author: BROWN, C.

text:
    IDALIA REALTY AND DEVELOPMENT COMPANY v. W. W. NORMAN, Appellant.
    Division One,
    June 30, 1914.
    1. EJECTMENT; Second Suit Controlled by Prior Adjudication. While a judgment in ejectment is not a bar to another suit for the same premises, the action being only possessory, yet, when the title is in issue and the right of possession is only an incident, it has all the consequences of an ordinary suit and a former adjudication is conclusive upon a second suit between the same parties and upon the same evidence.
    2. -: Petition: Amendment: Continuance. Plaintiff in its original petition in ejectment alleged that, being entitled to the possession, the. defendant afterwards entered and withheld the premises, to plaintiff’s damage in the sum of $100. The monthly rental was laid at $100. Held, that there was no error in the plaintiff’s amending its petition before the trial, seven months later, to read, being so entitled to the possession, the defendant afterward entered and withheld the premises, to plaintiff’s da&age in the sum of $800; and defendant was not entitled to a continuance on that ground.
    3. LANDLORD AND TENANT: Tenancy from Year to Year; Noice to Quit. The notice to quit necessary to terminate a tenancy from year to year, under Sec. 7882, R. S. 1909, does not have to be accompanied by the deed under which the landlord claims title.
    4. EVIDENCE: Document: Possession of Opposite Party: Read rrom Record. In accordance with Sec. 2818, R. S. 1909, providing that “every instrument in writing, conveying or affecting real estate, which shall be acknowledged or proved, etc., may be read in evidence, without further-proof,” the plaintiff, after testifying that the original was in defendant’s possession, could read from the recorder’s book the record of a lease without giving the defendant notice to produce it, especially where, after the record was before the court and jury the defendant was examined at length by his counsel as to the contract and his possession under it, without questioning the correctness of the copy, the execution of the instrument, or his custody and control of the original.
    5. EJECTMENT: Possession: Deed: Summons: Lis Pendens. Where the defendant in ejectment admits that he held possession until December 12, 1911, but on that date he deeded his interest to a corporation controlled by him, and there is no further showing of change of possession, the trial court was right in instructing the jury to find for plaintiff, alias summons having been ordered against defendant by the court December 7, issued December 13, and served December 15, Whatever the corporation took by defendant’s deed, if anything, it took pendente lite, with knowledge, actual as well as constructive, of the pendency of the suit, and it was not necessary to make it a party to bind it by the judgment.
    6. -: Mesne Profits: Transfer of Possession. One sued in ejectment by one entitled to the possession cannot escape liability for mesne profits by surrendering the possession to another not the agent of plaintiff.
    Appeal from Stoddard Circuit Court. — Eon. W. S. C. Walker, Judge.
    Affirmed.

      Sheppard & Green for appellant.
    (1) The court erred in refusing td give for defendant instructions in the nature of peremptory instructions to find for the defendant. The contract offered in evidence by plaintiff between S. B. Hunter and the defendant "W. W. Norman, is not in contemplation of law a lease, but said contract operated legally to transfer to the defendant a beneficial right in the land itself, namely, the right to occupy said land and remove timber therefrom until his sawmill located thereon ceased to be operated and was removed from the land in controversy, and, therefore, the court should have directed a verdict for the defendant. Realty & Development Co. v. Norman, 232 Mo. 663; Hobart v. Murray, 54 Mo. App. 249; Meeks v. Mining Co., 141 Mo. App. 661; Railroad v. Railroad, 135 Mo. 173. (2) The court erred in permitting plaintiff to amend its petition by interlineation over defendant’s objections and after tbe trial bad begun; and in any event tbe court erred in refusing to grant defendant a continuance upon said amendment being made. Street v. Bushnell, 24 Mo. 328; Pence v. Gabbert’s Admr., 70 Mo. App. 201; Joyce v. Growney, 154 Mo. 263; Ensworth v. Barton, 67 Mo. 622; Sec. 1848, R. S. 1909. (3) The court erred in admitting in evidence over defendant’s objections the record of the contract between plaintiff’s grantor and defendant; the original contract was the best evidence and there was no testimony as to its being lost or destroyed; furthermore, unless it conveyed an interest in land, it was not admissible to record. Sec. 1944, R. S. 1909; McLain v. Winchester, 17 .Mo. 49; Mosher v. Bacon, 229 Mo. 338; Fitzmaurice v. Nirney, 214 Mo. 610; Orchard v. Collier, 171 Mo. 399. (4) The notice to quit possession offered in evidence by plaintiff should have been excluded by the court as it was not accompanied at the time of service by the original deed under which plaintiff claimed title. Secs. 7882, 7909, 7910, R. S. 1909. (5) The court erred in refusing to admit in evidence the deed from the defendant to Norman’s Land and Manufacturing Company as well as the incorporation papers of said company; all of which were executed and recorded prior to the issuance of the summons which was served upon defendant. Sec. 1756, R. S. 1909; White v. Reed, 60 Mo. App. 380; Seever v. Lincoln, 21 Pick. (Mass.) 267; Jackson v. Brooks, 14 Wend. 649; Howell v. Shepard, 48 Mich. 472; Burdick v. Green, 18 Johns. 14; Vischer v. Gansevort, 18 Johns. 496; Mason v. Cheney, 47 N. H. 24. (6) The court erred in refusing to admit in evidence the alias summons issued in this case as well as the memoranda made by the clerk showing that the original summons was held up by plaintiff’s attorney; while the date of filing the petition ordinarily determines the date of the institution of the suit, yet that is not true where the summons is delayed by the action of plaintiff’s attorneys. Sec. 1756, R. S. 1909; White v. Reed, 60 Mo. App. 380; Seever v. Lincoln, 21 Pick. (Mass.) 267; Jackson v. Brooks, 14 Wend. 649; Howell v. Shepard, 48 Mich. 472; Lumber Co. v. Wright, 114 Mo. 326; Lynch v. Railroad, 30 Atl. (N. J.) 187. (7) The court erred in giving to the jury plaintiff’s instruction in the nature of a peremptory instruction to find for the plaintiff; it is error to give a peremptory instruction when there are any facts in the case which are not admitted. Milliken v. Comm. Co., 202 Mo. 655; Bank v. Plammond, 124 Mo. App. 177; Wolff v. Campbell, 110 Mo. 114; Gregory v. Chambers, 78 Mo. 298. (8j The damages assessed by the jury are excessive and defendant should not have been held liable for the monthly rents and profits. Defendant could only be held liable for damages until the time possession was transferred by him to Norman’s Land and Manufacturing Company. 15 Cyc. 211; Gillaspie v. Bank, 35 La. Ann. 779; Ryers v. Wheeler, Labor (N. Y.), 389; Mitchell v. Freedley, 10 Pa. St. 198; New Orleans v. U. S., 131 U. S. 220; New Orleans v. Christmas, 131 U. S. 191; Edgerton v. Clark, 20 Vt. 264; Gilman v. Gilman, 11 N. Y. 265'; Gardner v. Graniss, 57 Ga. 539.

      Wammack & Welborn for respondent.
    (1) Defendant, W. W. Norman, was a tenant from year to year and Ms tenancy was properly terminated by the notice to quit served on him sixty days before the end of the yearly period. Realty .& Development Co. v. Norman, 232 Mo. 663. (2) The rule of stare decisis governs the construction of the lease between Norman and Hunter. McAnaw v. Clark, 167 Mo. 443; Potter v. Adams, 143 Mo. 665. (3) Permitting plaintiff to amend its petition was a matter purely within the discretion of the trial court. Peterson v. Railway, 211 Mo. 516. (4) It was not error for the court to admit into- evidence the record of the lease between Norman and Hunter. R. S. 1909, secs. 2818, 2819; Boogher v. Neece, 75 Mo. 383; Barton v. Murrain, 27 Mo. 238; Gilbert v. Boyd, 25 Mo. 27. (5) A lease, whatever its terms, affects real estate. Jennings v. Sparkman, 39 Mo. App. 663. (6) It was not necessary for plaintiff to exhibit to the defendant its deed from Hunter when it gave the notice to quit. Green v. Railroad, 82 Mo. 653; 18 Am. & Eng. Ency. Law (2 Ed.), p. 395; Thamms v. Hamburg, 2 Brews. (Pa.) 528. (7) The statutes cited by appellant to the effect that the original deed must be exhibited do not apply in this case. Tucker v. McOlenney, 103 Mo. App. 318. (8) The testimony regarding the transfer by Norman of the possession of the premises to the Norman Land & Mamifactnring Company was not competent, for the reason, that, said company was not incorporated nor the transfer made to it until after the order for the process by which defendant was served had been obtained. Sec. 1756, R. S. 1909. (9) The court correctly instructed the jury to find for the plaintiff for the possession of the premises. Smith v. Ponath, 17 Mo. App. 262; Morgan v. Durfee, 69 Mo. 476; Wolff v. Campbell, 110 Mo. 114; Bank v. Hainline, 67 Mo. App. 489; Howard v. Hurst, 156 Mo. App. 211; May v. Crawford, 150 Mo. 504; Purber v. Bolt & Nut Co., 185 Mo. 311; Hendley v. Globe Refinery Co., 106 Mo. App. 27. (10) When a tenant denies his landlord’s title no notice to quit is necessary. Lyon v. LaMaster, 103 Mo. 612; Amick v. Brubaker, 101 Mo. 473; Cook v. Penrod, 111 Mo. App. 140; Stevens v. Brown, 56 Mo. 23. (11) Plaintiff is entitled to recover from, defendant the value of the rents and profits while the possession of the premises is held either by himself or the Norman Land & Manufacturing Company. Maguire v. Lebeaume, 7 Mo. App. 179; Hughes v. Carson, 90 Mo. 399; Adams v. Gilchrist, 63 Mo. App. 639; Tyler on Ejectment (1 Ed.), p. 840; West v. Hughes, 1 Har. and Johns. 574.
   BROWN, C.

