Arkadelphia Lumber Co. v. Asman

• Decision Date: 09 December 1907
• Citation: 107 S.W. 1171
• Parties: ARKADELPHIA LUMBER CO. v. ASMAN.
• Court: Arkansas Supreme Court

107 S.W. 1171

ARKADELPHIA LUMBER CO. v. ASMAN.

Supreme Court of Arkansas.

December 9, 1907.

Appeal from Circuit Court, Clark County; J. M. Carter, Judge.

Action by H. R. Asman against the Arkadelphia Lumber Company. Judgment for plaintiff. Defendant appeals. Affirmed.

Appellee sued appellant for personal services under a verbal contract of employment alleged to have been for the term of one year. He was discharged, and brought this suit for $400 for two months' services. Appellant, answered: Paragraph 1 admitted the employment, but alleged that it was for no definite time. Paragraph 2: That appellee was at the time of making said contract a stockholder and a member of the board of directors of the appellant, and as such was bound by its by-laws. That the following by-laws of appellant were in full force at that time, to wit: Section 1, Art. V: "The directors shall elect from their number a president and vice president, and from the stockholders a secretary and a treasurer. They shall also elect a general manager, and may select such attorneys, clerks, bookkeepers and agents as may be deemed necessary. * * * The president, vice president, secretary, and treasurer shall hold their offices for one year, and until their successors are elected and qualified: Provided, they may be impeached by the board of directors for corruption, incapacity, or neglect of duty. All other officers, attorneys, or agents shall hold their positions at the pleasure of the directory." Section 2, Art. V: "The president shall be the chief executive officer of the company. It shall be his duty to direct and control the affairs of the company, and to exercise the same supervising power over all departments that is usually exercised by the presiding officer of incorporated associations. All instructions emanating from him shall be taken by subordinates as having received the sanction of the directory."

The plaintiff adduced testimony tending to show that the St. Louis Refrigerator & Wooden Gutter Company, a Missouri corporation, owns a majority of the stock in the Arkadelphia Lumber Company, appellant, an Arkansas corporation, and appellant owns the Ultima Thule, Arkadelphia & Mississippi Railroad, hereafter called the "Railroad." Mr. Werner, who was an officer and a large stockholder in all three of the above-named companies, sold, in the latter part of 1896, his stock in said companies. When it became known that Mr. Werner had sold his stock, Mr. F. R. Pierce, who was sales manager of appellant and general freight agent of the Railroad, decided to resign said positions with appellant, and go with Mr. Werner. When this was known, Mr. Wm. Grayson, who was an officer and large stockholder in all three of said companies, and had been for more than 10 years, sent for appellee and told him that he (appellee) was to go to Arkadelphia to succeed Mr. Pierce. The appellee, at this time, was in the employ of the St. Louis Refrigerator & Wooden Gutter Company in the sales department, in whose employ he had been for the past 10 years, and his employment was by the year. Mr. Pierce, who was the sales manager of appellant and general freight agent of the Railroad, was also employed by the year. For something like 10 years appellee had been in the employ of the St. Louis Refrigerator & Wooden Gutter Company in the sales department, and for about the same time Mr. Pierce was sales manager of appellant and general freight agent of the Railroad, and during this time they were both employed by Mr. Werner, who was a stockholder and officer in said companies, and employed the men in the sales department of said companies. When Mr. Werner sold his stock and Mr. Pierce resigned as sales manager of appellant, appellee went to Arkadelphia and succeeded Mr. Pierce. The affairs of the three companies were so connected that appellee was familiar with all the duties and that appellee knew from statements made by both Mr. Pierce and Mr. Werner that Mr. Pierce was employed by the year. The day after appellee went to Arkadelphia to succeed Mr. Pierce he was transferred some stock in appellant company which he immediately transferred back, and, although not a stockholder, he was elected vice president of appellant for the purpose of "giving him prestige with the trade." And about the same time he was appointed general freight agent of the railroad, which appointment is for a year. As sales manager it was necessary for him to make freight rates in order to sell the output of the mill. H. R. Pierce testified that Mr. Werner was vice president of appellant company at the time he was employed by appellant, and continued in that capacity throughout the period of his employment; that he (Pierce) was hired by the year; that he was salesman from the office for the Wooden Gutter Company immediately prior to the time he was employed by appellant; that it had been the custom of appellant to employ persons by the year to fill positions such as he and appellee filled.

Wm. Grayson, for defendant, testified: "I am president of the Arkadelphia Lumber Company. Mr. Asman's connection with it came about in this way: I told Mr. Asman that I would give him Mr. Pierce's place at $200 per month. This was about December 20, 1896. That I would put some stock in his name so that he could be elected director and vice president. The object of that was that he had to travel a great deal in selling lumber, and to be an officer of the company would give him prestige with the trade. The stock was put in his name December 21, 1896. Q. How much stock? A. 100 shares, which he signed back, leaving him still a stockholder on the books, and entitled to be elected vice president. Our annual meeting takes place on the first Monday in February. Asman was present, and was elected a director, and, by the directors, vice president. He was paid nothing for being either vice president or director. He was paid to sell the products of the Arkadelphia Lumber Company's mill. Q. Are any of the officers — the president, secretary, or vice president — paid any salary? A. No, sir; nobody is paid without he performs some actual duties all the time. Q. What occurred at your residence when Mr. Asman was there at the time he mentions? A. I sent for Mr. Asman. I talked with him previous to going to my house and agreeing upon the salary. Nothing was said about the salary at that time as he says. Q. Was there any mutual understanding between you and he that his employment should be by the year? A. No, sir; I only agreed to pay him so much per month. Q. Have any of the employés of the Arkadelphia Lumber Company since you have been connected with it been employed by the year? A. Not one. I will qualify that. I do not employ all the employés at the mill — the foreman or engineer or anything like that. That is left to the manager. Q. Do you know of your personal knowledge of anybody being employed by the year? A. No, sir; I do not. Q. Was Mr. Pierce employed there by the year? A. I do not think so. I did not employ him. Q. There was no custom at that time that you know of? A. No, sir. Q. You were a member of the...