Opinion
No. 33890.
October 30, 1939. Suggestion of Error Overruled January 8, 1940.
1. APPEAL AND ERROR.
Where the stenographer's transcript of the evidence has not been made up and dealt with in the manner provided by law, the transcript is a nullity and will be stricken from the record upon request of the opposing party, unless the transcript is made up pursuant to notice within required time and is not incorrect in any material particular (Code 1930, sec. 725).
2. APPEAL AND ERROR.
A motion to strike from the record the stenographer's transcribed notes of the testimony taken in the court below, on ground that notice required to be given to court reporter, under statute, was not given until after expiration of 10 days from adjournment of the court, was granted notwithstanding an agreement in regard thereto (Code 1930, sec. 725).
ON SUGGESTION OF ERROR. (Division B. Nov. 27, 1939.) [192 So. 293. No. 33890.]1. MANDAMUS.
Where stockholder indorsed certificate in blank and delivered it to bank, bank was entitled to mandamus against corporation after stockholder's death to compel transfer on the books and issuance of new certificate, though corporation had allegedly made transfer and issued new certificate to third person pursuant to request of original stockholder's administrator (Code 1930, sec. 4153).
2. MANDAMUS.
Where corporation issued new stock certificate to third person on order of original holder's administrator, relying on representation that original certificate had been lost or destroyed, circuit court had jurisdiction of mandamus action by one holding by assignment from the original holder during his lifetime, and tendering the original certificate indorsed in blank, to compel transfer on corporation's books and issuance of new certificate, notwithstanding failure to make the third person a party (Code 1930, secs. 564, 565, 605, 2348, 4153).
3. APPEAL AND ERROR.
Where notes of evidence taken by stenographer were stricken out, reviewing court could not look to such notes to determine what the evidence was, but must presume that evidence warranted trial court's decision.
4. APPEAL AND ERROR.
Every presumption is indulged in favor of the validity of a judgment of the circuit court.
5. APPEAL AND ERROR.
The reviewing court must presume, in absence of notes of the evidence, that any evidence necessary to support the circuit court's judgment that could have been introduced on the issues made, including matter set up in notice of general issue, was so introduced.
6. MANDAMUS.
On appeal from judgment awarding mandamus to compel corporation to transfer stock on books and to issue new certificate to transferee, where third person allegedly having claim to the stock was not brought into court, reviewing court need not decide whether other claimants of the stock could or should have been brought in (Code 1930, secs. 564, 565, 605).
APPEAL from the circuit court of Hinds county; HON. J.P. ALEXANDER, Judge.
W.S. Henley, of Hazlehurst, and Green, Green Jackson, of Jackson, for appellee, on motion.
Herein, as appears from the decree, in April, 1939, Harold Cox was receiver of The Merchants Bank Trust Company, in the Chancery Court of Hinds County, Mississippi, and there Honorable F.H. Bradshaw was his attorney when this cause was tried. Thereafter Cox, as receiver, was discharged, the Bank found solvent and all of its assets redelivered to it, so that it presently stands before the court as the owner of these two certificates of Jackson Opera House Company stock in controversy. In this condition, the cause was tried March 24th, at which time the judgment was entered. The court adjourned March 25th. No notice was given to the stenographer to file his notes until April 12th, though conversation was initiated at April 7th, which was ten days past adjournment date. So that as at April 7th, five days before the notice was given, there had been a complete failure on the part of the appellant to give the notice.
9 C.J.S. 967.
The receiver, Honorable Harold Cox, was absolutely without authority to waive any right possessed by the Bank for the receivership, as to the stenographer's notes.
High on Receivers (4 Ed.), p. 311, sec. 264; 53 C.J. 345; Toler v. Wells, 158 Miss. 628, 130 So. 301; Woods v. Elliot, 49 Miss. 180; 24 C.J. 297; 37 C.J. 721.
Herein there was a total failure to comply with the jurisdictional requirements of notice, which renders requisite that the stenographer's notes be striken.
Spitchley v. Covington (Miss.), 177 So. 31; Mayflower Mills v. Breeland, 168 Miss. 207, 149 So. 787, 789.
