Schwartz v. Wright

56 P. 608, 6 Cal. Unrep. 248, 1899 Cal. LEXIS 1165
CourtCalifornia Supreme Court
DecidedMarch 9, 1899
DocketS. F. No. 843
StatusPublished

This text of 56 P. 608 (Schwartz v. Wright) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schwartz v. Wright, 56 P. 608, 6 Cal. Unrep. 248, 1899 Cal. LEXIS 1165 (Cal. 1899).

Opinion

PRINGLE, C.

Appeal from order denying motion for new trial and from judgment. Action brought upon the following check:

“San Francisco, Cal., Nov. 14, 1894. “Union Savings Bank of San Jose, Cal.:
“Pay to F. W. Van Reynegom, or order, $3,300—three thousand three hundred dollars.
“WM. H. WRIGHT,
“By H. W. WRIGHT, “Attorney in Fact.
“Anglo-Cala. Bank:
“Please pay.”

The jury rendered a verdict in favor of the defendant. There is a painful conflict of testimony in the case. The defense is that the check was never absolutely delivered, and that there was no completed consideration for it. The facts are peculiar. The testimony on behalf of the defendant is that William H. Wright was anxious to obtain the control of the majority of the stock of the Oceanic Phosphate Com[250]*250pany, and for that purpose entered into negotiations with M. C. Chapman, who undertook to put into his hands 2,707 shares of the stock, the requisite majority being 5,070 shares. Chapman and John A. Magee owned 2,461 shares, but they were in the hands of Judge Van Reynegom, who held them in pledge to secure a note of Chapman and Magee to Bayle, Laeoste & Co. They could be released and put into the pool by payment to Van Reynegom, for Bayle, Laeoste & Co., of $3,300. In order to accomplish this, W. H. Wright agreed to obtain the $3,300, if Chapman would secure other stock to make up 2,707 shares, and would complete the pool of 5,070 shares. The negotiations lasted some weeks, and before they were completed W. H. Wright went to the eastern states, leaving power of attorney with his brother, H. W. Wright, with instructions to complete the transaction. On November 14, 1894, H. W. Wright came from San Jose to San Francisco with W. I. Gill, his attorney, and met Chapman and Magee in the office of Magee. A pooling agreement was prepared in duplicate or triplicate, to be signed by stockholders for 5,070 shares of stock, including Chapman and Magee for 2,707 shares. The arrangement was complicated, and involved the preparation also of two notes by stockholders, which were to aid Wright in obtaining the required $3,300, and also a contract between Wright and Chapman and Magee, by which Wright was to be secured for his advance. The morning was consumed in arranging details, and at 2 o’clock Judge Van Reynegom was sent for to bring the stock held by him in pledge, and complete the transaction. Here the stories diverge. The statement of H. W. Wright and Gill, his attorney, is that the pooling contract was fully and freely discussed in the presence of Judge Van Reynegom and John Laeoste, of the firm of Bayle, Laeoste & Co., as part of the transaction; that Mr. Wright then explained that he had not brought any money, or any certified check, but that he could give his check upon the San Jose Union Savings Bank of San Jose, payable at the Anglo-California Bank in San Francisco, if that would be acceptable, and that he thereupon drew the check in question, and passed it over to Judge Van Reynegom for his inspection; that Van Reynegom took out the certificates of stock held by him, indorsed them, and passed them over to Mr. Gill; that 246 shares were wanting to make up the 2,707 that Chapman and Magee were to sup[251]*251ply; that Chapman took from his pocket 83 shares more, and promised to supply the remaining 163; that all the papers connected with the pooling contract were on the table, and while Wright was signing the pooling papers, and Gill was talking with Chapman about making up the deficiency, Judge Van Reynegom took the check, and retired; that just as Mr. Gill noticed that Van Reynegom had gone out with the check, he learned from Chapman and Magee that they both made objection to signing the pooling contract, whereupon Gill said that it was a fraud and a swindle, and called upon Mr. Wright to go with him to the Anglo-Califomia Bank, and stop the payment of the check, which they did, and then went immediately to the office of Judge Van Reynegom, and used the same strong language, tendering back the stock, and demanding the check; that Van Reynegom expressed surprise at the failure of Chapman and Magee to finish the pooling transaction, and promised not to negotiate the check, and not to part with it “until it was all fixed up satisfactorily.” On the other hand, the statement of Judge Van Reynegom is that he never promised to hold the check; that he had no knowledge whatever of any other matter being connected with the transfer of his stock, or the delivery of the check; that the delivery was absolute and unconditional, and that otherwise he would never have parted with the stock. John Lacoste fully corroborates him. These are the strong points of discrepancy. There is great conflict. But the story of the defendant does not necessarily involve what Mr. Gill said, “This is all a fraud.” It might well be that Judge Van Reynegom took the check and delivered the stock supposing that all matters between the other parties were, or would immediately be, adjusted; and that obstruction on the part of Chapman unexpectedly arose, and changed the aspect of affairs. But, however that may be, the question was fairly submitted to the jury. The court stated the case from both points of view, and said, “The one great point to be determined here is whether or not there was an absolute or conditional delivery of this check.” The verdict was in favor of the defendant. There is clearly conflict of evidence. The motion for new trial was denied by the court in which the trial was had, and the verdict cannot be set aside without violating the well-settled rule of this court.

[252]*252The appellant claims that errors were committed by the court below in the admission of evidence. Most of these errors are charged to be in admitting evidence to show the whole consideration for or inducement to the giving of the check, as has been stated above. It is to be observed that the true question is not whether there was a sufficient consideration for the check, for, if the check had been unconditionally delivered, its payment could not have been defeated if Wright had relied upon the promise of Chapman to furnish the missing 163 shares of stock and the required signatures to the pooling contract, and he had failed to do so. Hence this evidence, touching the consideration, was admissible, not as tending to show insufficiency of the consideration of a check delivered, but as showing, in a consideration unperformed, a circumstance tending strongly to show that the check was undelivered. And the criticism of the appellant that evidence was admitted of negotiations had between Chapman and Wright when Van Reynegom and Laeoste were not present is not just, because the object of those negotiations was to establish the. contemplated consideration; and it was sufficient to require, as the court in its ruling very plainly did, that Van Reynegom and Laeoste had notice of all that was to be done before the check was to be delivered. Negotiations uncompleted, with notice to the payee of the want of completion, would certainly be a strong circumstance tending to show that the transaction was not ripe for completion. The payees need not have been present at all such negotiations if they were seasonably affected with notice of them.

Appellant insists also upon the fact that Judge Van Reynegom and John Laeoste were not parties to the pooling contract, and hence could not be affected by any evidence concerning that contract or the two promissory notes that were to be signed with it.

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Bluebook (online)
56 P. 608, 6 Cal. Unrep. 248, 1899 Cal. LEXIS 1165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwartz-v-wright-cal-1899.