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by this court December 6, 1906) 87 Pac. 826,
(45 Wash. 114) where we held that Baker, who was killed GELLERMANN V. ATLAS FOUNDRY & by a logging train backing onto him while
MACH. CO. et al. he was attempting to cross a railway track (Supreme Court of Washington. Dec. 19, 1906.) in a switchyard where many engines and 1. CORPORATIONS - STOCK - SUBSCRIPTIONS trains were constantly passing, was guilty
-ALTERATION OF BY-LAWS.
A change in the by-laws of a corporation of contributory negligence in not stopping
as to the declaration of dividends, made after to look and listen before stepping on the a person became a stockholder and after divitrack, although it was the conceded duty
dends accrued, cannot affect his rights to the
dividends. of the company in that case to have a look
2. SAME-CONSTRUCTION OF BY-LAW. out, or rear brakeman, upon the train to Under a by-law of a corporation providing protect the people passing along the street. that the trustees may at their discretion declare
dividends on the paid-up stock, and that divi If there is any difference, this is a more
dends accruing on any stock that may have been pronounced case of contributory negligence; subscribed for and not paid up shall be applied for the appellant was a brakeman of many on the unpaid subscription, when a dividend is
declared on the paid-up stock, a like dividend years' experience, perfectly familiar with the
to be applied on unpaid subscriptions for stock yard and the dangers incident thereto. He accrues and must be paid as a matter of course testified frankly that, in the performance of [Ed. Note:-For cases in point, see Cent. Dig. his duties, he was in and about the round vol. 12, Corporations, $$ 561, 563.] house nearly every day, and knew how the
Root, Crow, and Hadley, JJ., dissenting. engines were handled about the roundhouse Appeal from Superior Court, Pierce Counand the yard. He also testified that he ty; Mason Irwin, Judge. did not look to see if the engine was coming,
Action by A. B. L. Gellermann against because the steam was following him and
the Atlas Foundry & Machine Company and around him to such an extent that he could
others. From a judgment in favor of denot have seen if he had looked; that as a
fendants, plaintiff appeals. Reversed, with rule at that time the engines around the
direction to enter decree for plaintiff. yard were blowing off more or less steam. Walter Christian and Chas. T. Peterson,
It seems to us that a man of experience for appellant. J. W. Quick, for respondents. who would place himself in the position that the appellant did, under the circumstances
RUDKIN, J. The Atlas Foundry & Mawhich he describes, cannot claim that he
chine Company was incorporated on the 6th was exercising any degree of prudence or
day of February, 1903, with a capital stock care whatever ; but that, on the other hand,
of $11,000, divided into 1,100 shares of the he was guilty of a high degree of negligence.
par value of $10 each. Article 6 of the by
laws of the company, as adopted on the 7th While, of course, the general doctrine that
day of February, 1903, provides as follows: the servant has a right to rely on the rules
"The trustees may, from time to time, at of the company in relation to warning can
their discretion, declare dividends upon the not be gainsaid, the law does not contemplate
paid-up stock out of the net profits arising a blind, unreasoning reliance, but the servant
from the business of the company. must exercise ordinary care himself, even "The dividends accruing upon any stock while relying on the exercise of duty on the that may have been subscribed for and not part of the master. There are instances paid up shall be applied upon such unpaid when, from the necessities of the case, and subscription.” by reason of the duties imposed upon the G. R. Couls subscribed for 250 shares of servant, he must be protected in absolute the capital stock at the time of the organizareliance, as if, for instance, his duties called tion of the company, 147 of which were him under a car, or onto some dangerous not paid up.' On January 2, 1904, Couls asplace on or about a car or engine, where he signed to the plaintiff all his right, title, was absolutely dependent upon the perfor
and interest in or to the unpaid stock submance of duty on the part of the master.