Of the power of the attorney for the receiver to waive, the letter of Mr. Bradshaw to Mr. Cameron expressly called attention to the possible want of authority and merely said that so far as the counsel was individually concerned he would not make the point. The power of counsel, even had he represented the Bank, did not extend to the right to surrender a valuable right of clients.
5 Am. Jur. 300, sec. 70; 7 C.J.S., p. 922; Hoffman v. Owens, 103 P. 414; Marx v. Lewis, 53 P. 600; Stanton v. Ballard, 133 Mass. 464; U.S. v. Newman, 25 F.2d 357.
The notice being jurisdictional and not being given within the ten day period, the notes must be striken.
Ben F. Cameron, of Meridian, for appellants, on motion.
The motion does not seem to challenge the sufficiency of the waiver, or agreement, the only point apparently being that what the receiver's attorneys did was not binding, because the receiver did not obtain specific chancery court authority for making the agreement.
The point raised has to do with a mere technical procedural detail, such as any lawyer is called upon to handle in almost every case he tries. The matter is not vital in any degree to the real merits of the controversy and does not affect all the fundamental rights of the receiver to prevail in the suit, if it has intrinsic merit.
In far more vital matters the vast majority of courts permit waivers to stand when made by receivers, just as in the case of private individuals.
23 R.C.L. 126.
Here we have a specific agreement by the receiver, through his own action and through his attorney of record, on which agreement complete reliance was placed by the appellant. Relying on the agreement, appellant went ahead and prosecuted the appeal and incurred the expense incident thereto.
The circuit court actually adjourned on March 25th, of which fact attorney for the appellants was advised on April 7th.
On April 7th attorney for appellants asked attorney for appellee if he would omit to make the point that the notice to the stenographer was not given within the ten day period, if appellant should prosecute its appeal. Appellee's attorney replied that he thought it would be all right, but would consult the receiver.
April 10th, appellee through his attorney agreed in writing that no point would be made in the Supreme Court about failure to give notice to the stenographer within ten days.
All steps looking toward prosecution of the appeal were made in full reliance on this agreement.
The receiver was specifically given authority to file this suit and "prosecute it to final conclusion." This authority carried with it the right to make any agreements and to take any position which would normally be involved in the give and take of the trial of a lawsuit. This necessarily inheres in the prosecution of a suit by a fiduciary, or any other litigant. Not a day passes in the trial of lawsuits when agreements are not made by counsel engaged in the trial, and without such agreements trials would be tedious and vexatious indeed.
Alderson on Receivers, pp. 714, 740.
The right to waive or to be estopped with respect to a procedural detail is recognized in 23 R.C.L. 126, in which the matter is being discussed of the necessity of obtaining permission to sue a receiver. Surely that is a valuable right and one which has to do with the very possession of the assets of the receivership by the receiver. Since a matter of procedure only is involved, however, the courts have not hesitated to hold that a receiver waives a right to require permission to sue by entering his appearance and not challenging the absence of permission to sue.
24 C.J. 768; 53 C.J. 353, 356; Elkhart v. Ellis (Ind.), 15 N.E. 249.
Stress is laid by our opponents on the holding by this court that the giving of notice to a stenographer is jurisdictional. Surely this holding is not intended to have the effect of declaring that such notice is "jurisdictional" in the sense that the court is without power to move, unless the requisite step is performed. "Jurisdictional" is an all-inclusive term and has various meanings. It it quite generally held that if the subject matter of a controversy is not within the purview of the court's powers, it is without "jurisdiction" to proceed, regardless of what the parties may want to do about the matter.
This same strict rule does not apply, however, with respect to the other phases of jurisdiction, and the consent of the parties is sufficient to warrant the court in going along, regardless of any so-called "jurisdictional" objection.
7 R.C.L. 1038.
The rule about giving notice to the stenographer is, of course, an effort to require diligence on the part of litigants and that is proper. Neither the legislature, nor the courts, could desire that the truth be suppressed, or a litigant be penalized in such a rigorous manner, unless the statute or rules of court absolutely require it. Certainly the court would not be disposed to extend the doctrine to the point where it will work real hardship, unless it feels driven so to do by rules of law which it feels it cannot avoid applying. Certainly such is not the case here.
