71 P. 127 | Idaho | 1902
Lead Opinion
— The plaintiff commenced his action in the district court of Shoshone county to set aside the sale of eight thousand shares of the stock of the Sonora Mining and Milling Company, alleged to have been sold to appellant by the officers of said corporation, and thereafter sold to respondent Gibbs for certain alleged assessments due. A demurrer was interposed and sustained to the complaint. An amended complaint was filed, and a motion sustained to strike out certain portions thereof. A second amended complaint was filed, which alleged the corporate existence of the respondent the Sonora Mining and Milling Company under and by virtue of the laws of the state of Idaho, and that it has, or claims to have, a capital stock of $1,000,000 divided into one million shares, of one dollar each, and that at the time of its incorporation the incorporators thereof set forth and declared that all of said stock was fully subscribed; that on or about the thirteenth day of June, 1899, George Steward, A. F. Gill, W. G. Chapman, D. Cardoner, H. J. Rossi, and W. C. Clark, members of the board of directors of defendant corporation, pretended to hold a meeting of the board of directors of said corporation, at which pretended meeting plaintiff is informed and believes the following proceedings were had and recorded, to wit: "After discussing the financial condition of the company, a resolution was offered that an assessment of one mill per share on the outstanding stock of the company was levied, the same to become delinquent on July 15, 1899, and the delinquent stock to be sold on August 15, 1899. The vote upon the proposed assessment was as follows: Ayes, Steward, Gill, Chapman, Cardoner, Rossi, Clark — 6. Absent, Moffatt — 1.” Plaintiff alleges, on information and belief, that the pretended meeting of the board of directors was not duly assembled on said day, in that all the members of said board were not present, and no notice of such meeting had been given, and no provision had been made by said company for calling such or any meeting. On information and belief, plaintiff alleges that the pretended levy of an assessment at said pretended meeting was not a uniform and equal assessment on all of the capital stock of defend
The defendants answered, denying all the allegations of the complaint, with the exception of the allegation that defendant the Sonora Mining and Milling Company was a corporation. The answer avers that on the thirteenth day of June, 1899, and long prior thereto, George Steward, A. F. Gill, W. G. Chapman, D. Cardoner, H. J. Eossi, W. C. Clark, and John F. Moffatt were the duly elected, qualified and acting board of directors of said defendant corporation; that on said thirteenth day of June, 1899, said board duly assembled at the office of Herrington & Eossi, in the city of Wallace, all being present, excepting John F. Moffatt; that said meeting had been duly and regularly called by an order of the president; that at such
Appellant assigns fourteen errors occurring at the trial, and in the rendition of judgment in favor of respondents. The first and second are based upon the ruling of the court sustaining the demurrer to the original complaint, and a motion to strike out certain portions of the amended complaint, and will be considered together. The first paragraph of the complaint alleges the corporate existence of the defendant corporation under and by virtue of the laws of the state of Idaho. Counsel for respondents file a general demurrer, which was sustained by the court, seemingly on the ground that the complaint failed to allege that one-fourth of the capital stock had been subscribed, as provided for in section 2614. This section says: “The directors of any corporation formed, or existing under the laws of this territory, after one-fourth of its capital stock has been subscribed may, for the purpose of paying expenses, conducting business or paying debts, levy and collect assessments upon the subscribed capital stock thereof in the manner and form and to the extent herein provided." We do not think this demurrer should have been sustained. The plaintiff was complaining that his stock, or a portion of it, had been wrongfully sold by defendant corporation, and it devolved upon the corporation to show that it had complied with this section of our statutes before it attempted to assess and sell the stock of any stockholder of the corporation; hence a matter of defense. It is urged by counsel for defendants that, even if the demurrer was wrongfully sustained, the plaintiff waived any error committed by the trial court when he filed his amended complaint. He cites a number of authorities in support of this contention, to wit: Brittan v. Bank, 112 Cal. 1, 44 Pac. 339; Bank of Santa Fe v. Haskell Co. Bank, 54 Kan. 375, 38 Pac. 485; Anthony