This is ejectment. Petition filed in the Stoddard Circuit Court August 21,1911, and original summons issued August 25, 1911, but was not served. Alias summons issued December 13, and served on defendant December 15.

The original petition is, omitting caption and signature, in words and figures following:

“Plaintiff states that it is a corporation "organized and existing under the laws of the State of Missouri.
“Plaintiff states that on the 16th day of August, 1911, it was entitled to the possession of the following described premises, to-wit: The southeast quarter of the southeast quarter of section 12, in township 25, range 11 east, in Stoddard county, Missouri. And being entitled to the possession thereof, defendant after-wards, to-wit, on the 17th day of August, 1911, entered into such premises and unlawfully withholds from the plaintiff the possession thereof to its damage in the sum of one hundred dollars.
“Plaintiff further states that the monthly value of rents and profits of the premises is one hundred dollars; wherefore plaintiff demands judgment for the recovery of said premises and one hundred dollars damage for unlawfully withholding the same from plaintiff, and one hundred dollars for monthly rents and profits from the rendition of the judgment until the possession of the premises is delivered to the plaintiff.”

It contained another count which was afterwards dismissed and is immaterial to the questions raised here.

On March 28,1912, the plaintiff, by leave of court, amended its petition by increasing the damages demanded to $800, and by inserting the words “so” between the words “being entitled. ’ ’ The cause was tried at the March term," 1912, resulting in a directed verdict for the plaintiff for possession of the property, and damages assessed by the jury at $700 and monthly rents and profits assessed by them at $100.

The defendant objected to the action of the court in permitting the amendment.

On the trial S. B. Hunter, president of plaintiff, testified that the defendant went into possession of the land under a contract with him of which there was but one copy, which was delivered by him to defendant, and that on one occasion since, Mr. Norman had let him take it and he had returned it, and had not seen it since. The plaintiff then offered in evidence the record of the same contract in book 36 of the deed records of Stoddard county, with the acknowledgment and certificate of filing thereon. The contract is as follows:

“This agreement made and entered into this 16th day of August, A. D. 1899, by and between Stephen B. Hunter, of the county of Scott and. State of Missouri,* party of the first part, and W. W. Norman of the county of Cape Girardeau and State of Missouri, party of the second part.
“Witnesseth, that the said party of the first party, in consideration of the sum of thirteen hundred dollars to him paid by the said party of the second part, has this day sold unto the said party of the second part, does by these presents sell, assign and transfer unto the said party of the second part all timber, tramroad and right of way on the following lands, to-wit: The west half of section 18, east half and. the east half of the west half of section 19, and northwest quarter of the southwest quarter of section 19, and the east half, and the east half of the west half of section 30 and the east half, and the southwest quarted of section 31, all in township 25 north of range 12, in the county of Stoddard and State of Missouri; the said first party reserves the right to clear and fence lands in the said section 18, and to deaden timber on all the above lands after August 1, 1902; the said first party also leases unto the said second party for the term of five years, free of rent except the taxes, all of the southeast quarter of the southeast quarter of section 12, in township •25, range 11 in said county and State, except two houses, which are used by tenants cultivating lands at .or near Hunter’s switch, together with the privilege of renting the last-named lands at yearly rent of $25 per year after the expiration of this contract until mill is removed, this contract to end in five years after this .date. This contract is subjected to a former contract made with Jl B. Livesay by S. B. Hunter, and assigned -to Platt B. D. GL Co.
“In testimony whereof, the said parties to these presents have hereunto, and also to copy hereof, set their respective hands at ... on the date first above written.
“Stephen B. Htjnter,
“W. W. Norman..”

The defendant objected on the ground that the original was the best evidence, that there was no proof that it had been lost or destroyed, and that its record was not'authorized by the statute relating to that subject; and excepted when it was admitted by the court. Plaintiff: then introduced, against defendant’s objection on the ground that it was not sufficient in form and not accompanied by the deed under which plaintiff .claims title, the following notice:

“To W. W. Norman.
“You are hereby notified that the undersigned desires to terminate your tenancy of its property, namely:
“The southeast quarter of the southeast quarter of section 12, township 25, range 11, in Stoddard county, Missouri. Also all tramroad and right of way and other lands now used or occupied by you on the following lands, to-wit:
‘ ‘ The west half of section 18, the east half and the east half of the west half of section 19, and the northwest quarter of the southwest quarter of section 19, and the east half and the east half - of the west half of section 30, and the east half and the southwest quarter of section 31, all in township 25 north, range 12, in said county and State, now used and occupied by you as its tenant under the lease made by Stephen B. Hunter to W. W. Norman, dated August 16,1899. And you are hereby notified and required to surrender and deliver up to the undersigned as assignee of Stephen B. Hunter, and present owner of said property, the full and complete possession of all of said premises at the end of the present year, August 16,1911.
“You are further hereby notified that said Stephen B. Hunter has conveyed all of said lands, to the undersigned by deed, duly recorded in book 41, page 424, of the deed records of Stoddard county, Missouri, a copy of which deed is hereto attached.
“Done this 14th day of June, 1911.
“The Idalia Realty &• Development Company, a corporation.
“By Stephen B. Hunter,
“President.”

Service of this on June 14,1911, by the delivery of a copy to the defendant was proven by the testimony •of A. L. Harty. Plaintiff also introduced a general warranty deed from Mr. Stephen B. Hunter to the plaintiff, dated January 27, 1904, conveying, among •other lands, the tract here in controversy. This was •duly recorded March 8, 1904.

Mr. S.. B. Hunter testified that defendant was in possession <of lands in controversy and had been since the latter part of 1899 under the contract in evidence; and plaintiff introduced evidence tending to show that the rental value of the property with its buildings placed thereon by defendant was $100 per month, but aside from such buildings the rental value would be $25 per month.

The defendant testified that he was not in possession of the land hut that it was in possession of the Norman’s Land and Manufacturing Company, a corporation, and that said corporation was in possession of the premises when the summons was served on him; that he was president and general manager of the corporation; that at the time of making the contract he had a mortgage from one J. B. Livesay covering this land and a sawmill located thereon owned by Mr. Live-say, and it was then agreed between Hunter and himself that he should have the use of the premises on which the sawmill was located as long as the mill was there; that he did not take possession of the land under the contract but secured possession through a suit brought against Plouston & Company who were in possession for some two or three months after the contract was made. After he went into possession he went to work running his sawmill and building houses, claiming the right under the contract to stay there as long as he could get timber with which to run his sawmill, and that he did not know that Hunter denied his right to stay there as long as the mill should remain on the premises, until the first five years had expired. That he had always claimed to hold possession of the lands under the contract with Hunter, with the understanding that he would have the use of the property as long as the sawmill was located thereon: that he claimed to abide by the contract; and that he made the deeds to his corporation before the summons was served.

He then introduced a deed from himself and wife to Norman’s Land and Manufacturing Company dated December 12 ,1911. He also offered deed from Henry H. Bedford and wife to J. B. Livesay dated June 7, 1897, and duly recorded, wbicb was excluded upon plaintiff’s objection and defendant excepted; also two deeds of trust from J. B. Livesay and wife to Imid Weber, trustee for Stephen B. Hunter, and to Stephen B. Hunter, trustee for W. W. Norman, respectively, both of which were excluded on plaintiff’s objection, and defendant excepted. He then offered the certificate of incorporation of the Norman’s Land and Manufacturing Company, dated the 8th day of December, 1911, and recorded December 12, 1911, which was excluded upon plaintiff’s objection and defendant excepted. He then offered the alias summons and return for the purpose of showing that the possession of the land at the time of its issue and service was not in W. W. Norman, but was in the corporation. These were also excluded and the defendant excepted. Also the Stoddard county deed records, showing that the articles of incorporation of the Norman’s Land and Manufacturing Company had been filed November 22, 1911, which was also excluded and defendant excepted.

On the original summons in this case were the following memoranda: “Hold until instructed by Welborn;” “This summons was never delivered to sheriff;” “Charles D. Wilson, Clerk, per Crosser.” The clerk testified that the memoranda indicated just what they said. He would have no knowledge of it unless he had seen the memoranda. That he could not keep track of these little things unless he made some memoranda. Mr. Crosser, the deputy clerk, testified that it was evident that there was not sufficient time to get service for the September term for some reason and that Mr. Welborn had instructed him to hold it until further notice, but he did not remember anything about it, and he was not sure whether further notice was given or not. These memoranda were excluded and defendant excepted. Norman testified that he had heard before the transfer of the land to the Norman’s Land and Manufacturing Company that this suit was filed but that he did not make the transfer and incorporate the company for the purpose of avoiding service. Cross-examined he said: “I heard it some way but don’t remember how I heard about it. I think that was the first suit, but it was too late to get it into court.” The capital stock of the Norman corporation was two hundred shares of one hundred dollars each, subscribed as follows: W. W. Norman, 180 shares, Mena Norman, his wife, 10 shares, J. Raymond Kinder, 10 shares. It was paid up by the personal property, including lumber, milling and mercantile goods and fixtures, milling machinery, and logging and lumber outfit and supplies, and not in money.

