McCormick v. Badham

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] This is the third appeal in this case. The several trials were had before different judges.

On the first appeal the ruling of the trial court was sustained on demurrer to certain counts of the complaint; the written contract, on which the suit was sought to be maintained, was construed, and reversal was had for the giving of the general affirmative charge for defendant. McCormick v. Badham, 191 Ala. 339, 347, 67 So. 609.

The verdict for plaintiff, on the second trial, was set aside on motion for a new trial; and that judgment was affirmed. The Chief Justice declared that, although the seller agreed to sell the stock of the plaintiff buyer to a third person and to account for the stipulated price obtained, and later made a contract with such third person rescinding the contract, in the absence of a showing as to what the seller would have realized by forcing the third person to perform, or that the amount stipulated was realized by the sale made, plaintiff could only recover the market value of the stock. McCormick v. Badham,201 Ala. 210, 77 So. 736.

The present appeal is from a judgment for defendant. In plaintiff's motion for a new trial it is averred, among other grounds, that the jury improperly carried with them to the jury room three papers which had not been introduced in evidence, which said papers had a bearing on the issues in the case and were considered by the jury in arriving at a verdict. The motion was overruled and due exception reserved.

On the first appeal the sufficiency of the twelfth count was not passed upon, since demurrer thereto had been overruled. McCormick v. Badham, 191 Ala. 339, 346 (5), 67 So. 609. In counts 13 and 14 plaintiff had the benefit of the issue of fact sought to be presented by the twelfth count. That "the defendant agreed with the plaintiff to account to the plaintiff or to settle with the plaintiff for the price of the said stock," without other essential averment, did not clearly disclose to what the words "price of the said stock" referred; that is, whether reference was made to the market value of the stock or the amount for which it was purchased by plaintiff, or contracted to be sold to a third party. The word "price," as it occurs in the twelfth count, is made to refer, or may be referred, to two different sums, viz., defendant agreed to sell plaintiff 45 shares of the stock of said company at the par value and at the price of $100 each; and defendant agreed to sell the stock to V. C. Badham at the price of $200 a share. Testing the count by its weakest averment, in the light of this varying use of the word "price," it was subject to challenge by demurrer. This indefiniteness was remedied in count 13 by the averment that "defendant agreed with the plaintiff to account to the plaintiff or to settle with the plaintiff for the price at which the said stock was sold to the said V. C. Badham"; and in count 14 by the averment that "the defendant agreed with the plaintiff to account to the plaintiff or to settle with the plaintiff for the said stock, meaning the value thereof, not exceeding the price at which it was sold." It is evident that the issue of fact sought to be presented under count 12 was afforded plaintiff in counts 13 and 14, and that no evidence could have been introduced under count 12 which was not introduced under the two latter counts.

There was a consideration imported by the written contract. B. R. L. P. Co. v. Littleton, 201 Ala. 141, 77 So. 565,572-574; Prudential Casualty Co. v. Kerr, 80 So. 97,99;¹ Georgia Home Ins. Co. v. Boykin, 137 Ala. 350, 367,34 So. 1012. It was not necessary that plaintiff prove the true consideration for that contract. The surrender of rights, indicated on former appeal, was said to constitute the consideration for the alleged new parol agreement between the plaintiff and defendant. McCormick v. Badham, 191 Ala. 339, 346 (6), 67 So. 609. This suit is founded on said new agreement between said parties. It follows that the question, "What was the consideration of this contract?" (the written contract of July 7, 1904) did not call for evidence material to a controverted issue of fact as presented in counts 13 and 14.

No error was committed in not permitting plaintiff to introduce in evidence the letter (of January 26, 1907) from defendant to plaintiff. It contained no statement bearing on the issues made by the pleading. The gravamen of the complaint was that defendant, by agreement with plaintiff, sold or agreed to sell stock of the Dorchester Lumber Company to defendant's brother, V. C. Badham, and to include in the sale the stock in which plaintiff had an interest, and that defendant would account to plaintiff for the price at which the said stock was sold to the said V. C. Badham. If plaintiff had any right of action, it was based on this completed transaction with V. C. Badham, and not on the rights plaintiff would have had if defendant had otherwise contracted for the sale of the stock. That is to say, it was immaterial what negotiations defendant had with other persons for the sale of the stock. For like reason, there was no error in refusing to allow plaintiff to testify of his conversation with H. L. Badham at the mill relative to its sale through one Tucker in Charleston. Nor was that matter made relevant by the statement of plaintiff's counsel that defendant (at some other time) went to Charleston for the purpose of negotiating a sale of the stock through Tucker to Lindsay at $200 a share. The irrelevancy of the foregoing proposed testimony is further shown by the fact that, at the time of the alleged conversation sought to be given in evidence, no dividends had been declared on shares of stock in said lumber company, and no payment had been made by plaintiff to defendant for the stock in question. The indebtedness of the lumber company had not only not been canceled, but had largely increased from the time when McCormick began his employment with that company.

