Wunderlich v. Coeur D'Alene Vulcan Mining Co.

• Decision Date: 31 December 1924
• Citation: 40 Idaho 173,232 P. 588
• Court: Idaho Supreme Court
• Parties: MARIE M. WUNDERLICH, Appellant, v. THE COEUR D'ALENE VULCAN MINING COMPANY, a Corporation, Respondent

232 P. 588

40 Idaho 173

MARIE M. WUNDERLICH, Appellant, v. THE COEUR D'ALENE VULCAN MINING COMPANY, a Corporation, Respondent

Supreme Court of Idaho

December 31, 1924

CORPORATIONS-EXECUTION SALE-RIGHT OF STOCKHOLDER TO REDEEM-EXPENSES-ATTORNEYS' FEES.

1. In order to establish his right to redeem corporate property from an execution sale an individual stockholder must show that he first made a bona fide effort to have redemption made by the directors of the corporation, and failing there, made a like effort with the stockholders as a body; or, if he seeks to excuse his own default in that direction, he must show that such efforts to induce a redemption by the directors or stockholders would have been useless.

2. A stockholder attempting a redemption without having taken substantially the course outlined above is not entitled to attorneys' fees or other expenses incident to an attempted redemption from execution sale against the corporation.

APPEAL from the District Court of the First Judicial District, for Shoshone County. Hon. W. F. McNaughton, Judge.

Action to recover for money expended for redeeming property of respondent from execution sale, including expenses. Judgment for plaintiff. Modified and affirmed.

Judgment affirmed. Costs awarded to respondent.

Carlton Fox and John L. Fitzgerald, for Appellant.

Mrs Wunderlich, as a stockholder, had a right to redeem from the execution sale. (Wright v. Oroville Min. Co., 40 Cal. 20.)

When it appears that demand upon the corporation to do an act to preserve its property is useless, the stockholder may act without making such demand. (Ryan v. Old Veteran Min Co., 37 Idaho 625, 218 P. 381; Smith v. Rader, 31 Idaho 423, 173 P. 970; Just v. Idaho Canal etc Co., 16 Idaho 639, 133 Am. St. 140, 102 P. 381; Wills v. Nehalem Coal Co., 52 Ore. 70, 96 P. 528.)

The plaintiff was entitled to recover her expenses, including attorney's fees. (Trustees v. Grenough, 15 Otto (U.S.), 527, 26 L.Ed. 1157; Central R. R. etc. Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915; Alemany v. Wensinger, 40 Cal. 288; Miller v. Kehoe, 107 Cal. 340, 40 P. 485, at p. 486; Clark v. Anderson, 76 Ky. (13 Bush) 111; Jenkins v. Commercial Nat. Bank, 19 Idaho 290, 113 P. 463; Commercial Trust Co. v. Idaho Brick Co., 25 Idaho 755, 139 P. 1004; Stone v. Omaha Fire Ins. Co., 61 Neb. 834, 86 N.W. 468; In re Creighton's Estate, 93 Neb. 90, 139 N.W. 827.)

James E. Gyde and Donald A. Callahan, for Respondent.

Before Mrs. Wunderlich, as a stockholder, could redeem this property, it must appear that she had exhausted all of the means in her reach to get the corporation to redeem it, where time permitted. (Fletcher on Corporations, pp. 6872, 6873; 2 Clark & Marshall on Corporations, p. 1690; Hawes v. Oakland, 104 U.S. 450, 26 L.Ed. 827; Dunphy v. Travellers' Newspaper Assn., 146 Mass. 495, 16 N.E. 426.)

A corporation must act through its board of directors, and neither Mrs. Wunderlich nor any other stockholder had any right to redeem this stock. (3 Fletcher on Corporations, p. 2917, sec. 1727.)

In Idaho attorney's fees cannot be recovered as costs except where there is a special statutory provision. Attorney's fees are regulated by contract. (C. S., sec. 6576; Jenkins v. Commercial Nat. Bank, 19 Idaho 290, 113 P. 463; Callahan v. Dunn, 30 Idaho 225, 164 P. 356.)