The alias summons served on the defendant was ordered by the court December 7, 1911.

At the close of all the evidence the defendant asked for a peremptory instruction in his favor, which was refused, and he excepted. The court then gave the following instruction for the plaintiff:

“The court instructs the jury that under the pleadings and evidence, as adduced in this case, the finding-must be for the plaintiff for the possession of the premises sued for, and you will assess as damages for the plaintiff the value of the rents and profits of the said premises from the date of the institution of this suit until this time, not to exceed the sum of $800, and you will also determine in your verdict the value of the monthly rents and profits of said premises, not to exceed one hundred dollars a month.”

To the giving of the aforesaid instruction counsel for defendant then and there duly objected and excepted.

The jury returned the following verdict, upon which the judgment was entered:

“We, the jury, find the issues joined in the above-entitled cause for the plaintiff, for the possession of the property described in the petition, and assess the’ damages sustained by the plaintiff by the detention of said premises at the sum of seven hundred dollars;, and we assess the monthly value 'of the rents and profits at the sum of one hundred dollars.”

I. These parties brought this same contract to us-for our consideration and construction in connection with Idalia Realty and Development Company v. Norman, 232 Mo. 663. At that tiine, as we said through Lamm, J., they did not ask the case to ride off on any of the nice distinctions indulged by courts in determining whether the clause before us then and now is a lease or a mere contract for the renewal of a lease, but they submitted in all candor whether it was to be construed, in the light of correct leg’al principles, as contemplating or agreeing to a tenancy for years. We decided that it was not. The parties then put it up to us to decide what it was, the plaintiff claiming that the defendant became, from the expiration of five years, a mere tenant at will, and that his tenancy had been terminated by a notice to quit given upon that theory. The defendant, on the other hand, contended that if it were not a tenancy for years it was a tenancy from year to year, arid required sixty days ’ notice to terminate it. We were convinced by his masterly logic, and decided that very point for him; and he went out of court satisfied, as we supposed, with victory won on the favorable grounds of his choice. We were mistaken however. Perhaps it is not too much to say that we are disappointed to see him here with the same paper and the message that he has “made a fuller investigation into this contract, and the conclusion is reached that the contract is not a lease but the transfer of a beneficial interest in the land itselfThe italics are his. We cannot agree with the sentiment they express for two reasons: First, we are satisfied with, the conclusion at which we then arrived after mature consideration and careful investigation; and, second, the former adjudication of the same quéstion in the former suit between the same parties, upon the same evidence (the paper itself), is, even though the previous action was ejectment, conclusive in this. While a judgment in an ejectment suit is not a bar to another suit for the same premises, the action being only possessory, yet when the title is in issue, and the right of possession only an incident, 'it has all the consequences of an ordinary suit, when the parties are the same, the land is the same, and the evidence in support of the respective titles is the same. [McAnaw v. Clark, 167 Mo. 443; Potter v. Adams, 143 Mo. 665.]

II. It is urged by the defendant that the court committed error in permitting the plaintiff to amend its petition at the trial by inserting the word “so” between the words “being entitled;” and by substituting the word “eight” for the word “one” before the word hundred in stating the amount of the damages, so as to make the particular sentence in which they occur read as follows: And being so entitled to the possession thereof the defendant afterward, to-wit, on the 17th day of August, 1911, entered into such premises and unlawfully withholds from plaintiff the possession thereof to its damage in the sum of eight hundred dollars. When this amendment was allowed over the defendant’s objection, he asked for a continuance because his counsel had made no preparation to meet the demand of eight hundred dollars, thinking that one hundred dollars was a reasonable demand; also that he had no witnesses subpoenaed and was not prepared to meet the issue raised by the changed amount of damages. This request was denied by the court to which the defendant excepted. We are’ unable to understand the defendant’s reasoning as to the important character of the first of these amendments. The' grammatical construction of the principal parts of the' proposition is not changed in the least, for if, without the word “so,” the clause meant that the defendant was entitled to possession, the meaning is not changed by the insertion of the word, except to convert it into a declaration that the defendant is so entitled to the possession. The statutory form is one of those grammatical anomalies of which the meaning” is fixed by the context. It is substantially followed in the original petition. The change in amount of damages laid from $100 to $800 flowed necessarily from the lapse of time before the case went to judgment; the monthly rental being laid at one hundred dollars. The amendment went as a matter of course, and the continuance of the case would only have had the effect to make another like amendment necessary. There is no merit in this contention.

III. The defendant says that “the notice to quit possession offered in evidence by plaintiff should have been excluded by the court as it was not accompanied at the time of service by the original deed under which the plaintiff claims title,” citing sections 7909 and 7910, Revised Statutes 1909, to sustain his position.

Those sections have no application whatever to the notice required by the terms of section 7882 to terminate a tenancy from year to year. They simply give the tenant the right, when asked to attorn to an apparent stranger by the payment of rent, to be satisfied of the right of the new landlord to make the demand; and it makes it the duty of the latter to so satisfy him, in the manner therein pointed out, before proceeding against him under those sections for nonpayment of rent.

IV. Defendant also contends that the copy of the lease between the plaintiff’s grantor and the defendant, duly certified from the land records of the county, should not have been admitted because the original was better evidence, and there was no proof of its loss or destruction.

The statute provides that “every instrument in writing conveying or affecting real estate, which shall be acknowledged or proved, and certified as hereinbefore prescribed, may, together with the certificates of acknowledgment or proof, and relinquishment, be read in evidence without further proof.” [R. S. 1909, sec. 2818.] Thq defendant insists that this instrument, which we have already held to be a lease for five years with a provision for its continuance from year to year, does not affect real estate. The utmost that construction or, explanation can do is to reduce the proposition to its simplest terms; and in this case it is done by stating it in the plain and unambiguous words in which the Legislature has expressed its will. It again recognizes, as it had already done in section 2809, that some instruments which come within its provisions convey, while others only affect, the thing with which they deal, and without giving any intimation whether or not it might come within the former class, we have no hesitation in saying that it clearly falls within the latter. It follows that to entitle the record to be read in evidence in accordance with the terms of section 2819, it is not necessary to prove the loss or destruction of the original, or to give the opposite party, when it is presumed to be in his possession, notice to produce it. Of this we said at an early day, and here repeat: “The words of the statute ‘not within the power,’ should be construed as not within the control or possession of the party wishing to use a copy — that is, not in the possession of the party, his agent, servant •or bailee, or other persons’under his control. Therefore, if the original is presumed to be in the hands of a third person, a .'copy may generally be read without the preliminary oath or affidavit of the party wishing to use it.” [Barton v. Murrain, 27 Mo. 235, 238-9.] In view of the plain provisions of the statutes to which we have referred, and the unmistakable expression of this court as to their force' and effect, taken in connection with the fact that after this record was before the court and jury the defendant was examined at length by his counsel as to the contract and his possession under it, without questioning the correctness of the copy, the execution of the instrument, or his custody and control of the original, we do not hesitate to characterize the point as highly technical and without merit.

V. The real question suggested by the record is whether the defendant was in possession at the time the action was commenced. If this is not conclusively shown by the record, the court was in error in instructing the jury to find for the plaintiff. The defendant frankly admits that for a long time and up to December 12, 1911, he was in possession, but insists that the execution of his deed of that date to the corporation, Norman’s Land and Manufacturing Company, automatically transferred his possession to the grantee. We say automatically, because both he in his testimony and his attorneys in their argument, insist upon the execution of the deed as the change in the possession — the act that instantly gave a new meaning to the same physical conditions that had existed for years, so that the occupant lost his character of an individual and became a corporation. There is no suggestion of any change in the conditions, nor in the application of the earnings or rents of the property. The transformation was so easy that it did not impress itself upon the defendant, and he testifies with reference to the buildings he had placed upon the land, “they must bring me about fifty dollars per month rent.” The only evidence that the corporation had taken possession was the execution of the deed, and the statement, of Mr. Norman of his legal conclusion that it was in possession ; a conclusion which is for the court to draw from the facts in evidence. The action of ejectment is a purely possessory one. The possession against which it may be directed is actual and not constructive. It contemplates that the defendant may be in possession without right to the exclusion of the" one having the right, and is designed for the trial of that question only. Whether one’s possession accrues simultaneously with the delivery of the deed under which he claims, is, in cases like the present, a question of fact and not of law.

