37 Colo. 483 | Colo. | 1906
Lead Opinion
delivered tbe opinion of tbe court:
Tbe complaint in tbis action, brought by Tbe Fruita Improvement Company, as ■ plaintiff below, against Tbe Grand Valley Irrigation Company, appellant and defendant below, contained two causes
1. No prejudicial error of the trial judge or jury affecting the second cause of action has been called to our attention. The judgment thereunder will be affirmed.
2. The judgment which the plaintiff recovered under the first cause of action, however, cannot be sustained. The most important question involved in this appeal concerns a ruling of the trial court, in the plaintiff’s favor, that the matters sought to be litigated in this action by the defendant are res judicata by a decree in a former action between the same' parties. It becomes necessary, therefore, to state fully the contents of the pleadings in both actions, the evidence which the court admitted, and the rejected offer of proof made by the defendant in the pending action.
It appears from both complaints that the defendant irrigation company was organized for the purpose of acquiring water rights and canals, and, with the irrigation system thus acquired, to supply water for irrigation to its'stockholders. Under its charter and by-laws, it was not a common carrier of water, did not have the power to make contracts to sell or
When an annual assessment is levied, the secretary of the company is required to notify the stockholders of the same, and of the time and manner of paying, by depositing in the post office a suitable notice to the several stockholders, and making publication thereof in some newspaper published in the town of Grand Junction for the period of one week. If any stockholder fails to pay after such notice, the company may resort to one of three methods for compelling payment: First, by refusing to' supply him with water; second, by bringing suit in court to recover the amount of the assessment; third, by selling the delinquent stock to the highest bidder, after a specified publication of notice of sale.
By another by-law, each share of stock entitles its holder to receive 5-16 of a statute inch of water, at any point along the line of defendant’s canal, as the same was originally built, to be delivered under such regulations as the board of directors prescribes. Each stockholder is also entitled to have water delivered to him, not only at any point along this original line, but also on any land lying north or west of a certain ravine, into which the company’s ditch, as first constructed, emptied. But, if water is delivered at 'such point beyond the end of the original canal, the stockholder who demands it must pay to the company, in addition to the usual assessment,
In the original complaint, filed in February, 1901, as well as in the complaint herein, which was filed December 31, 1901, the foregoing facts are' recited; and, in the later complaint, it is further alleged that, in such former action between the same parties in the same court, wherein the Fruita company was' plaintiff and the Grand Valley company defendant, a hearing was had upon the matters then in issue, which resulted in a final decree in plaintiff’s favor. In that injunction suit, as appears-from the complaint therein, it was alleged that the Grand Valley company had entered into a contract with The Colorado Sugar Manufacturing Company; one of its stockholders, for the delivery of 2,000 inches of water at $2.50 per inch, 1,000 inches of which was to be delivered during the year 1901 for the aggregate sum of $2,500, which contract, it was alleged, was ultra vires the company,' in direct contravention of its charter and-by-laws hereinabove referred to.
The complaint charged that the Grand Valley company, under its charter and by-laws, could not make any extension of its ditch, or deliver any water be/ond the end of its originally constructed canal, to any of its stockholders at the expense of the company itself; or of the other stockholders, but the same could be made only upon the payment by the sugar company, a stockholder, of the entire cost thereof; that the sum of $2,500 was not sufficient therefor, but the cost would be at least $10,000. In order that the Grand Valley company might carry out that contract, it was charged that its board of directors, on January 28, 1901, had made an annual assessment upon its stock of $ .80 per share, which was three or four times as large as it ought to be to meet its regular expenses. The object of this illegal
Issues were joined upon this complaint, and a hearing had, resulting in findings for the plaintiff, and, on March 7, 1901, the court entered a decree, which, as it is material here, we quote in full:
“Now, therefore, the court doth order, adjudge and decree that the said defendants be, and each of them are, perpetually enjoined from in any manner carrying out the contract (so-called) mentioned in the complaint and pleadings herein; and that the defendants, other than The Colorado Sugar Manufacturing Company, be perpetually enjoined and restrained from levying or collecting any assessment or assessments upon the stockholders of The Grand*490 Yalley Irrigation Company for the purpose of delivering, or undertaking to deliver, water out of the end of its canal system, or in accordance with the contract with The Colorado Sugar Manufacturing Company # * * in the pleadings in this cause.”
