Byers v. Rollins

• Decision Date: 24 May 1889
• Citation: 13 Colo. 22,21 P. 894
• Parties: BYERS et al. v. ROLLINS et al.
• Court: Colorado Supreme Court

21 P. 894

13 Colo. 22

BYERS et al. v. ROLLINS et al.

Supreme Court of Colorado

May 24, 1889

Error to district court, Arapahoe county.

The action was commenced in February, 1887, by William N. Byers A. D. Bullis, Lewis B. France, and David J. Bull, as plaintiffs, against John Q. A. Rollins, Lewis C. Gaskill Frederick T. Gooch, Frank Fisher, and William M. Clark, as defendants. It appears from the pleadings and the agreed statement of facts upon which the case was tried below that the defendant Rollins and others incorporated the Grand River Bridge Company with a capital of $3,000, divided into 60 shares of $50 each. The articles of incorporation were filed in the office of the secretary of state, and in the office of the county clerk of Grant county, but not in the office of the county clerk of Clear Creek county, the latter being one of the counties in which the business of the company was to be transacted. It is agreed that the capital stock of the company was originally fixed at $3,000, this amount at the time being deemed sufficient to cover the cost of the bridge and it is also admitted that the actual cost of the bridge was over $7,000, and that it was necessary to increase the capital stock to meet such cost. At a meeting of the stockholders, held in 1875, at which all the stock was represented, it was unanimously voted to increase the stock to $7,000, and such increase was in fact made, and the additional stock sold, although no amendment to the original articles of incorporation was made providing for such increase. From November 17, 1874, to the time of bringing the action, defendants Rollins and Gaskill have been the president and secretary, respectively, of the said company. From date of organization till January 17, 1885, Rollins Gaskill, and Gooch collected the tolls, and has the general management and control of the affairs of said company; Fisher and Clark being each entitled to a small amount of the stock but taking no part in the management. No certificates of stock were in fact issued, but the secretary issued certificated showing that certain persons were entitled to their respective shares of stock when issued; and in the agreed statement such certificates are referred to as stock, and are so designated in the argument of counsel and in the opinion of the court. These certificates bore no statements concerning the amount of the capital stock. Such a certificate was issued to one W. H. Cushman; and Byers claims that Cushman represented that his certificate was for all of the capital stock of the company, and that he believed Cushman, and bought the certificate of him after having examined the articles on file in the secretary of state's office, showing that 60 shares was the entire capital stock. Defendants deny that Cushman sold the stock to Byers, and it is agreed that Gaskill, the secretary, if on the stand as a witness, would produce the original certificate to Cushman, and would swear that the order thereon, to issue a new certificate to Byers, is made and signed by Thomas Guanella, and that a certificate was issued by the secretary to Byers upon such order, and not upon any order from Cushman. It is agreed that the certificate issued was not signed by the president or under the seal of the company, and that it was issued without any order having been made therefor by the board of directors, and it is admitted that it was notorious that Rollins, Gaskill, and Gooch had been the managers and directors of the company since its organization, and Byers knew thereof before he bought the stock, and that he was aware of the law requiring such officers to be selected from among the stockholders. Byers claims not to have known that the capital stock had been increased, and claims that he supposed that he was buying all the stock. Some of this stock Byers assigned to his coplaintiffs. Due notice thereof having been given, a stockholders' meeting was held January 17, 1885, at which meeting stock was held and represented as follows: Rollins, 52 shares; Gooch, 10 shares; Fisher, 10 shares; Gaskill, 2 shares; Ball, 2 shares; Clark, 4 shares; Byers, 60 shares. At that meeting, Rollins and associates claimed the capital stock to be $7,000 or 140 shares, of which they held a majority; and it is conceded that the said Rollins and associates owned and voted at said meeting 34 shares of the original capital stock and 40 shares of the increased stock. After the secretary had announced the names of the stockholders, and the shares held by each, and after the voting for directors had recommenced, plaintiffs present withdrew from the meeting, and held a separate meeting without giving public notice. At this meeting of Byers and associates, the plaintiffs were elected directors, and claimed the offices. Byers was chosen president, and Bullis, secretary, of their board. At the other meeting, held at the time and place designated in the call, the defendants were, by such meeting, elected directors of the company, each receiving 34 votes of original stock and 40 votes of increased stock. After the meeting, Rollins was chosen president, and Gaskill, secretary; and Rollins and Gaskill still have possession of the books and property of the said company, and claim the offices. The...