Putnam v. Gunning

39 N.E. 347, 162 Mass. 552, 1895 Mass. LEXIS 331

Opinion

Knowlton, J.

Many documents and papers were introduced in evidence on which appeared the signature or initials of the defendant in his own handwriting, wherein he was referred to as governor general, or director, or member of the committee on finance of the American Protective League, the corporation of which the plaintiff is receiver. These were objected to by the defendant. They were admitted to show that during all the time from its organization he was acting for the corporation, and was familiar with its business, and also as evidence that he was an officer of the corporation, at least de facto. In this way the plaintiff also sought to connect him with the issuing of the pamphlet “ Live to Win,” of which great numbers were being issued during all the time that the corporation was doing business. The evidence was clearly competent. The defendant’s own acts and declarations can be proved against him to show that he was an officer of a corporation, as well as for any other purpose. 1 Greenl. Ev. § 195, and cases cited. Smith v. Palmer, 6 Cush. 513. Loomis v. Wadhams, 8 Gray, 557. Topping v. Bickford, 4 Allen, 120. Commonwealth v. Kane, 108 Mass. 423. Commonwealth v. Tobin, 108 Mass. 426. The ex-, tract from the pamphlet “ Live to Win ” was competent evidence,

* in connection with the testimony that thousands of these pamphlets were being issued from the office of the corporation while the defendant was governor general and afterwards, to show that he knew the reserve fund was held out to the members of the corporation and to the public as a trust fund for the payment of matured certificates, and that it could not be appropriated to any other use, and also to show that in like manner the proceeds of the monthly per capita tax and of the assessments were all to be deposited in securities with the Treasurer of the Commonwealth, or held as a part of the reserve fund. See St. 1890, c. 341, § 1. The evidence in regard to the fund from which the payments of the amounts which the plaintiff seeks to recover were made is not direct and clear, but the jury might fairly infer that it was the reserve fund. There was testimony that the semiannual per capita taxes for payment of expenses were sent directly to the secretary general, and did not go to the treasurer general; and it appeared that the defendant received his payments through the treasurer general.

The defendant contends that there was no evidence that he received the money wrongfully or in fraud of the corporation. There was evidence that he was governor general of the corporation from its organization in June, 1889, until June, 1891 ; that he was a director, and received his salary as director up to the time of the receivership; that on January 1, 1892, he made a contract with the corporation to continue for eighteen months from that date to promote the growth and well being of the order in the States of New York and New Jersey, in such form and manner as should be directed from time to time by the governor general or the secretary general, at a salary of fifteen hundred dollars per year, to be paid him by the corporation; that on March 23, 1892, he received five hundred dollars from the corporation before any part of this salary had become due, and at the time of the payment, when asked by the bookkeeper what it was for, replied that “ he would tell him what it was for at some future time ”; that he said “ he was in a tight place, and had got to use the money”; and that afterwards, on April 14, he received five hundred dollars, which he receipted for on account of salary, and again on June 14 he received five hundred dollars more. It was also in evidence that there had previously been talk by the defendant, or by other officers of the league in his presence, as to the likelihood of the league being stopped very soon, and that a fund of $10,000 had been set apart by the directors two or three months before for the purpose of perpetuating the league and defending it. There was also evidence tending to show that he did little or nothing under his contract, and that the payments by direction of the governor general had been charged up to the “ Endowment Review,” as for services of the defendant as editor and publisher. The defendant afterwards told the bookkeeper that the entry on the books should be changed, as the money was paid to him, not for the Endowment Review,” but for lecturing for the league and promoting its interest. All this time his salary of $125 per quarter as director was paid to him separately, and he was preaching regularly on Sundays at a church in another State. The defendant did not testify nor offer any explanation of these matters. We are of opinion that this testimony, in connection with the other evidence in the case, was proper for the consideration of the jury on the question whether the defendant did not, while a director of the company, connive with the other managing officers to obtain money of the corporation without consideration and against right. The facts established by the witnesses, especially when taken in connection with the defendant’s failure to testify, open a wide field for legitimate inferences against one who had long been a prominent officer of a corporation which can now make but small returns to those who invested their money in it. We are of opinion that the presiding justice was right in submitting the case to the jury.

Exceptions overruled.

The material portion of this extract was as follows r

“ Reserve Fund. At least fifty per cent of the per capita tax and assessments is invested in proper securities, as the law directs, and deposited in trust with the Treasurer of Massachusetts, to be used only for the payment of matured certificates. The balance will be used to pay sick and accident benefits, and the surplus will be covered into the reserve fund. These .benefits are constant payments on account, and are thus constantly lessening final liabilities.

“ No portion of the reserve fund can be drawn except upon requisition, signed by three fourths of the executive committee and indorsed by the insurance commissioner of the State, setting forth that the same is to be used only for the purpose of the trust, namely, the payment of maturing certificates.”