Court Opinion

ID: 3541708
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:53:17.727661+00
Date Added: 2024-06-11T13:45:38.783661
License: Public Domain

I think there was such a variance between the allegations of the complaint and the proof as to amount to a failure of proof.
The complaint, which was filed July 10, 1933, consists of two causes of action. In the first cause it is alleged that on February 18, 1930, an involuntary petition in bankruptcy was filed against Harrington Motor Company, a corporation, in the United States District Court of Minnesota; that the company was adjudged a bankrupt on March 6 and plaintiff Franz was appointed trustee on March 31; that on March 30, 1930, and for a long time prior thereto, the defendants were the agents of W.V. Harrington with authority to collect and sell each season the share of grain to be delivered by Krogstad under a certain contract for the sale of land entered into between Harrington and Krogstad; that at the time of adjudication in bankruptcy the Harrington Motor Company "was the owner *Page 505 
of Harrington's interest in the contract"; that from the time of adjudication in bankruptcy until February 23, 1933, plaintiff was the owner of that contract and of all grain delivered by Krogstad thereunder; that during August and September, 1930, Krogstad delivered grain grown during 1930 to defendants under the contract; that plaintiff was the owner of the grain; that defendants, without knowledge of the interest of Harrington Motor Company or plaintiff in the grain, received and sold it for the account of W.V. Harrington and received $800 net therefor; that plaintiff is the owner of the proceeds of the grain in the sum of $800, for which, less a commission of 10 per cent., recovery is sought. The second cause of action is identical with the first, except that it relates to a contract between Harrington and Forsness, covering different property and involving the sum of $192, less a 10 per cent. commission.
The reply reiterates that "on March 30, 1930, and for a long time prior thereto defendants were the agents of Harrington to collect and sell each season the share of grain to be delivered" by Krogstad and Forsness to Harrington under the contracts involved.
The evidence shows that on May 1, 1928, W.V. Harrington, as vendor, entered into a written contract to sell certain real estate to Ole Krogstad. Krogstad executed a note "to the order of W.V. Harrington," for the purchase price. On May 20, 1929, a similar contract, relating to other property, was made with G.R. Forsness and a note in the same form, but in a different amount, was executed by him. Neither note was ever assigned or endorsed to the Harrington Motor Company, and neither was there an assignment of Harrington's interest in either contract to the Harrington Motor Company prior to the filing of the petition in bankruptcy; but defendants on the cross-examination of Harrington, a witness for plaintiff, developed the fact that there was a written assignment of Harrington's interest in these contracts to plaintiff trustee on March 9, 1932.
The plaintiff, over defendants' objection, was permitted to show that the Harrington Motor Company was the owner of *Page 506 
the land sold to Krogstad and Forsness since July, 1921, when it was deeded by Harrington to the Harrington Motor Company, and that company owned the Krogstad contract and notes and the Forsness contract and note immediately after their execution, since they were then delivered by Harrington to the Harrington Motor Company. In effect, the plaintiff's proof shows that the Harrington Motor Company was the owner of the lands sold to Krogstad and Forsness at the time the contracts were made, and was also at all times the owner of the contract rights and of the crops to be delivered by Krogstad and Forsness under the contracts.
I think it was error to admit this evidence and that by its admission there was a variance between the allegations of the complaint and the proof amounting to a failure of proof. Plaintiff undoubtedly had the right to make a general allegation of ownership of the property in the Harrington Motor Company at the time of the filing of the petition in bankruptcy, and any proof of ownership would then have been admissible. Instead of doing this, however, plaintiff alleged that defendants were the agents of Harrington as late as March 30, 1930, "with authority to collect and sell each season the share of grain to be delivered" by Krogstad and Forsness "to Harrington under a certain contract for the sale of land entered into between Harrington" and Krogstad and Forsness. It then alleged that "at the time of adjudication of the bankruptcy of the said Harrington Motor Company, a corporation as aforesaid, the Harrington Motor Company was the owner of Harrington's interest" in the contract. In effect, plaintiff alleged that the Harrington Motor Company became the successor in interest of the rights of Harrington under the contracts between Harrington and Krogstad and Harrington and Forsness, and the fair implication is that the corporation acquired those interests some time after March 30, 1930.
Fair construction of the complaint leads to the conclusion that plaintiff has pleaded the particular source of his title. "Ordinarily a general allegation of title is sufficient to admit evidence pertaining thereto, without setting up the facts showing *Page 507 
its character; but if a particular source or kind of title is pleaded, evidence of a different source of title is inadmissible." (49 C.J. 797.) To the same general effect arePain v. British-Butte Min. Co., 41 Mont. 28, 108 P. 12,Craig v. Burns, 65 Mont. 550, 212 P. 856, and Costello v.Shields, 99 Mont. 335, 43 P.2d 879.
