Gooch v. Natural Gas Supply Co.

1935 OK 1107, 51 P.2d 932, 175 Okla. 153, 1935 Okla. LEXIS 835
CourtSupreme Court of Oklahoma
DecidedNovember 12, 1935
DocketNo. 25742.
StatusPublished
Cited by2 cases

This text of 1935 OK 1107 (Gooch v. Natural Gas Supply Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gooch v. Natural Gas Supply Co., 1935 OK 1107, 51 P.2d 932, 175 Okla. 153, 1935 Okla. LEXIS 835 (Okla. 1935).

Opinion

PER CURIAM.

This is an action by Sarah Gooch, of Schell City, Mo., against the Natural Gas Supply Company, an Oklahoma corporation, with its principal and only place of business in Chickasha, Okla., for damages in the sum of $1,000 for the refusal of the corporation to recognize her as the holder of 100 shares of its capital stock of $10 par value, for which she alleges she paid the $1,000. The case was tried to the court without a jury and resulted in a judgment for the defendant, from which she has appealed to this court. We shall refer to her as plaintiff and the company as defendant.

In her petition plaintiff alleged that she purchased the stock certificate, which she exhibited, because it bore the signature of one Y. A. Reardon, vice president of the company, and who she 'alleged was acting within the apparent scope of his authority in the issuance of the stock “as affecting per right for the relief prayed for” and that prior' to the issuance and delivery of the certificate she had had no contractual relation with the defendant and that she acted in good faith and relied upon the issuance of the certificate by Reardon as vice president. She alleged she paid or caused to be paid the $1000 direct to Reardon “in his official capacity as vice president”, but the defendant had refused to recognize her as a stockholder and that she had been damaged to the extent of her investment and prayed for judgment in that amount and tendered the certificate into court for the benefit of the defendant.

Defendant answered that the stock certificate was a forgery and not issued by or under the authority of the defendant or by any one authorized by it to dc so and denied that Reardon was acting within the apparent scope of his authority in issuing the certificate, if, in fact, lie ever issued it, and 'alleged that, under the laws of Oklahoma and the by-laws of the defendant corporation, no person could become a stockholder except by proper entry on its books, and that plaintiff had never been entered' as a stockholder on the books of the company and had never-been a stockholder thereof, and that if she .had ever paid Reardon any money and received from him a purported stock certificate, she was guilty of gross carelessness and negligence in so doing, inasmuch as no such certificate had been authorized by the company or its proper officers, and that if plaintiff had any such certificate it was a forgery and utterly void and of no effect. The answer was verified. Plaintiff replied with a general denial.

Just before trial defendant was allowed to amend its answer to show that at the time the purported certificate was issued "all the stock of the corporation had been issued It was stipulated at the trial that Reardon was vice president on the date the certificate bore and that his signature thereon was genuine. Thus there were two issues raised by these pleadings: First, whether plaintiff acquired the certificate in reliance upon the apparent authority of Reardon to issue it; second, whether the certificate was a forgery. Plaintiff had the burden of establishing- the first, defendant the second. We think plaintiff failed and defendant succeeded.

The evidence showed that plaintiff did not acquire the certificate through any efforts of Reardon nor with prior knowledge that his name would appear on the certificate. She acquired it solely through the representations and efforts of one T. E. Burns, a stock salesman from Kansas City, whom she had known for a year or so prior to this transaction. He was in no way connected with the company and was unknown to any of its officers except, doubtless. Reardon. She did not know Reardon, had never met him, had never seen him, had never heard ctf him until she received the certificate. Burns had been her confidential business and investment advisor *155 in whom she placed the utmost confidence, even entrusting him w'ith the collection of dividends for her on other investments. On October 20, 1930, she gave him her check for $1,000 on her savings account in a Schell City bank, payable to defendant’s order, ostensibly for defendant’s stock. Burns cashed this check two days later at a Kansas City bank by indorsing the check as defendant’s agent. Later plaintiff received through the mail a purported certificate for 100 shares of defendant’s capital stock, dated October 21, 1930, signed by Reardon as vice president and bearing the purported signature of one TV. M. Burwell as secretary, and an impression of the purported seal of the corporation. The certificate was numbered 102 and was accompanied by a letter on defendant’s stationery, signed by Reardon, in which he said the board of directors had just authorized an extra dividend of 3 per cent, to be paid January 1, 1931, along with the> regular quarterly dividend of 7 per cent., and offering assistance to her in her investments whenever she needed it. Sometime in January, 1931, she received through the mail a check on a Kansas City bank signed either by Burns or Reardon, she could not recall which, nor could she remember the name of the bank, for about $3, which she took to be the extra dividend. The check also was accompanied by a letter on company stationery signed by Reardon, congratulating her for being able to receive the dividend. Later in the month Burns brought to her in cash what she was led to believe w>as the regular quarterly dividend of the company. This was the last she ever received. She had not seen Burns for two years prior to the trial and did not know where hei was. Her testimony was positive that she purchased the purported stock upon the sole representations of Burns and her implicit reliance upon him. There was no evidence that she had relied on anything that Reardon had done or said, or through any apparent authority vested in him by the company. No effort was made to connect the company with the transaction other than to show that Reardon signed the certificate.

Defendant was organized in the early part of 1930 with a capitalization of $100,000. All of the stock was issued immediately after organization. The corporation was purely a local affair. Its stockholders, were limited in number and confined for the most part to intimate friends of its president! and treasurer, B. P. Siddons, 'and of its secretary, Harry Hammerley. These two men have held office continuously since the corporation was organized. Y. A. Reardon was its vice president during the transaction involved in this suit, but was dismissed shortly thereafter. The stock of the company has not been listed on any exchange. It is not dealt with in the open market. It has never paid any dividends, nor has it carried a bank account in Kansas City. But 100 stock certificates were ever printed by the corporation and these were numbered consecutively from 1 to 100. Not more than 75 have been issued. Unissued certificates, together with the records of the corporation, have been continuously in the exclusive possession of the secretary. There is no evidence that Reardon, as vicej president, ever had any of them in his possession, or was ever entrusted with any duties involving their custody. There is no evidence that he was ever authorized to issue or to sign stock certificates, or that he had ever issued or signed any valid ones.

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Bluebook (online)
1935 OK 1107, 51 P.2d 932, 175 Okla. 153, 1935 Okla. LEXIS 835, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gooch-v-natural-gas-supply-co-okla-1935.