This decree has never been appealed from, and remains in full force and effect, and, as to all matters and things set forth in the complaint in the “injunction suit, which has been above summarized, the same, plaintiff says, have become and are res judicata as between the parties to the present action.
The complaint herein then proceeds by alleging that, after the rendition of such decree in the injunction suit, the defendant Grand Yalley company undertook to enter into another contract with the sugar company exactly similar to the former one, except that the sum to he paid by the sugar company for the delivery of 1,000 inches of water, during the year 1901, beyond the end of the defendant’s canal system was fixed at $6,000 instead of $2,500, as in the first contract, and that such action of the ditch com-' pany is in violation of the previous injunction decree and contrary to the provisions of the defendant’s by-laws; hut, notwithstanding this fact, the ditch company has begun the work of enlarging its canal, so that it may deliver, for $6,000, the 1,000 inches of water to the sugar company under the second contract. That the defendant company, acting under its by-laws, had made, during the previous January, one assessment of $ .80«per share upon its capital stock, for the illegal purpose of carrying out the first, or $2,500, contract, already mentioned, and which was the subject of the litigation in the injunction suit, and that this assessment was the only one made during the year 1901, and was, as the plaintiff says, adjudged illegal and void by the court in the injunction action, and its collection thereby enjoined. But,
To the complaint, whose substance is above recited, the defendant made answer^ herein, admitting the bringing of the former injunction suit, the decree therein, the provisions of the by-laws quoted, the making of the assessment that was alleged to be illegal, and the sale of plaintiff’s stock. The answer also admits that, after the entry of the injunction decree, defendant entered into the second contract described in the complaint, and, in pursuance thereof, enlarged a portion of its canal system, in order that it might deliver water to the, sugar company, one of its stockholders, in accordance with the terms of the contract. It denied, however, that this second contract was in violation of the former, or any decree of court, or that the same was prohibited by any provision of its by-laws. It also alleged that the cost
The answer alpo alleged that, after the decree in the injunction suit was entered holding the assessment of $.80 per share illegal, for the purpose of carrying out the first, or $2,500 contract, the defendant company reduced the same to the amount necessary for carrying on the ordinary business and meeting the usual expenses of the company, to wit, to the sum of $2.80 per inch, or at the rate of $.65 per share of stock; and that no portion of said assessment, or of any sum received thereupon, was intended or expended for the purpose of enlarging the canal, or delivering water at the end thereof to the sugar company or other stockholders under the second contract, or at all, but, on the contrary, the averment is, that all of the said sum received from the reduced assessment of $.65 per share was levied and expended to1 pay interest on its bonded debt, and for the usual and ordinary operation and maintenance of its canal system; and that plaintiff’s stock in defendant’s company was assessed at the same ratio as other stock, namely, $.65 per share, which plaintiff refused to pay, and, because of such refusal, the defendant company advertised and sold the.same for the purpose of collecting this reduced assessment, and not otherwise. There is a denial that defendant ever gave, or plaintiff received, any notice from it that any sale was, or would be, made for the purpose of enforcing the illegal assessment of $.80 per share, and it is denied that plaintiff’s stock was ever advertised or sold for any such purpose, or for any purpose except the failure to pay the reduced assess
In the replication there was a departure from the allegations of the complaint in that, while the complaint alleged that the plaintiff company had received notice of the assessments made by the defendant during the year 1901, in the replication there was an averment that defendant company had not made a publication thereof in some newspaper published in the town of Grand Junction, as the by-laws required should be done.