We submit that this court ought to approve this statement in 7 C.J.S. 918: "Moreover, where attorney's control of procedural matters is regarded as exclusive, it is often held that the power of the attorney to make stipulations and agreements with respect to the management of purely procedural matters in a pending cause is exclusive, and the client himself cannot do so without the attorney's consent . . ."
Ben F. Cameron, for appellants.
Mandamus will not lie to compel official of private corporation, at instance of alleged stockholder, to transfer stock or issue certificates.
Miss. Code 1930, sections 2348 et seq.; McHenry v. State, 91 Miss. 562, 44 So. 831; Greenwood v. Provine, 143 Miss. 42, 108 So. 284; Hamilton v. Long et al., 181 Miss. 627, 180 So. 615; Hook v. Bank, 134 Miss. 185, 98 So. 594; American Co. v. Vandiver, 181 Miss. 518, 178 So. 598; Edmondson v. Bd. of Sup'rs., 187 So. 538; 18 R.C.L. 185, 186; 14 C.J. 485 et seq.; 38 C.J. 792 et seq.; Terrell v. Ga., etc. R.R. Co., 115 Ga. 104, 41 S.E. 262; Stackpole v. Seymour, 127 Mass. 104; Clarke v. Hill, 132 Mich. 434, 93 N.W. 1044.
As far as we have been able to learn from an examination of the Mississippi authorities, this court has never permitted mandamus to stand where a member of a private corporation was seeking a remedy looking towards the regulation of its internal affairs. It is not contended that this remedy is not available under proper circumstances but the fact that it has never been invoked in this state shows the jealousy with which its issuance is guarded.
Authorities abound in other jurisdictions withholding the writ of mandamus from a stockholder seeking to get stock issued to him.
14 C.J. 485 et seq.; Travis v. Knox, 215 N.Y. 259, 109 N.E. 250, L.R.A. 1916A, 542; Kimball v. Union Co., 44 Cal. 173, 13 Am. Rep. 157; Freon v. Carriage Co., 42 Ohio State 30, 51 Am. Rep. 794; State v. N.Y. Co., 122 A. 55.
Burden is on plaintiff to show assignment without aid of presumption.
5 C.J. 1016 et seq.; 6 C.J.S. 1201 et seq.
Evidence of plaintiff fails to show assignment.
Plaintiff is barred from action by mandamus by lapse of time.
14 C.J. 487.
W.S. Henley and Green, Green Jackson, for appellee.
Appellant's contention "mandamus will not lie to compel official of private corporation at the instance of alleged stockholder to transfer or issue certificates" is invalid. The only applicable Mississippi decision is to the contrary.
Scherck v. Montgomery, 81 Miss. 426, 33 So. 507; Smith v. Richardson, 2 Miss. Dec. 287; White v. Williams, 159 Miss. 732, 132 So. 573; Gully v. Jackson International Co., 145 So. 905, 165 Miss. 103; Griffin v. Jones, 170 Miss. 230, 154 So. 551; Thompson v. Person, 177 Miss. 63, 170 So. 694; Russell v. Fed. Land Bank, 180 Miss. 55, 176 So. 737; Bridgforth v. Middleton (Miss.), 186 So. 837.
The appellee averred ownership and asked the court to compel the transfer. To this demand, appellants did not demur on the ground of want of jurisdiction, or move to strike. They elected to try on the facts before an honest court, and having lost on those facts, now seek to assert that the court had no right to do that which the court was then impliedly invited to do and did at appellant's request.
Sec. 147, Const. of Miss.; Goyer v. Wildberger, 71 Miss. 443; Sec. 2351, Code of 1930; Evans v. Miller, 58 Miss. 120; Whitney v. Bank, 71 Miss. 109, 15 So. 33; Broom's Legal Maxims (7 Ed.), p. 191.
Here the question was determinable under the modern rule both at law and in equity. And by the Constitution the right to trial by jury is guaranteed. Section 31. And due to the fact that Mississippi has already accepted the modern rule by the Montgomery case [ 81 Miss. 426], it would be inappropriate to allow this question to be raised here for the first time. 15 C.J. 849. The jurisdiction might be either at law or in equity, and if thus concurrent, a demurrer challenging was requisite (Green v. Creighton, 10 S. M. 163), with a transfer to the chancery court.