The measure of the value of plaintiff's "contingent, inchoate, contractual right to impose upon Badham the obligation to sell the stock to him" (McCormick v. Badham,191 Ala. 346 [6], 67 So. 609) was not affected by the fact, if it be a fact, that the stock could have been disposed of to other parties than V. C. Badham for the same or a different price, at other times. Of this, defendant's counsel aptly observes:

"It is one thing to say that the surrender of such rights (secured by the written contract) would afford consideration for a new undertaking (McCormick v. Badham, 201 Ala. 210,77 So. 738), * * * and say, on the other hand, that they had an actual monetary value capable of measurement" at the time in question.

This, by way of plaintiff's effort to introduce evidence tending to show the reasonable market value of the stock at other times than that when H. L. Badham had completed the sale of said stock to V. C. Badham. However, the record shows that plaintiff was permitted to testify that its fair market value was easily $200 a share. If the court had been in error in excluding the evidence in question, plaintiff could not ask more than that he testify generally as to what was the fair market value of the stock. This he was permitted to do.

The letter of H. L. Badham, dated Birmingham, Ala., 3/5/07, to plaintiff was not material. It contained no offer to purchase or confirmation thereof, no disclosure or admission of liability on plaintiff's part unconditionally to pay plaintiff for the 45 shares of stock in the Dorchester Lumber Company. The letters of December 24 and 28, 1907, were properly excluded. They do not tend to show liability of defendant on the parol agreement declared upon. It may be the letters would be competent in a suit between McCormick and Dorchester Lumber Company for 5 per cent. of the earnings of that company as a part of plaintiff's compensation for services rendered. The other objections and exceptions made and reserved on introduction of evidence have been considered and are without merit.

Several written charges were requested by plaintiff, which we have denominated A to F, inclusive. Given charge A correctly states the measure of damages under the new parol agreement, to which plaintiff would be entitled, in event of recovery — the sum of $200 per share less the amount due the defendant for the purchase price of the stock, with interest at the legal rate of South Carolina to the time of the trial. Given charge B correctly states the measure of damages where there was a rescission of the sale by H. L. Badham to V. C. Badham as follows: "a fair and reasonable market value (not to exceed the sum of $200 per share) of the said stock in the year 1907, less the amount due the defendant for the purchase price of said $4,500 of stock," with interest at the legal rate of South Carolina from the time when it was payable up to the present time. Refused charge D, to a contrary effect, was properly refused.

Charge E, not in conformity to the issue made by the pleading, was properly refused as confusing, if not positively misleading.

Charge F, if not otherwise faulty, was refused without error for instructing a finding for plaintiff for the full value of his stock, at $200 a share, less the amount of $4,500 due therefor, regardless of what defendant may have realized or collected on its sale to V. C. Badham. That is to say, the alleged new parol agreement did not provide that the defendant was to pay plaintiff $200 per share for the stock, but was merely to include plaintiff's stock in the sale to V. C. Badham and to account to McCormick for what defendant received from its sale, while the charge sought to instruct a finding of $200 per share for plaintiff's stock, if the sale was made to V. C. Badham, regardless of what defendant may have collected on the whole purchase price.

Under the evidence the court properly gave the general affirmative charge for defendant as to the common counts. And charge 11 was properly given at defendant's request. The undisputed evidence shows that nothing by way of dividends or earnings was or had been paid to H. L. Badham, nor was the stock otherwise paid for by plaintiff; and under the written agreement of July 7, 1904, plaintiff would only have become entitled to the $4,500 of stock in said lumber company when the same was paid from such dividends or earnings.

Given charge 16 properly stated that it was defendant's duty, so far as plaintiff is concerned, to enforce the original contract with V. C. Badham only in the event defendant had agreed to sell the $4,500 worth of stock to V. C. Badham, and further agreed to settle with plaintiff for its value on an agreed basis.

The sixteenth ground of the motion for a new trial is that —

"The jury improperly took with them to the jury room, when they retired to make up their verdict, and had before them in the jury room with other documentary evidence, three papers which had not been introduced in evidence, namely: (a) A letter from plaintiff to defendant dated at Badham, S.C., March 9, 1906. (b) A statement of the Dorchester Lumber Company, dated May 31, 1904. (c) A balance sheet of the Dorchester Lumber Company, dated Feb. 28, 1907."

