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assessments, all of which were levied and collected as provided by law. They, however, claim that these assessments were voluntury. The records show them to have been levied and enforced under the statute. The evidence is wholly insufficient to show that any money was obtained by any one connected with the company after March 9, 1903, that was not accounted for, except it be the money the Campbells and Lloyd obtained for the stock they bid for and bought at the assessment sale and no one seems to make any claim upon them therefor. The evidence is clear that at the time the corporate affairs were turned over by plaintiff and his associates there was no money in the treasury, and the company was free from debt.
The mining claims were mere locations on which the assessment work had to be done each year to retain them as the property of the company, and it was upon these claims, seven in number, that the corporation was formed and the stock issued. After the assessment sale in 1903, and in the beginning of October, 1904, the appellant, C. W. Jones, with about 10 others, some of whom were his relatives residing in the state of Wisconsin, through correspondence with him, bought a large amount of the stock which had been bid in by the company and the Campbells at the assessment sale, and thus said persons became stockholders of the company, obtaining through that and other sources the controlling interest, which they held at the time of the trial. It is this stock that was by the court decreed to have been obtained illegally and through the fraudulent acts of C. W. Jones and Ed Mingle, and of which acts the court finds these Wisconsin stockholders to have had knowledge or the means of knowledge. The fraud, as we understand the findings of the court and the argument of respondent's counsel, consisted in the acts of Ed. Mingle and C. W. Jones in obtaining the option and proxy on the stock of respondent and his associates in February, 1903, and in failing to enter into the bond and lease whereby Mingle had the right to purchase the property of the company for $15,000 at any time prior to April 1, 1904. It is too obvious to require argument that if Mingle failed to enter into this bond and lease he simply forfeited the right to purchase the property. This was a right given him, and the mere failure to comply with it would, at least not by itself, constitute a fraud on any
But it is asserted that the power of attorney or proxy to vote the stock depended on this bond and lease, and in case Mingle failed to enter into the bond and lease the proxy was void and of no further effect. But the power of attorney or proxy in this regard speaks for itself. We have quoted the conditions imposed therein, and none such are contained in the proxy itself. The proxy, however, says that it is irrevocable for the period of time named therein, namely to April 1, 1901, this being the date on
which the option or right to purchase the 176,000 and odd shares of the stock owned by respondent and his associates terminated.
In this connection it is not easy to see why Mingle should want an option to purchase the property at precisely the same figure he had an option to purchase the stock apart from the fact that respondent wanted Mingle to advance for them $700 for assessment work for which Mingle received absolutely no consideration in view of the right he had to purchase the stock. This fact also shows that there was no good reason why respondent and his associates wanted the bond and lease, except to obtain from Mingle the assessment work. Be that as it may, the election of the board of directors of March 9, 1903, was not based upon the condition that the election should be void if Mingle failed to enter into the bond and lease. This, however, is the claim now made by respondent's attorney, and, as he asserted at the trial, this whole case is based upon such claim. The agreement discloses no such condition, and it seems to us that to permit the authority of the board of directors and officers of a corporation to rest upon such a frail tenure would be a reproach to both law and morals. Whatever the rule might be in case of a direct and timely attack made against the directors elected upon such a condition, we think it too obvious to require discussion that such condition, even if absolutely established, could have no effect whatever on a collateral attack against the acts of the directors. All irregularities in corporate electious, and even the legality thereof, as well as the legal qualifications of the directors, are settled by the election in so far as collateral attacks are concerned. This is the clear weight of authority as is made manifest by reference to the following authorities where the cases are collected and cited: 2 Cook on Corporations, § 713; 3 Thomp. Comms. on Corp. 88 3893-3895; 3 Clark & Jarsh. on Priv. Corp. § 662. To the same effect is Hatch v. Lucky Bill Min. Co., 25 Utah, 405, 71 Pac. 865. But if we pass this by for the present and give respondent the benefit of the right to impose other conditions than those named in the agreement, what then are his rights in a court of equity as regards the acts of the board of directors elected March 9, 1903? He and his associates held the majority of the issued stock at that time, and joined in the election according to their own statements. They knew who the directors were, and they all wanted the new board to take charge of the corporate affairs. They turned all of them over, and the new board took them, not conditionally, but unconditionally. If thus Mingle was to enter into a bond and lease in less than a month from that time, why is it that neither of the interested parties ever took either the time or the pains to inquire about it? They, however, were informed within a very few months thereafter that Mingle had not entered into
a bond and lease, and that the acting officers per share for stock that no one seemed to claimed to know nothing about his agreement want at one-fourth of a cent, when the highto do so. Respondent thus knew all about it. est obligation resting upon him was a mere Moreover, respondent was then offered resti option to buy it. But under the ruling of tution of the property and affairs of the com this court in Gary v. York Min, Co., 9 Utah, pany. This was all Mingle offered to return 464, 35 Pac. 494, and under the more recent in case he failed to enter into the bond and holding in Nelson V. Keith-O'Brien Co., lease. Respondent refused to accept this, (Utah) 91 Pac. 30, decided this term, the and yet it was just what he was entitled to mere fact that there was some stock in the if Mingle failed to comply with the alleged treasury would, under the circumstances in agreement to enter into a bond and lease.