scribed for, and at a meeting of the trustees But such is not this case. Here there were
held on the 6th day of January following, mutual duties to be performed. The ap
the transfer was approved and the plaintiff pellant was a healthy, competent man, pre
recognized as the holder of the unpaid stock
subscribed by Couls. No certificate appears sumably in the possession of all of his senses. These senses he neglected to exercise, and it
to have been issued for these 147 shares, but
the plaintiff was at all times recognized as was the two acts of acts of negligence-negli
the holder thereof, and the stock was voted gence on his part and negligence on the
by the plaintiff and other members of the part of the respondents—concurring, which
corporation at all stockholders' meetings. caused the accident. Under such circum- | In addition to the 147 shares of unpaid stances he cannot recover.
stock, the plaintiff is the owner of 78 shares The judgment will be affirmed.
of fully paid-up stock, which he acquired
from Couls at or about the same time. MOUNT, C. J., and HADLEY, FULLER
George C. Dupea owned 114 shares of paidTON, ROOT, and CROW, JJ., concur.
up stock and 61 shares on which the sub.
scription had not been paid. The balance of that the matter of declaring dividends on the stock was subscribed and fully paid up. the paid-up stock out of the net profits of On the 5th day of January, 1905, the trustees the business rests in the discretion of the declared a dividend of 15 per cent. on the trustees; but, when such a dividend is depaid-up stock out of the net profits arising clared on the paid-up stock, a like dividend from the business of the company, and on to be applied on the unpaid subscription for January 2, 1906, a like dividend of 60 per stock not paid up accrues and follows as a cent. was declared and paid. On neither oc matter of course. While the by-law is by casion was any dividend applied on the un no means free from ambiguity, this construcpaid stock subscribed for and held by the tion gives effect to all its provisions and plaintiff. This action was brought to compel works no injury to the stockholder who has the defendants to issue to the plaintiff a paid his subscription in full. A stockholder certificate for the 147 shares of stock and to is not in default upon his subscription unallow him credit on his subscription for the til a call is made by the corporation, and dividends which should have been applied the corporation is at liberty to call in the thercon. The court below gave judgment subscription at any time. If not paid on defor the defendants, from which the present | mand, the stock is subject to sale and forappeal is prosecuted.
feiture in such manner as may be provided Two questions are presented by the ap in the by-laws. Section 4262, Ballinger's peal: First, a determination as to the provi Ann. Codes & St. sions of the by-law which should govern the We are therefore of opinion that the appelrights of the parties to this action; and, sec lant was entitled to a certificate for the 147 ond, the proper construction of such by-law. shares of stock, and to a credit on the un
The respondents contend: That article 6 paid subscription in a sum equal to the of the by-laws of the company, as submitted dividends declared and paid on the paid-up to the stockholders for adoption at their stock, as of the date of such dividends; and first meeting, was as follows:
the judgment is reversed, with direction to "The trustees may, from time to time, at enter a decree accordingly. their discretion, declare dividends out of the net profits arising from the business of the
MOUNT, C. J., and FULLERTON and company.
DUNBAR, JJ., concur. "The dividends accruing upon any stock that may have been subscribed for and not paid up shall be applied upon such unpaid
ROOT, J. I dissent. It is admitted that subscription."
at the time appellant purchased his stock That before adoption the words "upon the
the by-laws provided that the trustees might, paid-up stock" were inserted in the first par
"at their discretion, declare dividends upon agraph, after the word "dividends," and the the paid-up stock." That is exactly what second paragraph was stricken out.
they did. Assuming that the second part of the secretary inserted the words "upon the
the by-law quoted was still in force, that paid-up stock" in the first paragraph, but
was intended to apply (as it plainly says) neglected to strike out the second paragraph,
when there were "dividends accruing upon and that a resolution was adopted by the
any stock that may have been subscribed stockholders on the 7th day of February,
for and not paid up." In this instance there 1906, reciting this error in the by-laws as were no such dividends accruing. If only a adopted, and correcting the article to read part of the net profits had been applied as as originally agreed upon.