Upon these issues the present action proceeded to a trial below. Aside from the admissions of the answer, the only material evidence for the plaintiff consisted of the oral testimony of Mr. Brockway, the president and attorney for the plaintiff company. After testifying to the making of the second contract, he said that the defendant company was proceeding thereunder to deliver water to the sugar company, as charged in the complaint; that the plaintiff owned 1,750 shares of the defendant company’s capital stock, and that, on January 28, 1901, the defendant attempted to levy an assessment of $.80 per share On its capital stock, and, in April of that year, its board directed a rebate of $.15 per share. He says that no notice of any assessment for 1901 was published in any newspaper printed in Grand Junction.
He owned 196 out of 200 shares of the plaintiff company’s capital stock, he and his wife practically owning all of it. Mr. Broekway testified that he did not know the cost of the enlargements and improvements of defendant’s canal, which were to be made under the second contract, or what part of the $6,000 received from the sugar company was expended by
The foregoing, we think, sufficiently summarizes the plaintiff’s evidence in support of its cause of action.
The defendant produced one of its directors, and offered to show by him the cost and expense of making the enlargement of the canal, under the second contract with the sugar company, was within the amount received from the' latter. To this the plaintiff objected, because the estimated cost had been litigated in the injunction suit, and since, in that action, the holding was that the first contract could not he carried out, it necessarily included the holding that the assessment therefor was invalid, and that that assessment could not he collected, because the same
In sustaining plaintiff’s objection to this question, the court clearly indicated the theory upon which its important rulings were made. It applied the doctrine of res .judicata, as appears from the following language of the court:
“While the validity of the assessment was not directly mentioned in either the findings of the court nor in the judgment, there can be no question as to what was litigated. The allegations of the complaint are, that the assessment was levied for the purpose of enlarging this ditch to carry out the contract entered into between the irrigating company and the sugar company. If the question of the validity of that assessment had not been litigated, or had not been involved, the plaintiff in the action would have had no cause for action, for the reason that, if they had made some other arrangement towards carrying’ out their contract with the sugar company, whereby none of the stockholders would have been assessed for doing it, then there would have been no cause of action on the part of the stockholders, and the case would have had to go out of court. The court held in that case that there can be no assessment made for any other purpose than provided by the by-laws, and ás the assessment had been levied for the purpose of enlarging that ditch, the plaintiff in that action had a right of action, and the court would enjoin the making or collecting of an assessment for that purpose, and the allegations of the the complaint were that the assessment had been made for that purpose; had been made three or four times larger than was necessary for the ordinary purposes of cleaning out and necessary expenses, as*496 contemplated by the by-laws, and, in view of the record here, while the court at that time did not announce in so many words that the assessment was illegal, the whole support of the findings and the decree was to< the effect that it was illegal, and could not be sustained; the objection will be sustained. ’ ’
Defendant’s counsel then offered to prove by this witness, who was one of its directors, its auditor and a, member of its construction committee, that no assessment was made in the year 1901 to enlarge its system for delivering water to the sugar company in accordance with the second contract, and that no money of the company was ever used for any such pürpose, and no assessment ever collected therefor; that, upon a demand of different stockholders, including the sugar company, it was required to deliver water, as its by-laws provide, at the lower end of its canal, and that, by this, second contract between the defendant and the sugar company, the latter paid $6,000 for making the' enlargement, which was necessary in order to make delivery of the extra amount of water so' required, and that all such work cost less than the $6,000 which defendant received from the sugar company, and that no part of the cost of enlargement was paid from any assessment made upon, or collected from, the other stockholders. This offer was rejected by the court, for the reason already given.