this case, not make the assessment void. At this time the stock remained unsold But it is furtber contended that at least -the assessment unenforced. If respondent one of the directors, appointed in May, 1903, and his associates had taken charge then, to fill the vacancy occasioned by the failure they could have recalled the assessment un of the two to qualify, vitiated the acts of der the statute, and, if they desired, could the board in levying the assessment for the have provided the means required to pro reason that the acting director was not eltect the mining claims in some other way. ligible as a director when elected because They did not want this. What they wanted not holding sufficient shares of stock to was that Mingle should do the assessment qualify him under the articles of incorporawork when, according to their own conten tion. The records, howerer, affirmatively tion, the matter was optional with him to show that at the time the assessment was do it or not. The right to purchase which levied he was a stockholder in amount suffiMingle had was contingent at best, and if cient to qualify him as such, and hence he refused to perform he forfeited this right, until removed from office was at least a nothing more. As a legal proposition, then, de facto if not a de jure director, and the how could Mingle perpetrate a fraud upon acts of the board of which he was a member any one by neglecting to do that which was were not subject to collateral attack, under at his option to do or not to do? But it the authorities above cited. The assessment is contended that the articles of incorpora was therefore not void, but at most might tion provided that the new board should or perhaps have been directly attacked for irganize within 30 days after their election; regularities, if action in some proper form that this was not done, and hence the elec had been taken in time. In view that the retion was void. The articles do not provide spondent and his associates not only had that in the event this was not done such a means of knowledge respecting all the cirresult or any result would follow, and hence cumstances of the assessment, but about the the provision must be deemed to be direc time it was levied and before the sale tory merely. The board did organize, quali- made an investigation of the acts of the fy, and thereafter acted as a board. It is board through a competent lawyer, and could also asserted that the levying of the assess thus have arrested the consequences of the ment was void because the articles provided assessment had they desired to do so, they that no assessment should be levied while cannot now be heard to complain in a court there was treasury stock remaining in the of equity for the reasons urged by them. The treasury and that there were about 5,000 facts and circumstances of this case bring it shares of such stock undisposed of when this squarely within the decision of Hatch v. assessment was levied. It, however, appears Lucky Bill Min. Co., supra. The irregularifrom the articles that this stock should be ties in that case were in some respects much disposed of by the directors for development greater than in this case, and the equities purposes and to conduct the affairs of the much stronger, and still the court refused company. It was contemplated, therefore, relief from the assessment there involved. that something should be realized from the Counsel for respondent, however, seeks to disstock for the purposes named. No one con tinguish this case from the Hatch Case uron tends that these 5,000 shares had any sale the ground of fraud, which, it is asserted, able or other substantial value at the time makes it peculiarly one for equitable relief. the assessment was levied. Indeed this is In a proper case this contention would be of proved by the facts and circumstances in re great force, and might be conclusive, but the lation to the sale of the stock for the assess difficulty encountered by this record is that ment. There were over 168,000 shares bid the evidence is wholly insufficient to establish in for the company at the sale. No one would the alleged fraud. If it were conceded that pay the nominal price of one-fourth of a cent Mr. Mingle practiced fraud in entering into a share therefor. Moreover, from the acts the agreements and in obtaining possession of of respondent and his associates at that the proxy to vote the stock, still this would time, it is clear that they did not want the not, in view of all the facts and circumstanstock, even at that price. It is no answer to ces, permit respondent to set aside and hold say that they relied on Msingle to do the for naught all the acts and proceedings of assessment work under the bond and lease. the board of directors elected under the Tbey then knew he was not doing it, and that proxy, and under the direction of respondle was not likely to do it and pay five cents ent and his associates and with their con
