Court Opinion

ID: 6737842
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:56.319932+00
Date Added: 2024-06-11T16:01:51.622275
License: Public Domain

On Petition for Rehearing. (Filed March 15, 1917.)
Christianson, J.
The plaintiff has filed a petition for a rehearing wherein he asserts that the issue in the case is not whether there was any consideration for the note in suit (as discussed in the former opinion), but “that the only issue in the case is as to whether or not there was a failure of consideration.”
In support of this contention plaintiff refers to certain statements in the answer, which he contends are, in effect, an admission on the part of the defendant that he became a stockholder in the company: The ansiver contained three defenses. Want of consideration and failure of consideration were both asserted as defenses. The statements relied upon by the plaintiff are:
1. Certain language in paragraph 3 of the first defense to the effect that defendant on or about April 11, 1908, signed his name to an offer in writing Avhereby he offered said company to subscribe for $100 worth of its capital stock at par; and
2. Certain language in paragraph 5 of the same defense to the effect that on or about June 20, 1908, payment was demanded by the company, and that defendant, being unable to pay, was induced by Welo to execute and deliver the note in suit.
Plaintiff, however, wholly ignores paragraph 4 of the first defense-in the answer (found between the two statements relied upon by *58plaintiff), which reads as follows: “That the said Cavalier'"County Farmers’ Co-operative Mercantile Company did not accept, and never has accepted, the defendant’s said offer in the last paragraph alleged, to subscribe for said stock, and never has issued or delivered any stock to the defendant, and that this defendant never has become, nor is he now, a stockholder in the said Cavalier County Farmers Co-operative Mercantile Company.” The language quoted is too plain to admit of ■doubt. It clearly negatives any intent on the part of the defendant to admit that he became a stockholder in the company.
It may also be mentioned that the answer was not verified; and that upon the trial the defendant positively denied that he signed any written offer to subscribe for stock, and we are unable to find that the .alleged admissions in the answer were invoked against him. And the record shows that the plaintiff placed upon the stand Welo, the person with whom defendant’s negotiations were had, for the purpose of controverting defendant’s testimony on this point. The theory adopted in the court below, therefore, seems to have been contrary to that for which plaintiff now contends.
It is true defendant in his answer alleged, and upon the trial offered ■evidence to show, that at the time he executed and delivered the note to Welo, certain promises were made to him by Welo to the effect that he might, within a certain specified time, upon demand, have his note returned. Plaintiff contends that these promises were void as .against creditors of the corporation, and cannot be asserted after the ■corporation has become insolvent. This contention is predicated upon the assumption that defendant became a stockholder. In our opinion defendant made a prima facie showing that he never became a stockholder, and consequently it is not necessary to consider the question respecting the validity of such oral promises.
Plaintiff also asserts that in our former opinion we were in error in stating that “the undisputed evidence shows that the defendant at no time received any notice of acceptance of his offer to purchase stock.” A careful examination of the record discloses that there is no positive statement to this effect. But there is a stipulation efitered into upon the trial stipulating it to be a fact that no stock was issued to Sabie ■or offered to him. The defendant testified as follows: “I never received any notice to participate in any of the meetings of the stockholders in that concern.”
*59A careful consideration of the evidence as a whole leads us to the same conclusion announced in our former opinion: That the defendant made a prima facie showing that he never became a stockholder in the company, and consequently he overcame the presumption 'that the note was executed and delivered for a consideration.
While not very material upon this appeal, it may be mentioned that -the affidavits submitted in support of the motion for a new trial show that the by-laws of the company in force at the time involved in this action provide as follows: “Any person not a competitor in any line -of business carried on by this organization may become a member of this organization by applying for such membership to the president ■or secretary thereof, who shall decide upon all applications for stock in the corporation, in accordance with the constitution and by-laws •thereof and with such rules and regulations as the board of directors may adopt. If they cannot agree, they shall call in one of the directors, -and the majority shall decide. Providing that the final approval is left to the next directors’ meeting.”
. “No certificate of shares shall be issued to any person until the full .amount thereof shall have been paid in cash or its equivalent. No person shall be allowed to become a shareholder in said corporation «except by consent of the board of directors of the same.” These bylaws rather lend force to the claim of the defendant that he never became a stockholder, and more fully confirm our belief that the judgment should be reversed, and a new trial had. We adhere to our former npinion. A rehearing is denied.