Hamersley, J.
The defendant claims that the evidence offered and excluded was admissible in support of both his defenses.
First. The issue of fact raised by the first defense is, did the plaintiffs and defendant, before the defendant’s note became due, agree that the stock held by the plaintiffs as collateral security for the note should be owned by the plaintiffs, and received in full payment of the note ? The fact that [402]*402the plaintiffs subsequently treated the stock as their own property, would be relevant to that issue. Any fact tending to show that the plaintiffs had treated the stock as their own would be a relevant fact; and the defendant claims that portions of the deposition of Rossman tend to show that fact. The testimony of Rossman on this point is substantially as follows:—■
I was secretary of the Anoka Pressed Brick & Terra Cotta Co. in the fall of 1885, and kept the books of the company, and remained secretary until after March 1st, 1886. At some meeting of the company, between October 15th, 1885, and March 1st, 1886, I think the plaintiffs represented defendant’s stock by voting on the stock. That is my recollection. The books will show. I do not remember how much stock the defendant had. I am not positive whether more than twenty shares of his stock was ever transferred to the plaintiffs. It is not for me to say whether they could vote on stock not transferred to them. I think they did vote on stock standing in the name of the defendant. I am not positive. I cannot say positively whether the defendant himself was present at any of the meetings of the company during this time. The minutes will show.
If this evidence is admissible it must be so because the fact claimed to be proved by it—that the recording officer of this corporation has an impression (of which he is not positive) that at some meeting of the corporation held seven years before, the plaintiffs, who were stockholders by transfer of a portion of the stock formerly standing in the defendant’s name, voted on the balance of the stock still standing in the defendant’s name—is relevant as tending to show the fact that the plaintiffs did vote on the defendant’s stock ; which fact is relevant as tending to show the fact that the plaintiffs had treated the stock as their own property ; which fact is relevant as tending to show the fact in issue as alleged in the first defense. The trial judge thought that this evidence, whether relevant or not, was under all the circumstances of this case, too remote to be material, and excluded the evidence. We cannot say that such ruling was erroneous.
[403]*403The exhibits offered in connection with Rossman’s testimony are clearly irrelevant to any issue raised by the first defense.
Second. The defendant relies on the admissibility of the evidence under his second defense, and this reliance is based mainly on the deposition of Rossman. In addition to his testimony above recited, Rossman testified substantially as follows:—
After I became secretary of the Anoka Pressed Brick & Terra Cotta Co., in the fall of 1885, the company was advised by counsel that its organization was not legal. The company was in debt. I cannot remember the amount of the debts within $25,000; cannot attempt to tell what the debts were. The company was reorganized in the spring of 1886. Its name was changed to the Anoka Pressed Brick Co., and the capital stock increased. The first steps were taken in February, and the new articles of incorporation took effect March 1st, 1886. The old company was absorbed by the new, and its assets sold to the new. The transfers, including a bill of sale, were in wilting. I think the consideration expressed in the papers was one dollar. The actual consideration for the transfer of the property included the assumption by the new company of all the debts of the old. Those who held stock in the old company at the time of the incorporation of the new received in lieu thereof stock issued by the new company to an amount equal to that which they held in the old. There were two objects in the reorganization of the company : first, to properly organize according to the statutes of the State; and, second, to increase the capital stock. At some conversations—I cannot cite any particular conversation, at which the plaintiff Dunham was present—the substance of the talk was, that all those who could not come to the front would either have to put up or shut up. I paid my assessments.
From the exhibits offered in connection with the deposition it also appeared that the articles of incorporation were signed by the witness Rossman, who was made a member of the first board of directors, and that its capital stock con[404]*404sisted of 1000 shares, of $100 each, to be paid in as called for by the directors; that on April 7th, 1886, the old company conveyed to the new company certain real estate, the deed being sealed with the corporate seal of the old company, and its corporate name subscribed by the witness Ross-man as secretarj' and the plaintiff Dunham as president; that six and one half years afterwards, and subsequent to the bringing of this suit, a one fourth interest in the land described in the above deed was conveyed by the plaintiff Dun-ham and his wife to the plaintiff Johnson.
Essential portions of the testimony of Rossman were objected to at the taking of his deposition, not only as immaterial and irrelevant, but as secondary evidence. Counsel for the defendant claimed that the papers and books which constituted the primary evidence were lost or in the control of the plaintiffs, but no evidence to that effect was produced, and the fact was notproved, either before the magistrate or the trial court. Assuming, however, that Rossman’s testimony was not inadmissible on this ground, the defendant’s claim is that the evidence excluded tends to prove the fact which he claims to be relevant under his second defense—that the reorganization of the corporation, whose stock was held by the plaintiffs as collateral security, in connection with the defendant’s failure to take advantage of his rights under the reorganization, destroyed the value of the defendant’s stock, —the plaintiff Dunham, as stockholder and officer of the corporation, consenting to such reorganization.