It is, however, unnecessary in this case to place our decision on the ground just stated. It is only important in so far as it bears upon the question whether or not there was evidence that the Norman corporation was in possession of the premises on December 7, 1911, the day on which the plaintiff sued out the alias summons by securing an order of court for its issue. Whatever may have been the effect of the delay in delivering the original summons, or' of the failure to deliver it for service at all, of which we express no opinion, when the plaintiff secured the order mentioned, it had done all that could be required of it for the “institution” of its suit according to the terms of section 1756, Revised Statutes 1909, and whatever the corporation acquired by the deed of Norman executed on the 12th day of December, 1909, was acquired pendente lite with knowledge, actual as well as constructive, of the pendency of the suit, and it was not necessary to make it a party to bind it by the judgment.

There remains the contention that with the moulting of December 12, 1911, when Mr. Norman cast off his natural feathers and assumed the artificial plumagel of the corporation, his liability for mesne profits ceased, and that the judgment is erroneous in the assessment of damages thereafter accruing. He cites numerous cases to the point, none of which have a tendency to support it. The rule is that when one in possession is sued in ejectment by one entitled, he may cease to add to the damages for which he is liable, by surrendering the possession to the plaintiff, but cannot do so by any sort of scheme to keep him out. It is not even sufficient in all cases that he withdraw from the possession. As is said in one of the cases cited by the defendant (Mitchell v. Freedley, 10 Pa. St. 198): “A party after ejectment brought, cannot escape a recovery for mesne profits, by privately withdrawing from the possession without notice to the owner.”

The judgment of the circuit court must be affirmed.

PER CURIAM. — The foregoing opinion of Brown, C., is adopted as the opinion of the court.

All of the judges concur.


source: Caselaw Access Project

author: GRAVES, J.

license: Public Domain

text:
    NATIONAL BANK OF WEBB CITY v. NEWELLMORSE ROYALTY COMPANY, Plaintiff in Error.
    Division One,
    June 30, 1914.
    1. - CORPORATION: Negligence in Issuing Stock. "Where the vice-president who signed the stock issued to the company’s secretary testifies that by an examination of the stock books he could have determined that the stock was fictitious and was an over issue and that he made no such examination and no precautions against fraud were taken, the charge that the company was guilty of negligence in issuing the void stock is established.

      2. -: -: Reliance on Regularity. A bank which loans money and takes as security certificates of corporate stock issued to the borrower, has a right to rely upon the regularity of the issue as disclosed by the face of the certificates — in this case, upon the signature of the company’s vice-president, the signature of its secretary and its corporate seal.
    3.--: Certificates of Stock: Governed by Rules of Commercial Paper. The general rule of law respecting bona-fide purchasers of commercial paper for value, before maturity, are applicable to corporate stock certificates so far as their peculiar nature will admit. , -
    4. -:--: Holder for Value Without Notice: Damages. The holder for value of a fictitious certificate of corporate stock, issued by the proper officers of the corporation, without notice of the fraud or other defenses against it, has a primary and direct claim, the limit placed by the charter upon the issue of stock having been reached, to such damages from the corporation as shall be sufficient to recoup him for his loss, whether the stock was bought or taken as collateral security, or whether fraudulently or negligently put in circulation.
    5. -: -- — : -: Nominal or Actual Damages. Although the market value of the stock is not in terms shown, yet where it appears that there was a pool of most of defendant company’s stock, that the stock was not on the market, the fictitious certificate recites its value, and the evidence shows that the money value .of defendant’s holdings is in excess of its capital stock, the bank which in good faith accepts it as collateral security from the person to whom issued, without notice of its infirmity, in a suit for damages for its. negligent issue, is entitled to substantial and adequate damages, rather than a mere nominal sum..
    Error to Jasper Circuit Court. — Mon. D. E. Blair, Judge.
    Affirmed.

      Thomas £ Hackney for plaintiff in error.
    (1) Under the pleadings and evidence the defendant was not liable for the fraud of Newell in illegally issuing to himself the spurious certificate of stock. This stock had never been thrown on the market. It was issued on the very day of the loan and bore the same date as the loan papers. The plaintiff was not dealing with the defendant corporation; it was dealing with Newell in his individual capacity. It relied on Newell’s individual representations. It placed confidence in Newell. It was deceived and defrauded by Newell. The certificate was entirely in the handwriting’ of Newell, except the signature of the vice-president, and the certificate being newly issued and so long after the organization of the corporation the plaintiff was bound to know at the time of making the loan that Newell could acquire the stock only by a transfer on the books. Farrington v. South Boston R. Co., 150 Mass. 406, 5 L. R. A. 849; Moores v. Bank, 111 U. S. 156; 1 Cook on Corp (6 Ed.), p. 805, (4 Ed.), p. 571; 10 Cyc. 445 (B); 2 Tkomp. on Corp., sec. 1499; Whitfield v. Copper Co., 123 Pac. 1078; Lee w Smith, 84 Mo. 304; Bank v. Edwards, 147 S. W. 978. (2) The court erred in refusing declarations of law 2, 3 and 4 asked by the defendant. Under Sec. 8, art. 2 of the Constitution of Missouri, the certificate was absolutely null and void, having been issued in excess of the authorized capital stock of the defendant company, and Newell not having power under the constitution, acting singly or in conjunction with any other officer of the corporation, to issue said certificate, did not have the power to put the same in circulation and any frauds committed by him, or any representations made by him, with respect to the stock were not the representations of the defendant company and were not binding on the defendant. The restriction contained in the Constitution on the'powers of corporations and their officers in the issuance of stock puts every purchaser of stock of a Missouri corporation on notice to determine the one important question of whether or not the stock is issued in excess of the powers of the corporation. If the corporation can be held liable for the frauds of its officers in issuing spurious certificates in excess of the authorized capital stock and this liability is limited only by the value of an equal number of genuine shares of stock, then the constitutional provision is shorn of its vig’or and becomes a -dead letter, for the officers can do indirectly by fraud and bad faith what they could not do directly by contract in good faith. (3) The market value of the stock of the defendant company was not shown and the plaintiff, if allowed to recover, was entitled to nominal damages only, and the judgment was therefore excessive. The evidence adduced on the trial showed that Newell had issued fraudulent certificates of stock to the extent ,of 850 shares having an alleged face value of $85,000. It appears also that other similar damage suits were pending against this company on some of these fraud-ulent certificates. The amount of the defendant’s debts and liabilities is not shown. The evidence simply showed that the company originally owned a quarter section of land, the fee of which was worth from $1500 to $2000 per acre, but it further shows that this land had been leased by defendants to mining companies and some of it worked out, and what the defendant company’s interest in the land, subject to the mining leases, was worth is not shown. Under these circumstances the court was not justified in assuming, as it .did, that 250 shares of genuine stock had a market value of as,much as the plaintiff’s loan to Newell.