sent. But we cannot conceive why Mingle should have intended any fraud or wrong in entering into the agreements. The evidence clearly demonstrates that he did not profit to any extent by doing so. Moreover, it is not apparent how he could have profited by it. If the property turned out all right, he had the right to purchase the stock for five cents a share by paying therefor. If he thought the property was not worth it, he could refuse to exercise his option. The same result followed if he had entered into the bond and lease; the only difference being that under it, in order to exercise the right to purchase the property apart from the stock, he would have to do at least the assessment work on the seven claims. The benefit from this would, of course, have been for the stockholders. Respondent and his associates, however, were advised before the sale of the stock upon the assessment that Mingle was not going on with the bond and lease. They were told by the officers that they knew nothing about such a bond and lease. Mr. Mingle would thus have forfeited his right under the bond and lease even if it had been executed. This respondent was bound to know. When, therefore, the officers offered to return to him the corporate affairs, he was offered all that the agreements provided for. This he would not accept, but permitted the directors to get on as best they could in raising funds to hold the mining claims; permitted the sale of the stock to take place and thereafter to be sold to the Wisconsin people and after about two years of inaction, and after the purchasers of the stock had invested their money, respondent seeks to be reinstated into all his rights as of March 9, 1903, upon the sole ground that Mingle had committed a fraud and that the subsequent purchasers of the stock knew, or had the means of knowing, all about Mingle's fraudulent acts, and this knowledge he sought to bring home to them from the various proceedings as recorded in the records of the meetings of the board of directors. But in the meantime the annual stockholders' meetings were held in January, 1904, and in January, 1905, at which at least some new men were elected upon the board of directors. These meetings were advertised and publicly held as required by law, and respondent, nor any of his associates, seemed to manifest any interest in the matter, although they knew, or ought to have known, that Mingle was neither holding these meetings nor interested in them under the proxy; that they were held under the stock purchased by others under the assessment sale. Under such circumstances it would be most inequitable to permit respondent to attack in this way, and after such a lapse of time, the
acts of those who conducted the corporate affairs under a claim of right, and who thereby kept intact the corporate property and the mining claims from being forfeited.
We have read with great care and attention the entire evidence contained in the original bill of exceptions. We did this for the reason that the respondent contends that the findings of the trial court are conclusive upon us, unless clearly contrary to the evidence. We concede this to be the rule adopted by this court in equity cases. But there are also other elementary rules in force in all courts of equity, which are, that he who seeks equity must do equity; that he who charges fraud assumes the burden of establishing it; and, finally, that when a party comes into a court to obtain relief froin the acts of others in matters such as are involved in this case, he must act with reasonable diligence or present some good excuse for not having done so, or he must fail in his action. The foregoing doctrine is especially applicable, and is generally enforced in cases like the one at bar. Great W'. M. Co. v. Woodmas A. M. Co., 14 Colo. 90, 23 Pac. 908; Rabe v. Dunlap, 51 N. J. Eq. 40, 25 Atl. 959; Speidel v. Henrici, 120 U. S. 387, 7 Sup. Ct. 610, 30 L. Ed. 718; Harwood v. Railroad Co., 17 Wall. (U. S.) 78, 21 L. Ed. 358.
The evidence in this case utterly fails to establish fraud. The most that can be said is that there are some facts from which one might conjecture fraud and that is insufficient. The evidence equally fails to show any reasonable diligence upon the part of respondent to correct the alleged wrongful acts, and he offers no excuse why he did not act sooner. The evidence, therefore, fails to sustain the findings upon which the decree is based, and it thus cannot stand, for want of support. With regard to the lack of diligence to prosecute this action, and the failure to take appropriate action in proper time in the absence of fraud, the case of Hatch v. Lucky Bill Min. Co., supra, is conclusive, and leaves us no alternative but to reverse the judgment upon that ground as well. This view makes it unnecessary to pass upon the question whether the court exceeded its power in removing officers not before the court and in reinstating others in an action like this. It is also apparent from the entire record that the plaintiff cannot make a proper case for relief at this time under the facts as set forth in the complaint, or under any proper amendment thereof.
The judgment, therefore, is reversed, with directions to the district court to dismiss the action. Appellant to recover costs.
MCCARTY, C. J., and STRAUP, J., concur.
judgment dismissing the action, plaintiff appeals. Affirmed.