Myrick v. Mansell (Miss.), 185 So. 582; Waits v. Black Bayou Drainage Dist. (Miss.), 185 So. 577; Lester v. Harris, 41 Miss. 670.
Under modern conditions mandamus is appropriate remedy.
Scherck v. Montgomery, 81 Miss. 426, 33 So. 507; 13 Am. Jur. 400, sec. 321; Orange Grocery Co. v. Leverett (Tex. Civ. App.), 282 S.W. 625; 12 Fletcher Cyclopedia Corporations (Perm. Ed.), p. 406, sec. 5521; Flowerdale Greenhouses, Inc. v. McJunkin (Okla.), 233 P. 758; 6 Thompson on Corporations (3 Ed.), sec. 4451, notes 90 and 91; Sheppard v. Rockingham Power Co. (N.C.), 64 S.E. 896; Dennett v. Acme Mfg. Co., 106 Me. 476, 76 A. 922; Capitol Petroleum Co. v. Haldeman (Colo.), 180 P. 759; Citizens Nat. Bank v. Consolidated Glass Co. (W. Va.), 97 S.E. 689, 690; Sec. 4153, Code of 1930; Meyers v. State, 61 Miss. 138; 18 R.C.L. 185.
In this case when Hayne indorsed the stock and delivered, the legal title passed. Timberlake v. Shippers' Compress Co., 72 Miss. 323. So herein, under the modern rule, mandamus may be utilized to enforce this remedy, and there is no need for this court to depart from the declaration made by Calhoon, Jr.
As to defendants' fourth point, namely, that "Plaintiff is barred from action by mandamus by lapse of time," the answers are: (1) Under defendants' citation of 14 C.J. 287, it is said: "The right of a purchaser of corporate stock to demand the certificates therefor can be enforced without reference to the lapse of time, if no loss or injury has resulted to an innocent person by reason of delay." (2) Laches are a defense in equity, not at law. (3) Laches must be pleaded before they can be relied on. (4) This question of laches is sought to be raised here for the first time. This is a court of appeals and not a court of first instance, and the lower court may not err as to matters not raised in the pleadings.
14 C.J. 487.
Argued orally by Ben F. Cameron, for appellants, and by Garner W. Green, Jr., for appellee.
This is a motion to strike from the record the stenographer's transcribed notes of the testimony taken in the court below, on the ground that the notice required to be given to the court reporter, under section 725, Code of 1930, was not given until after the expiration of ten days from the adjournment of the court.
The motion must be sustained. In the case of Richmond v. Enochs, 109 Miss. 14, 67 So. 649, the Court held that the stenographer's transcript of the evidence which has not been made up and dealt with in the manner provided by law would be a nullity, and would be stricken from the record upon request of the opposing party. That the only instance in which the transcript which had not been made up in the manner pointed out by the statute shall be treated as a part of the record is when the transcript is made up pursuant to notice given to the stenographer within the time required by law, and is then not "incorrect in some material particular."
It was again held, in the case of Mayflower Mills v. Breeland, 168 Miss. 207, 149 So. 787, 788, that "the giving of notice to a stenographer to transcribe his notes of the evidence is jurisdictional, and, if not given, the notes cannot be considered."
The agreement made in regard thereto, at the time and under the circumstances disclosed by the proofs in support of this motion, was wholly ineffective. It should be explained, however, in justice to the receiver, that the motion to strike the stenographers notes in violation of the agreement is made after the termination of the receivership, and on behalf of the substituted appellee.
Therefore the motion is sustained.