Counsel for plaintiff says of the letter, statement, and balance sheet in question that —

"The evidence as to the value of the company's timber lands and other assets did not merely go to the measure of damages, but it was material in determining whether or not the plaintiff was entitled to recover at all; for if the 45 shares of stock in question were worth no more than par, then the plaintiff could not recover, for there was due the defendant for purchase money for the stock, $4,500."

Mr. Hayden, in his affidavit, declared that, as a juror who tried this cause he examined the statement of May 31, 1904, and balance sheet, dated February 28, 1907, while the case was under consideration, and that he saw another member of the jury examine the letter of March 9, 1906.

A juror may not testify as to what transpired in the deliberations of the jury. This is forbidden by public policy, which demands that deliberations of the jury room be kept secret. Clay v. City Council of Montgomery, 102 Ala. 297, 302,14 So. 646; B. R. L. P. Co. v. Moore, 148 Ala. 115, 130,42 So. 1024; Continental Casualty Co. v. Ogburn, 186 Ala. 398,403, 64 So. 619; Ala. F. I. Co. v. Rice, 187 Ala. 458,463, 65 So. 402; Brister v. State, 26 Ala. 107, 133; Proffatt on Jury Trial, § 408; Thompson Merriam on Juries, § 363; 12 Am. Eng. Encyc. of Law (1st Ed.) 318. The affidavit of a juror may, however, be allowed to show extraneous facts which may have influenced their verdict. Clay v. City Council of Montgomery, supra; Ala. F. I. Co. v. Rice, supra.

The plaintiff proved the extraneous fact that the juror Hayden examined the balance sheet dated February 28, 1907, and the statement of May 31, 1904, in the jury room, while the case was under consideration by the jury, and that another juror examined the letter of March 9, 1906. As to the examination of the letter, statement of assets, and balance sheet in question by other jurors, the affidavit of the foreman of the jury was to the contrary and supported the verdict.

The bill of exceptions shows that the letter of March 9, 1906, was referred to by Mr. McCormick, as a witness, in these words:

"I wrote that letter dated March 9, 1906, (referring to the letter shown the witness). That is in my handwriting. If it is so stated in that letter, I guess I said, 'replying to yours, I went over the timber acreage with Jacques, and cut out all we considered worthless and left 17,494 acres Dec. 31st; we valued this at $7.50 per acre.' I did not have anything to do with putting the figures on except as given to me I put them on the books. I was not mistaken then when I valued this land. Jacques was the man in charge of the timber. I did not make the valuation. I did not intend to convey the idea. When I said 'we,' I referred to the Dorchester Lumber Company. That timber was bought at different prices. In some instances we valued it on the books at $7.50 that was bought at $5."

The witness Reed in his testimony referred to the letter as follows:

"I get that 17,000 acres of timber from an inventory on a letter Mr. Badham showed me; one of Mr. McCormick's letters, saying he had 17,000 acres of timber in 1907. And the books show they had 21,000 in 1904; and they bought a little, bought 3,717 acres of timber, making a total of 24,717 acres of timber all told, and they had according to a letter as an inventory in 1907, 17,000 acres. This letter says 17,494 left on December 31st. So that a quantity of timber less by 4,000 acres was valued in 1907 at $150,000, and had a value in 1904 of $28,000 in round figures."

Thus was a pertinent part of the letter before the jury by plaintiff's reference, as well as by reference made thereto by defendant's witness Reed.

The statement of February 28, 1907, was referred to by McCormick in his evidence as follows:

"I suppose I sent H. L. Badham that statement (referring to a statement shown the witness). It is not in my handwriting. That at the bottom is in my handwriting. That was the balance sheet, February 28, 1907. I could not say it was sent then; it was sent some time after. As to the valuation of the property shown by that statement, you have to add the earnings of the business; those figures change every month. They varied some between February and September. I don't know that they did vary $100,000. I would be afraid to say they did without referring to the papers. They show total assets of a value in September of $475,000. And this (the one of February 28, 1907) shows $406,000. * * * When I went there I made up a statement, and that statement showed assets approximately amounting to $207,000. I kept the books in the meantime. And I claimed to have a contract to pay me 5 per cent. of its earnings. And while my statement when I went there showed assets of $207,000, when I left it showed assets of over $400,000, and I wrote the company was about to go into bankruptcy. * * * (A written statement was here shown the witness.) That is in my handwriting. That shows the valuation of the timber at the time I went there of $28,894.86. (Another statement was then shown the witness.) That is the statement I checked in February, 1907, and that shows a valuation of timber of $159,360.80."