dividends upon the paid-up stock, and the At the time the appellant became a stock balance declared as dividends upon all the holder in the company, article 6 of the by stock or upon the unpaid stock, then there laws read as set forth in the first part of
would have been occasion for the latter secthis opinion, and a change made in the by tion of the by-law to apply; and in such laws after the appellant became a stock
case the "dividends accruing" upon the upholder and after the dividends in controversy
paid stock would be credited as payment pro here had accrued, even though made for the tanto thereupon. The object of the latter ostensible purpose of correcting a mistake, portion of the by-law was to compel the subcannot affect the appellant's rights. This scriber for any unpaid stock to pay there. case must therefore be determined from a upon any “dividend accruing," instead of consideration of the by-law as it stood when receiving the dividend in cash while his inthe appellant became a stockholder and debtedness to the company for the stock reWhen the dividends were declared.
mained unpaid. It was not intended to modIt is contended that the matter of declar ify the plain language, or defeat the maning dividends was vested exclusively in the ifest purpose, of the first clause of said bydiscretion of the trustees, but this construc law. The two paragraphs are, to my mind, tion entirely ignores the second subdivision in no sense inconsistent. Under the plain of article 6 of by-laws. The by-law must terms of that portion of the by-law relied on be so construed as to give force and effect by appellant, he was entitled to no credit unto each and every of its provisions, if pos til a dividend accrued. It did not accrue for sible, and this can only be done by holding the simple reason that the trustees, under the
full power expressly conferred by the first fire limits in violation of a contract and an
ordinance, evidence was inadmissible to show paragraph of the by-law, applied all of the
that the city had not removed other buildings net profits to the payment of dividends up
maintained in violation of the ordinance and on the paid-up stock. Knowing at the time similar contracts. he bought his stock that the by-laws confer 9. SAME-DAMAGE. red this discretion and authority up on the
In an action against a city for the destruc
tion of a frame building maintained within trustees, appellant cannot be heard to com
the fire limits in violation of a contract and an plain of their said action.
ordinance, the owner could not recover damages to his leasehold interest in the land upon
which the building was located or for mental CROW and HADLEY, JJ., concur with
distress, shame, humiliation, or disgrace. ROOT, J.
Appeal from Superior Court, Chehalis Cour.
ty; W. 0. Chapman, Judge. (45 Wash. 63)
Action by N. G. Wheeler and others against WIIEELER et al. v. CITY OF ABERDEEN the city of Aberdeen and others. From a et al.
judgment for plaintiffs, defendants aprel. (Supreme Court of Washington. Dec. 18, 1906.)
Reversed, and new trial ordered. 1. MUNICIPAL CORPORATIONS - TORTS - DE John C. Ilogan and R. E. Taggart, for apSTRUCTION OF PROPERTY.
pellants. J. C. Cross and J. W. Robinson, Though a city may have a right to destroy a building maintained within the fire limits
for respondents. in violation of a contract and an ordinance, it is liable for any needless damage occasioned in CROW, J. The plaintiffs, N. G. Wheeler, the destruction.
and F. (. Wheeler, copartners, as Wheeler 2. PLEADING-ISSUES-EVIDENCE ADMISSIBLE UNDER PLEADINGS.
Bros., Florence Wheeler and Minnie Wheeler, In an action against a city for destroying their respective wives, commenced this action a frame building, the city pleaded in defense against the city of Aberdeen, a municipal corthat, upon plaintiffs' failure to remove it from
poration, John Lindstrom, and James Birthe fire limits, plaintiffs sought to enjoin the city from a threatened destruction of the build
mingham, to recover damages for the destrucing, and that judgment was rendered for the city, tion of a certain frame building, together there being a finding that plaintiffs had breach with its contents, and for other injuries. ed an agreement made at the time permission
John Lindstrom and James Birmingham was granted for the temporary erection of the building that they would remove it within 6
were respectively the mayor and acting marmonths. Held, that plaintiffs' failure to deny shal of the city of Aberdeen. The complaint that the finding had been made concluded the
alleges that on October 10, 1905, the plainquestion as to their having made the agreement, and therefore, evidence was inadmissible to
tiffs held an unexpired lease on a certain lot show duress or fraud on the part of the city
in the business section of the city of Aberin the making of the agreement.