      Frank L. Forlow, Norman Cox and Hugh Dabbs for defendant: in error.
    (1) The certificate of stock pledged to respond- „ ent was issued in excess of the amount limited by law and by the.,articles of incorporation of appellant. It bore the genuine signatures of the vice-president and secretary, who- had authority to issue the stock of the company, and. was actually issued by them and certified by the corporation under its seal. The certificate ,was issued; jn/fayor of the secretary, Newell, who, the record shows, was owner of a majority of the stock and who was a director of the corporation and had absolute control and management of its business, without any inquiry or supervision or examination of the corporate records by the board of directors, officers or stockholders of the corporation. Respondent received this certificate in good faith as' collateral security for the loan to Newell. The certificate, on its face, represented to respondent and to the public, by appellant corporation, through the acts of its officers, that J. P. Newell was the owner of 250 shares of its capital sto'ck. It'was presented to respondent as security and as a pledge by the very agent that appellant held out to the public. The stock was worthless, and void. Under these circumstances, the appellant corporation was liable to respondent for the damage sustained by the latter by reason of the issue and circulation of this fraudulent and spurious certificate of stock by its, officers in the apparent line of their duty. Davey v. Royalty Co., 169 Mo. App. 565; Railroad'v. Bank, 56 Ohio St. 351, 43 L. R. A. 783; Watch Case Mfg. Co. v. Dougherty, 62 Ohio St. 595; Tome v. Parkersburg R. Co., 36 Md. 36; Maryland R. Co. v. Bank, 60 Md. 36; Havens v. Bank, 133 N. C. 214, 95 Am. St. 627; Titus v. Turnpike Road, 61 N. Y. App. 237;' Railroad v. Schuyler, 34 N. Y. App. 30; Allen v. Railroad,, 150 Mass. 200, 15 Am. St. 186; Jarvis v. Manhattan Beach Co., 148 N. Y. App. 652, 31 L. R. A. 778; Bank v. Railrpad, 137 N. Y. App. 231; Land Co. v. Parker, 87 Am., St-845; Land Co. v. Hildebrandt, 79 N. W. 753; Watson v. Printing Co., 56 Mo. App. 153; Thompson on Corporations, secs. 1500-1501; Colbrook on Collateral Securities, sec. 314; Clark & Marshall on Corporations, sees. 428-433; Cook on Corporations (6 Ed.), sec. 293; Purdy’s Beach on Corporations, secs. 279-280. (2) Purchasers, or parties receiving stock as security for- a loan, are not bound to look beyond the certificate itself, nor to examine the hooks of the corporation to ascertain whether the stock has been issued according to law. This is the duty of the corporation and its officers. Railroad v. Bank, 43 L. R. A. 784; Titus v. Turnpike Co., 61 N. Y. App. 243; Jarvis v. Manhattan Beach Co., 31 L. R. A. 778; Allen v. Railroad, 15 Am. St: 191; Trust Co. v. Glass Co., 213 Pa. St. 307; Morawitz on Corporations, sec. 185; Land Co. v. Parker, 87 Am. St. 845; Trust Co. v. Lumber Co., 118 Mo. 454; Havens v. Bank, 95 Am. St. 637. (3) The certificate of stock in question, although fair on its face, was void because issued in excess of the authorized capital stock of the corporation, and the liability therefor is the same whether the certificate is void because prohibited by the Constitution, the statutes of the State, or void at common law. Clark & Marshall on Corporations, sec. 430 ; Thompson on Corporations, secs. 1490-1493; Purdy’s Beach on Private Corporations, sec. 283; Railroad v. Schuyler, 34 N. Y. App. 50; Land Co. v. Parker, 87 Am. St. 845; Allen v. Railroad, 15 Am. St. 185; Cook on Corporations (6 Ed.), secs. 292-3; Davey v. Royalty Co., 169 Mo. App. 565. (4) A certificate of stock in a corporation is a continuing affirmation by if that the person to whom it was issued is the owner of the shares therein named, and it partakes, to a great extent, of the qualities of a negotiable security. It can be transferred and passes from hand to hand by delivery, upon being endorsed by the original holder by signing a blank power of attorney authorizing the person therein named to transfer it on the books of the corporation. It is not requisite to title that the stock should be transferred on the books of the corporation. Keller v. Machine Co., 43 Mo. App. 87; Trust & Savings Co. v. Lumber Co., 118 Mo. 458; Havens v. Bank, 95 Am. St. 635; Bank v. Lanier, 11 Wall. (U. S.) 369; Dadn Mfg. Co. v. Seed Co., 95 Mo. App. 144; O’Brien v. Cummings, 13 Mo. App. 199; Crenshaw v. Mining Co., 110 Mo. App. 355; Austin v. Hayden, 171 Mich. 38; Safe D. Co. v. Hibbs, 229 U. S. 394; Clark & Marshall on Corps., sec. 430. (5) The evidence shows that at the time of the pledge of the /Certificate' of stock to respondent as security, the property of the corporation was of the approximate value of $320,000. The par value of its capital stock was $250,000. The par value of the certificate delivered to respondent as security for the loan of $10,000 was $25,000, or more than twice the amount of the loan. This evidence was competent to show the value of the stock, and, in the absence of evidence of actual sales of stock, the law presumes its market value to be its par value, because the corporate records show the stock to have been fully paid up. Trust & Savings Co. v. Lumber Co., 118 Mo. 461; Hewitt v. Steele, 118 Mo. 474; Muck v. Hayden, 173 Mo. App. 32. (6) It was the duty of the corporation, and of the directors, as well as its vice-president, Blair, to know the condition of its stock books at the time Blair signed the certificate in question. The law imputes knowledge to the corporation of facts which its president and directors ought to know in the exercise of ordinary diligence in the discharge of their official duties, and, with respect to the rights of third parties, this presumption is conclusive. Thompson on Corporations, secs. 5308, 6529; Martin v. Webb, 110 U. S. 728; 10 Cyc. 1059; Stonecutter v. Myer, 64 Mo. App. 533; Clark & Marshall on Corpl, sec. 718; Bank v. Lovitt, 114 Mo. 519; Taylor v. Mining Co., 247 Mo. 1.
   GRAVES, J.

This case reached us by virtue of our writ of error directed to the circuit court of Jasper county. Plaintiff below, defendant in error here, is a banking corporation under the laws of the United States, doing business in Jasper county, Missouri. Defendant below, plaintiff in error here, is a business corporation organized under the laws of this State. For convenience we shall speak of the parties as plaintiff and defendant rather than plaintiff in error and defendant in error. In other words, we shall nse the style of the ease below rather than its style here. Matters of proof and pleading can well be stated together.

Defendant was incorporated with a capital stock of $250,000, divided in shares of* $100 each. Its capital stock was paid by the transfer of 160 acres of mining lands near Webb City, Missouri, shown at the time of the trial to be of a value in excess of the $250,000. The action is one sounding in tort, and plaintiff seeks to recover of defendant damages in the sum of $10,000, with interest thereon from January 14,1910. Plaintiff had judgment below for $10,155, from which judgment defendant sued out its writ of error herein.

Defendant was incorporated June 22, 1905. Its full capital stock was issued in the beginning, but some 1500 shares were issued to J. P. Newell, as trustee. Newell was the secretary from the beginning down to and including the transaction involved in the suit. One S. F. B. Morse was president during all the time, as was H. W. Blair its vice-president. Newell, the secretary, received 850 shares of stock in his own right, as well as those held by him in trust. The petition charges that the defendant by and through its officers, directors and agents negligently permitted Newell, its secretary, to issue two certificates of stock numbered respectively 198 and 200, in excess of its authorized capital stock, certificate 198 for 150 shares and certificate 200 for 250 shares. Both, certificates were to J. P. Newell, the secretary, and were signed by J. P. Newell as secretary, and H. W. Blair, as vice-president, and each had the corporate seal attached. The certificates were regular upon their face. Plaintiff relying upon the certificate of stock No. 200 for 250 shares, loaned to Newell, upon Newell’s application and request and on his note therefor, the sum of $10,000, and took said certificate No. 200 as security for said loan. Under the facts pleaded and proven Newell practically ran the corporation. Neither Morse nor Blair made inquiry when they signed up certificates of stock presented to them by Newell. Neither these officers nor the directors examined the stock book in which the only account of stock was kept. The certificates mentioned were signed by Blair, without examination of the books, or any inquiry as to the status of the stock account. Blair testified that if he had examined the books he could have discovered the fact that these certificates were in excess of the authorized capital of the corporation, and were fictitious, but that he did not so do. Newell had the corporation books in his office in Carthage, Missouri, and Blair resided there.

Afterward the plaintiff discovered the fact that Newell had procured these certificates of stock to be fraudulently issued, and therefore demanded of the corporation good shares of stock or a return of its $10,000, and interest, which Newell got personally and used for his own account. Defendant refused to do either, and thereupon this suit, with result as aforesaid.

The petition counts upon the negligence of the defendant in issuing such void stock. Matters pleaded by way of the answer will be noted so far as necessary in the course of the opinion.

I. Defendant by its answer averred that the certificate of stock was fraudulently issued by Newell, and that it was the fraud of Newell as an individual which occasioned the loss to plaintiff, and that such stock being issued without authority of defendant, no liability attached to it. Around this and the plaintiff’s charge of defendant’s negligence is centered the legal battle of this case. That the defendant was negligent in the conduct of its business, and rested its faith too much upon its secretary, J. P. Newell, is indelibly written throughout this record. Time and again stock certificates were signed and issued without any precautions against frauds. No examination of the stock book was made at such times, when such an examination would have disclosed the fraud. The vice-president, who signed the certificate in question, said that by an examination of the stock books he could have determined the fact that it was an over issue of stock. With the negligence of the defendant overwhelmingly shown in this regard, how stands the case? It should be remembered that the certificate of stock was not issued direct to the plaintiff, for the courts seem to draw a distinction here. Had the plaintiff received stock issued direct to it, a duty might have arisen thereby for plaintiff to have examined into the regularity of the issue. But we do not take that to be the rule on the facts of this case. Plaintiff had a right to rely upon regularity of the issue as disclosed by the face of the certificate, i. e., by the signature of the vice-president, the signature of the secretary and the corporate seal. Under the facts of this case the corporation defendant is liable for the negligent issue of this spurious stock by its officers in the apparent line of their duty.

The facts of this case were before the Springfield Court of Appeals in a companion case, and that court held the defendant liable. [Davey v. Newell-Morse Royalty Co., 169 Mo. App. 565.] In 1 Purdy’s Beach on Private Corporations, sec. 273, it is said:

“A certificate of stock is not a negotiable instrument, but a bona-fide purchaser may, by operation of the law of estoppel, take it free from equities of previous holders, who have enabled persons to sell it to the purchaser who has given value for it, before he knew of any defect in the seller’s title. The general rules of law respecting bona-fide purchasers of commercial paper for value, before maturity, are applied to stock and corporate securities so far as their peculiar nature will admit. Although corporate bonds may have been wrongfully put into circulation, a purchaser in good faith, ignorant of the circumstances, may enforce their payment. Accordingly, where a corporation was authorized to issue bonds secured by mortgage to the amount of two-thirds of its capital paid in, and it issued bonds to an amount less than two-thirds of its authorized capital, but much more than the amount paid in, the bonds were enforceable in the hands of bona-fide holders. So in respect of stock certificates, if the owner indorses them in blank, and puts them in the hands of a broker or agent, who sells or pledges them in fraud of the owner’s rights, he nevertheless cannot reclaim them from an innocent holder for value. A bona-fide purchaser of a certificate from defendant before levy of attachment or execution in a suit, is entitled to retain the stock. The assignee thereof takes them subject to all equities existing against the assignor. If the company transfers the shares to the indorsee of the certificate after notice of an adverse claim, it does so at its own peril. They are said to be of the nature of quasi-negotiable instruments, mere evidence of ownership. Yet, while not within the category of negotiable instruments as defined by the law merchant, like warehouse receipts and bills of lading, they frequently convey as good a title as though they were actually negotiable. This title is grounded in estoppel. ’ ’• The cases cited by the author sustain this text.