It is difficult to understand how this fact can be claimed to be relevant, unless upon the theory that it tends to prove that the plaintiffs Johnson and Dunham took partin this reorganization in bad faith, for the purpose of promoting their interests and to the injury of the defendant. If admissible for that purpose, it is by no means clear that the rejection of the evidence in the circumstances of this case was detrimental to the defendant. The evidence does not tend to show that the reorganization was against the interests of the stockholders; on the contrary, it shows that it was necessary in some form, and plainly indicates that the form adopt[405]*405ed was the best for the stockholders. It justifies no lawful inference that Dunham had any interest, or exercised any influence, other than as the holder of 70 out of 600 shares of the stock. It justifies no inference that the defendant did not know of the action taken by the stockholders at the time, and did not have notice of the special meeting which must have been called for taking such action.
Free access — add to your briefcase to read the full text and ask questions with AI
Hamersley, J.
The defendant claims that the evidence offered and excluded was admissible in support of both his defenses.
First. The issue of fact raised by the first defense is, did the plaintiffs and defendant, before the defendant’s note became due, agree that the stock held by the plaintiffs as collateral security for the note should be owned by the plaintiffs, and received in full payment of the note ? The fact that [402]*402the plaintiffs subsequently treated the stock as their own property, would be relevant to that issue. Any fact tending to show that the plaintiffs had treated the stock as their own would be a relevant fact; and the defendant claims that portions of the deposition of Rossman tend to show that fact. The testimony of Rossman on this point is substantially as follows:—■
I was secretary of the Anoka Pressed Brick & Terra Cotta Co. in the fall of 1885, and kept the books of the company, and remained secretary until after March 1st, 1886. At some meeting of the company, between October 15th, 1885, and March 1st, 1886, I think the plaintiffs represented defendant’s stock by voting on the stock. That is my recollection. The books will show. I do not remember how much stock the defendant had. I am not positive whether more than twenty shares of his stock was ever transferred to the plaintiffs. It is not for me to say whether they could vote on stock not transferred to them. I think they did vote on stock standing in the name of the defendant. I am not positive. I cannot say positively whether the defendant himself was present at any of the meetings of the company during this time. The minutes will show.
If this evidence is admissible it must be so because the fact claimed to be proved by it—that the recording officer of this corporation has an impression (of which he is not positive) that at some meeting of the corporation held seven years before, the plaintiffs, who were stockholders by transfer of a portion of the stock formerly standing in the defendant’s name, voted on the balance of the stock still standing in the defendant’s name—is relevant as tending to show the fact that the plaintiffs did vote on the defendant’s stock ; which fact is relevant as tending to show the fact that the plaintiffs had treated the stock as their own property ; which fact is relevant as tending to show the fact in issue as alleged in the first defense. The trial judge thought that this evidence, whether relevant or not, was under all the circumstances of this case, too remote to be material, and excluded the evidence. We cannot say that such ruling was erroneous.
[403]*403The exhibits offered in connection with Rossman’s testimony are clearly irrelevant to any issue raised by the first defense.
Second. The defendant relies on the admissibility of the evidence under his second defense, and this reliance is based mainly on the deposition of Rossman. In addition to his testimony above recited, Rossman testified substantially as follows:—
After I became secretary of the Anoka Pressed Brick & Terra Cotta Co., in the fall of 1885, the company was advised by counsel that its organization was not legal. The company was in debt. I cannot remember the amount of the debts within $25,000; cannot attempt to tell what the debts were. The company was reorganized in the spring of 1886. Its name was changed to the Anoka Pressed Brick Co., and the capital stock increased. The first steps were taken in February, and the new articles of incorporation took effect March 1st, 1886. The old company was absorbed by the new, and its assets sold to the new. The transfers, including a bill of sale, were in wilting. I think the consideration expressed in the papers was one dollar. The actual consideration for the transfer of the property included the assumption by the new company of all the debts of the old. Those who held stock in the old company at the time of the incorporation of the new received in lieu thereof stock issued by the new company to an amount equal to that which they held in the old. There were two objects in the reorganization of the company : first, to properly organize according to the statutes of the State; and, second, to increase the capital stock. At some conversations—I cannot cite any particular conversation, at which the plaintiff Dunham was present—the substance of the talk was, that all those who could not come to the front would either have to put up or shut up. I paid my assessments.
From the exhibits offered in connection with the deposition it also appeared that the articles of incorporation were signed by the witness Rossman, who was made a member of the first board of directors, and that its capital stock con[404]*404sisted of 1000 shares, of $100 each, to be paid in as called for by the directors; that on April 7th, 1886, the old company conveyed to the new company certain real estate, the deed being sealed with the corporate seal of the old company, and its corporate name subscribed by the witness Ross-man as secretarj' and the plaintiff Dunham as president; that six and one half years afterwards, and subsequent to the bringing of this suit, a one fourth interest in the land described in the above deed was conveyed by the plaintiff Dun-ham and his wife to the plaintiff Johnson.
