Stivers v. Sidney Mining Co.

• Decision Date: 28 June 1949
• Docket Number: 7510
• Citation: 208 P.2d 795,69 Idaho 403
• Parties: STIVERS et al. v. SIDNEY MINING CO
• Court: Idaho Supreme Court

208 P.2d 795

69 Idaho 403

STIVERS et al. v. SIDNEY MINING CO

No. 7510

Supreme Court of Idaho

June 28, 1949

Rehearing Denied Aug. 29, 1949.

Rehearing Denied August 29, 1949.

Appeal from District Court, First Judicial District, Shoshone County; E. V. Boughton, Judge.

Affirmed.

Robert E. Brown, Kellogg, Lester S. Harrison, Kellogg, for appellant.

When stock purchased in a corporation is issued to a married woman she and her husband are both estopped as against the corporation to deny that it is other than her separate property. Section 29-126 I. C. A.; Section 29-403 I. C. A.; Overland National Bank of Boise v. Halveston, 33 Idaho 489, 196 P. 217.

It is a well established rule of law that notice to an officer of a corporation is not notice to the corporation unless received by him while acting for the corporation and within the scope of his duties. Oliver v. Grande Ronde Grain Co., 72 Or. 46, 142 P. 541; 3 Fletcher Cyclopedia Corporations (Perm.Ed.) § 793; 13 Am.Jur. § 1110, p. 1035; Wilmans v. Peoples Building & Loan Ass'n, 193 Ark. 118, 97 S.W.2d 930; American Surety Co. v Pauly, 170 U.S. 133, 18 S.Ct. 552, 42 L.Ed. 977; Bourne v. Root, 125 Cal.App. 461, 13 P.2d 1066; McDermott v. Hayes, 1 Cir., 197 F. 129; Franklin v. Mortgage Guaranty & Security Co., 9 Cir., 57 F.2d 834.

Whitla & Knudson, Coeur d'Alene, for respondents.

When notice of change of address is given to acting President and he agrees to cause change of address to be made upon the books of the corporation -- the corporation is estopped to question the authority or form of the notice. Farber v. Page & Mott Lumber Co., 20 Idaho 354, 118 P. 664; Madden v. Caldwell Land Company, 16 Idaho 59, 100 P. 358, 21 L.R.A.,N.S., 332; Pennypacker v. Latimer, 10 Idaho 625, 81 P. 55.

Notice of change of address given to corporation by husband, for himself and wife, in regard to stock which was community property, is sufficient. Sec. 31-913 I.C.A.; 2 C.J. p. 431, Paragraph 24; Waniorek v. United Railroads of San Francisco, 17 Cal.App. 121, 118 P. 947; Exchange State Bank v. Taber, 26 Idaho 723, 145 P. 1090; Leaf v. Reynolds, 34 Idaho 643, 203 P. 458.

Porter, Justice. Holden, C. J., and Givens, Taylor and Keeton, JJ., concur.

OPINION

Porter, Justice.

The respondents, plaintiffs below, are husband and wife. In the summer of 1929, they lived in Kellogg, Idaho. Thereafter, they moved to Nampa, Idaho; and a few years prior to 1940, moved to Spokane, Washington. In 1940 they moved to Boise, Idaho. Between the years 1929 and 1937, the husband purchased with community funds, 2500 shares of the capital stock of the appellant represented by 3 stock certificates issued in the name of Mrs. Vernon T. Stivers.

When respondents moved from Nampa to Spokane, Mrs. Stivers notified the appellant by letter of her change of address. When respondents moved from Spokane to Boise, she did not notify appellant in writing of her new address. The husband had procured employment as a salesman. His duties caused him to be in Kellogg two or three times each year. The wife requested him to notify appellant of their new address.

The appellant is a mining corporation with its principal place of business at Kellogg, Idaho. During the time material in this case, Mr. Harvey Ross was president of the company; his son, Myron Ross, was vice president; and W. T. Simons was secretary-treasurer. Harvey Ross lived in Seattle, Washington, and had not been active in the affairs of the company for about ten years prior to 1948. Myron Ross lived in Kellogg for many years prior to 1942, and was employed in a clothing store. W. T. Simons was cashier of the Idaho First National Bank. Since 1944, he has been president of the appellant. Prior to 1943, the appellant did not maintain an office but transacted its business at the Idaho First National Bank.

