139 P. 785 | Mont. | 1914
delivered the opinion of the court.
While not questioning, but acquiescing in, the propriety of that portion of the decree which awards relief to Ellen Kleinsehmidt requiring the transfer to her of the Mady and Hoag certificates, the defendants contend that the complaint does not state facts sufficient to warrant any relief in other respects. It is said that it is defective in failing to allege facts showing that the plaintiffs had exhausted their remedy within the corporation, and that it must therefore follow that this action cannot be maintained. The relief sought is not against the corporation, but against the individual defendant directors who, it is alleged, have made a misappropriation of the funds of the company. It is alleged that prior to the bringing of the action the plaintiffs demanded of the board of directors that it require the defendant R. H. Kleinschmidt to refund to the company the sums of money retained by him on account of salary, and
That it is not alleged that the company is insolvent is not material. The right of minority stockholders to require the board of directors and the officers, to whom has been intrusted
That the facts alleged do not warrant the issuance of an injunction is also immaterial. The decree does not grant injunctive relief. The same may be said touching the demand for
It appears that subsequent to the action by the board on September 5, 1904, ratifying the appropriation of E. H. Kleinsehmidt of $4,200 to the payment of part of his claim for salary, the board also ratified his further appropriation of $3,500 for the same purpose. It also by resolution fixed his salary at $300 per month, payable from January 5, 1898. Since it appears that E. H. Kleinschmidt kept the records of the proceedings at the directors’ and stockholders’ meetings well enough for all
According to the rule announced in McConnell v. Combination M. & M. Co., in the original opinion (30 Mont. 239, 104 Am. St. Rep. 703, 76 Pac. 194), and affirmed on the motion for rehearing (31 Mont. 563, 79 Pac. 248), the board of directors has not the inherent power to vote a salary to any director. “The power to do so must emanate from the stockholders, from the statute, or from by-laws legally enacted. ’ ’ This rule is inflexible, and is recognized by the decisions and text-writers everywhere. (Eakins v. American White Bronze Co., 75 Mich. 568, 42 N. W. 982; Ashton v. Dashaway Assn., 84 Cal. 61, 7 L. R. A. 809, 22 Pac. 660, 23 Pac. 1091; Wood v. Lost Lake etc. Co., 23 Or. 20, 37 Am. St. Rep. 651, 23 Pac. 848; Kilpatrick v. Penrose Ferry Bridge Co., 49 Pa. 118, 88 Am. Dee. 497; Cheeney v. Lafayette,
The corporation never having elected to do business under the Code of 1895 or subsequent legislation, the powers of its board are determined by the Compiled Statutes of 1887 (Civ. Code 1895, see. 401 [Rev. Codes 1907, sec. 3816].) Under the Compiled Statutes of 1887 (Fifth Division, sec. 454), its board was authorized to adopt by-laws. It was also authorized to appoint such subordinate officers and agents as its business required, and allow them suitable compensation. (Section 482.)
Finally, counsel contends that the evidence does not sustain the finding that the amount expended upon the Crescent claim should be charged to R. H. Kleinschmidt as a misappropriation of the funds of the company, because it appears that the interests held therein by the brothers are held by them as trustees of the company and not in their -own right. It does not appear what the original source of title was, nor how the interests were acquired. Moreover, the evidence is in conflict as to the capacity in which they hold the title. Albert Kleinschmidt testified that the title was originally acquired with the purpose to convey it to the company, but that when the differences arose between him and his brother this purpose was abandoned. "While there is evidence tending to show that at one time the brothers treated their interests as belonging to the company, there is also evidence tending to show that both brothers considered their respective, interests as their own. There is nothing in the evidence to show that the funds of the company were used to acquire the title. Upon this condition of the evidence we cannot say that it preponderates against the finding.
The decree and order are affirmed.
!Affirmed.