Harold Cox, Receiver of the Merchants Bank Trust Company, being authorized by the Chancery Court, which was administering the affairs of the Merchants Bank Trust Company in liquidation, filed a petition in the Circuit Court for a writ of mandamus against the Jackson Opera House Company, its president and secretary, alleging that said Company, on the first of April, 1901, issued two shares of stock to W.E. Hayne, evidenced by its certificate number 38, of the par value of $100.00 each; that in due course of business and for value, without notice of any person claiming said certificate, the Merchants Bank Trust Company became the owner thereof, the said certificate being endorsed by its owner, W.E. Hayne; that the said receiver, being by operation of law the owner and holder of the said certificate, was entitled to have the same transferred from the books of the Company, and cancelled, and a new certificate issued therefor to the plaintiff in his capacity as receiver; that he has made demand upon the Jackson Opera House Company, and its president and secretary, for transfer of the certificate, but they failed and refused to do so, and refused to issue a new certificate to the plaintiff. And that the plaintiff is entitled to a writ of mandamus, directing and compelling the said secretary and president to permit the transfer of the certificate upon the books of the Company, and to issue a new certificate to the plaintiff; and asks for process, and for order commanding the transfer to be made, etc.
The certificate of stock, No. 38, was made an exhibit to the petition for writ of mandamus; it shows that it was duly issued to W.E. Hayne, and recites that it is "Transferable only on the books of the said Company in person or by attorney, or legal represenative, on surrender of this certificate properly endorsed." On the reverse side the certificate was endorsed in blank by W.E. Hayne, and witnessed by W.G. Plummer.
The defendants pleaded the general issue, and gave notice thereunder that it would offer to prove that certificate No. 38 for two shares of stock of the Jackson Opera House Company was issued to W.E. Hayne on April 1, 1901, and that between that date and June 18, 1920, the said W.E. Hayne departed this life, being at the time, as defendants are advised, the legal owner of said shares of stock in the corporation; that the Hibernia Bank Trust Company, of New Orleans, Louisiana, was the duly appointed administrator of the estate of W.E. Hayne, and that the said administrator called on the defendant, the Jackson Opera House Company, to transfer the two shares of stock to Thos. S. Bratton, to whom sale of said stock had been made, and the administrator represented to the said corporation that the original stock certificate No. 38 had been lost or destroyed; pursuant to this advice the defendant corporation, on June 18, 1929 issued to Thomas S. Bratton its certificate No. 187 of its capital stock, shown on its records to have been issued in lieu of certificate No. 38, and that said certificate was transferred from W.E. Hayne. It further set forth subsequent transfers of said certificate of stock to other persons, and finally to R.D. Sanders.
To this notice the plaintiff replied that R.D. Sanders is not the lawful owner of certificate No. 38 for two shares of stock in the Jackson Opera Company, issued to W.E. Hayne on April 1, 1901, endorsed by him, duly witnessed, and transferred in the course of business to the Merchants Bank Trust Company, without notice of existence of any claim thereto; and that the Merchants Bank Trust Company thereby became the owner of the stock certificate, free from any claim of any person whatsoever. That the plaintiff is not advised as to when W.E. Hayne departed this life, but denies that at the time of his death he was the legal owner of said stock in the Jackson Opera Company.
The plaintiff further said it was not advised whether the Hibernia Bank Trust Company of New Orleans was appointed administrator of the estate of W.E. Hayne, deceased, or whether the said bank, acting in that capacity, called upon the defendant Jackson Opera Company to transfer the two shares of stock to Thos. S. Bratton; and, further, even should this be true, the Hibernia Bank Trust Company acquired and had no interest in the stock certificate as the representative of the decedent for the reason that the two shares of stock were held and owned by the Merchants Bank Trust Company; that the original stock certificate No. 38 had not been lost or destroyed, but had been transferred and assigned to the Merchants Bank and Trust Company, which became, and is, the holder and owner thereof, and entitled to have it transferred upon the books of the Company. The plaintiff denied that the certificate was lawfully issued to Thos. S. Bratton and the other parties named in the notice under the general issue; and alleged that at no time had the certificate been surrendered to the defendant corporation, and if the corporation attempted to transfer the certificate on its books without its being surrendered for cancellation, that it acted at its peril; and denies the validity of the certificate of stock issued in lieu of No. 38, set forth in the notice under the general issue, alleging that throughout this period of time certificate No. 38 was held and owned by the Merchants Bank Trust Company, and is now held and owned by the plaintiff as its receiver. The plaintiff denied that R.D. Sanders acquired the two shares of stock originally owned by W.E. Hayne, claiming that the plaintiff is the lawful owner thereof, and is entitled to have the same transferred upon the books of the Company, and to have a new certificate issued in lieu thereof.