The defendant then offered to prove that it had, for the first time, learned at the trial that the $1,835, the aggregate of the assessment for which plaintiff’s stock was sold, was made up from a delinquent assessment of over $800 for the year 1900, as well as for the delinquent assessment of 1901, made- at the rate of $ .65 a share; no part of which was used for the enlargement of the canal under the second contract, and asked leave to amend its answer to corre
. The books of the company show that the January assessment of $ .80 a share was made for the purpose authorized by the company’s by-laws. Afterwards, and in March or April of that year, and after the $ .80 per share assessment had been, as it is said, declared illegal in the injunction suit by the former decree of March 7, the defendant company books show the following entry:
“In the matter of a readjustment for the assessment for the year 1901. Moved and seconded that 15 cents per inch of the assessment, as levied January 28, 1901, be rebated to> the several owners of water in the canals of this company. Motion carried. All members present voting ‘Yea’.” ■
The findings and rulings of the trial court in the injunction suit - were introduced in evidence, from which it appears that the trial judge held that the defendant company had the power to enlarge its ditch to meet the requirements of its stockholders, but, as no provision in. its charter or by-laws had been made for obtaining money for such purpose, its stockholders could not be required by assessments to provide money therefor, and any attempt to levy an assessment on them for the same would be illegal, unless the stockholders unanimously voted for it; and the court then expressly said that the defendant company had the right, and it was its duty, to deliver water at any point on the canal that a’ stockholder' desired it, and, if the stockholder made such request, the company must • comply therewith; but that such requesting stockholder or stockholders would be obliged to pay the additional expense or cost which would be necessitated by the enlargement
Before proceeding with the principal question, we notice first the contention of plaintiff that the assessment for which its stock was sold was illegal, because the defendant company had not published, in some newspaper in Grand Junction, notice of the assessment. The record is clear that the plaintiff company, through its president, had actual notice and knowledge of whatever assessment or assessments were made during the year 1901. It also appears that, uniformly and with the full acquiescence of all its stockholders, the defendant company has never published notice of its assessments in a newspaper, but has given only personal notice thereof. In addition to this, the complaint alleged that plaintiff had received notice of the assessment, and to permit it by way of replication to depart from this admission would be improper.
If, however, the issue was properly raised in the case, in view of the fact that the plaintiff company had -received personal notice of the assessments, and that it had been the uniform custom of the defendant company, in which the stockholders acquiesced, not
already stated, the important question in this case, which is the main contention of the plaintiff, relates to the doctrine of res judicata. Plaintiff’s position in this behalf is that, as there was but one assessment for the year 1901, it must necessarily, under the issues of the injunction suit, have been determined to be illegal, because the court enjoined defendant company from levying or collecting any assessment that had theretofore been, or might thereafter be, made for the purpose of defraying the cost of enlarging its ditch to deliver water to the sugar company under the $2,500 contract, and since plaintiff’s stock was sold for failure to pay this invalid delinquent assessment, that sale was void, because the former decree was res judicata upon that subject.
Defendant’s position, on the other hand, is that, while but one formal assessment at the rate of $.80 per share was made during 1901, it was not adjudged invalid, except as to its application to the work called for by the first contract, and that after defendant had been enjoined in the former action from collecting from the stockholders any assessments for carrying out that contract, its board of directors, in the subsequent March or April, reduced the former assessment $.15 per share and made the same $.65 per share, to be devoted solely to the legitimate purposes of the campany, and this, in legal effect, was a second and valid assessment, independent of the former one,
Tbe doctrine has often been stated in tbe law books that a valid judgment is conclusive between tbe parties to tbe action in wbicb tbe judgment was rendered, not only as to such matters as were in- fact therein determined, but also as to every other matter wbicb tbe parties might have litigated as incident to, or essentially connected with, tbe subject-matter of tbe litigation, whether tbe same, as a matter of fact, were, or were not, then considered. — D. C. I. & W. Co. v. Middaugh, 12 Colo. 434.
This general statement, however, must be taken in connection with tbe facts of tbe particular case, as is well illustrated in Johnson v. Johnson, 20 Colo. 143, where Mr. Justice Goddard said that if tbe matter alleged to be conclusive was not incidental or essential to tbe determination of tbe subject-matter that was litigated, and was left expressly undetermined, then tbe doctrine does not apply.