The respondent, Vernon T. Stivers, and Myron Ross were friends of long standing. When in Kellogg, Stivers would usually call upon Ross and talk with him about the Sidney Mining Company and its properties. In 1940, Stivers told Myron Ross of the change of address of respondents to Boise, Idaho, and requested him to have the change noted on the books of the company, and Ross agreed to do so. In 1941 the change of address was again mentioned. In April, 1942, Stivers asked Myron Ross if he had notified the company of such change of address, and Ross not being certain, Stivers gave Ross his business card with the Boise address of respondents thereon, and Ross promised to make sure that the new address was recorded on the books of the company. Stivers was not acquainted with the secretary-treasurer, Simons. His last stock certificate issued in 1937 was signed by Myron Ross as vice president.

On April 21, 1942, the appellant levied a stock assessment of one cent per share. Notice of such assessment was mailed to the respondent, Mrs. Vernon T. Stivers, at her Spokane address. Such notice was never received by respondents or either of them. The assessment not having been paid, 1800 shares of the stock were, on October 10, 1942, sold for the sum of $ 37.75 to strangers to this action, such sum covering the assessment and costs of advertising and sale.

Although respondent, Stivers, was in Kellogg and talked with Myron Ross about the company in September, 1942, no mention was made of the assessment or that the stock owned by Mrs. Stivers was delinquent. Respondents did not learn of the levying of such assessment and of the sale of their 1800 shares of stock until March 26, 1945. June 1, 1945, respondents tendered to the company $ 38.00 to redeem their stock. This offer was refused by Simons, the secretary-treasurer.

On July 13, 1945, the respondents brought this action to have the sale of said 1800 shares of stock declared invalid and such stock reinstated, or in lieu thereof, for judgment for the sum of $ 4,086.00. Such action was based on the ground that appellant failed to give legal notice to Mrs. Stivers of the levy of such assessment and that the sale of her 1800 shares of stock was therefore void. The proceedings for the levying of the assessment and the sale are not otherwise challenged. After the issues were formed, a trial was held before the court sitting without a jury which resulted in a judgment and decree for respondents. From such judgment and decree this appeal is prosecuted.

The appellant in its brief, sets out 16 specifications of error. We will not discuss each specification of error separately but will consider the pertinent questions raised by appellant's claims of error.

Subsection 5 of Section 30-157, I.C., provides that when an order for an assessment has been made by a corporation, the secretary must cause to be published and mailed to each shareholder at his last-known address, a notice thereof. Appellant contends that the mailing of the notice to Mrs. Stivers at Spokane, as her address appeared on the books of the company, was sufficient and fully complied with this statute. It is the position of the respondents that the notice to the vice president, Myron Ross, of the change of address was binding on the company.

By its By-Laws, the President of appellant is given the general superintendence of the affairs of the company. In his absence, the Vice President is required to perform his duties. It is apparent from the record that the vice president, Myron Ross, in 1942, was performing the duties of president of the company. In New England National Bank v. Hubbell, 41 Idaho 129, at page 138, 238 P. 308, 312, this court said:

"To apply the rule of law that notice to an officer is not notice to the corporation, it must be first found that the officer was acting in his own interests and adverse to those of the corporation."

In Prewett v. First Nat. Bank of Hagerman, 45 Idaho 451, 262 P. 1057, the court held that a bank had knowledge that a deposit made by mortgagor to be paid to mortgagee was proceeds of mortgaged property where cashier having knowledge of transaction so notified new cashier and new president of bank when bank changed hands; and again approved the rule set out in New England National Bank v. Hubbell, supra, that notice to the cashier is notice to the bank unless the cashier is, at the time, acting in his own interest adversely to the bank. In Balfour v. Fresno Canal & Irrigation Co., 123 Cal. 395, 55 P. 1062, at page 1063, the court said:

"But, if full knowledge was necessary, it must be presumed that the corporation had full notice of all the facts which were known to its president. The president of a corporation is a proper person to whom notice, which is to affect a corporation, is to be given. The corporation has no eyes, ears, or understanding save through its agents. The president is considered the head of the corporation, and it is his duty to report to the trustees information affecting the interests of the corporation. And the presumption is that he does so. Usually this is a conclusive presumption."

The vice president, Myron Ross, was acting as legal head of the appellant in 1942 and it was within the scope of his authority to receive notice of change of address of a shareholder. His knowledge of the change of address of the respondents was the knowledge of the corporation. Valley Lumber Co. v. McGilvery, 16 Idaho 338, 101 P. 94; Fresno St. R. Co. v. Southern Pac. R. Co., 135 Cal 202, 67 P. 773; Dexter Sav. Bank v. Friend, C.C., 90 F. 703. It will be noticed that the statute uses the term "last known address." It does not say the address appearing on the books of the corporation. Appellant would have been justified in relying upon the address appearing upon its books in the absence of knowledge to the contrary. It will not be heard to say that it had no knowledge that the address of the respondent, Mrs....