Anthony v. Hillsboro Gold Mining Co.

• Decision Date: 21 February 1911
• Parties: ANTHONY v. HILLSBORO GOLD MINING CO.
• Court: Oregon Supreme Court

113 P. 442

58 Or. 258

ANTHONY v. HILLSBORO GOLD MINING CO.

Supreme Court of Oregon

February 21, 1911

Appeal from Circuit Court, Washington County; Thomas A. McBride Judge.

Action by A.W. Anthony against the Hillsboro Gold Mining Company. From a decree dismissing the suit, plaintiff appeals. Decree modified.

On February 3, 1903, the defendant was duly incorporated, with a capital stock of $6,000, divided into 6,000 shares of the par value of $1 each. The stock was subscribed as follows: J.W Shute, 3,000 shares; A.C. Shute, 1,000; W.D. Hare, 500; A.W Anthony, 1,000; J.C. Hare, 500. J.W. Shute, J.C. Hare and A.W. Anthony were chosen directors; J.W. Shute, president and A.C. Shute, secretary and treasurer. Plaintiff alleges that, during the year 1903, he paid for his stock in full, namely $200, by delivering to the corporation an option to purchase a mine and $800 in services performed; that defendant refused to deliver to him his stock, and on the contrary attempted to sell it for nonpaid assessment thereon, and has excluded him from participation in the affairs of the corporation. He asks that he be adjudged to be a stockholder in defendant corporation, and that it be required to issue to him his stock. Defendant denies that plaintiff has paid for his stock, except the $200, and states that on May 1, 1904, it duly levied an 80 per cent. assessment on the stock of the corporation; that in default of such payment by plaintiff his 1,000 shares were on July 5, 1904, sold for $800 to Geo. R. Bagley, in the manner provided by the by-laws of the company. Defendant also alleges that plaintiff shall be and is estopped to maintain this suit for the reason that on November 20, 1903, he refused to pay the balance due on his stock ($800), and declared to the officers of the company that he would neither pay it nor have anything further to do with the corporation, its stock, officers, or stockholders; that he did not expect to own the stock of defendant; and that he abandoned any interest, right, or claim to such stock. Defendant and its officers, relying upon those statements and believing them to be true, paid and advanced on behalf of the company $9,800, with which to acquire the mining property--$5,795 for its development, and $1,500 for other purchases of mining property. The allegations of the answer are denied by the reply. The cause was referred to C.E. Runyon to take and report the testimony and state his conclusions of fact and law, which he did, and made findings in favor of defendant. At the time of reference, counsel for plaintiff objected to the referee making the findings, and also objected to the findings when filed, and asked the court to ignore them. The court overruled plaintiff's objections and approved the findings of the referee, except No. 16, which was to the effect that the sale of the stock for nonpayment of assessment was duly made, and rendered a decree thereon, dismissing plaintiff's suit, from which he appeals.

A. King Wilson (Wilson & Neal, on the brief), for appellant.

Geo. R. Bagley (Bagley & Hare, on the brief), for respondent.

EAKIN C.J. (after stating the facts as above).

The statute of 1874 (Laws 1874, p. 97, § 4) amending section 805, D. & L. Gen.Laws, authorized the court in equity suits to appoint a referee to take the testimony in the case and report his conclusions of fact and law thereon. This statute was amended in 1893 (Laws 1893, p. 26) by authorizing the court to refer the suit to a referee in the cases provided in section 397, Hill's Code 1892 (section 405, L.O.L.), to take the testimony in the case and report the same to the court, thus eliminating the provisions authorizing the referee to make findings. Section 397, Hill's Code 1892, as amended in 1893 (Laws 1893, p. 26), provided that suits shall be tried by the court unless otherwise referred (as provided in section 815, Hill's Code 1892 [section 838, L.O.L.]), "provided that in districts composed of no more than one county and having more than one judge of the circuit court, no cause shall be referred to a referee without the consent of all parties to such suit in writing filed in said cause except in suits involving the examination of long and complicated accounts." Washington county is in a district composed of four counties, at that time having but one judge. Thus, except in districts having more than one judge and composed of but one county, the judge is authorized to refer cases for the taking of testimony. Therefore, the reference of this case was not unauthorized, even when made without the consent of counsel. But the referee had no authority to make findings. The fact, however, that such findings were made by him and adopted by the court as its findings, and that a decree was rendered thereon, does not render the decree void, and as the suit is tried anew in this court, the ruling of the lower court in regard thereto is not reversible error. Sutherlin v. Bloomer, 50 Or. 398, 93 P. 135.

As to the effect of the attempted sale of stock of plaintiff, it is sufficient to state, that the by-laws of the corporation provided that such sale may be had upon four weeks' notice, while the statute (section 6686, L. O.L.) provides that the corporation is authorized to make by-laws for the sale of any portion of its stock for unpaid assessments, "provided that no such sale shall be made without thirty days' notice of time and place of sale." Therefore, the by-laws of the corporation, so far as they provided for the sale of stock for nonpayment of assessments, are void. The corporation was without authority to make such sale, and it is not validated by the fact that the notice was given for 30 days, as the statute does not provide for or authorize the sale. The by-laws of the corporation must be the source of its authority.

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