DeLoach v. Bennett

Gilbert, J. Evans County Bank foreclosed a mortgage on described real property in the possession of Evans County Oil Mill and Ginnery Company. Mortgage fi. fa. was duly levied, and the property was advertised for sale. G. W. DeLoaeh filed a claim to the property. On the trial of the claim issue the court directed a [635] verdict for the mortgagee, plaintiff in fi. fa. The claimant moved for a new trial; the motion was overruled, dnd the case is in this court on exceptions to that judgment. The property in dispute, prior to 1915, was owned by the Hagan . Oil Mill and Fertilizer Company, which company became insolvent, and the property was sold by the sheriff at public sale. G. W. DeLoach, acting in behalf of his fellow stockholders in that company,, as well as himself, bought in the property for $14000. The purchasers applied to the superior court for a new charter, and were accordingly granted articles of incorporation -under the name of Evans County Oil and Ginnery Company. The property aforesaid constituted the capital stock of the new company. G. W. DeLoach and others, formerly shareholders in the Hagan Oil and Fertilizer Company, became the shareholders in the new company. The new company took possession of the property and transacted business thereon and therewith and pursuant to the terms of the new charter. W. H. Hodges acted as president and E. E. DeLoach as secretary of the new company. The old company was indebted to G. W. DeLoach at the time it ceased to do business. The exact amount of this indebtedness was not shown, because the court deemed the evidence immaterial and rejected it when offered by the claimant. When G. W: DeLoach bought in the property he ’caused the sheriff to execute the deed to himself, instead- of to the new company or to the actual purchasers for whom he acted. The deed was never recorded, and has been lost or misplaced. On the trial G. W. De-Loach testified to the facts in regard to the making of the deed and its loss, but did not state the contents of the deed as a whole. A copy of the deed was not established. G. W. DeLoach did not pay any money or other thing of value for the property at the time he bid it off at the sheriff’s sale. No certificates of stock in the new company were ever issued, and there was no formal acceptance of the charter by the shareholders. The new company continued to do business and to hold exclusive possession of the property, and, on September 6th, 1919, executed the mortgage to Evans County Bank to secure a loan of $2500, the same being signed by “Evans County Oil & Ginnery Company, by W. H. Hodges, Pres., E. E. DeLoach, Sec.” This was the mortgage which was foreclosed as above mentioned. The minutes of the company show that G. W. DeLoach owned 27 shares of stock and [636] that he was a director in the company and on the steering committee, and that he, together with D. M. Bradley and W. H. Hodges, were elected “ special advisory directors.” In addition to the above undisputed facts the brief of evidence shows the following: The plaintiff in fi. fa. introduced evidence to the effect that G. W. DeLoach was fully cognizant at all times of the application by the Evans County Oil Mill and Ginnery Company to the Evans County Bank for the loan, and of the execution of the mortgage to secure the same; that G. W. DeLoach conferred with the parties about the loan, furnished the description of the property to be incorporated in the mortgage, and assured the bank officials that the property was well worth the amount. This evidence was denied by G. W. DeLoach, who swore that he did not know of any of these facts, nor of the execution of the mortgage, nor that he had been elected a director in the new company until about the time the loan became due. In addition to the general grounds of the motion for new trial complaint is made, first, that the court permitted W. H. Hodges to testify that the new company was doing business, that himself, G. W. DeLoach, and others had stock in the same; and second, that the court refused to allow G. W. DeLoach to testify as to the several items of indebtedness claimed by him against the original company. Error is assigned also on the direction of the verdict. The heádnotes require no further elaboration. Judgment reversed. All the Justices concur.