Tbe leading case on this general subject is Cromwell v. County of Sac, 94 U. S. 351. It was there said that tbe difference between tbe effect of a judgment as a bar or estoppel against the prosecution of a second action for tbe same claim or demand, and its effect as an estoppel in another action between tbe same parties upon a different claim or cause of action, is this: In the- former, tbe judgment, if rendered upon tbe merits, constitutes an absolute bar to a subsequent action. It concludes tbe parties as to every matter wbicb was offered and received to sustain or defeat tbe claim or demand, and as to every other substantial matter wbicb might have been offered for that purpose; but where tbe second action between tbe same parties is upon a different claim or demand, tbe judgment in the prior action operates as an estoppel only as to those matters
The concluding sentence of the foregoing statement contains the rule which determines this case. The cause of action in the first or injunction suit was the wrongful action of the defendant in making, and undertaking to perform, an illegal contract with the sugar company, whereby, in violation of - its charter and by-laws, it obligated itself to enlarge its ditch or canal, and deliver water to one of its stockholders at a price less than such enlargement could be made for, and at the expense of all of its stockholders, instead of at the expense of the one with whom the contract was made. The object of that action was to enjoin the carrying out of this illegal contract. The present cause of action against defendant company by the plaintiff, is defendant’s wrongful conduct in selling plaintiff’s- stock for failure of the latter to pay what is said to be an illegal assessment, and the object of the action is to recover, as damages, the value of the stock which was sold. The two causes of action are not the same, though some of the issues involved may be similar or identical. Therefore the rule for ascertaining whether the matters sought to be litigated here were determined in the former action, is different from the rule which governs when the two causes of action are the same.
One who interposes a plea of res judicata must establish it by a fair preponderance of the evidence. The plaintiff at the trial below and here claims that burden was discharged, because in the injunction suit necessarily the illegality of the $.80 assessment was determined. The proofs relied upon are the pleadings and decree in the injunction action, which have been summarized or heretofore copied. The decree on its face enjoins the defendant from, carrying out
Indeed, the plaintiff expressly limited the issue concerning assessments, by asking- for an injunction restraining the levy or collection thereof, only to the extent of using- the money arising therefrom for the illegal purpose of carrying out the first contract. The injunction complaint expressly recognized that the defendant company might enlarge its canal and deliver water, provided the expense which the' same occasioned was met by the stockholder asking- therefor. If, therefore, the decree purported to pass upon the validity of any assessment which was not made for the illegal purpose charged, it would, to that extent, he outside the issues and void. We cannot so construe the decree, in the absence of clear proof that such are its provisions. •
But if, under the issues in that case, the validity of this assessment might have been determined, in so far as concerns the contract then before the court, the decree might well have been what it was, irrespective of the legality of the assessment; for, as the record here shows, the trial judge specifically held that it was competent for the defendant company to enlarge its ditch and deliver water out of the end of its canal system, not at the expense of its stock
The defendant here offered to show, and did show, by the stenographer who took the testimony in the injunction suit, that no evidence whatever was introduced with reference to the validity of the January assessment. The resolution, or the motion for the assessment, as it' appears on the books1 of the company shows that it was made for paying interest on defendant’s bonded debt, and for its ordinary expenses. It could not well be, therefore, in the absence of any evidence upon the subject, that the court intended to, or did, declare it invalid for all purposes. The plaintiff, therefore, should, in view of these considerations, have shown that the issue, as to the validity of this assessment, was, as a matter of fact, expressly litigated and determined, which it failed to do. Defendant’s offer to show that it was not then determined certainly should have been entertained by the court in this action. For the foregoing reasons the judgment on the first cause of action was wrong.
But, if it were necessary, we-might grant, for our present purpose, that the January assessment of $.80 per share was determined to be illegal in the injunction suit, in so far as it was to be devoted to the illegal, or first, contract, and as one reading of defendant’s answer would seem to admit, and we might also concede that, if defendant relied solely upon that assessment, and its validity for that purpose, to uphold its sale of plaintiff’s stock, it might
The answer further alleged, and defendant offered to show, that the entire cost of making the enlargement under- the second, or $6,000, contract was to be borne by, and actually was paid by, the stockholders requesting it to be made, and that no part whatever of the assessment of $.65 per share, for failure to pay which plaintiff’s stock was sold, was used or expended in carrying out the same, but, on the contrary, was exclusively used in paying interest on defendant’s bonded debt, and the ordinary maintenance of its canal. Certainly, if true, these averments constitute a sufficient defense.