So, too, in Colebrooke on Collateral Securities (2 Ed.), sec. 314, it is said:

“The holder for value of a certificate issued by the proper officers of a corporation, without notice of fraud, or other defenses against the same, has a primary and direct claim, either to be admitted as a stockholder of the corporation, or where that is impossible, the limit placed by the charter upon the issue of stock having been reached, to such damages as shall be sufficient to recoup him for his loss. Such holder for value, without notice, upon a transfer of the shares of stock to his name upon the books of the company, is protected, although there be no authority on the part of the company to make the transfer because of the number of shares of stock already issued. Although a certificate of stock itself is not the- title to the shares of stock, it is an authoritative declaration that such a title exists, which may operate as an equitable estoppel in favor of third persons who part with value in the belief that it is true.”

The doctrine is well worded in 2 Clark and Marshall on Private Corporations, sec. 430, thus:

“It is a well-settled principle that a certificate of stock issued by a corporation having the power under its charter to issue certificates in the form in which the certificate is issued is a continuing affirmation or representation of the ownership of the amount of stock therein specified by the person named therein, or his assignee and of his right to transfer the same, and that purchasers or pledgees of the certificate, or the stock represented by it, have a right to rely on such affirmation, without inquiry as to the validity of the certificate, unless they have actual notice of its invalidity, or the circumstances are such as to create suspicion, and put a reasonably prudent man upon inquiry. It is also a well-settled principle, as we have seen, that a corporation is liable to the same extent and under the same circumstances as a natural person, for every fraud which it commits, and for negligence and other wrongs, however foreign to its nature or beyond its granted powers the wrongful transaction or act may be. It follows from these principles that if a corporation itself, or an officer or agent for whose act it is responsible, fraudulently, or even by mistake and without any actual fraudulent intent, issues certificates of stock which are fictitious because they are in excess of its authorized capital stock, or otherwise unauthorized, it is liable in damages to bonafide purchasers or pledgees of such certificates who are deceived and injured by relying upon their genuineness. And in an action to recover damages, upon refusal of the corporation to recognize the validity of such a certificate, the corporation is estopped to /set up as a defense that it had no power to create the stock or issue the certificate.”

The Ohio court in Railroad v. Bank, 56 Ohio St. l. c. 380, says:

“If the signatures of the president and the secretary are genuine and the seal has been affixed, and the paper on its face a certificate of stock, to require one without knowledge of any fraud in its issue, before purchasing it, to inquire of the company or any of its officers as to whether it is genuine, would be to require a degree of care not exacted in any other similar business transaction; and not observed by the most care-ful business men in dealing in the stock of a company. And hence'the omission to make such inquiry is not such negligence as to deprive the holder of stock innocently acquired, of his remedy against the company on a refusal to transfer it as promised in the certificate. The fact that the certificate appears on its face to have been issued to the secretary as the owner of it, cannot be- regarded as a suspicious circumstance, where, as in this case, he was not forbidden to hold stock, and, as found, 650 valid shares had been issued to him. [Railroad v. Bank, 60 Md. 36, 48; Titus v. Turnpike Road, 61 N. Y. 237, 242.] As the secretary had the right to hold stock, and did hold it, and as but one mode is provided by statute and the rules of the company for the issue of stock certificates, the fact that a certificate is issued in his favor, cannot, of itself, be adjudged a circumstance calculated to place an ordinarily prudent man on inquiry. This is shown by the fact that it did not excite inquiry in the minds of any of the numerous persons who became the owners of such stock, men accustomed to such business, and in-eluding some of the most careful business men of Cincinnati. Protection against tbe possibility of such frauds, is provided in tbe requirement that tbe certificate shall be signed by the president as well as secretary. Either, by this requirement, must be deemed a sufficient check on the dishonesty of the other, where the company itself has provided no other check. Where, then, one of the officers becomes negligent, or conspires with the other to commit a fraud on the company by the issue of spurious stock, which comes into the possession of an innocent holder for value, who should more reasonably suffer the loss, than the company, who selected its president and secretary, and thus placed it in the power of one or both to practice the fraud? The law has always been careful to protect the rights of the innocent third person under such circumstances. When one by the fraud of another is induced to make and deliver him a deed, who then sells and conveys the land to an innocent purchaser for value, the latter is- protected against the fraud that had been practiced by his grantor in acquiring the land; for the reason that having no knowledge of the fraud, he had the right to rely on the deed held by his grantor. This is the doctrine of innocent purchaser for value, and is of very general application. It rests upon the principle that where one of the two innocent persons must suffer by the wrongful act of another, he must bear the loss that placed it in the power of such person to do the wrong.” And further on in the same case, and going to the question of negligence that court says:
“The general rule is that a corporation, like a natural person, is liable for the negligence of its agents, causing injury to others, where the act done is within the scope of their agency, whether the act be one of omission or commission. [Story on Agency, sec. 452; Tome v. Railroad, 39 Md. 36; Railroad v. Bank, 60 Md. 36, 43.] But in answer to the claim of liability on the ground of negligence the company asserts that there is no privity between it and third persons who may deal in its stock; that a certificate of stock is not negotiable; and therefore that neither the company nor any of its agents were under any legal obligations in favor of persons dealing in its stock to supervise the acts of its president and secretary in issuing or in transferring stock.
“It is not necessary to determine whether a certificate of stock is a negotiable instrument, like a promissory note or bill of exchange. It is not- a promise to pay money, and it has no period of maturity as such instruments have; yet as has been said, it is much like negotiable instruments.. On its face, a certificate of stock is an evidence of the title of the person named in it to a certain number of shares, with an assurance to all persons that it will be transferred on the books of the company to any one purchasing it, on surrendering the certificate. In Bank v. Lanier, 11 Wall. 377, it is said: ‘Although neither in form nor character negotiable paper, they (certificates of stock) approximate to it as nearly as practicable. It is easy to see why investments of this character are sought after and relied upon. No better form could be adopted to assure the purchaser that he can buy with safety. He is told under the seal of the corporation, that the shareholder is entitled to so much stock, which can be transferred on the books of the corporation, in person or by attorney, when the certificates are surrendered, but not otherwise. This is a notification to all persons interested to know, that whoever, in good faith, buys the stock and produces to the corporation the certificates, regularly assigned, with power to transfer, is entitled to have the stock transferred to him.’ In re Bahia & San Francisco Railway Co., L. R. 3 Q. B. 584, is to the same effect; and it is there shown that the power of giving, certificates is for the benefit of the company in general, as the effect of it is to make the shares of greater value. It is said in Cook on Stockholders, section 415: ‘To such an extent has the law of estoppel been applied to protect a bona-fide purchase of stock, that he is protected in almost every instance where he would be protected if he were purchasing a promissory note or other negotiable instrument. ’
‘ ‘ The cases and authorities certainly show that the claim of the company that there is no duty (for that is all that can be meant by the use of the term privity), resting upon it or its agents, toward third persons, to observe care in the issue and transfer of its certificates of stock, and that as a consequence, it is not liable to them for negligence in such matters, is not well founded. From the character of the certificate it must be held to contemplate and know, that persons relying upon it will purchase the certificate in the market and meet with loss, should the person named in it not be the lawful owner of it. It must therefore be held to care in regard to this, and answer for any loss, the result of its negligence, or of its agents.”

The doctrine of this case from Ohio and of the texts which we have quoted find ample support in a long list of cases collated and cited in plaintiff’s brief, which list will be preserved by the reporter in his notes upon this opinion. The rule to be declared is, that if the certificate of stock fair upon its face, is, without notice and good faith, bought, or taken as collateral, and such certificate turns out to be spurious, then the corporation is liable for the damages occasioned, whether such certificate be fraudulently or negligently put in circulation. In the case at bar there was fraud upon the part of Newell and the grossest negligence upon the part- of the vice-president Blair, and the other officers and directors of this' defendant corporation. For these things the corporation itself is liable to the plaintiff. The certificate of stock was spurious, because in excess of the authorized capital stock. There is nothing in the record showing that plaintiff had any notice of either the fraud of the one o'r the negligence of the other. Under such circumstances the corporation cannot escape liability, and the liability found in this case was only to the extent of reimbursing plaintiff for its actual loss and interest. This was proper.

II. It is next urged that the market value of the stock was not shown, and therefore plaintiff was not' entitled to more than nominal damages. In terms the market value of the stock was not shown. On the contrary it appears from the record that there was a pool of most of this stock, and that the stock was not upon the market. The certificates recites the value of the stock, and the evidence shows that the money value of defendant’s holdings is in excess of its capital stock. Under such circumstances the trial court was authorized to find damages in a substantial and adequate, rather than in a nominal sum.

III. It is urged that error was committed in refusing divers declarations of law asked for by defendant. In the main they state propositions of law contra to the views we have expressed as to what is the rule of law under these facts. Under the conceded facts of this record, and the rule of law we think applicable thereto, the plaintiff was clearly entitled to recover. The instructions refused announced contrary doctrines and were rightfully refused. The judgment nisi is clearly for the right party and it is therefore affirmed.