S. P. Armstrong, for appellant. W. R. Hutchinson and J. M. Thomas, for respondents.
(.22 Utah, 454) I. X. L. FURNITURE & CARPET INSTALLMENT HOUSE v. BERETS
et al. (Supreme Court of Utah. June 27, 1907.) ) 1. LANDLORD AND TEXANT LEASE ConSTRUCTION.
In construing a lease, the whole instrument must be considered and all its terms looked to to ascertain the true intent of the parties; and, when the intent can be ascertained, it must prevail, though contrary to the strict letter of the contract.
[Ed. Note. For cases in point, see Cent. Dig. vol. 32, Landlord and Tenant, $ 98.] 2. SAME-TERM-COMPUTATION.
Where the term of a lease extends "from December 1, 1904, to December 1, 1906, a term of two years," it expires November 30, 1906, if possession is taken December 1, 1901, or December 1, 1906, if possession is taken December 2, 1904. 3. PLEADING-DEMURRER.
In an action involving the date of expiration of a lease, the landlord's demurrer to the tenant's complaint raised a question of law and not of fact, and by demurring they must be bound by a fair construction of the terms of the lease in fixing the term granted.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 39, Pleading, $ 485.] 4. LANDLORD AND TENANT-OPTION TO RENEW-TIME FOR EXERCISE.
Where a lease provided that upon the lessee's election "at the expiration of the term" the lessors would renew, the lessee was bound to elect at a point of time at or before the old time was expiring, after it had expired being too late.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 32, Landlord and Tenant, $ 271.] 5. SANE.
The provision of a lease entitling the lessee to remove improvements placed on the premises did not extend the right to possession under the lease beyond the term fixed, but at most gave the right nerely to enter upon the premises within a reasonable time for the purpose only of removing the improvements.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 32, Landlord and Tenant, $$ 296, 627.] 6. SAME.
Courts may not disregard any provision of a contract, or save rights lost thereunder through the act of the party asking relief, unless it will be unconscionable or clearly inequitable not to do so; and, where a lessee failed to exercise an option to renew for three days after the time given in which to exercise it, he may not enforce the option where he pleads nothing that would have prevented him from making the election at the proper time except mere inadvertence, though the lessors knew that the lessee intended to request a new lease.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 32, Landlord and Tenant, $ 271.] 7. SAME.
The equity rule seeking to prevent forfeitures is not available to a lessee who seeks to enforce a renewal of a lease after omitting to exercise an option for a renewal within the time prescribed by the lease.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 32, Landlord and Tenant, 271.]
Appeal from District Court, Third District; C. W. Morse, Judge.
Specitic performance suit by the I. X. L. Furniture & Carpet
Carpet Installment House against Louis Berets and others. From a
FRICK, J. This is an equitable action for specific perforinance, based upon substantially the following allegations contained in the complaint: That on the 1st day of December, 1904, the plaintiff, a corporation, appellant in this court, and the defendants, respondents here, entered into a certain contract of lease in writing, duly subscribed by the parties, whereby the respondents demised and leased certain premises, describing them, to the appellant, for the term of two years thereafter in consideration of $2,400, payable in sums of $100 per month, on the first day of each and every month in advance; that it was further agreed in said lease that in consideration of the sum of $1, paid by appellant to respondents, that, in case appellant should so elect, respondents, upon the request of appellant, would, at the expiration of said lease, continue and renew the same, and give a further lease on said premises to appellant for the further term of three years commencing from the date of the expiration of said first lease upon the same terms, rental, and conditions as in said first lease contained ; that for reasons, which, however, were not unavoidable nor accidental, the appellant further alleges that on the 1st day of December, 1906, when said first lease terminated, it inadvertently overlooked the matter of making a formal request of respondents for a renewal thereof, and did not do so until the 30 day of December, 1906, and that but for that fact it would have made such request for a renewal both before and at the expiration of said lease, and that the failure to do so was a mere oversight and wholly unintentional. Appellant also alleges: That during the summer of 190.3 it made certain improvements on said premises, and that during the month of November, 1906, it made further improvements thereon by placing electric wires for lighting the buildings. The whole of the improvements so made it is alleged were of the value of $750. That during the month of November, 1906, the president and general manager of appellant met and talked with one of the respondents almost daily, and frequently did so with another of the respondents, and that both said respondents knew and were fully aware during all of said time, and long before the expiration of said lease, that appellant bad elected and intended to continue said lease and in the occupation of said premises, and upon information and belief alleges that said two respondents were well aware that the lease was about to expire, but refrained from calling the attention of appellant's manager to such fact, with the intent and purpose of permitting him to overlook such fact, and to
