T. F. Scholes Inc. v. United States

Royden Brown brought this action against Herbert B. Alkire, Forest S. Alkire, and others, to recover the balance due on a promissory note which the Alkires had endorsed and the amount which he had paid in satisfaction of an indemnity agreement, the responsibility of which the defendants had assumed. Browns action grew out of a transaction involving the exchange by the Alkires of their stock in First, Inc., a corporation controlled by Brown, together with certain other considerations for stock in Consolidated Distributors, Inc. of Colorado, a subsidiary of First, Inc., plus other assets of First, Inc. The Alkires admitted their endorsement on the note and the assumption of the indemnity agreement, but alleged that these were obligations created as the result of a scheme by Brown to defraud them, and that they lacked consideration. The case was tried and submitted to a jury upon these issues, and it returned a verdict in favor of Brown for $5,000. Brown appeals from the judgment entered on this verdict, contending that the court erred in not granting his motion for a directed verdict or, in the alternative, that the court abused its discretion in overruling his motion for a new trial, for the reason that, according to the evidence and the courts instructions, the verdict was inadequate.