All concur.


author: BOND, J.

text:
    PATRICK H. GANEY v. KANSAS CITY, Appellant.
    Division One,
    June 30, 1914.
    1. EVIDENCE: Credibility: Measurements. It is not the province of the court to say that the testimony of witnesses who made actual measurement of a distance is to prevail over the testimony of other witnesses testifying without measurement. Testimony of the latter kind is competent, and its probative force and credibility are for the jury.
    2. NEGLIGENCE: Unused Post in Line of Work: Assumption of Risk. Plaintiff’s duty was to roll a wheelbarrow, containing concrete, on a wall, 18 or 20 inches wide, near which was a post that had been erected to carry an electric light for certain night work, the post having been left standing after the work was completed. In passing the post plaintiff ran his barrow against it, and the collision threw him into a basin on the opposite side of the wall, a depth of about twenty feet. Held, first, that, the presence of the post not being an auxiliary to the day work in which plaintiff was engaged and the night work to aid in which the post was placed having been completed, whether or not the failure to remove the post was negligence depended on its propinquity to the runway whereon plaintiff was required by the foreman to roll the wheelbarrow and the probability of its causing injury to him when so engaged;' and, second, the assumption of the risk of danger does not arise from the negligence of the employer unless it is a natural and reasonable incident of the work which the servant contracts to do, and under the circumstances the post was not an observable object which became one of the conditions under which the work of wheeling the barrow laden with concrete was to be done.
    3. -: -: Contributory Negligence: Obvious Danger. Where reasonable minds can differ as to the inferences to be drawn from facts and circumstances tending to prove contributory negligence, the question is one for the jury; and where the evidence establishes that another man employed in wheeling a barrow, laden with concrete, on a wall, near a post, as plaintiff was, safely passed the post, immediately in front of plaintiff, without striking it with his barrow, there was objective refutation of the presence of danger so glaringly imminent and threatening as to deter a man of ordinary prudence from performing a like work.
    4. -: Instruction: Assumption of Fact. Where the petition charged that the post which plaintiff’s wheelbarrow struck was witliin “one foot- or less” from tlie wall on which he was wheeling the harrow, an instruction telling the jury that if defendant negligently permitted said post to remain in dangerous and unsafe proximity, to-wit, “within a foot or less of said wall,” they should find for plaintiff, was prejudicially erroneous, since it assumed that any point within “one foot or less” to the wall was a dangerous proximity.
    Appeal from Jackson Circuit Court. — Eon. James E. Slover, Judge.
    Reversed and remanded.

      A. F. Evans, A. F. Smith and Francis M. Eayivard for appellant.
    (1) The evidence of actual measurements must prevail over mere estimates or guesses, particularly when such measurements are corroborated by the estimates of many other witnesses and by the pleadings themselves. 5 Ency. Ev., p. 643-; Perkins v. Township, 113 Mich. 379; Jones v. Detroit, 171 Mich. 608; Bur-rough v. Milwaukee, 110 Wis. 478; Wanta v. Milwaukee, 148 Wis. 295; Ryan v. Manhattan Ry. Co., 121 N. Y. 126; Mann v. Phoenix B. & C. Co., Í51 Mo. App. 586. (2) No negligence can be attributed to defendant on the uncontroverted facts, for the wall on which plaintiff worked was not unsafe for plaintiff to work upon, and if the erection of the post in the progress of the. work, being only temporary, made the work unsafe, it was not negligence on the part of defendant to require plaintiff, with full knowledge of the conditions, to use the wall, and plaintiff assumed such risk and cannot recover. Pugler v. Bothe, 117 Mo. 475; Mathis v. Stock Yards, 185 Mo. 434; Holloran v. Iron & Foundry Co., 133- Mo. 470; Blundell v. Manufacturing Co., 189 Mo. 552; Steinhauser v. Sp-raul, 127 Mo. 541; Burnes v. Railroad, 129 Mo. 41; Iron Works v. Green, 79 Kan. 558; Casey v. Railroad, 90 Wis. 113; Sullivan v. Manufacturing Co., 113 Mass. 396.; Cunningham v. Pierce, 112 App. Div. (N. Y.) 65 ; Administrator v. Lime & Cement Co., 113 Mo. App. 330; Armour v. Hahn, 111 U. S. 313; Bradley v. Railroad, 138 Mo. 293; West v. Cudahy, 86 Kan. 890; Ballard & Ballard Co: v. Lee, 131 Ky. 412; Foreman v. Railroad, 142 Ky. 62; Grure v. Storey, 40 L. R. A. (N. S.) 832. (3) Respondent was under the undisputed evidence guilty of contributory negligence of the grossest kind, and cannot recover. Slagel v. Lumber Co., 138 Mo. App. 432; Wheat v. St. Louis, Í79 Mo. 572; Woodson v. Met. St. Ry., 224 Mo: 685; Devitt v. Railroad, 50 Mo. 302; Ladd v. Street Ry., 180 Mass. 454; McCarthy v. Emerson, 77 App. Div. (N. Y.) 562; Railroad v. Jones, 95 U. S. 439 ; Pahlan v. Railroad, 122 Mich. 232. (4) The giving of instruction 1 asked by respondent was reversible error for if there could be any doubt in the minds of reasonable men as to the post being dangerously near the wall, then the jury should have had the question submitted to them, whereas the instruction told them that if the post was within twelve inches of the wall, then as a matter of law it was dangerously near the wall. Murphy v. Wabash, 115 Mo. 120; Power v. Wabash, 224 Mo. 1; Huhn v.'Railroad, 92 Mo. 450.