Trial of the cause was had in the Circuit Court, evidence was taken, and the court rendered a judgment in favor of the plaintiff, directing a mandamus to issue, and the president and secretary to transfer the stock to Harold Cox, as receiver of the Merchants Bank Trust Company; from which judgment this appeal was taken.
The notes of the evidence taken by the stenographer was heretofore stricken out, and we cannot refer to them in order to determine what the evidence before the Circuit Judge was. He tried the cause as both judge and jury, by agreement of the parties.
It is insisted by the appellant that mandamus will not lie, as prayed in the petition, and the pleadings show that the stock was claimed by other persons than the plaintiff, and the court could not have jurisdiction to award the mandamus on the pleadings, irrespective of the evidence.
Under section 2348, Code of 1930, among other things it is provided that: "On the petition of the state, by its attorney-general or a district attorney, in any matter affecting the public interest, or on the petition of any private person who is interested, the writ of mandamus shall be issued by the circuit court, commanding any . . . corporation, board, officer, or person to do or not to do an act the performance or omission of which the law specially enjoins as a duty resulting from an office, trust, or station, where there is not a plain, adequate, and speedy remedy in the ordinary course of law."
It is shown in the above statement that a certificate contained a provision that it was only transferable upon the books of the company by the owner in person or by his attorney or local representative, on surrender of this certificate, properly endorsed. There is nothing to show, at the time of the attempted transfer of the stock from W.E. Hayne to Thos. S. Bratton, that the certificate was produced; on the contrary, it appears by the recitals of the notice of the general issue by the defendant that it was not produced. But it is claimed that it was lost or destroyed.
The certificate of stock was presented with the petition for mandamus, properly endorsed — or endorsed in blank.
Section 4153, Code of 1930, provides that the stockholder shall be liable for debts, etc., for any unpaid balance remaining for the stock subscribed for by him; and that he may be sued, etc., by the corporation or its creditors; and that said liability shall continue for one year after the sale or transfer of the stock. It then provides, "The stock in all corporations shall be transferable by the indorsement and delivery of the stock certificate and the registry of such transfer in the books of the corporation."
In Scherck v. Montgomery, 81 Miss. 426, 33 So. 507, 508, it was held that any person entitled to a certificate of stock in a corporation may assign his right, and the assignment is good between the parties, although not evidenced by a transfer on the books of the company. It is also held in that case that an assignee of a right to have a certificate of stock in a corporation issued may sue in equity, and is entitled to a mandatory injunction. In the course of its opinion the Court said: "It is plain that, if Mr. Scherck had never transferred, and if he had, after the payment of his whole stock subscription, demanded his certificates of stock, and been refused, he could have sustained mandamus at law for their issuance. Granted this, it is equally plain that his immediate, or remote, transferee would have the same right, unless there was some counterclaim in the chain of transfer in the way." Further on in the opinion the Court said: "We cannot support the contention that a sale of the stock, as between the parties, cannot be made except by actual transfer on the books of the company. This is for the convenience of the corporation, and it has, in this suit, full opportunity to give any valid reason why it should not make the actual transfer."
We think the circuit judge had a right to hear the facts set forth in the petition; and we must presume, in the absence of evidence before him, that the evidence warranted his decision. We cannot look to the notes which were stricken out to determine what this evidence was. Every presumption is indulged in favor of the validity of a judgment of the Circuit Court. Any evidence that could have been introduced on the issues made may be presumed to have been done as necessary to support the judgment of the Circuit Court. It may be that the proof wholly failed to show any right in any other person than the bank. We must presume that it did. We must presume that the matter set up in the notice of the general issue was shown on the proof to be against the defendant. The only parties to this suit are those named, the plaintiff, the Jackson Opera House Company, its president and secretary.
It may be that other parties could have claimed the subject matter of the litigation under section 605, Code of 1930. As to this we are not called on to decide, for the reason that no other person was brought into court, or appeared therein as a claimant. Claims by a third person of the subject of the action and proceeding thereunder are provided in sections 564, 565 of the Code. We do not decide whether claimants could or should have been brought in under these sections.
It follows that the judgment of the court below must be affirmed.
Affirmed.