Gillies v. Robert E. Lee Mining Co.
| Decision Date | 04 March 1927 |
| Docket Number | 6064. |
| Parties | GILLIES v. ROBERT E. LEE MINING CO. |
| Court | Montana Supreme Court |
Appeal from District Court, Silver Bow County; Wm. E. Carroll Judge.
Action by Edna B. Gillies against the Robert E. Lee Mining Company. Judgment for plaintiff, and defendant appeals. Affirmed.
Canning & Geagan, of Butte, for appellant.
E. B Howell, of Los Angeles, Cal., and William Meyer, of Butte for respondent.
During the first days of September, 1925, Edna B. Gillies was the owner of 20,190 shares of the capital stock of the Robert E. Lee Mining Company. There were four certificates of 5,047 1/2 shares each, issued to Manfred Reinhart, executor, who assigned them severally to Vera C. Thurston, formerly Vera C. Reinhart, Allan Reinhart, Milton Reinhart, and Edgar Reinhart. These people, except Edgar Reinhart, assigned their respective certificates in blank; Edgar Reinhart assigned his to plaintiff. Two of these certificates were purchased by plaintiff, and two by her mother some time in 1918. Shortly after the purchase the officers of the Robert E. Lee Mining Company received actual knowledge of the fact. The stock never was transferred on the books of the company. The property of the company consisted of the Robert E. Lee mining claim. The company was inactive, and during the entire period of this controversy no work of any kind was done upon the mining claim.
In January, 1925, there was a meeting of the stockholders of the company which plaintiff did not attend, but her mother was present. At this meeting the plaintiff was named a director of the company, and when the directors met John A. Cannon was elected president, the plaintiff, vice president, and J. Chauvin, secretary. In the fore part of the year 1925 a special meeting of the directors was called to meet at the office of Mr. Chauvin. It does not appear that any business was transacted at the meeting, but upon that occasion Mr. Chauvin told plaintiff and her mother that an attractive proposition had been made to the company, which was, in short, that the owners of the Butte West Side Mines Company, which owned a mining claim known as the Minnie Jane, adjoining the Robert E. Lee, were desirous of obtaining the stock of the Robert E. Lee Mining Company. The proposition was that the stockholders of the Robert E. Lee Mining Company exchange their stock, share for share, for stock in the Butte West Side Mines Company. Plaintiff's mother said she thought they, referring to herself and daughter, should consult an attorney. Mr. Cannon said:
"Oh, no; now is the time to let attorneys alone; they will get your money."
And plaintiff's mother rejoined:
Mr. White seems to have been the controlling factor in the Butte West Side Mines Company. From this time on plaintiff and her mother frequently were urged to agree to the trade proposed, but they refused to accede.
The evidence on part of plaintiff shows that about September 4, 1925, the plaintiff, who then was the owner of the 20,190 shares, in company with her mother and her attorney, Mr. Meyer, called upon Mr. Chauvin, secretary of the company, presented the certificates, and asked that the stock be transferred upon the books of the company to her (plaintiff). In response to this request Mr. Chauvin said:
"Well, I don't know whether we will transfer them or not.
Mr. Meyer: Well, is there any reason why?
Mr. Chauvin: Well, Miss Gillies is making us a lot of trouble.
Mr. Meyer: That has nothing to do with her right to have the certificates transferred.
Mr. Chauvin: Well, anyhow, I haven't the stock book here. I will have to see Mr. McC. White about it.
Mr. Meyer: What has he to do with it; he isn't an officer of the company, is he?
Mr. Chauvin: Well, all the books are in his office.
Mr. Meyer: Well, aren't you the secretary?
Mr. Chauvin: Yes.
Mr. Meyer: Why is it that the books are not in your office?
Mr. Chauvin: We have taken all the books and all the papers and everything over to McC. White's office. I will have to see him about the matter.
Mr. Meyer: (Handing the certificates to Mr. Chauvin) I want to make a demand, Mr. Chauvin, that you transfer these certificates.
Mr. Chauvin: Well, I will not do anything without seeing McC. White."
