Byers v. Gilmore

Citation10 Colo.App. 79,50 P. 370
PartiesBYERS et al. v. GILMORE. [1]
Decision Date14 June 1897
CourtCourt of Appeals of Colorado

Appeal from district court, Arapahoe county.

Action by Rodelphus H. Gilmore against William N. Byers and others on an appeal bond. From a judgment in favor of plaintiff defendants appeal. Affirmed.

L.B France and W.T. Hughes, for appellants.

W.W. Anderson and R.H. Gilmore, for appellee.

WILSON J.

In 1874, J.Q.A. Rollins and six others executed, signed, and acknowledged articles of incorporation for the corporation known as the Grand River Bridge Company, the object of which was to construct a bridge across the Grand river, near Hot Sulphur Springs. The capital stock was to be $3,000, the estimated cost of the bridge, and was divided into 60 shares. The certificate of incorporation was not filed in the office of the secretary of state until January, 1877. After the execution of the certificate, and before the filing of the same, at a date which is not fixed by the evidence, it was ascertained that the cost of the bridge would be $7,000, and thereupon the capital stock of the company was increased to that amount, divided into 140 shares. It appears, however that no certificate of this amendment or amended articles was ever filed either with the secretary of state or with the clerk of the county in which the business was conducted. Although the $7,000 was actually paid by the stockholders who were incorporators, no certificates of stock were issued, but it seems that the secretary of the company delivered to each stockholder a certificate signed only by himself, but not by the president, and not attested by the seal of the corporation, to the effect that he was entitled to receive a certificate for the number of shares of stock for which he had paid. In 1882, William N. Byers, one of the appellants, purchased from William H. Cushman, who was one of the original incorporators and stockholders, the certificate held by him, in which the secretary had certified that he was entitled to receive 60 shares. Byers supposed this to be the entire capital stock of the company. In December, 1884, a meeting of the stockholders, called by Byers, was held. Rollins, who was acting as president and general manager of the company, and had been since its organization, in 1874, appeared at the meeting, but after some discussion retired, taking no part in the proceedings. Those who remained then elected a directory, and selected Mr. Byers as president. Soon thereafter the Byers directory caused a suit for an accounting to be commenced in the district court of Clear Creek county in the name of the company and against Rollins. Rollins appeared and answered, and also presented a counterclaim. Upon the trial a judgment was recovered by Rollins, from which the company appealed to the supreme court, by which the judgment was affirmed. Bridge Co. v. Rollins, 13 Colo. 5, 21 P. 897. The appeal bond in the case was signed, "The Grand River Bridge Company," by its president, W.N. Byers, and also by Byers and the other appellants herein as sureties. It contained the usual recitals, and attached to it was the justification of each of the sureties, properly signed and acknowledged, and it was presented within the required time to the clerk of the district court, by whom it was filed and approved. In the body of the bond there was no date, the space for the day and month being left blank; and there were mentioned as sureties Walker McQuary and David J. Ball, who, however, did not sign the bond. In the meantime, and before the affirmation of this judgment by the supreme court, the Byers directory had instituted a suit against Rollins and his directory to compel an accounting, to oust them from office, and to obtain a decree for the cancellation of all stock of the company held by them, or any of them. In this suit the defendants prevailed, and upon appeal to the supreme court the judgment was affirmed. Byers v. Rollins, 13 Colo. 22, 21 P. 894. Proceedings were also instituted in the name of the people upon the relation of Frank S. Byers, one of the appellants, for the purpose of procuring a dissolution of the corporation. The trial court sustained the demurrer to the complaint, and entered judgment for the defendant. Upon appeal this judgment was also affirmed by the supreme court. People v. Grand River Bridge Co., 13 Colo. 11, 21 P. 898. The opinions and statements of the supreme court in these three cases were put in evidence in the trial of this case, and are a part of the record before us. In 1889, Rollins assigned and transferred in writing to appellee the judgment recovered by him against the bridge company, and also all his rights and interest in and to the appeal bond in the cause and right of action thereon. In 1890, appellee, as assignee of Rollins, instituted suit upon the appeal bond, and upon trial to the court recovered the judgment from which this appeal has been taken.

Counsel for appellant first urge in their brief that the court erred in overruling defendants' demurrer to plaintiff's amended complaint. Even if this were true, defendants waived it by answering over. Stanbury v. Kerr, 6 Colo. 28.

It is also claimed that the court erred in sustaining a demurrer to the fourth defense in defendants' answer. In this defense there was an attempt to set up a plea in the nature of an equitable estoppel. In it was set forth a full and detailed statement of all the facts and circumstances connected with the purchase of stock by Byers, and the organization and management of the company from its inception to the institution of this suit, and by reason thereof it is claimed the plaintiff, who was the assignee of Rollins, is estopped to maintain this action. It also contained an allegation substantially the same as in the third defense, to the effect that in the suit instituted by the Byers directory to oust the Rollins directory from office (Byers v. Rollins, supra) it having been found that Byers was not the president of the company, he had, therefore, no authority to sign the name of the company to the appeal bond. We cannot agree with counsel. Admitting the averments in this defense to be true, they would have constituted no bar to the rights of Rollins to recover in an action on this bond, for the reason that, however much Byers may have been deceived, the facts as alleged do not show that Rollins had any part in the deception, or was responsible in any manner for any false representations. The mere fact that he did not see fit to question the authority of Byers and his associate directors in the suit for an accounting instituted against him in the name of the company, and by their authority, did...

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