Since, therefore, the plaintiff has not, as was its duty to do, sustained the plea of res judicata by showing that the assessment for which plaintiff’s stock was sold was actually litigated in the injunction suit, and there determined to be invalid, and also because the court improperly refused defendant’s offer to show that such was not the case, and that the particular assessment for which the stock was sold was not levied, and no attempt was made
The same judge presided at the trial of both actions, and much weight ought to be, and has been, given to his judgment; but in reaching his conclusion that the plea of res judicata was sustained, his statement that in the former action that'particular issue must have been determined is not conclusive. Whether or not it was litigated must be determined by the injunction decree and the pleadings and records in that action, or both, and, if they are silent upon the question, by extrinsic evidence. It is apparent that the error of the trial court consisted in the fact that it applied to the facts of the case the doctrine of res judicata, which obtains where two actions between the same parties are upon-the same cause of action, and not where the causes of action are different, as in the case at bar.
The court struck out defendant’s evidence with relation to Brockway’s ownership of stock of the plaintiff company. This was competent evidence! It tended to show that Brockway, who purchased the stock at the sale, was in reality the plaintiff company ■ — that is, that he owned 196 out of 200 shares of its capital stock, which stood in his name, and that the other four shares were in the name of others, to qualify them to act as members of its board of directors. This evidence was legitimate as bearing upon the question of damages. If, as a matter of fact, Brockway and the plaintiff company were substantially the same, and if, in legal effect, the company at the sale re-possessed itself of this stock by the payment of the amount of the assessment, it
The judgment of $571.65 under the second cause of action is affirmed, and upon the first cause of action for $4825.36 is reversed, and the cause remanded for further proceedings in harmony with the views expressed in this opinion. Affirmed in part.
Reversed in part and remanded.
Chief Justice Gabbert and Mr. Justice Steele concur.
Rehearing
On Petition for Rehearing.
Appellee’s brief in support of its petition for a rehearing is largely a re-statement of the same arguments made at the original hearing. Nothing new is presented which calls for a change in the opinion, but some additional observations, explanatory of the facts and the particular points how urged, may possibly more clearly show the fallacy and injustice of plaintiff’s contentions.
In the original opinion it was stated that the complaint averred that the appellee had received notice of the assessment, for failure to pay which its stock was sold, hence it was a departure in the replication to deny receipt thereof by alleging an omission of the defendant to publish notice of the assessment, as required by the by-laws. Plaintiff now says that no’ advantage can be taken by defendant of the alleged departure, because the same was waived by its treating such failure as an issue in the case. We were in error in stating that such averment was in the complaint. It is silent in that particular. But the legal effect is the same. The accurate statement is that the complaint did not rely upon, or allege, the failure to give the prescribed notice, and in his own
We did state in the opinion, and again say, that it was improper for plaintiff, in its replication, to change position and rely upon failure to publish notice of the assessment, after silence upon that point in the complaint. But nothing prejudicial to plaintiff was predicated upon the departure, and defendant was not seeking to avoid the effect of no publication by invoking a rule of pleading that had been violated. We immediately proceeded to add that if such an issue was properly in the ease, the plaintiff for the reasons we then gave, was not in a position to take advantage of the failure. This brings us to a consideration of the point again raised by plaintiff, that the failure to publish notice of the assessment in some newspaper in G-rand Junction for one week, was fatal to the' assessment and the subsequent sale of the stock for its non-payment.
