Court Opinion

ID: 6639226
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:44:03.237837+00
Date Added: 2024-06-11T15:59:10.868662
License: Public Domain

Buck, J.
Do the pleadings support the judgment? The first cause of action set forth in the complaint is directly in conflict with the one in the second count. The replication first denies “that plaintiff’s claim against the Shonbar Mining Company was assigned to the defendant for collection, as alleged in defendant’s answer.” This denial is equivalent to an admission that the account was assigned to it for collection. The second denial of the replication also is equivalent to a declaration that all the statements of the complaint are true. The replication then sets forth a cause of action which, while not inconsistent with, differs somewhat from the cause of action relied upon in the first count of the complaint. If the plaintiff had not been allowed without objection to abandon the allegations of his pleadings on which one of his theories of recovery was based, we should not hesitate to follow the rule laid down in Hauswirth v. Butcher, 4 Mont., at page 309, 1 Pac. 714, and would reverse the judgment, on the ground that the complaint and replication, being contradictory, do not support it. In the same verified complaint, plaintiff swears that certain facts are true, and that these facts are not true; and, in his verified replication, he also swears to statements contradictory to each other, and which substantially reiterate the contradictions contained in the complaint. The complaint is inconsistent and the replication is inconsistent, each within itself and each as to the *382other. But this inconsistency was eliminated when respondent was permitted to abandon the cause of action in his second count, and to substitute for the cause of action in the first count the one more particularly, but not inconsistently, averred in the replication.
Appellant insists that the respondent is absolutely bound by his admission in the pleadings that the account had been assigned for collection. We do not think be was. The rule is that a party is bound only by the admissions in the pleadings upon which he goes to trial. (Pfister v. Wade, 69 Cal. 136, 10 Pac. 369.)
Appellant contends that the respondent failed to establish any authority on the part of Watson, its manager, to enter into the agreement with him for the sale of the account. The argument is that appellant is a corporation organized for the purpose of dealing in hardware; that, under the terms of its charter and the laws of the state, even its directors could not have authorized the purchase of plaintiff’s claim; and that far less, therefore, could its manager, Watson, have purchased the account in behalf of the company. Appellant does not dispute the fact that it took assignments of accounts against the Shonbar Mining Company, and brought suit upon them. It admits that it bought the McGillis claims. It insists that these latter accounts were bought to protect its own claim against the Shonbar Company. It virtually concedes that Watson, its manager, represented it in all these matters. It does not for a moment suggest that he had no authority to so represent it, but contends that, while Watson had authority to take assignments of accounts for collection, and to buy lien claims against the Shonbar Company to protect appellant’s interest, neither he nor the directors of the company had authority to purchase plaintiff’s account. Under such a condition of facts, is this a tenable position? We think not. Why it should be ultra vires to buy plaintiff’s claim, but not ultra vires to buy ,the McGillis lien claims and the sheriff’s certificate of sale under the lien foreclosure suits, we do not comprehend. Even if Watson had no authority to purchase plaintiff’s claim, *383if he did purchase it under the circumstances aforesaid, is appellant now in a position to reject his act in doing so? Can it not be reasonably inferred that it countenanced whatever he (Watson) did?
Appellant brought suit on the claim after assignment, and reduced it to judgment. In the verified complaint it filed for the purpose, it set forth that the plaintiff’s claim had been sold and assigned to it. The plaintiff testified that he had a right to a lien, and would have secured his account by filing a lien but for the agreement entered into with Watson. If Watson had authority from his company to accommodate the Shonbar Company by taking assignments of accounts, and had authority to buy other lien claims against the Shonbar Company to protect his own company’s claim, how can it, in fairness, be contended, if plaintiff had a right to and could have filed a lien and secured his claim, that he (Watson) had no authority to purchase plaintiff’s claim also for the protection of appellant ? It was not per se an act of ultra vires for the appellant to purchase claims against the Shonbar Mining Company, secured by liens, in order to protect its own account. Conceding that it was organized to do a hardware business only, still, if, in the course of its legitimate business, it became necessary, in the exercise of business prudence, to purchase these claims for the protection of its own interest, and such claims were purchased in good faith, for that purpose only, that would not have been a violation of its charter or of the statutes of the state pertaining to corporations of its character. There was evidence to support the verdict as to an absolute purchase by appellant of respondent’s account.
Appellant offered in evidence its articles of incorporation, for the purpose of showing what business it was authorized to transact, as affecting the question of Watson’s authority. An objection was sustained to the introduction of the same. This was error. The case was tried apparently simply with reference to whether or not .the agreement between W atson and plaintiff was for a sale or not. Watson’s authority to bind the company in the purchase of this account was an issue in *384the case also, however, and it should not have been ignored.
The plaintiff was allowed to testify as to the date of the items of his account, in order to show that he was entitled to á lien thereon at the date of its assignment, and an instruction was asked and given as to this testimony. On cross-examination plaintiff was asked: ‘ At what date did you sell the first item to the Shonbar Mining Company ?” This was objected to as immaterial, and the objection sustained. On the theory that the sole issue in the case was as to the terms of the agreement between Watson and plaintiff, regardless of Watson’s authority to bind his company, no doubt all evidence as to the items of the account, in order to establish a right to a lien, was immaterial. But the question of Watson’s authority, and, as connected with it, the question of whether plaintiff had a right to a lien, were also involved, and, as shedding light on these questions, such evidence was admissible. But, even if an answer to the question asked plaintiff had not been admissible, allowing plaintiff to give such testimony as to the items of his account on direct examination, and refusing to allow appellant to cross-examine, and then giving an instruction as to such testimony on the theory that it was competent and material evidence, was prejudicial error.
The judgment rolls in the foreclosed lien suits were offered, for the purpose of showing the character of the suits and liens, and as bearing on the question of Watson’s authority to purchase plaintiff’s account. On objection they were excluded. This was error. They should have been admitted, for, if it had been shown that the plaintiff was not entitled to a lien on the account he assigned to appellant, they might have shed light in the determination by the jury of whether or not Watson had authority to purchase for the appellant an account not secured by a lien.
There are other errors assigned, but we need not discuss them, as what we have already decided disposes of them. Not only the question of whether or not Watson, the manager of appellant, absolutely purchased plaintiff’s account, should have been submitted to the jury, but also the question of *385whether or not Watson had authority to purchase it, and, as incidental thereto, the question of whether plaintiff was entitled to a lien on his account, should also have been submitted. The judgment is reversed, and the cause remanded, with directions to the lower court to grant a new trial.

Reversed and Remanded.

Pemberton, C. J., not sitting. Hunt, J., concurs.