Dial v. Inland Logging Co.

• Decision Date: 03 March 1909
• Citation: 100 P. 157,52 Wash. 81
• Court: Washington Supreme Court
• Parties: DIAL v. INLAND LOGGING CO.

100 P. 157

52 Wash. 81

DIAL v. INLAND LOGGING CO.

Supreme Court of Washington

March 3, 1909

Appeal from Superior Court, Island County; Lester Still, Judge.

Action by Charles M. Dial against the Inland Logging Company for services. From a judgment for plaintiff, defendant appeals. Reversed, with instructions to dismiss.

Albert D. Martin and H. A. Martin, for appellant.

B. B Crawford, for respondent.

GOSE, J.

This action was instituted by the respondent against the appellant to recover a judgment for the sum of $969.56, and to foreclose a laborer's lien filed on certain personal property to secure the same, which account and claim of lien were assigned to him by one A. F. Peters. From a judgment against the appellant for the sum of $400, but denying the lien, it prosecutes this appeal.

The complaint avers, in substance, that on the 6th day of October, 1906, the appellant made an oral contract with the said Peters, whereby it agreed to pay him the reasonable value of his services as foreman of its logging camp; that pursuant to the contract, Peters performed services for it as such foreman for a period of six months; that the reasonable value of such services was $150 per month, making in the aggregate $900; that under a similar contract Peters, upon the expiration of such period, performed services for it of the reasonable value of $69.56; that such claim had been assigned to the respondent. The alleged claim grew out of the following facts: On the 8th day of October, 1906, the said A F. Peters, C. O. Walston, and G. A. Wahlstrom, the last two of whom were brothers, organized a corporation, with a paper capitalization of $25,000, for the purpose of engaging in the logging and lumbering business. At this time Peters put into the corporation a $1,500 note. Walston and Wahlstrom each paid in the sum of $2,500. Later C. O. Walston put into the corporation an additional sum of about $4,500, and his brother about $2,500. In the articles of incorporation it is provided that C. O. Walston, A. F. Peters, and G. A Wahlstrom shall constitute the board of trustees for the first six months. A few days subsequent to the signing of the articles of incorporation, the three incorporators adopted and certified by-laws for the government of the corporation, and elected the said Peters as president, C. O. Walston as secretary and manager, and G. A. Wahlstrom as vice president. Article 7, subd. 3, of such by-laws, gives the president, subject to the advice of the trustees, the power to direct the affairs of the corporation. Article 5, subd. 3, empowers the trustees 'to supervise all officers, agents, and employés and see that their duties are properly performed.' Touching the compensation of the officers and trustees, it is provide in article 10 that 'the board of trustees shall be allowed their reasonable traveling expenses when actually engaged in the business of the company, to be audited and allowed as other cases of demand against the company,' and that 'the officers shall receive such compensation as the board of trustees shall from time to time fix and determine.' The evidence shows that Peters was the foreman of the logging camp for six months and that he acted as a general utility man for one month; that there was no express contract of employment between the appellant and himself; that a few days before the execution of the articles of incorporation he had a conversation with C. O. Walston, in which the latter said to him, in substance, that in his business he always reckoned wages to be deducted before he computed a profit; that C. O. Walston devoted almost his entire time to the business of the corporation, and that a part of the brother's time was occupied in promoting its interests; that Peters at no time mentioned wages to his co-trustees; that he filed his claim for a lien in the sum of $969.56, and assigned it to the respondent for a consideration of $400, without making any demand for payment; that about five days after such assignment, in consideration of the payment to him of the sum of $375 by the appellant, he executed and delivered to it an instrument of writing as follows: 'I, A. F. Peters, for and in consideration of the sum of $375.00 to me in hand paid by the Inland Logging Company, the receipt whereof is hereby acknowledged, do hereby assign, set over and transfer to the said Inland Logging Company, all my right, title and interest in and to the said Logging Company and any and all claims which I may have at this date. Dated this 20th day of May, 1907. A. F. Peters'--that at this time he said nothing to the appellant about the claim or its assignment; that the three incorporators were to have one-third each of the capital stock; and that its profits were to be divided on a like basis.

A careful reading of the by-laws of appellant and the evidence in the case makes it certain that it was the intention of each of the incorporators to devote his talent and energies to the prosecution of the corporate business without wages save such as they expected would result in the way of profits. ...