Counsel cited in his original brief, and again calls to our attention, certain authorities which he says sustain the proposition that, where the by-laws of a corporation require the publication of notice of making an assessment, actual notice thereof will not render an assessment valid that is made without such publication. We did not comment upon these authorities, or question the correctness of the legal propositions advanced, under the' facts of those cases, because we were satisfied that they are not applicable to the facts of this case. It is pertinent here to emphasize that plaintiff is not questioning the due regularity of the proceedings relating to the actual sale and forfeiture of stock, which the by-laws prescribe as a remedy to collect delinquent assessments, but the sole grievance alleged is that defendant did not publish notice of an assessment which a by-law directed. The due giving of that notice was not essen
In passing, however, we observe that, in Lewey’s Island R. R. Co. v. Bolton, 48 Me. 451, which is one of the authorities relied upon by appellee that strict compliance as to notice must be had, the court indicated that the doctrine. there laid down was not applicable to a case like that before us. In that case the by-laws of the company required that notices of the time and place of sale should be posted in two conspicuous public places in the city of Calais. The testimony was that they were published in two public places, but the court held that posting notices in a public place, without saying in a public and conspicuous place, as required by the statute, was insufficient, but the court added, and this is the statement to which we have adverted: “Perhaps, if it had been shown that a notice properly signed had been given in hand to defendant, that fact, as to him, might have been sufficient, notwithstanding the defect in proof as to the posting.”
At the trial here the secretary of the defendant company testified, and there was no evidence to the contrary, that it has been the uniform practice of defendant since its organization not to publish notice of assessments, but it has relied upon the giving of personal notice, in response to which the plaintiff company and other- stockholders . have uniformly made payment. The testimony upon this point clearly established, in our judgment, that the company, with the full acquiescence of the stockholders, had given only personal notice of assessments, and thus virtually that portion of the by-law requiring publication thereof for one week in some newspaper in Grand Junction is repealed. The authorities which
Among the authorities which we cited to the point that actual notice is sufficient is Railroad Company v. Gaster, 20 Ark. 455, which is cited with approval by Judge Thompson at 10 Cyc. 498, as taking the sensible view. In that case the act of incorporation provided that the payment of the shares of capital stock shall be made in such sums and at such periods as shall be fixed by the board of directors, provided that sixty days’ notice be given of each call, published in at least two newspapers in South Arkansas, and one in the city of Little Eock. The court, by Compton, J., in passing upon this statute, said that the provision was for the benefit of the stockholder, and the object was not only to notify him that assessments had been made, but also to allow sixty days in which to make payment. It appeared that the defendant in that case had received personal notice of the assessment more than sixty days before suit, and was requested to make payment. It also appeared that- sixty days ’ notice was not given by publication in newspapers, as required by the charter, and the question was squarely presented whether the mode of giving the notice, as well as the notice itself, is a condition precedent to the plaintiff’s right to recover. The court held that the giving of sixty days’ notice was imperative, because it was of the essence of the thing required to be done, but that the mode of doing so is directory, because not of the essence, and held that if the defendant had received actual notice sixty days before the suit was brought, that was sufficient, although no publication
The facts in the present case are that the plaintiff company received through the mail actual notice of the levying of the assessment of $.80 per share, and the president of the company testifies that, in the fall of the year, and before the sale of the stock was made, he saw upon the books of the company what he calls the order of rebate, what we called the second assessment of $.65 per share, and it is not material whether the latter was merely a reduction of the first, or an entirely new and different assessment. No claim is made that he and his company did not have actual notice of both for the full time allowed before payment could be lawfully enforced.
In view of these considerations, that the by-law, as to publication, was repealed, by implication, that plaintiff had actual notice, and did not, when actual notice of the assessment .was received, object to payment on the ground of a failure of publication, but solely upon the ground, as alleged in the complaint in the first action and repeated in the complaint in the pending one,"that the assessment made was illegal because it was for an illegal purpose, we are clearly of opinion that the failure of the defendant company to publish for one week in a newspaper in Grand Junction notice of these assessments was not fatal to the sale.-
Appellee further says that the judgment ought to have been affirmed because the defendant, in its answer, admitted the invalidity of the assessment, for failure to pay which plaintiff’s stock was sold, and in
Appellee now says that the evidence relating to Brockway’s ownership of the stock of plaintiff company, which the court took from the jury after having admitted it, was properly withdrawn because, inter alia, it was, if anything, an equitable defense, constituting new matter which should have been affirmatively pleaded in the answer, and as there are
Other propositions advanced by counsel for appellee in his present brief have been sufficiently considered, and we think satisfactorily answered, in the original opinion.
Petition for rehearing heard by the court en bcmc, and denied, all the justices concurring.
Remanded.