deen; that they were the owners, and in pos3. JUDGMENT-CONCLUSIVENESS OF ADJUDICA session, of a certain frame store building loTION. An adjudication sustaining the right of a conducting a retail mercantile business, har:
catel thereon: that they were engaged in city to remove a frame store building from its fire limits being conclusive against a subse ing and owning for that purpose a stock of quent action for damages for the removal, evi- coffees, teas, spices, glassware, queensware, dence was inadmissible in such action to show the damage to the owner's business
crockery, and groceries, together with certain
OCcasioned by the removal.
furniture and fixtures; that they were reali4. SAME – PERSONS CONCLUDED — MUNICIPAL
zing a net profit of $300 per month; that on OFFICERS.
October 10, 1907, and on other dates immediAn adjudication in an action against a
ately thereafter, the defendants wrongfully, city, its mayor, and marshal was conclusive against a subsequent action on the same is
unlawfully, with violence and force, did take sue against the city, the same mayor, and the possession of the said property, and the marshal's successor.
whole thereof, did oust plaintiffs therefrom, [Ed. Note.-For cases in point, see Cent. Dig. and did wrongfully destroy such building, vol. 30, Judgment, $ 1096.]
improvements, and fixtures; that plaintiffs 5. SAME-ADJUDICATION AS PARTIAL DEFENSE.
were therehy compelled to remove their stock An adjudication, sustaining the right of a city to remove a building from its fire limits,
of goods; that the building was rendered unwas available as a defense in a subsequent ac fit for occupancy; that their business was tion for damages for the removal of the building destroyed; that such acts were committed though by reason of the wanton manner in which the removal was made the adjudication
in the presence of a large number of plainmight be only a partial defense to the action.
tiffs' acquaintances, subjecting plaintiffs to 6. MUNICIPAL CORPORATIONS – DESTRUCTION great indignities, mental suffering. humilia
OF BUILDINGS-ACTION FOR DAMAGES-Evi- tion, shame, and disgrace, and that they susDENCE.
tained damages in the total sum of $7,812. In an action against a city for the destruction of a frame store building maintained with
The defendants admitted the destruction of in fire limits in violation of a contrart and an the building, but denied all wrongful acts ordinance, evidence was inadmissible to show alleged in the complaint. the owner's expense in removing his stock from For a first affirmative defense they alleged: the building. 7. SAME.
That on October 16, 1903, the city of AberIn an action against a city for the destruc- deen was visited by a great fire, which detion of a frame building maintained within the I stroyed the entire business district. That on
October 17, 1903, a mass meeting of citizens requested the city council to enact an ordinance creating fire limits. That on said October 17, 1903, at a special meeting, the city council passed Ordinance No. 372, entitled "An ordinance creating fire limits and dividing the city of Aberdeen into two building districts, and providing for the construction, alteration, and repair of buildings therein," etc, That on October 19, 1903, the city council, at a special meeting, passed the following resolution: "Resolution. Be it resolved by the city council of the city of Aberdeen, as follows: That until such time as an ordinance can be enacted and put in force, no person, firm, or corporation shall be permitted to use any of the streets or alleys within the district hereinafter described for the deposit or unloading of any lumber or building materials, without first obtaining a writteri permit for a temporary structure from the city clerk. The following is the district hereinbefore referred to": [Here follows description of the district] “That for the period of time above referred to, no permit shall be granted for any structures or buildings within said area, but temporary structures not exceeding one story in height, and the persons applying for such permit to erect such temporary structure or building shall make application therefor in writing, signed by him or his agent in substance as follows: Application for Permit to Erect a Temporary Building. To the city of Aberdeen: I herehy apply for a permit to erect a temporary building, in accordance with the outline of plans hereto attached, upon the premises described in the annexed schedule. And in consideration of such permit being granted, I hereby undertake and agree with the city of Aberdeen to remove said temporary structure within six months after this date, or to make the same conform with the ordinances of the city of Aberdeen then in force, with reference to fire protection and in event of my failure so to do, within the said time I hereby waive all claim for damages, which may accrue to me or my assigns by reason of the removal or destruction of said buildings, by the city authorities, after said date.'
