179 P. 185 | Cal. | 1919
This action was brought by plaintiff to recover from Carrie M. Cook upon her stockholder's liability for indebtedness incurred by the Morton L. Cook Company, a corporation, in which it was alleged she owned 49,095 shares of the total capital stock of fifty thousand shares. Morton L. Cook, her husband and guardian, was joined as defendant. The court found that Carrie M. Cook was not a stockholder in the corporation and rendered judgment in favor of defendants. Plaintiff appeals. Mrs. Cook has since died and the administratrix of her estate with the will annexed has been substituted. The main question presented by the appeal is as to the sufficiency of the evidence to support the finding of the court that Mrs. Cook was not a stockholder in the corporation. In determining that question we must consider the evidence from the view most favorable to the conclusion of the court. The corporation was organized March 6, 1903. Morton L. Cook was the owner of 49,095 shares. On the 28th of October, 1908, he caused a new certificate for these shares to be issued to Carrie M. Cook. Mr. Cook took this certificate *94
to his wife, telling her that they had decided to make her the principal stockholder of the Morton L. Cook Company. She immediately repudiated the transaction and refused to accept the stock or to have anything to do with the matter. Two or three days later her husband told her that if she was not going to have anything to do with the corporation she should sign an indorsement that he had written upon the back of the stock as follows: "October 28, 1908. I hereby assign any and all int. I may have to this stock to Morton L. Cook." She thereupon signed said indorsement. Mr. Cook, who was during this whole period president of the corporation, took the stock to Mr. Alderson, who was the secretary, and said, "Mr. Alderson, that is all off; just let that matter remain in abeyance, I will take it up again at a later date." The stock certificate ever since October, 1908, has remained in the custody of Morton L. Cook in his safe deposit box in San Francisco. Mrs. Cook never had anything to do with the corporation or with said stock other than as stated. The corporation was actively engaged in business and the indebtedness upon which plaintiff sued was incurred by the corporation between the first day of January, 1912, and the first day of February, 1914. Before that time Mrs. Cook, on December 10, 1910, had been declared an incompetent and her husband had been appointed her guardian. She was under this guardianship up to the time of her death. It is obvious that there never was any contract or agreement between Mrs. Cook and the corporation that she should become a stockholder. Upon being tendered the stock she refused the same and returned it to the president of the corporation, who had presented it to her, and for the purpose of perfecting her repudiation and permitting the ownership of the stock to appear upon the books in conformity with the real fact she indorsed the same, so that such stock might be transferred on the books of the corporation in the usual and proper manner. Morton L. Cook was at all times the owner of the stock. Appellant's contention is that as Mrs. Cook was shown by the books of the corporation to be a stockholder and by reason of the presentation to her of the stock certificate and her indorsement thereof must have known that fact, she was liable for her proportionate share of the indebtedness of the corporation during such period as the stock continued to appear upon the books of the corporation in her name. This contention is based upon the *95
following provision contained in section 322 of the Civil Code relating to stockholders' liability: "The term stockholder, as used in this section, applies not only to such persons as appear by the books of the corporation to be such, but also to every equitable owner of stock, although the same appears on the books in the name of another; . . ." The statutory liability of stockholders is declared by our constitution (article XII, section 3): "Each stockholder of a corporation, or joint stock association, shall be individually and personally liable for such proportion of all its debts and liabilities contracted or incurred, during the time he was a stockholder, as the amount of stock or shares owned by him bears to the whole of the subscribed capital stock, or shares of the corporation or association." At the time this constitutional amendment was adopted, the Civil Code, in accordance with the general law concerning the subject, declared: "The owners of shares in a corporation which has a capital stock are called stockholders." (Civ. Code, sec. 298, enacted 1871. [1] The term "stockholder," therefore, as used in the constitution, must be construed in the light of this definition, and the liability, therefore, attaches to the owner of the stock. Section 322 of the Civil Code uses the exact language with reference to stockholders' liability as that contained in the constitution, excepting that the words "of joint stock association" and the words "or association" are omitted in the statutory declaration of liability. The remaining provisions of section 322 are obviously and necessarily for the purpose of carrying out the constitutional and statutory liability thus declared. Under the constitutional declaration of liability, carried into section 322, that liability is predicated upon ownership of the stock. (Western Pacific Ry. Co. v. Godfrey,
Appellant relies upon the case of Abbott v. Jack,
In addition to the facts heretofore stated it may be said that M.L. Cook, the husband, while acting as guardian, reported to the court sitting in probate, on several occasions, that the stock in question belonged to his wife and was a part *101 of her estate. These declarations, however, merely went to the question of his credibility, and the court having based its decision upon the truth of his statement concerning the original transaction, if we hold his statement sufficient to support the finding that she was not a stockholder, as we must do upon the authorities above quoted, the judgment must be affirmed.
The judgment is affirmed.
Shaw, J., Sloss, J., Melvin, J., Lawlor, Jr., and Angellotti, C. J., concurred.