Bovee v. Boyle

• Decision Date: 10 November 1913
• Citation: 25 Colo.App. 165,136 P. 467
• Parties: BOVEE et al. v. BOYLE.
• Court: Colorado Court of Appeals

136 P. 467

25 Colo.App. 165

BOVEE et al. v. BOYLE.

Court of Appeals of Colorado

November 10, 1913

Appeal from District Court, Denver County; George W. Allen, Judge.

Action by Charles A. Boyle against R.Y. Bovee and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

William C. Danks, L.F. Crawford, and Felix B Tait, all of Denver, for appellants.

S.S Abbott and R.D. Rees, both of Denver, for appellee.

CUNNINGHAM P.J.

This action was brought by Boyle, the appellee, to whom we shall hereafter refer as plaintiff, against appellants, to whom we shall hereafter refer as defendants, under section 911, R.S.

The first paragraph of the complaint alleges the corporate capacity of the Hydro-Engine Power & Irrigation Company, of which appellants were directors, and the date of its incorporation, to wit, March 8, 1909. The third paragraph alleges that the defendants were the directors of said company. The fourth paragraph pleads the following from section 911: "And if any such corporation, joint stock company or association shall fail, refuse or omit to file the annual report aforesaid, and to pay the fee prescribed therefor, within the time above prescribed, all the officers and directors of said corporation shall be jointly and severally and individually liable for all debts of such corporation, joint stock company or association 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 and filed." Those portions of the complaint above alluded to were either admitted or are not vital to this controversy, hence need not receive further consideration. The remaining paragraphs of the complaint, II and V, read as follows:

"Par. II. That said company duly incurred certain obligations during the year 1909 towards the plaintiff herein, and belonging to the plaintiff herein, for which said plaintiff duly recovered judgment on a case tried and decided. Finally, on, to wit, the 15th day of March, 1910, said plaintiff did recover judgment in the sum of $1,050, together with his costs in that behalf expended, to wit, in the sum of $50."

"Par. V. That said officers and directors did not, in pursuance with said law, file their annual report as required by the law referred to in said statute, and have not filed any such report, whereby, by virtue of the law in such cases made and provided, said officers and directors became and are personally and individually liable, jointly and severally, for the debts of said corporation, and are liable to plaintiff for the said judgment rendered as aforesaid for the debts of such corporation."

Defendants answered, admitting the judgment and the statute as pleaded by plaintiff, and denying all other allegations, and especially denying paragraphs II and V quoted above. The defendants further, in their answer, demurred to the complaint, on the ground that the same did not state facts sufficient to constitute a cause of action. On the trial appellants admitted their official capacity, and it was further stipulated that the corporation was organized under the laws of the state of Colorado, and had not filed its annual report as required by statute; but it was stipulated that the same was filed on March 9th, eight days after it should have been filed. Aside from certain formal exhibits not necessary to be considered, plaintiff's proof consisted of an agreement entered into between the corporation and the plaintiff, bearing date May 24, 1909, which we shall later quote in part, the complaint against the corporation on which the judgment pleaded was based, a certain notice served by plaintiff upon the corporation offering to return to the corporation the stock which he had purchased from it, and demanding the return of the money which he had paid, and a note that he had given for stock in the company. (This notice will be referred to later on, and its purpose made apparent.) The decree of the district court against the corporation, being the decree pleaded in the complaint in this case, and a receipt given by the corporation to plaintiff admitting the payment by plaintiff to it of $500 on the stock purchase, were also introduced. No witnesses were introduced by either side, and the defendants offered no proof whatever. At the close of plaintiff's case, defendants moved for a nonsuit on the ground: "(1) That the complaint did not set forth, and the evidence support, any original cause of action against the defendants, or any one or more of them, as contemplated under section 911, R.S. (2) That the complaint and the evidence disclose this to be an action based wholly upon a judgment obtained against the company after the removal of the default of the directors. *** (3) That the plaintiff has failed to establish any original cause of action against the defendants, or any one or more of them." This motion was denied, and judgment was rendered against defendants, from which this appeal is prosecuted.

The agreement introduced in evidence, and hereinabove referred to, discloses that Boyle had subscribed for 4,000 shares of the treasury stock of the corporation, for which he was to pay $1,000, as follows: $500 cash, and the balance in a bankable note due in six months. In this agreement the corporation bound itself that it would at once commence the manufacture of an automatic water lift, and complete the machine on or before June 28, 1909. It is then provided in this agreement that: "In case said party of the first part [the corporation] does not commence the manufacture of said automatic water lift and air compressor at once, and does not complete said machine on or before June 28th, Charles A. Boyle is to have the option of reverting his stock back to the party of the first part, and the party of the first part hereby agrees to refund the entire amount paid by said Charles A. Boyle on such stock to him, when such stock shall have been delivered [apparently meaning redelivered or delivered back] to party of the first part."

The notice served by Boyle upon the corporation, and which was introduced in evidence in this case, and of which we have already made mention, recites the agreement between Boyle and the corporation of May 24th, and its terms and conditions; asserts that the agreement has been violated in that the company had not completed the air compressor on or before June 28, 1909; tenders back to the corporation plaintiff's certificate for 2,000 shares of stock; and demands the repayment of the $500 which he had paid to the corporation, and the return of his note for $500. This notice tenders 2,000 shares of stock; whereas, the plaintiff appears to have purchased 4,000 shares of stock, but, as no point is made of this discrepancy, we shall not further notice it. This notice is not dated, nor is there anything to indicate when the same was served.

1. We shall first consider and determine whether, under the pleadings, the plaintiff counted on his judgment against the corporation, as it is held, in Tabor v. Commercial National Bank, 62 F. 383, 10 C.C.A. 429, he might have done, or whether he counted on the original obligation. Counsel for plaintiff repeatedly on the trial below vigorously insisted (as indeed he was obliged to do in order to maintain his cause, since the judgment pleaded was not rendered until after the annual report had been filed and the default of the defendants removed) that he was not suing on the judgment. At one point during the course of the trial he used this language: "I am not suing on the judgment. I am suing on the obligation against the officers and directors. I only state that it ripened into a judgment, and became a judgment, for the purpose of showing this situation. *** And the decree [[meaning the decree against the corporation] is simply evidence of the amount of the indebtedness and the judgment. All I have to show here is when the obligation was contracted" We, however, are unable to perceive, under the pleadings, any escape from defendants' contention that the plaintiff did, in fact, notwithstanding the protest of his counsel to the contrary, count upon the judgment against the corporation. And in support of our conclusion we call attention to ...