Some conversation then took place in which it was said that the plaintiff did not want to exchange her stock in the Robert E. Lee Mining Company for stock in the Butte West Side Mines Company. Mr. Chauvin then said he would let Mr. Meyer know in the afternoon whether the certificates would be transferred upon the books of the company. In the afternoon Mr. Meyer returned to the office of Mr. Chauvin, and this took place:
"Mr. Meyer: Well, what did you decide to do?
Mr. Chauvin: Well, our attorney advises us that we do not have to transfer, and, as long as Miss Gillies is making us trouble, there is no reason why we should favor her. We won't transfer it.
Mr. Meyer: Is that the only reason?
Mr. Chauvin: Well, we don't know that that is Manfred's signature. If you will get an affidavit from somebody that that is his signature, we might decide to.
Mr. Meyer: Well, you have been recognizing it as his signature right along, haven't you?
Mr. Chauvin: Yes; but Miss Gillies is making us trouble now, and there is no reason why we should favor her."
Mr. Meyer asked if Miss Gillies' affidavit would not do, to which Mr. Chauvin replied:
"No; we must get somebody from California who knew Manfred Reinhart."
As a matter of fact, as the record shows, Miss Gillies was well acquainted with the signature of Manfred Reinhart, as well as the signatures of Vera C. Thurston, Allan Reinhart, Milton Reinhart, and Edgar Reinhart, and was in all respects competent to testify concerning the genuineness of the signatures upon the certificates.
That same afternoon Chauvin talked with plaintiff over the telephone, at which time he said to her:
The officers of the company did not require an affidavit that Manfred Reinhart was living when he made the indorsement, nor did they ever demand a bond as a condition to their transferring the stock.
The plaintiff never attended a stockholders' meeting. She received two notices of special meetings of the directors, one to be held upon the 28th of September, 1925, and one on the 30th. The meeting of September 28th was not held. She attended the meeting of the 30th, but what part, if any, she took in the proceedings the record does not disclose. At that meeting a resolution was passed by the board of directors calling a special meeting of the stockholders of the Robert E. Lee Mining Company for the 4th of November, 1925, at 2 o'clock p. m. at the office of the Butte West Side Mines Company, which for the first time, so far as the record discloses, was designated as the office of the Robert E. Lee Mining Company. The stockholders' meeting was called for the following purposes: (1) Considering the adoption of a by-law empowering the board of directors of the corporation to sell, lease, mortgage, exchange, or otherwise dispose of the property of the corporation; (2) considering the question of adopting new by-laws, or amending existing by-laws; (3) to elect new directors, "since all directors have served more than one year, and no election of new directors has been held for more than a year past;" (4) "to consider the advisability of the levying of an assessment upon the stock of the corporation, for the purpose of paying the running expenses of the corporation and conducting its business and defraying the cost of development, operation, and working of its property, and for considering any and all business of the corporation that might come before the stockholders." The plaintiff did not attend the stockholders' meeting of November 4th.
In January, 1925, a voluntary assessment had been levied for the purpose of paying for an abstract of the property. Plaintiff and her mother paid their portion, amounting to $6.10 each.
On October 31, 1925, the plaintiff began this action against the Robert E. Lee Mining Company and Joseph Chauvin. In the complaint she alleged her ownership of the shares; that the mining property had not been operated and the stock then had no present earning capacity or market price, but that at all times the stock "derived substantial value, to wit, $1 per share, from the corporation's unincumbered ownership of the Robert E. Lee mining claim"; that plaintiff had presented her certificates of stock to the defendant company, requesting the transference of the same from the name of Manfred Reinhart, executor, to herself; and that the defendant had refused to recognize plaintiff's right to the stock or to transfer the same, or any part thereof, to the plaintiff. Paragraph 6 pleads:
"That by reason of defendants' said refusal plaintiff's said stock has become valueless, and plaintiff has been and now is deprived of participating in the stockholders' meetings of the defendant corporation, or in the profits or property of said corporation, to her damage in the sum of $20,190."
Its demurrer having been overruled, the defendants answered admitting that plaintiff had presented a certificate of stock in the corporation to the defendant, which certificate on the face...
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