prevent him from making a formal request for a renewal of said lease, and thereby to secure an unconscionable and technical advantage. That the respondents were in no wise misled and suffered no damage or loss by reason of the failure of appellant to make a formal request sooner than it was made. That appellant upon the execution and delirery of said lease entered into and was in the sole possession of the premises up to the present time (December 21, 1906), conducting a mercantile business, buying and selling secondhand furniture, goods, and chattels, and that during the time of the occupancy of said premises appellant has built up and established said business and good will thereof on said premises, and thereby the location has become and now is valuable for carrying on and conducting said business. That appellant has duly performed all the conditions of the said lease to be performed by it, and that "on Monday, December 3, 1906, which day was the first business day at the expiration of the term of said lease, the plaintiff requested and demanded from defendants" a renewal of said lease for a further term of three years, upon the same rental and conditions as contained in the original lease, and tendered the respondents the sum of $100, as payment for the first month's rent under the renewal, and requested them to comply with their agreement and renew said lease, but that they refused and still refuse to do so. That appellant always has been, and now is, willing to pay said rent, and brings into court said $100, as the first month's installment, and always was, and now is, able, ready, and willing to enter into and accept a renewal of said lease pursuant to the terms of said original lease for the further term of three years from the expiration of said original term. There are additional allegations to the effect that respondents have instituted proceedings against appellant for the possession of said premises and are prosecuting the same, and thereby are seeking to dispossess and forcibly eject appellant from said premises; that appellant has no legal defense to said action, and asks for a specific performance of the agreement to renew said original lease, for an injunction, and for general relief. To the foregoing complaint there is also attached, as an exhibit, a copy of the original lease entered into between the parties in which are contained several provisions which are important in solving the questions presented. The first provision, which was intended to fix the beginning and ending of the term, reads as follows: “To have and to hold the said premises, etc., unto the said lessee, its successors and assigns from the 1st day of December, 1904, for and during and until the 1st day of December, 1906, a term of two years." The rent is stipulated to be payable at the rate of $100 per month, payable in advance "on the first day of each and every month during said term.” The other provision re
ferred to reads as follows: "And in consideration of the sum of $1 to said lessors, paid by the said lessee, the receipt whereof is here by acknowledged, the said lessors do hereby agree with said lessee that in case said lessee *
* so elect, and upon request of said lessee
at the expiration of the term of this lease, they will continue and renew this lease and give a further lease on said premises unto said lessee
for the further term of three years from the date of the expiration of the term of this lease, upon the same terms, rental, and conditions as are herein contained." The lease also provides for a surrender of the premises by the lessee at the expiration of the original term, or at the expiration of a renewal thereof, and further provides that the lessee shall have the privilege of removing any and all improvements which he may place upon said premises.” To the complaint, supplemented by the lease as a part thereof, the respondents demurred upon the ground that the facts therein stated are insuficient to constitute a cause of action. The district court sustained the demurrer, and upon appellant electing not to amend or plead further, entered judgment dismissing the action, from which judgment this appeal is prosecuted.
While numerous errors are assigned in different ways, the ruling of the court, as we view it, presents but two questions, to wit: (1) When did the term of the original lease begin and end? (2) Was the request for a renewal of the original leaze made in time to entitle the appellant to the relief prayed for, either as a strict legal right under the terms of the lease, or by reason of the alleged equities set up in the complaint? With respect to the first proposition, it may well be conceded that in the computation of time, where a period is fixed as commencing "from" a named date, as a general rule of construction, the date named will be excluded, and by the same rule, when a period of time is to continue "until” a certain day named, such day is also excluded. From this it necessarily follows that where, as in the lease in question, both "from" and "until" are used, then, unless the two dates named are both outside of the term granted, the general rule excluding both these dates cannot be applied. This is manifest in this case from the fact that the term granted was for two years; no more, and no less. Under a lease, like the one in question, where the words "from" and "until" are used in connection with the other phrase, "a term of two years," as fixing the term granted, it may well be that either one or both of the dates named may be either included within the term or excluded therefrom. The whole instrument must be considered, and all its terms looked to to ascertain the true intent of the parties, and when this intent can be ascertained it must prevail, although it may be contrary to the strict letter of the