Essential portions of the testimony of Rossman were objected to at the taking of his deposition, not only as immaterial and irrelevant, but as secondary evidence. Counsel for the defendant claimed that the papers and books which constituted the primary evidence were lost or in the control of the plaintiffs, but no evidence to that effect was produced, and the fact was notproved, either before the magistrate or the trial court. Assuming, however, that Rossman’s testimony was not inadmissible on this ground, the defendant’s claim is that the evidence excluded tends to prove the fact which he claims to be relevant under his second defense—that the reorganization of the corporation, whose stock was held by the plaintiffs as collateral security, in connection with the defendant’s failure to take advantage of his rights under the reorganization, destroyed the value of the defendant’s stock, —the plaintiff Dunham, as stockholder and officer of the corporation, consenting to such reorganization.
It is difficult to understand how this fact can be claimed to be relevant, unless upon the theory that it tends to prove that the plaintiffs Johnson and Dunham took partin this reorganization in bad faith, for the purpose of promoting their interests and to the injury of the defendant. If admissible for that purpose, it is by no means clear that the rejection of the evidence in the circumstances of this case was detrimental to the defendant. The evidence does not tend to show that the reorganization was against the interests of the stockholders; on the contrary, it shows that it was necessary in some form, and plainly indicates that the form adopt[405]*405ed was the best for the stockholders. It justifies no lawful inference that Dunham had any interest, or exercised any influence, other than as the holder of 70 out of 600 shares of the stock. It justifies no inference that the defendant did not know of the action taken by the stockholders at the time, and did not have notice of the special meeting which must have been called for taking such action. The defendant claims to have been in Minneapolis until March 1st, and was a stockholder of record, and the presumption is that he did have the same notice as other stockholders; and it does not tend to show that the value of the defendant’s stock was in fact impaired by the reorganization. It gives no reason to suppose that if the stockholders had refused to reorganize, the defendant’s stock would have had any greater value than it had when the reorganization was decided upon. The inference rather is that the reorganization was the only means of obtaining anything from the stock. It is true that other evidence might have given importance to that offered, but there was no such evidence in the case, and the defendant did not claim that he could produce such evidence.
The trial court, in passing on the materiality of evidence, must act in view of the circumstances of the case on ti’ial, and a party cannot claim before a court of review the legal right to a new trial because evidence, which is apparently of no consequence in connection with the facts found, might be important in connection with some unknown evidence Avhich was not produced on the trial and which he did not claim before the trial court could be produced.
But even if the evidence plainly tended to prove bad faith on the part of the plaintiffs in the reorganization of the company, it was properly rejected, because the question of bad faith on the part of the plaintiffs in the reorganization of the company was not a fact at issue in the case, unless connected with some mismanagement of the defendant’s stock held by the plaintiffs as collateral security. If the defendant really claimed that the plaintiffs had got control of the corporation, and had so managed its affairs as to destroy the value of all its stock, and was therefore responsible to [406]*406the defendant in damages which he could recoup in this case, he should have pleaded such defense. The second defense simply alleges that the plaintiffs held the defendant’s stock as collateral security, and so managed said stock that the same became entirely lost. The evidence excluded is not relevant to the issue raised by this defense. It does not tend to prove any management of the defendant’s stock by the plaintiffs to the injury of the defendant, either by itself or in connection with other evidence, and the court expressly finds that there was no other evidence of neglect or mismanagement in relation to the stock held as collateral by the plaintiffs.
We have treated portions of the deposition of Rossman as if offered in evidence and excluded by the court below ; but the record does not show this to have been done. The finding saj^s that the defendant offered portions of the deposition of Rossman, but does not specify what portions. A stipulation of counsel printed with the record states that the counsel agree “ that the whole deposition be printed, and that the parts thereof which tend to sustain the defendant’s claim as stated in the finding are the portions which were excluded by the court.” The counsel do not attempt to specify the testimony which was offered and excluded, and this court is asked to dissect a deposition filled with objections, and which, as a whole, was not offered in evidence, to determine what portions tend to support the defendant’s claim, and to grant a new trial on the assumption that such evidence was excluded by the court below, when there is nothing in the record to show that it was in fact offered. We cannot so supplement a finding; and in this case, if it had not been clear from the whole record that a new trial ought not to be granted, whatever portions of the deposition may have been offered, or if our attention had been directed to the irregularity before argument, we should have insisted on the record being properly amended.
A new trial is denied.
In this opinion the other judges concurred.