This corporation had the full period of redemption in which to redeem and it was not required to pay for the redemption thereof, anything in addition to what is provided in C. S., sec. 6933. There was no necessity for Mrs. Wunderlich's employing an attorney to redeem. (Jenkins v. Commercial Nat. Bank, supra; C. J. 1114, note 34.)

DUNN, J. McCarthy, C. J., Budge, William A. Lee and Wm. E. Lee, JJ., concur.

OPINION

DUNN, J.

This action was instituted by appellant, a stockholder of respondent corporation, to recover $ 812.62, paid by appellant to redeem the mining property of respondent from execution sale, together with interest, attorneys' fees and certain wages paid to a keeper put in charge of the property by appellant. The judgment directed that appellant recover nothing from respondent except $ 50 attorneys' fees. It also directed that the money paid to the sheriff by appellant be returned.

One Steier obtained default judgment against the company for $ 725.94. Thereafter execution was issued and all the property of the company was sold at sheriff's sale or September 28, 1918, Steier bidding it in himself.

Appellant, who lived in South Carolina and held 80,000 shares in respondent corporation, sent her husband to find out about the affairs of the company, with written power of attorney to act for her. He paid the sheriff the amount necessary to redeem the property from the Steier judgment. A certificate of redemption was made out in appellant's name but thereafter amended to run to respondent company. This redemption took place on August 11, 1919, over a month prior to the expiration of the period of redemption. Immediately thereafter appellant engaged a caretaker to watch the property paying him $ 7.50 a day. The personal property of respondent company, as shown by the testimony, was worth less than $ 1,000.

The evidence further shows that prior to September 27, 1919, an option agreement had been executed in favor of one Gearon under the terms of which eighty-four stockholders owning in the aggregate 477,447 shares of the capital stock of respondent corporation gave said Gearon an option to purchase their stock for four cents a share at any time before January 1, 1921, which option provided that as soon as Gearon had received an option on 501,000 shares of the capital stock he was to pay Steier $ 1,000 and that Steier, who was one of the stockholders executing such option agreement, should cancel his indebtedness against the corporation.

On September 27, 1919, one day prior to the expiration of the time allowed by law for redeeming the property, Gearon paid the sheriff $ 1,000 and accompanied such payment with written notice of the option agreement and directions to return to appellant, with the legal rate of interest, the amount paid by her to redeem the property. The sheriff offered to return to appellant the amount paid by her, but such payment was refused and the sheriff thereupon deposited the money with the clerk of the court, who still retains possession of it.

The trial court found that appellant redeemed the property without making a demand upon the company so to do; nor upon Gearon, who had an option coupled with a conditional duty to make payment, of which option appellant had notice; that on the day before the redemption time would have expired Gearon deposited $ 1,000 with the sheriff with directions to pay so much of it as was necessary to displace appellant as redemptioner; that said money was deposited to make redemption; that the judgment was satisfied out of Gearon's money; that the property was not worth more than $ 1,000; that the property had a speculative value by reason of the fact that a tunnel thereon might be useful as an outlet for ore from mines lying near said property; and that appellant should be paid $ 50 as attorneys' fees for consulting an attorney in making the redemption. Judgment was entered in the amount of $ 50 for appellant and a direction that the clerk pay over the sum deposited with him by the sheriff. No costs were allowed appellant. From that judgment this appeal is taken.

Appellant assigns numerous errors but confines her discussion and citation of authorities to three propositions. It will not be necessary to consider or discuss the assignments not included in those three propositions. Errors assigned but not supported by citation of authorities, nor argued by appellant either orally or in his brief, will not be discussed or considered on appeal. (State v. Brockman, 39 Idaho 468, 228 P. 250; State v. Petereit, 39 Idaho 715, 229 P. 747.)

Appellant contends, as her first point, that she as a stockholder, had a right to redeem from the execution sale. It is unquestionable that under certain circumstances a stockholder has a right to redeem from execution sale. The rule is clear, however, that a stockholder must make a demand upon the corporation to act in such a manner as to preserve its property. Whether or not the stockholder had made such a demand and had in good faith attempted to induce the corporation to act is a question of fact. It is true, as appellant sets forth in her second proposition, that "where it appears that a demand upon a corporation to do an act to...