That upon filing such application with the city clerk, duly signed, with an outline of plan of the proposed temporary building the city clerk shall issue to such applicant a permit. * * *” That the plaintiffs had full knowledge and notice of Ordinance No. 372, and the above resolution, both of which were published in the official paper of the city; that the city council, at a regular meeting held on October 21, 1903, passed Ordinance No. 375, substantially the same as Ordinance No. 372; that Ordinance No. 375 was published on October 24, 1903, and is still in full force and effect; that plaintiffs' property is, and was, located within the first building district created by such resolution and ordinances; that the resolution was passed, as plaintiffs well know, for the purpose
of holding the situation within the burned district in statu quo, until such time as Ordinance No. 375 might be enacted at a regular meeting, and become operative; that pursuant to such resolution of October 19, 1903, and other proceedings of the city council, the plaintiff's applied to the city for a building permit for the erection of a one-story frame building upon their leased lot; that, in consideration of the granting of such permit, they entered into a written agreement with the city that the building to be erected by them should be removed within six months after October 19, 1903, or made to conform to the ordinances of the city then in force, and that in the event of their failure to remove the same, they would waive all claims for damages which might accrue to them by reason of its removal or destruction by the city authorities; that, in pursuance of such permit, the plaintiffs erected the building mentioned in the complaint; that, after the expiration of six months, they failed and refused to remove the same or to make it conform to the ordinances of the city, although the defendants had made repeated demands upon them so to do, and had also served upon them a resolution of the city council passed August 2, 1905, requiring its removal; that the defendants Lindstrom and Birmingham are respectively the mayor and acting marshal of the city of Aberdeen, and were acting as such under the authority of the ordinances, resolutions, and instructions of the city of Aberdeen, and also under the authority of the contract entered into by the plaintiffs with the city when they destroyed the plaintiffs' building, and that they did so without inflicting any unnecessary damages.
For their second affirmative defense the defendants alleged that on or about August 10, 1905, when the defendants, in pursuance of the resolution of August 2, 1905, were about to destroy the building, the plaintiffs herein filed in the superior court of Chehalis county a complaint and application for injunction; that in such action the plaintiffs herein were plaintiffs, and the city of Aberdeen and John Lindstrom, as mayor, and H. H. Carter, as marshal, were defendants; that in their complaint the plaintiffs alleged their ownership of the building here involved, pleaded the enactment of Ordinance 375, and the resolution of August 2, 1905, and alleged that the city, through its mayor and marshal, threatened to summarily destroy their building, and that Ordinance No. 375 and the resolution of August 2, 1905, and other acts and proceedings of the city looking towards the removal of their building were invalid; that an ex parte restraining order coupled with a show-cause order was granted by the court and served on the defendant therein, who are the defendants in this action; that the city of Aberdeen, John Lindstrom, as mayor, and H. H. Carter, as marshal, appeared and made answer, alleging the various steps and
proceedings taken by the city creating fire, terial of which the building had been condistrict No. 1, the enactment of Ordinance structed, and that they also seriously and No. 375, the issuance of a permit to the needlessly damaged the respondents' furniplaintiffs, their contract with the defendant ture, fixtures, and merchandise. This they city, the passage of the resolution of August were not entitled to do. If, in fact, they did 2, 1905, and the right of the city to destroy any unnecessary damage, they should be held plaintiffs' temporary building; that to such liable therefor. Although the appellants deanswer the plaintiffs replied; that upon the nied having done any unnecessary damage, issues joined trial was had, evidence ad the evidence was conflicting, and the issue duced; and that after a hearing on the of the existence and amount of such unmerits the court made findings of fact and necessary damage, if any, was properly subconclusions of law in favor of the defend mitted to the jury for their