Spoerer v. Baker

BARNARD, P. J. This is an action on five notes, each for $2,000. These notes, dated June 24, 1949, were given to the Benders and the Handels and assigned by them to the plaintiff. The answer admitted the execution of the notes but alleged that they were delivered conditionally as security for the payment of like amounts to the Benders and the Handels by El Dorado Gold Mines, Ltd., and that there had subsequently been an accord and satisfaction through which El Dorado Gold Mines, Ltd. had fulfilled the obligation and discharged this debt. The court found that [665]no part of these notes had been paid and that it was not true that there had been any accord and satisfaction. Judgment was entered for the plaintiff and the defendant has appealed.

The real parties in interest and all of the witnesses were connected with a mining venture in Nevada operated by El Dorado Gold Mines, Ltd. For convenience, this company, will be referred to as El Dorado and the Benders and the Handels, to whom the notes were given, will be referred to as the respondents.

The appellant contends that the findings, to the effect that there was no payment or accord and satisfaction, are unsupported by any material evidence. It is further contended that the court erred in admitting testimony as to certain statements made by a Mr. Wickham with reference, to the cancellation of a stock certificate and the reissuance of other stock in lieu thereof; that this evidence was hearsay and inadmissible; and that these statements, had they been admissible, would have been legally insufficient to prove the cancellation of the certificate in question and the reissuance of other stock in lieu thereof. This Mr. Wickham was a stockholder in and an officer of El Dorado, and was active in its business affairs.

The respondents were potato growers at Shafter. On May 7, 1949, they entered into a written agreement with one Kelso, by the terms of which Kelso agreed to issue 100,000 shares of El Dorado stock to the respondents in exchange for certain stock in another company owned by them. On February 15, 1950, the respondents signed a memorandum on the bottom of the May 7th agreement stating, in effect, that this agreement was consummated on that day by giving them El Dorado stock Certificate No. 317 for 100,000 shares. In April, 1950, the respondents received certificates for 100,-000 shares of stock in El Dorado made out in their names, which were dated October 8, 1949, and which are referred to as “Exhibit B.” They held this stock at the time of the trial, and Certificate No. 317 had not been returned or can-celled of record. The controversy here is as to whether they obtained “Exhibit B” through this deal with Kelso, or obtained it from El Dorado in exchange for their chattel mortgage and loans, thus wiping out El Dorado’s debt to them and the appellant’s obligation on these notes.1