Court Opinion

ID: 5507430
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:19:46.58222+00
Date Added: 2024-06-11T08:34:05.067033
License: Public Domain

FOLLETT, J.
The corporation appeals from the first, second, and fourth clauses of the judgment, and Alfrederick S. Hatch from the third clause thereof. No other defendant appeals. The corporation urges that the judgment against it is not “consistent with the case made by the complaint, and embraced within the issue,” as required by section 1207 of the Code of Civil Procedure. The construction contract of September 15, 1885, the contract amendatory thereof of October 30, 1885, and the contract of November 17,. 1885, by which the corporation was authorised and undertook to sell options to purchase shares which the plaintiff was to become entitled to receive under his contract, are set forth in the complaint. It is also alleged that the corporation sold options to purchase many shares of stock, and received a large sum of money in cash, which was paid over to Lewis May and Alfrederick S. Hatch,, pursuant to the terms of the contract of November 17, 1885, which fund was subsequently transferred to Lee and Newcombe, who were-directors of the corporation. It is also alleged that the plaintiff is ignorant of the amount received for options so sold, and that all of the defendants are liable to account for and pay to the plaintiff the moneys received by them. The corporation alleges in its answer that it was agreed that the construction contract was not to be delivered to the plaintiff until $10,000 were paid over to it, to be expended in payment of the administrative expenses referred to in the contract; but that afterwards, on the 8th of October, 1885, a resolution was adopted by the defendant’s directors that the contract be delivered to the plaintiff upon the payment by him of $5,000, and on receiving an agreement from him that half of any money thereafter received for the sale of options should be paid to-the treasurer of the corporation, until $10,000 should have been full v paid. That thereafter plaintiff paid to the treasurer of the corporation $10,000 received from the sale of options. It also alleges that it has expended more than the sum of $10,000 in paying the expenses of administering the affairs of the corporation. Other defenses are set up which were not established before the referee, and which need not be referred to. Upon the application of the plaintiff the corporation was required to furnish a bill of particulars of the sums which it had paid out in administering the affairs of the corporation, which it refused to serve, and by an order of the court was precluded from giving evidence of the various items expended. Under this state of the pleadings it seems very clear that the issue as to how much the corporation had received, and how much of the sum remained unexpended and in its hands or in *1002the hands of its officers or of the trustees, waá clearly presented, ■and that the recovery against it was consistent with the case made by the complaint, and embraced within the issue.' Besides, the ■evidence of the amount of money and bonds in the possession or under the control of the corporation was not objected to on the ground that it was not relevant to any issue raised by the pleadings. The only objection that evidence offered by the plaintiff was inadmissible under the pleadings is found at folio 442, and relates to a violation by the corporation of its agreement not to sell shares without the consent of the plaintiff.
On the trial, the corporation, by its counsel, offered to prove the substance of the resolution of its board of directors adopted on the 12th of September, 1885. This was objected to by the plaintiff’s counsel, and the referee ruled that the offer was improper, and that the defendant should offer the resolution, and have it marked for identification, in case it was rejected. The resolution was not produced, and the referee was quite right in refusing to rule upon the -offer. The resolution was concededly in writing, and if the defendant desired to offer it in evidence it should have produced it, and, if rejected, should have had it marked for identification, and incorporated in the case, so that the appellate court could determine whether it was competent.
By the sixteenth finding it is found that the $5,000 paid by Hatch from the trust account to the treasurer of the corporation was for the sole purpose of securing the payment by the plaintiff of the administrative and other expenses which he was required to pay by the terms of his contract. It is urged that this finding is contrary to the weight of evidence. Over this issue there was a sharp conflict in the evidence, and we think that the finding of the ref•eree is amply sustained by the testimony, and that the finding that this sum was paid to the corporation as a bonus for awarding the -contract to the plaintiff has littld support in the evidence. The sixteenth finding being well founded, the fifth conclusion of law, that such part of the $5,000 as was not expended by the corporation in the payment of administrative expenses belongs to the plaintiff, necessarily follows. The referee found (third finding of fact) that it was provided by the construction agreement that, •should the plaintiff fail to build the road within five years, the corporation should have the right to cancel the contract, and thereupon both parties should be absolved from any liability thereunder "to each other; and he also found that for some years both parties to the contract had treated the construction agreement as abandoned. It is urged that these findings are destructive of the right ■of the plaintiff to require the defendant to account for sums of money which it had received from him, but had not expended pursuant to the terms under which they were received. This provision relates to the executory parts of the construction contract, and not to moneys received by the corporation under the contract of November 17, 1885. There is no provision in the contract that, in case the plaintiff paid into the hands of the corporation a larger isum than was necessary for the payment of administrative ex*1003penses, he should forfeit them in case the construction of the road should become impossible by reason of the refusal of the authorities of the city to grant permission for its construction; and there is nothing in these findings inconsistent with the right to recover from the corporation the sums of money which he had paid over to it, and which it had not expended, pursuant to the contracts.
The appeal on the part of Hatch is based upon the refusal of the referee to find that he had rendered services to the plaintiff equal in value to the sum of $510 retained by him, and for which a judgment was recovered. The referee found that the plaintiff agreed to pay Hatch a reasonable compensation for his services as trustee, but that the reasonable value of such services over and above the value of an option given by the plaintiff to Hatch did not appear from the evidence. Hatch ceased to be a trustee in 1887, and we think that the refusal of the referee to find that the services rendered by him previous to that date were of greater value than the option given him and the profits derived from the use of the deposits in his hands and in the hands of the firm was justified by the evidence. The judgment should be affirmed, with costs. All concur.