"The plaintiff * * * cannot assert a right to go without the lines within which he voluntarily confined himself. * * * If this were not so, the very purpose of pleadings would be destroyed, and instead of the complaint apprising the defendant of the proof which he would be called upon to meet, it would become a device to entrap him." (Flaherty v. Butte Elec. Ry. Co., 40 Mont. 454,107 P. 416, 135 Am. St. Rep. 630.)
Hence, I think the court erred in allowing plaintiff to introduce evidence of title and ownership of the property in question other than that alleged. Without this inadmissible evidence plaintiff did not make out a case.
While defendants do not assign error in overruling their demurrer to the complaint, I think it proper to call attention to the fact that the complaint is insufficient in considering defendants' contention on motion for nonsuit that there was a material variance between the allegations and the proof. Plaintiff's rights as trustee in bankruptcy attach only to such property as was owned by the bankrupt at the time of the filing of the petition in bankruptcy. "Property acquired by the bankrupt after the filing of the petition in bankruptcy, although before the adjudication, does not pass to the trustee." (7 C.J. 133; Inre Kane, 48 F.2d 96; Brouwer v. Superior Court,130 Cal.App. 163, 19 P.2d 834; Bramham v. Lanier Bros.,138 Tenn. 702, 200 S.W. 830; Collier on Bankruptcy, 13th ed., vol. 2, pp. 1635, 1641; Remington on Bankruptcy, 4th ed., sec. 1379.)
The petition in bankruptcy involved here was filed on February 18, 1930. There is no allegation in the complaint that the Harrington Motor Company was the owner of rights under the contracts in question at that time. The fair inference from the complaint is that it was not the owner at that time, because *Page 508 
it alleges that defendants as late as March 30, 1930, were the agents of Harrington. So that we have here a complaint that does not state facts sufficient to constitute a cause of action whereas proof was admitted, over objection, to enlarge the issues to the extent that a cause of action was permitted to be proved. This, I think, constituted a material variance amounting to a failure of proof for which a nonsuit should have been granted, equally as in a case where one cause of action is alleged and another proven, which has always been held a good ground for granting a nonsuit. (American Livestock  Loan Co. v. GreatNorthern Ry. Co., 48 Mont. 495, 138 P. 1102.)
I think my associates are in error in holding that the complaint states a cause of action on the theory that the contracts in question were made by Harrington on behalf of an undisclosed principal — the Harrington Motor Company. There is no intimation in the complaint that such was the case. I concede that it might have been proper to so allege, as was done inProsper v. Smith, 67 Mont. 308, 215 P. 649, or to allege that the principal made the contracts without mentioning the agency, as suggested in 2 American Jurisprudence, section 438, page 346, relied upon by my associates. But in order to state a cause of action on the theory of undisclosed principal, the complaint must make that disclosure in one form or the other. (Montana Amusement Securities Co. v. Goldwyn DistributingCorp., 56 Mont. 215, 182 P. 119.)
As stated in 2 Bancroft's Code Pleading, section 821: "In an action by the principal in his own name on a note taken by and in the name of his agent and not endorsed, he must allege the fact of the agency and that he is the owner of the note and the real payee." Here the complaint did not allege that Harrington made the contracts for the Harrington Motor Company, nor did it allege that the Harrington Motor Company made them. It alleged the contrary, by alleging that defendants were Harrington's agents and that Harrington had interests in the contracts which at some indefinite time passed to the Harrington Motor Company. *Page 509 
So here the complaint alleged that as late as March 30, 1930, defendants were the agents of Harrington, whereas the proof showed, in effect, that defendants were the agents of the Harrington Motor Company at all times. And, while the complaint alleged that at the time of the adjudication in bankruptcy the Harrington Motor Company was the owner of Harrington's interest in the contracts, the proof showed that Harrington never had an interest in those contracts or either of them, but that the Harrington Motor Company was the owner thereof at all times. The materiality and prejudicial character of this variance is made apparent when it is remembered that defendants alleged a good defense to the action, if Harrington was the owner of the rights under the contracts at the time of the filing of the petition in bankruptcy, whereas if the Harrington Motor Company was the owner of those rights at the time of the filing of such petition, if there were any defense at all, it would of necessity involve issues not tendered by the pleadings as they then stood.
I agree that pleadings should be liberally construed, but that does not mean that material allegations omitted from a pleading can be supplied by construction; nor does in mean that a different meaning can be attributed to allegations from what their wording fairly imports.
I think that defendants' motion for nonsuit should have been sustained.