Hammar v. Atkins

50 So. 787, 124 La. 897, 1909 La. LEXIS 562
CourtSupreme Court of Louisiana
DecidedNovember 29, 1909
DocketNo. 17,507
StatusPublished
Cited by2 cases

This text of 50 So. 787 (Hammar v. Atkins) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hammar v. Atkins, 50 So. 787, 124 La. 897, 1909 La. LEXIS 562 (La. 1909).

Opinion

MONROE, J.

This is a suit for damages for alleged malicious prosecution and false imprisonment, in which the defense is a general denial, coupled with the averment that ■defendant’s action in the matter complained of was taken in good faith and upon the advice of the district attorney of the parish of Caddo, given by that officer after he had been fully informed of the facts. There was judgment in the district court in favor of defendant, and plaintiff has appealed. The facts, as they appear from the transcript, are as follows: On January 26, 1907, J. B. & W. S. Atkins & Co. (of which concern J. W. Atkins was, perhaps, also a member) made a contract with J. S. Connelly, whereby they agreed to furnish certain gas land leases, gas wells, municipal franchises, and contracts for gas, and Connelly agreed to build certain pipe lines and to furnish $15,000 in money. The original contract was amended and modified, and it was understood that a corporation would be formed by which bonds would be issued, and that the parties who should advance money should receive the equivalent in bonds, together with stock of the company, in due proportion, as a bonus. Connelly sold a one-fourth interest in the contract to Geo. F. Hammar (plaintiff herein) in consideration of Hammar’s furnishing the first $10,-000 required for the building of the pipe line, and it was stipulated that:

“For all funds provided and paid by Geo. F. Hammar, he shall have bonds, when issued, or other negotiable evidence of indebtedness, of like character as that given to J. S. Connelly and his associates.”

Connelly also interested O. J. McLane in the enterprise, and McLane advanced between $15,000 and $20,000, which were invested in pipes. McLane, however, became dissatisfied and concluded to sell out, and Atkins, Connelly, and J. W. Jolly (who had, by that time, taken an interest) gave him their note for $15,000 payable in 60 days and secured by (what purported to be) a pledge of the pipes which were.on hand, the gas land leases, the wells, etc., in payment for' his interest. There were some other agreements, the particulars of which need not be recited, and thereafter a corporation was organized [899]*899under the name of “Louisiana Gas Company,” with Connelly as president, J. B. Atlcins as vice president, Hammar as secretary-treasurer, and J. W. Atkins, Jolly, and McLane (the latter having reacquired an interest) as members (with the others) of the board of directors, and provision .was made for the issuance of $100,000 of bonds in two series, payable, respectively, in 1908 and 1909. On August 14, 1907, before the bonds had been received from. the engraver, the board of directors adopted a resolution reading as follows:

“Resolved that J. B. Atkins, vice president of this company, be hereby authorized to borrow a sum of money, not to exceed a total amount of $25,000, on such terms and conditions as he may deem, to be to the best interest of this company, and to surrender as security for the payment of the amount so borrowed, such securities of this company as may be necessary and to him may be deemed best.”

There were present at the meeting: Connelly, president; Atkins, vice president; Hammar, secretary-treasurer; J. W. Atkins; J. W. Jolly; and O.' J. McLane — and the resolution was seconded by Hammar and unanimously adopted. The bonds did not arrive until about August 17th, and $15,000 of them were at once turned over to McLane, in satisfaction of the note held by him and the pledge by which it was secured, leaving $85,000 (of bonds), which, under the resolution of August 14th, were placed under the control of the- vice president, as securities of the company, to be used in borrowing money for its purposes. Considerable money had already been borrowed or negotiated for, on terms which required bonds as collaterai security, largely in excess of the amounts obtained or to be obtained, so that, whilst the company was still sorely pressed for money, it hail, but few .bonds at its disposal, and it.would have had none had the different members of the company who were to receive bonds for their subscriptions demanded them. No such demand was made, however, at that time, and the vice president of the company, acting under the resolution of August 14th, and, as he testifies, upon an understanding between the parties interested that they were to allow the bonds to which they were entitled to remain in the treasury, in order to tide the company over its difficulties, assumed that such bonds as were not actually pledged for loans already obtained were available as security for further loans; but he appears to have been unsuccessful in his ■ attempts to obtain money, in Shreveport, even with the bonds, and mentioning that fact, and the pressing need of the company, to Hammar, the latter suggested that, if $10,-000 of the bonds were turned over to him, he might be able to borrow some money on them elsewhere.

Atkins testified on that point as follows:

“I had exhausted all of my means to obtain additional money, and we were still in need of funds to construct the pipe line, and I talked to Hammar about the matter, and was very much worried; did not see how we could go any further without additional money; told him that the banks here refused to lend money on the bonds; nor could I find any individual who would give any additional money. Mr. Hammar then, remarked, he says, ‘If you will turn over to me $10,000 of the bonds of the Louisiana Gas Company, I feel satisfied I can go to some city’ — I think he said ‘Iowa’ — where he knew several banks and parties very well, and he felt satisfied he could raise $5,000 in cash to help us out of this trouble. We talked over the financial situation very fulfy, and I told him, if he could do that, it would relieve us very much, in the embarrassed circumstances we were under. We then went over to the First National Bank, and I got Mr. Byersdoffer to release $10,000 worth of bonds of the Louisiana Gas Company, and we came back to the office.”

Upon returning to the office of the gas company, the bonds thus obtained from the bank were delivered to Hammar, who gave a receipt for them, and he then returned to the bank and exchanged the bonds that he had received for others. The receipt given by him reads as follows:

“August 23, 1907.
“Received from the Louisiana Gas Company ten gold bonds, of the value of one thousand dollars ($1,000) each, and numbered as follows: [901]*9011, 2, 3, 4, 5, 6, 7, 8, 9, and 10. These bonds are to be used as collateral security to borrow money. Said money so borrowed is to be placed to the credit of the Louisiana Gas Company, with the First National Bank of Shreveport, La.,'for the purpose of being used for pay rolls, constructive work, or for other matters in the ordinary course of business. * * * Exchanged above ten bonds with the First National Bank for bonds numbered 14-23, inc.”

With regard to the exchange thus referred to, Atkins testifies that Hammar said that he wished to exchange the bonds that he had received for bonds bearing 'other numbers, and that, whilst he (Atkins) did not understand why, he made no objection. I-Iammár’s explanation is that he had received from Connelly, the president of the company, an order for the $10,000 of bonds coming to him under the contract agreeably to which he had subscribed, and paid $10,000 to the company, and that the order called for bonds maturing December 1, 1909; whereas, the bonds that he had at first received were of a different series.

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Related

Strong v. American Ry. Express Co.
111 So. 669 (Supreme Court of Louisiana, 1927)
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Bluebook (online)
50 So. 787, 124 La. 897, 1909 La. LEXIS 562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hammar-v-atkins-la-1909.