Myrtle Point Mill & Lumber Co. v. Clarke
| Decision Date | 10 January 1922 |
| Parties | MYRTLE POINT MILL & LUMBER CO. v. CLARKE. |
| Court | Oregon Supreme Court |
Department 1.
Appeal from Circuit Court, Coos County; J. S. Coke, Judge.
Action by the Myrtle Point Mill & Lumber Company against O. H Clarke. Judgment for plaintiff, and defendant appeals. Affirmed.
A. G. Thompson, of Myrtle Point, for appellant.
Claud H. Giles, of Myrtle Point, for respondent.
It is a conceded fact that the defendant, together with J. O Stemmler and eight others, signed the following agreement:
The defendant subscribed for ten shares, $1,000. The total subscription of all the subscribers amounted to $12,500 exactly one-half of the proposed capital stock of $25,000. The plaintiff, stating that it is a corporation duly organized and existing under and by virtue of the laws of Oregon, pleads the writing mentioned, both according to its legal effect and by copy attached to and made part of its complaint, states the subsequent organization of the plaintiff at a meeting of the stockholders in which the defendant and the other signers took part, and declares that the corporation has been duly incorporated as before alleged, and is now doing business. A demand upon the defendant for payment of the amount of his subscription, and his failure to do so except in the sum of $50 paid by him March 15, 1918, are alleged, with a demand for judgment.
The following denial appears in the answer:
"Denies each and every allegation contained in paragraphs I, II and III of said complaint, except that defendant did place his name on said purported list under the conditions and circumstances as hereinafter set forth, that there was a pretended meeting of the parties who had put their names on said pretended subscription list, and defendant was present thereat, and that defendant at all times has refused to make payment to plaintiff."
Further answering, the defendant alleges in substance that Stemmler was the organizer and promoter of the plaintiff organization, "which defendant, upon information and belief, alleges to be now a purported de facto corporation," and that Stemmler at all times has been, and now is, its secretary and general manager. He also says that at all times mentioned, both before and after the attempted organization of the corporation, Stemmler was the attorney for the defendant, and that the latter relied upon his advice at all times, and believed his advice and information to be true. After reciting various efforts of Stemmler to get the defendant to subscribe for stock, and his refusal to do so, he pleads another effort on the part of Stemmler to induce him to subscribe, and declares:
"That said Stemmler further falsely and fraudulently informed defendant that, if he would place his name on the subscription list as set forth in Plaintiff's Exhibit A, that he (the defendant) would be under no obligations to take stock in the corporation and would not obligate himself in any manner to pay for any stock, and falsely represented to defendant that his name would be used only for the purpose of organization, and that after said corporation was organized his name would be scratched or taken off the subscription list, and further represented to defendant that he had to have defendant's name on said list temporarily in order to have 50 per cent. of the capital stock subscribed to be able to organize said evening, otherwise he would be barred from taking up an option and lose a large amount of money advanced upon purchasing a sawmill to be taken over by the said corporation to be thus organized."
He then says that he believed the representations to be true, and signed the writing acting upon the advice, misrepresentations, and false statements of Stemmler, and lent his name to Stemmler for use, as stated, and without intention on the part of the defendant to make an offer to a corporation to be organized, to subscribe for, or take capital stock therein. Finally, in his first separate answer, he says in substance that Stemmler, and others whose names appear upon the subscription list, met on the evening of March 25, 1918, and attempted to adopt purported by-laws and to elect a board of directors, but said attempt was had before 50 per cent. of the capital stock was subscribed, and that thereafter, on March 26, 1918, and before the defendant was aware the representations of Stemmler were fraudulent, he demanded that the latter scratch defendant's name off the subscription list and release him from all obligation, if any were created, but that Stemmler refused to do so.
As a further answer, he says that the defendant's name was attached to the subscription list March 25, 1918, after the articles of incorporation had been filed with the corporation commissioner, but before the attempt was made to organize. This allegation appears in the second answer:
"That at the time of the said attempted organization of said purported corporation one-half of the capital stock had not been subscribed in this, to wit: $2,000 of said purported $12,500 as shown by said subscription list was a conditional subscription and $500 of said amount was withdrawn before said attempted organization."
The defendant also says that he was not aware of the conditional subscription or that the withdrawal of $500 had reduced the subscription to less than one-half of the proposed capital stock.
The new matter in the answer is challenged by the reply. A trial by jury resulted in a judgment for the plaintiff according to the prayer of its complaint, and the defendant appeals.
Passing the assignments of error that the verdict and judgment are against the evidence and contrary to law, and that the court erred in refusing to allow the defendant's motion for nonsuit, we come to the assignment that the court erred in admitting in evidence the minutes of the first meeting of the stockholders, without testimony showing that the same were approved or were authentic records of what occurred at the meeting. There is evidence in the bill of exceptions that the minutes were approved at a subsequent meeting, although the approval is not stated in the minutes themselves. This feature is controlled by Handley v. Stutz, 139 U.S. 417, 11 S.Ct. 530, 35 L.Ed. 227, where the fact that a resolution was adopted was not entered in the minutes of the corporation; but the court said:
It is next urged that the court was wrong in allowing the introduction of a carbon copy of a letter written on April 1 1918, by the plaintiff to the defendant, because there was no showing that the original could not be produced, and because no demand had been made upon the defendant before the trial to produce the original letter. The letter in substance is a notice to the defendant of his delinquency and a demand for payment of the amount of his subscription. The allegation of demand for payment was immaterial. The defendant had signed a writing, quoted above, promising to pay the subscription, not upon call by the corporation, but as follows: "40 per cent. in 30 days; 40 per cent. in 60 days; and 20 per cent. in 90 days." ...
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