Eastlick v. Hayward Lumber & Inv. Co.

• Decision Date: 06 February 1928
• Docket Number: Civ. 2650
• Citation: 263 P. 936,33 Ariz. 242
• Parties: JACK EASTLICK, Appellant, v. HAYWARD LUMBER AND INVESTMENT COMPANY, a Corporation, Appellee
• Court: Arizona Supreme Court

263 P. 936

33 Ariz. 242

JACK EASTLICK, Appellant, v. HAYWARD LUMBER AND INVESTMENT COMPANY, a Corporation, Appellee

Civ. No. 2650

Supreme Court of Arizona

February 6, 1928

APPEAL from a judgment of the Superior Court of the County of Yuma. Fred L. Ingraham, Judge. Affirmed.

Mr William H. Westover, for Appellant.

Mr. A J. Eddy and Mr. Lemuel P. Mathews, for Appellee.

OPINION

McALISTER, J.

This action was instituted by the Hayward Lumber & Investment Company, a corporation, against E. B. Keelen, doing business as the Keelen Sales Company, and Jack Eastlick and W. H Howe, doing business under the firm name of Howe & Eastlick. The purpose of the suit is to collect three notes, and, the plaintiff having prevailed at the trial, the defendant Eastlick appeals.

It appears that the Hayward Lumber & Investment Company, a California corporation, entered this state in 1917 for the purpose of engaging in the lumber business in the towns of Yuma and Somerton. At that time it made T. L. Lane of Yuma its statutory agent, but, on January 1st, 1924, he left the state permanently, and no other appointment was made until May 19th, 1925, when E. L. Simpkins, its Yuma manager, was appointed. In January and February, 1925, lumber was delivered by the company to E. B. Keelen upon the credit of W. H. Howe and Jack Eastlick, who were at the time in its employ. Thereafter Keelen executed three promissory notes totaling $735.32, the cost of the lumber, the payee in each being the Hayward Lumber & Investment Company, and delivered them to Eastlick, who, a few days later, was transferred to the company's Los Angeles office. Just before leaving for California, Eastlick placed the notes in a pigeon hole in a desk in the office of the company, where they were later discovered by the bookkeeper who showed them to the manager, Simpkins, and he delivered them to Howe, stating as he did so that the company would not accept them without the signatures of himself and Eastlick. On May 23d, following, Howe signed the three notes "Howe & Eastlick, by W. H. Howe," indorsed them in the same manner, and delivered them to Simpkins. They were not paid; hence this suit.

There are several assignments, but they are treated under two propositions, the first one being that the failure of the corporation to appoint a statutory agent within four months from the time T. L. Lane left the state resulted in the loss of its right to do business in the state until another agent was appointed, and therefore placed it beyond the corporation's power to enforce payment for lumber and material sold and delivered between May 1, 1924, the expiration of the first four months of Lane's absence, and May 19th, 1925, the day Simpkins was made its agent. This contention is based upon the provisions of paragraph 2229, Revised Statutes of Arizona, Civil Code, 1913, which reads as follows:

"Should any agent so appointed absent himself from the county in which his appointment is filed for a period of three months consecutively, and no other agent be appointed for said corporation within four months after the commencement of such absence of such agent, the right to transact business by the corporation represented by such agent shall cease, and all acts or contracts performed or made thereafter shall, at the option of any person interested, be declared null and void."

It is the defendant's contention that under this statute all contracts entered into by the plaintiff company during the period in which it had no statutory agent (except the first four months) are absolutely void at the option of the interested party, and that, inasmuch as Eastlick, the interested person in this case, saw fit to exercise his option to have the agreement to pay for the lumber declared null and void, the court has power to enter an order to this effect and none other. The language used would seem to justify such a construction, and, if the notes had been executed prior to May 19th, 1925, that is, before the company had complied with the statute by appointing another agent, this contention would be more forceful than under the facts of the case as now presented. The company, it is true, had no agent when the lumber was sold, but did have when the notes were executed and delivered, and this, of course, had the effect of restoring its right to transact business in the state. Such being true, the parties were then in a position to enter lawfully into the contracts evidenced by the notes, and if, as plaintiff claims, the action of Eastlick in executing and delivering the notes constitutes a waiver of his right to raise the question of plaintiff's failure to comply with the law in this particular, it follows that he is estopped from relying upon such failure as a defense.

The option to have declared null and void any contract entered into with a foreign corporation at a time when its right to do business in the state has ceased can be exercised or not as the person who has dealt with the corporation under these conditions thinks best, because this right is given for his benefit, and there is nothing in either the language or...