The plaintiff, as a witness, on cross-examination by defendant further referred to the statement as follows:

"I don't quite understand without going to the books about what that item of $15,000 in statement of February 28, 1907, refers to. I can't explain this memorandum on that statement. This points to the accounts receivable, including charges. I won't make a statement about it without going to the books. I do not know that $15,000 is the $15,000 paid Henry Badham. I don't recall any other item H. L. Badham was concerned in. I don't know perfectly well there was not any other. I can explain those items if you let me go to the books, but I cannot explain it from that sheet. That was for Mr. Badham's information that was put on there, for his information only."

In his testimony, McCormick makes reference to the statement of the Dorchester Lumber Company, dated May 31, 1904, as follows:

"I made a trial balance showing the assets and liabilities each month. I have one for 1904 when I went there, and one for September 30, 1907, when I left. These papers (exhibiting certain papers) include the trial balance, and an itemized statement of the assets and the liabilities of the company. * * * I furnished copies of these statements to H. L. and V. C. Badham from time to time, and I don't know but believe I furnished a copy at this time."

On page 50 of the record witness says:

"That is the statement I checked in February, 1907, and that shows a valuation of timber of $159,360.80."

The statement of May 31, 1904, was produced by McCormick, and he testified of it as follows:

"I made a trial balance showing the assets and liabilities each month. I have one for 1904 when I went there, and one for September 30, 1907, when I left. These papers (exhibiting certain papers) include the trial balance and an itemized statement of the assets and liabilities of the company. * * * I kept the books. I know these are correct. I furnished copies of these statements to H. L. and V. C. Badham from time to time."

The record recites:

"Plaintiff then introduced in evidence the balance sheet or trial balance showing the assets and liabilities of the Dorchester Lumber Company, September 30, 1907."

And on page 55 of the record plaintiff was interrogated somewhat as to the statement of September 30, 1907, and the balance sheet in question of February 28, 1907 — which it is insisted, should not have been taken by the jury to the jury room for consideration.

It was not reversible error for these documents to go to the jury room under the circumstances and under the references made thereto in examination of witnesses by the respective counsel.

In Mooney v. Hough, 84 Ala. 80, 87, 4 So. 19, 21, the court said:

"There was no error in allowing the jury to have with them in their retirement, the copy-accounts, used by witnesses in giving their testimony. Hirschfield v. Levy, 69 Ala. 351. The same object could have been accomplished by having the jury make memoranda of the accounts, or of the items composing them, as deposed to by the witnesses. In the absence of one or the other of these methods, it would be very difficult for the jury to reach anything approximating correct conclusions."

So in Heard v. Burton-Boyd Merc. Co., 202 Ala. 218, 219,80 So. 40, 41, Mr. Justice Sayre said:

"Appellee's itemized statement of its accounts against appellant's tenants, for which appellant was responsible to appellee, was allowed to go to the jury without reversible error. There was evidence tending to establish the correctness of this account, and while it seems not to have been formally offered in evidence, as properly it might have been, there was no error in submitting it to the jury as a mere memorandum of the facts to which the witnesses had testified."

If the documents in question had been formally offered as evidence on the trial of the cause, they would have been admitted. No objection of counsel on either side appears to the references made to these several documents, in direct and cross examinations of witnesses. The jury could not likely have carried in mind the figures detailed by the witnesses from such documents. On this ground we may justify the action of the trial court in not granting a new trial. For this reason it is not necessary to rest our ruling alone on affidavits of counsel. The Reporter will set out said affidavits in the statement of facts. Many letters and statements had been employed by counsel during the progress of the cause. It is undisputed that the statement was made by defendant's counsel that the documents be assorted so as to take to the jury room only those that were in evidence.

Mr. Thompson, in his work on Trials (volume 2, § 2591), on the authority of Maynard v. Fellows, 43 N.H. 255, 259, said that it is the duty of counsel "to ascertain what papers are sent to the jury before they leave the court; and no motion for a new trial should be allowed merely because this duty has been neglected. It should appear that the counsel used due care, that none but proper papers were passed to the jury; and that the paper in question was nevertheless sent to the jury by some mistake, or through some trick or artifice of the opposite counsel. At the same time it has been reasoned that it is not the duty of one counsel in a case to watch the opposite counsel to see that he does not send any improper papers to the jury." Flanders v. Davis, 19 N.H. 139. No desire or effort is shown on the part of either of respective counsel to put before the jury any testimony not formally admitted in evidence; only an inadvertence in allowing to go to the jury the three papers so used on the trial and to which reference was made is shown to have occurred. It is true that both counsel should have inspected the documents to be handed the jury.

The judgment is affirmed.

Affirmed.

ANDERSON, C. J., and MAYFIELD and SOMERVILLE, JJ., concur.

¹ 202 Ala. 259.

On Rehearing.