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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


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 years' experience, perfectly familiar with the

declared on the paid-up stock, a like dividend

to be applied on unpaid subscriptions for stock yard and the dangers incident thereto. He

accrucs 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

of $11,000, divided into 1,100 shares of the care whatever; but that, on the other hand,

par value of $10 each. Article 6 of the byhe was guilty of a high degree of negligence. While, of course, the general doctrine that

laws of the company, as adopted on the 7th

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.

to have been issued for these 147 shares, but These senses he neglected to exercise, and it

the plaintiff was at all times recognized as was the two acts 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 Le 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 unThe respondents contend: That article 6 paid

paid subscription in a

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 therecase 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 paragraph of the by-law, applied all of the net profits to the payment of dividends upon the paid-up stock. Knowing at the time he bought his stock that the by-laws conferred this discretion and authority upon the trustees, appellant cannot be heard to complain of their said action.

CROW' and HADLEY, JJ., concur with ROOT, J.

fire limits in violation of a contract and an ordinance, evidence was inadmissible to show that the city had not removed other buildings maintained in violation of the ordinance and similar contracts. 9. SAME-DAMAGE.

In an action against a city for the destruction of a frame building maintained within the fire limits in violation of a contract and an ordinance, the owner could not recover damages to his leasehold interest in the land upon which the building was located or for mental distress, shame, humiliation, or disgrace.

Appeal from Superior Court, Chehalis Couv. ty; W. 0. Chapman, Judge.

Action by N. G. Wheeler and others against the city of Aberdeen and others. From a judgment for plaintiffs, defendants appeal. Reversed, and new trial ordered.

John C. llogan and R. E. Taggart, for appellants. J. C. Cross and J. W. Robinson, for respondents.

(45 Wash. 63) WIIEFLER et al. v. CITY OF ABERDEEN

et al. (Supreme Court of Washington. Dec. 18, 1906.) 1. MUNICIPAL CORPORATIONS – TORTS – DE


Though a city may have a right to destroy a building maintained within the fire limits in violation of a contract and an ordinance, it is liable for any needless damage occasioned in the destruction. 2. PLEADING-ISSUES-EVIDENCE ADMISSIBLE UNDER PLEADINGS.

In an action against a city for destroying a frame building, the city pleaded in defense that, upon plaintiffs' failure to remove it from the fire limits, plaintiffs sought to enjoin the city from a threatened destruction of the building, and that judgment was rendered for the city, there being a finding that plaintiffs had breached an agreement made at the time permission was granted for the temporary erection of the building that they would remove it within 6 months. Held, that plaintiffs' failure to deny that the finding had been made concluded the question as to their having made the agreement, and therefore, evidence was inadmissible to show duress or fraud on the part of the city in the making of the agreement. 3. JUDGMENT-CONCLUSIVENESS OF ADJUDICATION.

An adjudication sustaining the right of a city to remove a frame store building from its fire limits being conclusive against a subsequent action for damages for the removal, evidence was inadmissible in such action to show the damage to the owner's business OCcasioned by the removal. 4. SAME — PERSOYS CONCLUDED — MUNICIPAL OFFICERS.

An adjudication in an action against a city, its mayor, and marshal was conclusive against a subsequent action on the same issue against the city, the same mayor, and the marshal's successor.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 30, Judgment, § 1096.] 5. SAME-ADJUDICATION AS PARTIAL DEFENSE.

An adjudication, sustaining the right of a city to remove a building from its fire limits, was available as a defense in a subsequent action for damages for the removal of the building though by reason of the wanton manner in which the removal was made the adjudication might be only a partial defense to the action. 6. MUNICIPAL CORPORATIONS DESTRUCTION


In an action against a city for the destruction of a frame store building maintained within fire limits in violation of a contrart and an ordinance, evidence was inadmissible to show the owner's expense in removing his stock from the building. 7. SAME.

In an action against a city for the destruction of a frame building maintained within the

CROW, J. The plaintiff's, N. G. Wheeler, and F. C. Wheeler, copartners, as Wheeler Bros., Florence Wheeler and Minnie Wheeler, their respective wives, commenced this action against the city of Aberdeen, a municipal corporation, John Lindstrom, and James Birmingham, to recover damages for the destruction of a certain frame building, together with its contents, and for other injuries. John Lindstrom and James Birmingham were respectively the mayor and acting marshal of the city of Aberdeen. The complaint alleges that on October 10, 1905, the plaintiffs held an unexpired lease on a certain lot in the business section of the city of Aberdeen; that they were the owners, and in possession, of a certain frame store building lo(ated thereon; that they were engaged in conducting a retail mercantile business, haring and owning for that purpose a stock of coffees, teas, spices, glassware, queensware, crockery, and groceries, together with certain furniture and fixtures; that they were realizing a net profit of $300 per month; that on October 10, 1907, and on other dates immediately thereafter, the defendants wrongfully, unlawfully, with violence and force, did take possession of the said property, and the whole thereof, did oust plaintiffs therefrom, and did wrongfully destroy such building, improvements, and fixtures; that plaintiffs were thereby compelled to remove their stock of goods; that the building was rendered unfit for occupancy; that their business was destroyed; that such acts were committed in the presence of a large number of plaintiffs' acquaintances, subjecting plaintiffs to great indignities, mental suffering, humiliation, shame, and disgrace, and that they sustained damages in the total sum of $7,812. The defendants admitted the destruction of the building, but denied all wrongful acts alleged in the complaint.

For a first affirmative defense they alleged: That on October 16, 1903, the city of Aberdeen was visited by a great fire, which destroyed 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 written 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 hereby 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 plaintiff's 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 plaintiff's' 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 fornier 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 zelathe 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 acwhich 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

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