Stedtfeld v. Eddy

• Decision Date: 15 February 1928
• Docket Number: 4800
• Citation: 264 P. 381,45 Idaho 584
• Parties: FRED H. STEDTFELD, Respondent, v. CLARENCE E. EDDY, JUANITA M. EDDY and the MONTE CRISTO GOLD MINES COMPANY, a Corporation, Appellants
• Court: Idaho Supreme Court

264 P. 381

45 Idaho 584

FRED H. STEDTFELD, Respondent, v. CLARENCE E. EDDY, JUANITA M. EDDY and the MONTE CRISTO GOLD MINES COMPANY, a Corporation, Appellants

No. 4800

Supreme Court of Idaho

February 15, 1928

CORPORATIONS - ACTION FOR ACCOUNTING - DEMAND - SUFFICIENCY OF COMPLAINT - APPEAL AND ERROR - ASSIGNMENT OF ERRORS IN BRIEF.

1. Complaint, in action by stockholder, suing on behalf of himself and all others similarly situated, for accounting by former officers and stockholders of corporation, failing to allege that demand had been made on majority stockholders for them to take action, held insufficient, since demand, or excuse for failure to demand relief, of stockholders was material allegation.

2. Complaint, in action by stockholder, suing on behalf of himself and all others similarly situated, for accounting by former officers and stockholders of corporation, failing to allege that demand had been made on majority stockholders for them to take action, held insufficient to sustain judgment entered in favor of corporation, even though proof showed demand on stockholders.

3. Question presented on oral argument which has not been assigned as error in briefs, as required by supreme court rule 40, or otherwise, will not be considered on appeal.

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. O. R. Baum, Judge.

Action for an accounting. Judgment for respondent. Reversed and remanded.

Reversed and remanded. Costs awarded to appellant.

Wesley B. Yates and G. L. Tyler, for Appellants.

"Before a suit can be maintained by a stockholder he must not only show that the officers of the corporation have refused to act; and that the stockholders have refused to act, but he must further show that a demand has been made upon the defendant for an accounting and that this has been refused." (1 Cyc. of Pleading & Prac., p. 98; Perry v. Foster, 62 How. Pr. (N. Y.) 228.)

"Before a minority stockholder can maintain an action in his own name he must allege and prove that he has exhausted his remedy within the corporation and that he has made proper demand of the corporation that suit be instituted and that such demand has been refused, or that relief cannot be obtained through the corporation." (Arkansas River L. T. & C. Co. v Farmers' Co., 13 Colo. 587, 22 P. 954; Bergman Clay Mfg. Co. v. Bergman, 73 Wash. 144, 131 P. 485; Checotah Hardware Co. v. Hensley, 42 Okla. 260, 141 P. 422; Elliott v. Puget Sound Wood Products Co., 52 Wash. 637, 101 P. 228; Hawes v. Oakland, 104 U.S 450, 26 L.Ed. 827; Holmes v. Jewett, 55 Colo. 187, 134 P 665.)

H. E. Ray, for Respondent.

Following the well-known rule of this court, that assignments of error not argued will not be considered, no mention will be made in this brief thereof. (Raide v. Dollar, 34 Idaho 682, 203 P. 469; Bothwell v. Bryant, 36 Idaho 337, 210 P. 1003; Witthoft v. Gathe, 38 Idaho 175, 221 P. 124.)

The plaintiff in this action can see nothing to the point contended for by the appellant to the effect that the trial court should have granted a nonsuit because of the insufficiency of proof upon the question of demand, for it is a well-recognized exception to the general rule requiring demand prior to the institution of suit that where the facts disclose a demand would have been useless, none will be required, for, to use the familiar phraseology common to many opinions, the law does not require a person to do a needless or useless thing, and the question of whether a demand would have been useless or vain is one of fact, as was so tersely stated by this court in Wunderlich v. Coeur d'Alene V. M. Co., 40 Idaho 173, 177, 39 A. L. R. 1052, 232 P. 588.

GIVENS, J. Wm. E. Lee, C. J., and Budge and T. Bailey Lee, JJ., concur.

OPINION

GIVENS, J.

Fred H Stedtfeld, plaintiff-respondent, as a stockholder in the Monte Cristo Gold Mines Company, a corporation, sued on behalf of himself and all others similarly situated for an accounting by Clarence E. Eddy and Juanita M. Eddy, former officers and stockholders of the corporation. Upon failure to appear, the default of the corporation was entered, and the action was dismissed against Clarence E. Eddy. A reference was ordered upon which judgment was entered in favor of the corporation and against appellant Juanita M. Eddy for $ 22,540.60 and interest, for stock...