Catlettsburg & Buchannan Telephone Co. v. Bond
| Citation | 262 Ky. 106,89 S.W.2d 859 |
| Parties | CATLETTSBURG & BUCHANNAN TELEPHONE CO. v. BOND. |
| Decision Date | 14 January 1936 |
| Court | Kentucky Court of Appeals |
Appeal from Circuit Court, Boyd County.
Suit by the Catlettsburg & Buchannan Telephone Company against Charles F. Bond and another. From a judgment denying recovery against defendant named, plaintiff appeals.
Affirmed.
Martin & Smith, of Catlettsburg, for appellant.
Woods Stewart & Nickell, of Ashland, for appellee.
STANLEY Commissioner.
The appellant, a domestic corporation, owns and operates a rural telephone line. At the time involved, it had no board of directors. Its subscribers are its stockholders, of which the appellee, Dr. Charles F. Bond, is one. On September 8, 1925 he loaned $1,000 of the company's money secured by a second mortgage on real estate. At that time the security was ample, but when the first mortgagee foreclosed in 1928, the property yielded but an inconsequential sum over its debt and the court costs. Thereupon this suit was brought by the company against Dr. Bond and George Bowling, its treasurer to recover the amount of them upon the ground that the lending of the money was unauthorized. The suit was dismissed as to Bowling. Dr. Bond defended upon the ground that his action was authorized and ratified. He also pleaded the election to pursue the security and the debtor in estoppel. The court gave a peremptory instruction for him and the appeal is from the judgment entered accordingly.
The stockholders held annual meetings and minutes were kept of their proceedings. Dr. Bond had previously loaned $500 for the company, which proved to be all right. There is some evidence that the matter of lending this money was discussed at one of the meetings in order that it might be preserved with interest for rebuilding the property when necessary. No formal action, however, was taken by the stockholders. We think it apparent that at different times it was agreed to by a number of the stockholders individually, although it appears that after the loan had been made some of the stockholders disapproved. A year's interest, $60, was collected in advance and this was deposited to the credit of the company. The assistant secretary, who kept the minutes of the stockholders meetings, was advised shortly thereafter and made a note of the transaction on the company's book. It appears that the minutes were read at the subsequent stockholders meeting, and the inference is that they included this item. At the meeting held in February, 1927, a minute was made that no interest had been received on this loan for the past year and that the matter should be looked into. In the suit filed by the first mortagee, the company set up its debt and lien and obtained judgment therefor. Bowling and Bond were present at the sale, as they say, to protect the company's interest. Bowling bought the property and Bond signed his bond for the purchase price. He has continued to hold it, but no claim was asserted by the company that he was doing so as trustee for the company. Indeed, the company denied Bond's pleading that Bowling so held the property.
There can be no doubt...
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