Angelus Securities Corp. v. Ball

WHITE, J., pro tem. We have this day filed an opinion in case No. S. C. 37 (ante, p. 423 [67 Pac. (2d) 152]), which involves questions presented in litigation out of which this appeal arises. While reference may be had to that case for a more complete statement of the facts, those involved in the appeal now before us, in brief, are as follows:

On April 15, 1931, and for several months prior thereto, respondent corporation had as its board of directors Messrs. Luton, Crowe, Woodward, Ball, Harriss, Seamans, Breslin and Cruiekshank. Of these, Luton was president, Crowe, Woodward and Harriss were vice-presidents, Cruiekshank was secretary-treasurer, and Harriss was general manager. For some time prior to the date last mentioned, considerable dissension existed between Crowe, Woodward, Harriss and Ball, on the one hand, and Luton and Cruiekshank on the other, regarding corporate policies. From the record it appears that directors Ball, Woodward, Crowe and Harriss were desirous of getting directors Luton and Cruiekshank “out of the picture”. After conferences among the first-named group, an approach was made to Luton and Cruickshank by Ball with a view to obtaining their preferred and common stock in exchange for certain trust deed securities belonging to plaintiff corporation and transferred to Ball by [438]Harriss in his capacity as vice-president of plaintiff corporation, with the understanding that if Ball obtained 470 shares of the preferred stock and 235 shares of the common stock from Luton and Cruickshank, the corporation would purchase the stock in question from Ball. It appears that, using the securities obtained from the corporation in the manner more specifically set forth in case No. S. C. 37, Ball obtained the 470 shares of preferred stock, but instead of obtaining only 235 shares of common stock, he obtained 1235 shares. Ball thereupon delivered to the corporation the aforesaid preferred stock, but turned over to the corporation only 235 shares of the 1235 shares of common stock. The remaining 1,000 shares Ball retained for himself, and some months later sold them to director Harriss for $2,500. This action was subsequently commenced by the corporation to recover from Ball the sum of $2,500, which it is alleged was a secret profit to him in the retention and sale by Ball of the 1,000 shares of common stock while acting as the agent of the corporation. Upon the trial judgment was rendered against appellant, Ball, for the sum of $2,500, and from that judgment he prosecutes this appeal.

Although the appeal comes to us on a bill of exceptions containing thirteen specifications of error, and appellant has not pointed out in his brief nor called to our attention the particular finding or findings claimed to have no support in the evidence and the particulars in which such finding is not supported by the evidence, and notwithstanding that it is not our duty to investigate the questions as to the sufficiency of the evidence, we have nevertheless read the record to determine in our own minds whether the findings are supported by substantial evidence. Assuming the sufficiency of appellant’s brief in presenting the specifications urged in the bill of exceptions, this appeal presents, as suggested by appellant, three inquiries: (1) Was appellant acting in these transactions as the agent of plaintiff corporation? (2) Did appellant purchase these shares from Luton, Cruickshank, Lyon, and Ferguson with the funds of the corporation? (3) Was the receipt and retention of these 1,000 shares of common stock by appellant a secret profit to him as a director of plaintiff corporation?