      Walsh, Aylwqrd é Lee for respondent.
    (1) The testimony of estimates as to measurements is admissible as amounting to the statement of a fact and such evidence is entitled to the same weight and value as any other testimony. Stotler v. Railroad, 200 Mo. 123; Railroad v. Washington, 49 Fed. 347; Railroad v. Davidson, 76 Fed. 521; Eastman v. Mfg. Co., 44 N. H. 155; Miller v. New York, 93 N. Y. Supp, 227, 104-App. Div. 33; Hacket v. Railroad, 35 N. H. 398; Hames v. Brownlee, 63 Ala. 277; Railroad v. Satterwhite, 19 Tex. Civ. App. 170; Pa. Co. v. Conlan, .101 111. 101; Railroad v. Swisher, 53 111. App. 417. (2) Plaintiff’s injury was the direct result of the negligence of the defendant. The undisputed testimony showed that the post with which plaintiff’s harrow collided was erected and located by the defendant in dangerous and unsafe proximity to the wall upon which plaintiff was required to work, thereby forming a dangerous obstruction so that the same was rendered not reasonably safe to work upon. Defendant was in control of the work under the supervision of its foreman and the plaintiff was warranted in relying upon the superior knowledge of the foreman, and his presence at and direction of the work was equivalent to an assurance of safety. Plaintiff, therefore, did not assume the risk of the master’s negligence. Charlton v. Railroad, 200 Mo. 433; Curtis v. McNair, 173 Mo. 270; Wendler v. House Pur. Co., 165 Mo. 527; Murphy v. Railroad, 115 Mr. Ill; George v. Railroad, 225 Mo. 411; Young v. Oil Co., 185 Mo. 665; Bradley v. Railroad, 138 Mo. 302; Smith v. Coal Co., 75 Mo. App. 180; Hamman v. Coal & Coke Co., 156 Mo. 232; Erwin v. Telephone Co., Í73 Mo. App. 535; Doyle v. Trust Co., 140 Mo. 1. The right of the master to do his work in his own way is qualified by the rule that the master must remain within the boundaries of reasonable care. Erwin v. Telephone Co., 173 Mo. App. 536; Mack v. Railroad, 123 Mo. App. 536; Brandt v. Brewing Co., 159 M!o. App. 568; Jarrel v. Coal Co., 154 Mo. App. 558. The evidence showed the post had been up eleven days and had not been in use for several days prior to the injury. It was serving no useful purpose and although defendant knew of its dangerous and unsafe proximity to the wall and that it formed a dangerous obstruction to workmen using the wall it failed and omitted to remove the same. The foreman of the plaintiff directed him what to do, where and how to do it, was present while the work was being done, and plaintiff had a right to rely upon the fact that the master had performed his duty and that the place and manner of doing the work in conformity with orders was reasonably safe, although the danger was temporary and the place shifting. Under the evidence the defendant was unquestionably guilty of negligence. Erwin v. Telephone Co., 173 Mo. App. 536; Corby v. Telephone Co., 231 Mo. 417; Jewell v. Nut & Bolt Co., 231 Mo. 176; Jarrell v. Coal Co., 154 Mo. App. 552; Smith v. Fordyce, 190 Mo. 28; Phippin v. Railroad, 196 Mo. 347; Dakan v. Chase, 197 Mo. 267; Brady v. Bailroad, 206 Mo. 509'; Wendler v. Pur. Co., 165 Mo. 527; Smith v. Kansas City, 125 Mo. App. 150; Bloomfield v. Wooster, 118 Mo. App. 259; Hendler v. Stove & Range Co., 136 Mr. 3. (3) Plaintiff was not guilty of contributory negligence. The question of contributory negligence is generally a question for the jury and uuless the danger is so glaring and imminent an appellate court will not interfere with the jury’s finding on that fact. Young v. Oil Co., 185 Mo. 666; Butz v. Const. Co., 199 Mo. 287; Garacai v. Const. Co., 124 Mo. App. 719; Shortel v. St. Joseph, 104 Mo. 114; Mahoney v. Railroad, 104 Mass. 73; Shore v. Bridge Co., Ill Mo. App. 291. Plaintiff had a right to assume that defendant had performed its duty and had placed the post a reasonably safe distance from the wall until he had information to the contrary, for it was no part of his duty to examine the post and see how dose it was to the wall. Devlin v. Bailroad, 87 Mo. 545; Waldhier v. Bailroad, 87 Mo. 37; Johnson v. Bailroad, 41 Am. & Eng. B. B. Cases (Minn.), 293; Bailroad v. Davis, 92 Ala. 300; Murphy v. Bailroad, 115 Mo. 111. (4) Plaintiff’s instruction numbered 1 was properly given. It required the jury to find that the post was negligently permitted to be and remain in dangerous and unsafe proximity to the wall and it did not invade the province of the jury nor assume any facts. Blankenship v. Hughes P. & G. Co., 154 Mo. App. 491; Geary v. Railroad, 138 Mo. 251; Dammann v. St. Louis, 152 Mo. 186; Brady v. Railroad, 206 Mo. 509;'Phippin v. Railroad, 196 Mo. 321; Henderson v. Kansas City, 177 Mo. 490; Dawson v. Railroad, 102 Mo. App. 284.- The most that can be said of plaintiff’s instruction is that plaintiff assumed an unnecessary burden and it is well settled that defendant cannot complain under such circumstances. Prewitt v. Railroad, 134 Mo. 615; Herrington v. Sedalia, 98 Mo. 585; Brooks v. Railroad, 35 Mo. App. 571; York v. Bank, 105 Mo. App. 127; O’Neil v. Blase, 94 Mo. App. 648. Plaintiff is not required to prove all the causes of negligence charged, but only sufficient to make out a case and is entitled to recover upon one or all of the causes of negligence submitted to the jury. Gammon v. Gas Co., 145 Mo. 512; Feddick v. Coal Co., 125 Mo. App. 24; Spaulding v. Met., 129 Mo. App. 607.
    STATEMENT.
    Plaintiff was injured when rolling a wheel-barrow, containing a load of moist concrete, on the wall of a water basin, wherein the defendant city was engaged in the work of constructing a water main. The coping, or top space of the wall over which he was pushing the wheelbarrow, was eighteen or twenty inches in width. On the one side of this wall was situated the reservoir or basin, on the other side is was bounded by the earth whose surface came within a few inches of the top. On the land side of the wall and within fourteen inches, a post had been erected to carry electric lights for certain night work, and had been left standing after the completion of the work.
    Plaintiff was working under the direction of the foreman and was required to roll the wheelbarrow containing its load of concrete along,the coping of the wall to a point beyond the location of the post, and then dump it. A fellow-workman a few feet ahead of plaintiff was engaged in a similar task and succeeded in passing the post in safety, bnt plaintiff ran his wheelbarrow against the post.
    According to the plaintiff’s testimony this collision threw him and the barrow into the basin — a depth of about twenty feet — and inflicted the injuries sued for.
    •Defendant’s witnesses testified that plaintiff was injured by stepping backwards and falling into the water basin, after having set his wheelbarrow down when it struck the post.
    The injury occurred in the daytime of the 10th of May, 1908. The. testimony was conflicting as to the distance from the post to the outer edge'of the coping and also as to the width of the wheelbarrow — plaintiff testifying that the post was set in the ground at a distance ranging from two or three tó twelve inches. Defendant’s witnesses testified that its measured distance was fourteen inches.
    The petition alleged the negligent maintenance of the post so close to the wall (“within a foot or less”) as to make it an unsafe runway for the wheelbarrow. The answer pleaded contributory negligence and assumption of risk. Plaintiff had judgment for $12,000. Defendant appealed and assigned various errors which will be ruled in the opinion.
   OPINION.

I.

BOND, J.

(After stating the facts as above.) — Appellant’s first point seems to be that the testimony of its witnesses stating the measurements made by them “must, prevail” over that of other witnesses testifying without measurement. Since the law is settled in this State that the evidence of the latter kind is competent (Gardner v. Railroad, 223 Mo. 389'), it necessarily follows that it has some probative force and its credibility and relative weight as compared with the testimony of the former kind, becomes a question for the triers of the facts.

It may be. that the jury, if they had believed the witnesses who testified as to actual measurements, would have accepted their testimony as to the distance from the post to the wall rather than the statement of its distance given by eyesight measurements of other witnesses. But the credibility of the two sets of witnesses was a matter for exclusive determination by the jury whose powers in that respect cannot be taken from them under our system of laws. As plaintiff did not admit the correctness of the measurements claimed to have been made by defendant’s witnesses, either on the trial or in his pleading, it is evident that we cannot pass on the credibility of defendant’s witnesses or the accuracy of their statements without invading the province of the jury.

The contention of defendant that the evidence of this witness as to measurements “must prevail” is therefore disallowed.

n.

It is insisted that the presence of the post alongside of the runway over the top of the wall, was not negligence, but was an observable object which became one of the conditions under which the work of wheeling the barrow laden with loose concrete was to be done, and that any danger caused thereby, was assumed by plaintiff in entering into contract with defendant.

There was evidence tending to prove that this post was erected to carry a light for the benefit of the workmen employed in certain duties appertaining to running a main through the wall of the water basin which were performed at night, but that it was left standing after the work of the men engaged in the night shift had been completed. It is clear, therefore, that the existence of the post was not an auxiliary of the day’s work or one of its natural conditions, and whether the omission to remove it was negligence or not depended on its propinquity to the runway whereon plaintiff was required to work and the probability of its causing injury to him when so engaged. The facts bearing on these elements of negligence were properly submitted to the jury whose verdict in favor of the inference of negligence is not therefore subject to review.

Neither did the plaintiff assume the risk of danger, for that is never done when it arises from the negligence of the employer and is not a natural and reasonable incident of the work which the servant contracts to do. [Charlton v. St. L. & S. F. Ry. Co., 200 Mo. l. c. 433; Curtis v. McNair, 173 Mo. 270.] We therefore overrule the assignment of error as to lack of negligence of defendant and the assumption of risk by the plaintiff.

III.

It is claimed plaintiff’s own negligence directly contributed to his injury, and therefore the trial court should have directed a verdict for defendant. There was evidence tending to prove that plaintiff was acting under the command of a representative of defendant .in the performance of the work. The post near the top of the wall which plaintiff was required to travel — though suggestive of care to avoid a collision — did not glaringly threaten imminent danger to a man of ordinary prudence engaged in the work assigned to the plaintiff. Before the happening of the injury to plaintiff, he had just witnessed the safe performance of a similar task by a fellow-workman. This was an objective refutation of the presence of danger so glaringly imminent and threatening as to deter a man of ordinary prudence from performing the work under the command of the foreman. Where reasonable minds can differ as to the inferences to be drawn from facts and circumstances tending to prove contributory negligence, the question is one for the jury. And so we think it was in this case. [Huhn v. Railroad, 92 Mo. 440; Butz v. Construction Co., 199 Mo. l. c. 287.]

IY.

Finally it is complained that instruction number one given for plaintiff was erroneous in that it assumed a fact in issue, to-wit, that the danger zone between the post and the wall was “one foot or less.” An inspection of the following language of the instruction shows that this assignment was well taken:

“And if you further believe and find from the evidence that the defendant, and its agents and vice-prin-, cipals, negligently and carelessly caused and permitted said post to be and remain in dangerous and unsafe proximity, to-wit, within a foot or less of said wall, and negligently and carelessly failed and omitted to remove the same from said dangerous and unsafe position, if yon so find, and that, ’ ’ etc., you will find for plaintiff.

In his petition in this case plaintiff had used the above quoted language intending to state thereby that his cause of action was predicated upon the fact that the pole stood within a “foot or less” of the wall, and making no claim to redress if it stood at a greater dis-stance. In drafting his instruction plaintiff adhered with too much literalism to the language of his petition. The issues which should have been submitted to the jury were whether the post was within one foot or less of the wall and also within dangerous proximity to the work required to be done by plaintiff. Instead of submitting those two issues, the instruction assumed that any point within “one foot or less” of the wall was a dangerous position for the post to occupy, and left only one issue to the jury; i. e., whether the post stood within “one foot or less” of the wall.

The error in the instruction might have been avoided if instead of using the term “to-wit” plaintiff had employed the copula “and”. As thus written the instruction would have been unobjectionable, for it would have submitted the issues of dangerous proximity as well as the specific distance pleaded in the petition, to the jury. This error, in the instruction was necessarily prejudicial, for it prejudged the issue of “dangerous proximity” provided the jury should find the pole was standing within “one foot or less” of the wall. [Moon v. Transit Co., 247 Mo. 227; Clark v. Railroad, 242 Mo. 570; Linn v. Massilon Bridge Co., 78 Mo. App. l. c. 118, 119.]

For the error contained in the instruction under review, the judgment is reversed and the cause remanded.

All concur.