Jack Waite Mining Company v. West, Civil 4121

• Decision Date: 15 April 1940
• Docket Number: Civil 4121
• Citation: 55 Ariz. 301,101 P.2d 202
• Parties: JACK WAITE MINING COMPANY, a Corporation, Appellant, v. CHARLES C. WEST, Appellee
• Court: Arizona Supreme Court

101 P.2d 202

55 Ariz. 301

JACK WAITE MINING COMPANY, a Corporation, Appellant, v. CHARLES C. WEST, Appellee

Civil No. 4121

Supreme Court of Arizona

April 15, 1940

APPEAL from a judgment of the Superior Court of the County of Maricopa. Howard C. Speakman, Judge. Judgment reversed.

Messrs Baker & Whitney and Mr. Lawrence L. Howe, for Appellant.

Messrs Townsend, Jenckes & Wildman, for Appellee.

OPINION

LOCKWOOD J.

This is an appeal by Jack Waite Mining Company, a corporation hereinafter called defendant, from a judgment in favor of Charles C. West, hereinafter called plaintiff, directing defendant to reinstate certain shares of its capital stock upon the stock record books in the name of plaintiff, or in lieu thereof, to pay him the sum of $1,200. The facts material to a decision of the case may be stated as follows:

Defendant prior to 1932, was a mining corporation in which plaintiff was the owner of 4,000 shares of fully paid capital stock. Under the articles of incorporation this stock was expressly declared to be assessable, but the articles provided no specific manner by which the assessment could be levied and collected. On March 21, 1932, the board of directors of defendant, hereinafter called the board, amended its by-laws by setting up a method for levying and collecting an assessment. It provided that the board might order an assessment payable on a certain date, notify the stockholders, and if the assessment remained unpaid, the stock of the delinquent stockholder would be sold at public auction in the manner set forth in the by-laws. On the same date the board levied an assessment of 4" per share on all of its outstanding capital stock, providing that it should be paid on or before May 6, 1932 and that any stock upon which the assessment remained unpaid at that date would be delinquent and sold at public auction on June 6, 1932. Notice of the assessment was duly mailed to plaintiff and received by him, and on May 2d he drew a check upon an account which he maintained with a certain private institution in New York. The check which plaintiff forwarded in payment of the assessment, according to defendant, was never received. Certainly it was never cashed, and the assessment was never, therefore, paid. Plaintiff left for Europe in July and returned in September, when he found that the institution where his account was kept was dissolved. He was given a statement of his balance and accepted it as correct without any investigation, assuming that the check for the assessment had been paid. He never compared the stubs of the checks which he kept with the charges against his account, though statements of it had been rendered to him from time to time while he was in Europe. In the meantime the date for the payment of the assessment had been postponed repeatedly, and the sale of the stock similarly postponed until November 1, 1932, when it was finally sold in the manner provided for by the by-laws. On August 27, 1934, plaintiff sold his certificate representing the 4,000 shares in controversy to a third party, and in March of 1937 this purchaser notified plaintiff that the stock had been sold for non-payment of the assessment. This as the first actual knowledge plaintiff had that the stock had been sold. A demand for reinstatement was made and refused, and on January 4, 1938, this action was commenced.

There were two causes of action set up, each of which was based upon an alleged conversion of the stock by the sale in November, 1932. Defendant, in its answer, raised two defenses, (a) that the assessment and sale of the stock as aforesaid was authorized by law and valid in all respects, and (b) that the action was barred by subdivisions 3 and 4 of section 2059, and subdivision 3 of section 2060, Revised Code of 1928, being the statutes of limitation. The case came on for trial, and defendant objected to any evidence being presented on the ground that it appeared upon the face of the complaint that the action was barred by the statutes of limitation. This objection was overruled and evidence was offered by both parties. At the close of the evidence defendant moved that plaintiff be required to elect between the two causes of action set up in his complaint, and for judgment on the ground that the evidence showed that both causes of action were barred by subdivision 3 of section 2059, supra. The motion for judgment was denied and an election was required, and plaintiff chose to stand on his second cause of action, whereupon judgment was rendered as above set forth.

The assignments of error raise two legal questions, (a) was the sale of plaintiff's stock made according to law, and (b) if it was not, is the action barred by the statutes of limitation? It is agreed by the parties that this is a simple action for conversion, involving no element of fraud other than might be said to be implied by such conversion. This being true, the statute of limitations governing the case is subdivision 3 of section 2059, supra, which reads as follows:

"Two year limitation. There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, the following actions, for 3. detaining the personal property of another and for converting...