Assignments 3, 4, 5, 6, 7, 8, 9, 11, 12, and 13 are based upon appellant’s objection to the introduction of parol testimony to prove a forfeiture of stock in a corporation. They were all argued together, and, we think, may be disposed of by us in like manner. Section 2614 of our statutes provides: “The directors of any corporation formed or existing under the laws of this territory [state] after one-fourth of its capital stock has been subscribed may, for the purpose of paying expenses, conducting business or paying debts, levy and collect assessments upon the subscribed capital stock thereof in the manner and form and to the extent herein provided.” Section 2617 provides: “The order levying the assessment must specify the amount thereof, when, to whom and where payable; fix the day subsequent to the full term of publication of the assessment notice on which the unpaid assessment will be delinquent, not less than thirty or more than sixty days from the time of making the order levying the assessment, and a day for the sale of delinquent stock not less than fifteen nor more than sixty days from the day the stock is declared delinquent.” Section 2639 declares that: “All corporations for profit are required to keep a record of all their transactions, a journal of all meetings of their directors, members or stockholders, with the time and place of holding the same, whether regular or special, and if special, its object, how authorized, and the notice thereof given. The record must embrace every act done or ordered to be done; who were present, and who absent, and, if requested, by any director, member or stockholder, the time must be noted when he entered the meeting or obtained leave of absence therefrom. On a similar request the ayes and noes must be taken on any prop
"W. C. Clark, the secretary of the defendant corporation, was called as a witness on behalf of the defendant, and testified to matters material that did not appear in the journal of the proceedings of the corporation. To this evidence the plaintiff objected, the objection was overruled, and the witness was permitted to answer. If the authorities we have referred to and quoted from correctly state the rule, this was error. If the ° corporation was seeking to escape a liability by a deficient record, or if it was an attempt to protect its property from an attempt of someone to get wrongful possession of it, then the rulei would, perhaps, be different, and they would be permitted to show the facts by oral evidence. In the ease at bar the record shows that it was an attempt on the part of the corporation to levy an assessment upon, and thereafter dispose of, the stock of one of the stockholders of the corporation. In cases of this character the law requires that every requirement of the statute must be strictly followed.
W. C. Clark, the secretary of the corporation, was a witness for defendants, and, over the objection of plaintiff, was per
In order to levy an assessment and sell the stock of a stockholder of a corporation in this state, every requirement of the statute must be followed. The record discloses that such was not done in this case, and the judgment must be reversed, and cause remanded for further proceedings consistent with the view expressed in this opinion. Costs awarded to appellant.
Rehearing
ON REHEARING.
— The interesting petition for a rehearing filed by respondents has been carefully considered. Bespondents insist that a rehearing should be granted upon the ground that appellant did not make and keep good a tender to the respondents, as required by section 2630 of the Bevised Statutes. This question was not raised at the hearing, and, upon the record as presented to this court, we think it was waived, and intended to be waived, so far as this appeal is concerned; hence a rehearing should not be granted on this ground.
As to the second point urged in the petition, we think that the erroneous sustaining of the demurrer to the original complaint, requiring the appellant to plead matters which it was unnecessary to plead, while not of itself sufficient to authorize a re
The trial court permitted respondents to introduce parol evidence to show that necessary steps, under the statute, had been taken by the respondent corporation in the matter of the assessment and sale of the stock in question. The statute requiring the corporation to keep a record of its proceedings intends that the substance of all of its proceedings should appear of record. In ease of the levy of an assessment by a corporation, and proceedings to sell stock on account of delinquency in paying such assessment, the proceeding is a special, summary one, by which citizens are deprived of their .property; and, in order to make the sale valid, all of the requirements of the statute' must be substantially complied with. The principle enunciated in this case is one relating to the proceedings on the part of the corporation whereby assessments are levied, and the stock of the stockholders sought to be sold thereunder. Inasmuch as boards of directors act by resolution, and the statute requires them to keep a record of their proceedings, we do not see how it can well be contended that a resolution levying an assessment need not be recorded in the record-book of the corporation; and we do not think that a mere recital of the fact that such assessment was levied — a conclusion of fact — can bo held to answer the requirements of the statute.
A rehearing is denied.