Austin v. Berlin

• Citation: 22 P. 433,13 Colo. 198
• Parties: AUSTIN v. BERLIN et al.
• Decision Date: 13 September 1889
• Court: Colorado Supreme Court

22 P. 433

13 Colo. 198

AUSTIN v. BERLIN et al.

Supreme Court of Colorado

September 13, 1889

Appeal from district court, Boulder county.

The plaintiff, Ira Austin, filed his complaint in the district court of Boulder county, showing the following facts: The Aggregation Company of Colorado was a corporation organized March 13, 1884, under the laws of this state, doing business in the county of Boulder. The defendants Bartleson, McKee and Rouse, impleaded with the appellees, were directors of the company from its organization to the date of the complaint, January 28, 1886. The appellee Berlin was a director from May 11, 1885, to the date of the complaint; and the appellee Brace was a director from June 15, 1885, to October 15, 1885. September 15, 1884, the company made and delivered its two promissory notes to the plaintiff for the amount of $2,500, payable September 15, 1887, bearing interest at 10 per cent. per annum, payable semi-annually on the 15th days of September and March, the company agreeing that in case of default in payment of the interest as aforesaid the said principal sum should at once become due and payable. The company having failed to pay the interest due March 15, 1885, and also that due September 15, 1885 certain real estate pledged to secure the payment of the above debt was sold by the trustee, and the proceeds credited to the corporation upon the notes, leaving a balance due thereon from the company to the plaintiff at the date of the commencement of his action of $1,047.56. The officers of the company did not make and file the report required by section 252 of the General Statutes of Colorado, and no certificate of paid-up capital stock had been filed. And it is also alleged that the capital stock of the company had not been fully paid. The defendants Berlin and Brace having filed general demurrers to the complaint, judgment was entered thereon in their favor. To review such judgment this appeal was taken.

R. H. Chittenden, for appellant.

S A. Giffin and S. H. Ballard, for appellees.

HAYT J., ( after stating the facts as above.)

The decision upon this appeal involves a construction of section 16 of the general corporation act of this state, which section reads as follows: 'Every such corporation shall annually, within sixty days from the 1st day of January, make a report which shall state the amount of its capital, and the proportion actually paid in, and the amount of existing debts; which report shall be signed by the president, and shall be verified by the oath of the president or secretary of said company, under its corporate seal, and filed in the office of the recorder of deeds of the county where the business of the company shall be carried on. And if any such corporation shall fail so to do, unless the capital stock of such corporation has been fully paid in, and a certificate made and filed as provided in section twelve (12) of this act, all the directors or trustees of the company shall be jointly and severally liable for all the debts of the company that shall be contracted during the year next preceding the time when such report should by this section have been made and filed, and until such report shall be made.' Section 252, Gen. St. Under the provisions of section 12 of the act, when the entire capital stock of a corporation is fully paid up it is made the duty of certain of its officers to make a certificate to that effect, and cause the same to be recorded in the office of the secretary of state, and a copy in the office of the recorder of deeds of the county wherein the business of said company is to be carried on.

Section 16 is not entirely free from ambiguity when viewed with reference to the various conditions of fact which may arise in the transaction of corporate business. If, as contended by appellant, the words used are to be literally construed, then...