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Robinson M. Co. v. Riepe

December 31, 1914


Appeal from the Fourth Judicial District Court, White Pine County; George S. Brown, Judge.

S. W. Belford, for Appellant.

Chandler & Quayle and Gilbert A. McElroy, for Respondent.

By the Court, McCarran, J.:

This is an appeal from an order of the Ninth judicial district court denying appellant's motion for a new trial. Judgment in this case was rendered on the counterclaim interposed by Henry M. Fulmer, who was made defendant in an action brought against himself, together with other defendants, by the appellant corporation. Respondent Fulmer's cause of action was acquired by him through assignment from one E. W. Hulse. The latter had purchased from Fulmer 21,500 shares of the capital stock of appellant corporation, giving in payment thereof his personal promissory note unsecured and $100 in coin. The secretary of the appellant corporation refused to transfer the stock on the books of the company when Hulse presented the certificate purchased from Fulmer. Respondent Fulmer consented to a rescission of the contract existing between himself and Hulse relative to the purchase of the stock; the stock being returned to Fulmer, together with an assignment of Hulse's cause of action. Hulse

[37 Nev. 27, Page 29]

received back his $100 in coin, and also the promissory note.

The appellant company moved the trial cout to set aside the decision and judgment, and grant a new trial thereof upon the counterclaim of Henry M. Fulmer against appellant upon the following grounds: “First—That the evidence is insufficient to justify the judgment of the court in favor of defendant Henry M. Fulmer, and against plaintiff, * * * and that said judgment is against the law. Second—That the said plaintiff Robinson Mining Company has newly discovered evidence to offer in its behalf material for the plaintiff, and pertaining to the said claim of the said defendant Henry M. Fulmer, against the defendant, which it could not with reasonable diligence have discovered and produced at the trial.”

Respondent Fulmer's cause of action, as set forth in his counterclaim, being an action in trover, was based upon the assignment of a cause of action accruing in favor of Hulse, due to the fact that the appellant company, having refused to transfer the shares of stock upon its books, had converted the stock to its own use to the damage of Hulse; Hulse's cause of action having been assigned to Fulmer.

[1] The record in this case discloses a series of most peculiar transactions. In Fulmer's counterclaim it is asserted that the conversion took place on the 17th day of June. The testimony of D. W. Ellis, secretary of the appellant company, is as follows: “Mr. Hulse approached me on the street, and I refused to cut up the stock. There was some little discussion there; but I did not give him any reason at that time. When he handed me the stock at the office I told him the reason I would not cut up that stock was because it was pooled. I was under the impression that the pool was not out yet; but I was wrong in that impression. There were a few further reasons which I would not state at that time. The company had grievances against several people; but I did tell him there were other reasons.”

[37 Nev. 27, Page 30]

The testimony of Fulmer and Hulse, as disclosed by the record, substantiates a bona fide transaction in the transfer of the stock from the latter to the former. Although the transaction itself was one of an unusual character, and perhaps subject to some suspicion, there is nothing disclosed that would cause one to believe that it was other than that of a bona fide nature. Fulmer's acceptance of an unsecured promissory note in payment for a large sum of money, and his delivery of the stock to Hulse upon receipt of that note, is emphasized by the appellant as indicating a suspicious transaction; but the dealings of men in matters of this character cannot be viewed with suspicion merely because one appears to place unusual faith in the honesty of another. After the company had refused to transfer the stock for Hulse, or to “cut it up,” as he terms it, Fulmer's act in permitting a rescission of the contract between himself and Hulse appears from the record to have been one of a voluntary nature, by which he gave back what he had received for Hulse, and in return accepted the stock from Hulse and an assignment of the latter's cause of action against appellant. Nothing in these transactions would indicate anything other than a peculiar yet honest dealing between the two men.

Prior to the assignment of Hulse's cause of action to Fulmer it is admitted that he had instituted proceedings in mandamus to have the stock transferred. With reference to Hulse's cause of action against appellant corporation, which cause of action was assigned to Fulmer, and upon which cause of action judgment is rendered in favor of Fulmer, it is alleged in the counterclaim that the presentation of the stock was made on the 17th of June. The testimony both of the witness Ellis and Hulse discloses that this presentation was made upon the street, in the way of a request by Hulse to have the stock cut up. A subsequent presentation was made in the office of the company. The secretary of the company, Mr. Ellis, to whom this request was made, both on the 17th of June and on the next occasion, whether it be on the 18th, 19th, or 20th, refused to transfer the stock; the principal

[37 Nev. 27, Page 31]

reason given to Hulse at that time by the secretary being that the stock was still in pool, but in his testimony at the trial it is disclosed that ...

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