determination. ants, which were attached to and made a Appellants further contend that the trial part of the answer herein; that final judg court erred in permitting the respondent N. ment was entered in favor of the defend G. Wheeler to testify in rebuttal that he ants, and that thereby all the matters and signed the contract for removal and waiving things claimed by the plaintiffs in their com damages, under circumstances tending to plaint herein were concluded, decided, and show fraud or duress on the part of the city, disposed of by the court in favor of the de. insisting that the court thereby opened a fendants; that the findings, conclusions, and question which had been concluded by the judgment in such former action have not former adjudication in the injunction suit. been vacated, reversed, or set aside, but are By their answer the appellants pleaded all in full force and effect on all the parties. of the issues in the former action, and also
The plaintiffs having replied, a jury trial set forth at length the findings of fact, conwas had, and a verdict was returned in favor clusions of law, and final judgment entered of the plaintiffs for the following damages : therein. The seventh finding in such action For loss by destruction of building, $400. pleaded herein, reads as follows: "That on For loss by damage to stock of goods and the 21st day of October, 1903, the plaintiffs costs of removal, $400. For damages to the herein, N. G. Wheeler and F. C. Wheeler, cobusiness of plaintiffs, $300. From a judy. partners as Wheeler Bros., applied to the ment entered upon this verdict the defend city of Aberdeen for a building permit to ants have appealed.
erect a temporary wooden building not exThe above statement discloses the situa ceeding one story in height, and thereupon tion surrounding the parties. It is undis the said Wheeler Bros. entered into an agreeputed that the fire took place as alleged ; that ment in writing with the city of Aberdeen the ordinances and resolutions were passed ; wherein they agreed, in consideration of such that the building permit was issued; that permit being granted, to remove such temthe contract was actually signed by plain porary building within six months after said tiffs (although they allege in their reply and date, or cause the same to conform to the ortestify that it was signed under duress) ; that dinances of the city of Aberdeen with relathe building was erected by plaintiffs; that tion to fire protection which might then be notice for its removal was given; that the in force, and thereupon the city of Aberdeen injunction suit was instituted; that final granted to the said Theeler Bros. a permit judgment was rendered therein, and that for a temporary building; that a copy of the appellants destroyed the building. The said agreement and permit is set out in parrecord, however, shows much dispute as to agraph 6 of section 8 of the defendants' anthe validity of the ordinances, resolutions, swer, and that said agreement was entered building permit, and plaintiffs' agreement into and permit granted to the plaintiffs unwith the city; as to the effect of the judg der the provisions of the resolution passed ment in the injunction suit; as to the amount by the city council on the 19th day of Octoof damages sustained by plaintiffs, and as to ber, 1903; that at the time of taking out the liability of the appellants therefor. said building permit for said temporary
The first contention of the appellants is building, and at the time of signing of said that the trial court erred in refusing to dis agreement the plaintifts, Wheeler Bros., well charge the jury, and dismiss the action. As knew that the city of Aberdeen was contemsuming that the appellants as they contend plating the enactment of an ordinance for were entitled to destroy respondents' build fire protection in the city of Aberdeen covering, we think it was their duty to do so in a ing the district described in the resolution careful and prudent manner, without unnec of October 19, 1903, the city authorities deemessary damage or injury to the material of ing Ordinance No. 372 to be void on which it was constructed, or to the furniture, count of having been passed at a special fixtures, and merchandise which it contain meeting of the council." The reply did not ed. There is evidence tending to show that deny that this finding had been made, and it they summarily proceeded with haste and must be taken as admitted. Hence, the quesviolence, after the dissolution of the injunc tion as to whether the respondents made tion, and that, in so doing, they unnecessarily the agreement was concluded by the former destroyed and rendered worthless the ma- | adjudication. Under the issues raised by