgment. It was not permissible to introduce the letters of the other company, nor the fact that the stock of the Seven States Oil Company, held by other persons, was traded for stock of the other oil company. There was nothing shown as a statement or representation by the Seven States Oil Company that there was any such merger, and the letters offered in evidence would be mere hearsay on that proposition. The fact that the federal court adjudged the Seven States Oil Company, a bankrupt and was administering its affairs in bankruptcy will be held, in the absence of allegation and proof, that it continued to be a corporation. In other words, the action of the bankruptcy court is presumed to be correct.
The judgment will therefore be affirmed.
Affirmed. *Page 50