Williams v. Williams Yellow Pine Co.
| Decision Date | 20 February 1933 |
| Docket Number | 30369 |
| Citation | 166 Miss. 803,146 So. 143 |
| Court | Mississippi Supreme Court |
| Parties | WILLIAMS v. WILLIAMS YELLOW PINE CO |
1 CORPORATIONS.
Director by receiving and collecting corporation's bonus check impliedly consented to conditions imposed on issuance thereof at meeting of stockholders and directors in which she participated.
2 CORPORATIONS.
In director's action on corporation's note, corporation had burden of proof on counterclaim for recovery of amount of bonus check.
3. EVIDENCE.
Acts of board of directors of corporation held provable by parol, in absence of charter provision or by-law requiring written record of business transacted.
4. CORPORATIONS.
Evidence held insufficient to establish, in director's action against corporation on note, that bonus payment to director was unauthorized.
APPEAL from circuit court of Pearl River county HON. J. Q. LANGSTON, Judge.
Action by Mrs. Trinity Tourne Williams against the Williams Yellow Pine Company, in which defendant counterclaimed. From a judgment denying plaintiff recovery and awarding defendant recovery on plea of set-off and counterclaim, plaintiff appeals. Reversed and remanded.
Reversed and remanded.
H. H. Parker and J. M. Morse, both of Poplarville, for appellant.
It is the contention of appellant that the plea of set-off and counterclaim filed in this cause took the place of a declaration on the part of the appellee, as if appellee were filing a suit to recover in an original cause of action, that its claim was based on the written by-laws of appellee, which it alleged to have existed, that without such written by-laws, it would have no right or standing in any court on a suit by way of set-off or counterclaim; such a counterclaim is, in fact, a suit in favor of appellee against appellant, a cross action, and must be supported in the same manner and to the same extent as if it were an original instituted action, independent of any suit on the part of the appellant.
Denny v. Wheelingwright, 60 Miss. 733.
In actions founded on any writing a copy of such writing must be annexed to or filed with the declaration.
Palmetto Fire Ins. Co. v. Allen, 141 Miss. 690, 105 So. 769; Cotton Oil Co. v. Fire Ins. Co., 152 Miss. 522, 120 So. 214; Home Ins. Co. v. Newman, 147 Miss. 237, 111 So. 455.
The failure to make a record of the action of the directors at meetings does not invalidate their action.
7 R. C. L. 441, section 428; Pixley v. Western Pacific Railroad Co., 91 Am. Dec. 623.
The stockholders of a corporation are in fact the corporation, and no matter what the by-laws provide, the stockholders can override same and the stockholders can ratify or authorize any act of the officers at any time, and certain it is that where two thousand nine hundred ninety-nine shares out of three thousand shares of stock authorizing a thing to be done, it cannot be disputed that no by-law of the corporation could prevent such being done.
Russell v. Henry C. Patterson Co., 36 L.R.A. (N.S.) 199, 204.
The court will observe from this record that pursuant to the stockholders' authorization and in accordance therewith, the dividend was actually paid and delivered to the plaintiff, who was the secretary of the company. There is no contention that this was in fraud of any creditor, or that the company was insolvent; there is no contention that this act violated any law, or the charter power of the corporation, and we submit that under these circumstances it was an entirely legal, authorized payment of a bonus, and the funds having been paid, they could not be recovered from the plaintiff who received same.
McDonald v. Williams, 174 U.S. 397, 43 L.Ed. 1022.
When the money had been paid by a corporation to plaintiff, as is the case here, irrespective of its authorization, although plaintiff could not have forced the payment thereof, nevertheless, the corporation, the appellee, could not recover same back.
Mississippi Valley Utilities Co. v. Williams, 143 So. 889; Tidewater S. R. Co. v. Jordon, 41 L.R.A. (N.S.) 130.
The court will observe that the lower court gave instructions to the defendant to pass on and find on evidence in this case, which was never introduced, and therefore, these instructions were given with no evidence whatever to support same.
Southern Ry. Co. v. Lannine, 83 Miss. 161, 35 So. 417; Brister v. Illinois Ry. Co., 84 Miss. 33, 36 So. 142; Railroad Co. v. Harris, 108 Miss. 574, 67 So. 54; Godfrey v. Railway Co., 101 Miss. 565, 58 So. 534; Bank of Newton v. Simmons, 96 Miss. 17, 49 So. 616.
Hathorn & Williams, of Poplarville, for appellee.
While appellee did not set up in its notice of special matter under the general issue and its plea of set-off and counterclaim that as a part of the condition and understanding upon which the five thousand dollars bonus was paid that the balance after cancelling the two thousand seven hundred dollars note should be refunded by appellant to appellee; yet it does appear that the testimony above set out showing such condition and agreement went to the jury without objection on the part of appellant; and it does further appear that appellant took issue with appellee on said testimony of appellee, which went to the jury without objection, by introducing appellant as a witness who contradicted this testimony; and it does further appear that appellant procured two instructions submitting this issue to the jury upon the said conflicting evidence. This variance between the evidence and the pleadings was cured by the statutes of Jeofails (section 600, Mississippi Code of 1930 Annotated). Appellant cannot complain of this variance on appeal.
Jackson v. Lewis, 142 Miss. 806, 108 So. 156; Knox v. Henderson & Taylor (Miss.), 135 So. 214; Illinois Central Railroad Co. v. Cathey, 70 Miss. 332, 12 So. 253; Kembrough v. Ragsdale, 69 Miss. 674, 13 So. 830; Stier v. Surgent, 10 S. & M. 154; Greer v. Bush, 57 Miss. 575.
The jury was fully warranted in bringing in its verdict awarding appellee a recovery over against appellant for three thousand eighty-eight dollars and eight cents on the issue of set-off and counterclaim under the evidence of Mr. Williams and Mrs. Koche that the five thousand dollars was paid to appellant upon condition and with the understanding that it would cancel the two thousand seven hundred dollar note sued on, and that the balance should be refunded to appellee.
A by-law of a corporation is, in a certain sense, a law and is to be applied in the government of such body whenever the circumstances arise for which it was intended to provide.
The members of a corporation are as a general rule conclusively presumed to have knowledge of its by-laws and cannot escape a liability arising thereunder, or otherwise avoid their operation, on a plea of ignorance of them.
Appellant was and is bound by this provision of the by-laws, and is conclusively presumed to have known of its existence and of its limitations upon the power of the president and her as secretary to issue and pay this bonus check to her out of the profits of the corporation. The...
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...written record. Burnett's Lumber & Supply Co. v. Commercial Credit Corp., 211 Miss. 53, 51 So.2d 54 (1951); Williams v. Williams Yellow Pine Co., 166 Miss. 803, 146 So. 143 (1933). Nonetheless, the only parol evidence offered of what transpired at any board meetings was that of an intereste......
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