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in stock on certificate or books of corporation, that the whereabouts of Smith was not cannot be held liable on ground of estoppel. known at the time of the hearing. Department 2.
The article of the Constitution before. cited Appeal from Superior Court, King Coun
reads as follows: ty; Griffiths, Judge.
"Each stockholder of any banking or insur
ance corporation or joint-stock association shall Action by John P. Duke and others be individually and personally liable equally and against H. J. Madill and wife. Judgment ratably, and not one for another, for all confor plaintiffs, and defendants appeal.' Re-tracts, debts, and engagements of such corversed and remanded.
poration or asgr.ciation accruing while they re
main such stockholders, to the extent of the Carkeek, McDonald, Harris & Coryell, of amount of their stock therein at the par value Seattle, for appellants.
thereof, in addition to the amount invested in Guy E. Kelly, Thomas MacMahon, and such shares." F. D. Oakley, all of Tacoma, for respond
 The section of the statute to which ents.
reference has been made contains the subFULLERTON, J. The respondent Duke,
stance of the constitutional provision, and as the supervisor of banking having in this further provision, namely: charge the liquidation of the Scandinavian “Persons holding stock as executors, adminAmerican Bank of Tacoma, an insolvent istrators, guardians or trustees, if such relabanking corporation, brought this action tion of trust shall appear in the stock certifiagainst the appellants, Madill, as stock cate and on the books of the corporation, or as
collateral security or in pledge, shall not be holders of the bank named, to recover upon personally liable as stockholders, but the asthe superadded liability imposed on stock sets and funds in the bands of such trustees holders of a banking corporation by article constituting the trust shall be liable to the 12, § 11, of the state Constitution and by same extent as the testator, intestate, ward, the act of the Legislature commonly known or person interested in such funds would be, if as the Banking Act. Laws 1917, p. 290, $ 35. | living or competent to act, and the person The supervisor recovered in the court be- pledging such stock shall be deemed a stock
holder and liable under this section." low, and the question presented by the appeal is whether the interests which the ap The first disagreement of the parties is pellants had in the shares are sufficient to over the construction of the statute quoted. charge them with liability.
It is the respondents' contention that the The facts material to the question in- qualification put upon the limitation convolved are in substance these: The bank- tained therein applies as well to persons ing corporation named was found to be in holding stock as collateral security, or in solvent, and was taken over for liquida- pledge, as it does to persons holding stock tion by the predecessor in interest of the as executors, administrators, guardians, or present supervisor of banking, on January trustees. But we agree with the appellants 15, 1921. Prior to November 20, 1920, the that this is not its natural meaning. The bank had issued a certificate for ten shares statute is not ambiguous. As it is written, of its stock to one A. A. Boggess. Boggess the qualification plainly applies to holders subsequently assigned and delivered the of stock in the last-mentioned capacity, and stock to one A. J. Smith, although no trans- it is only on the principle that the Legis. fer thereof was made on the bank's books. lature did not by its language express its inOn November 20, 1920, the appellants made tent that the courts can give it a different a loan to Smith of $1,000, payable in 90 days, meaning. Looking at the statute with this and took from Smith an assignment of the latter thought in mind, it may be that no stock as collateral security. On the same very substantial reason will readily occur day they forwarded the stock to the bank why the Legislature would require executors, and requested that it be transferred on the administrators, guardians, or trustees holdbooks of the bank to the appellant H. J. Sing stock to have the relation of trust apMadill. The bank complied with the request pear in the stock certificate and on the books by accepting a surrender of the existing of the corporation in order to escape percertificate and issuing to Madill a new cer- sonal liability, and not make the same retificate. No notice was given the bank of quirement of persons holding stock as colthe collateral nature of the ownership, nor / lateral security or in pledge.
But this did it acquire such notice prior to its fail- alone is not enough to enable the courts to ure. Between the time of the transfer to interfere. The reasons for legislative enMadill and the time of its failure, and while actment is wholly with the Legislature, and, the stock stood in the name of Madill as the if their language is clear, and the enactabsolute owner, the bank incurred a large ment is within the power of the Legislature, indebtedness, many times in excess of the the courts must give it effect as it is written, par value of the stock.
notwithstanding they may not readily gather It further appears that the loan was not the legislative motive. paid at its maturity, nor afterwards, and  It is said further that to give the stat
(230 P.) ute the foregoing interpretation is to ren- , guaranteed payment by other corporation, der it violative of the constitutional provi- though insufficient as guaranty under statute of sion. But we cannot so conclude. It will frauds, held admissible as declaration against in
terest. be observed that the Constitution does not define the meaning of the term "stockhold- 3. Corporations Ow422(3)-President may bind er.". It was of course known to the framers by his authorized declarations and admissions and adopters of that instrument that holders against interest. in an apparently unlimited capacity would President may bind corporation by declaraactually hold it in a qualified and limited tions and admissions, against interest, within capacity. The obvious deduction from this scope of his duties, and pertinent to issues inis that the framers of the Constitution in- volved in action against corporation. tended that the actual stockholder should 4. Corporations wi-Corporate entity disbe bound. There is here then room for legis. regarded, where one uses another as mere lative action. It will not be doubted that agency. it is within the province of the lawmaking While, in general, corporation is separate power to declare whether the apparent or legal entity, where corporation resorts to stock the real owner of such stock shall bear the ownership in another to use latter as mere agenburdens imposed on its ownership and the sy or instrumentality of owning company, court, Legislature by the present enactment has in proper case, will disregard corporate entity, done no more than this. It has declared
and treat two corporations as one, in interest
of justice. that as between the holder of stock pledged as collateral security and the pledgor of
Department 2. the stock, “the person pledging such stock
Appeal from Superior Court, King County; shall be deemed a stockholder and liable for"
Frater, Judge. the superadded liability the constitution and statute impose, and this without regard to the
Action by S. F. Platt against the Bradner question whether or not the pledgee has Company and another. Judgment for plaincaused himself to appear on the stock cer
tiff, and defendant named appeals. Affirmed. tificate and on the books of the bank as Grinstead, Laube & Laughlin and Harry the real owner.
A, Rhodes, all of Seattle, for appellant.  The respondent makes a further ar Elias A. Wright and Sam A. Wright, both gument in which he invokes the doctrine of of Seattle, for respondent. estoppel. We think, however, that this is beside the question. The lawmaking body, acting within its constitutional powers, has
HOLCOMB, J. A motion made and arseen fit to declare who is liable under such gued in the briefs to dismiss the appeal on circumstances, and the courts are not at ties bound by the judgment was not served
the ground that one of the interested parliberty to declare a different rule. The judgment is reversed, and the cause
with notice of appeal is denied, since the recremanded to enter a judgment in favor of ord has been supplemented to show that the
ground of the motion is unfounded. the appellants, defendants below.
The action is one by a dairy farmer su
ing in his own behalf and as assignee for MAIN, C. J., and PEMBERTON, MITCH- the purpose of collection of 16 other dairyELL, and PARKER, JJ., concur.
men in the vicinity of Issaquah, Tolt, Redmond, and Snoqualmie, to recover on 17 causes of action aggregating the sum of
$2,130.40. The action was brought against PLATT V. BRADNER CO. (No. 18745.) the Bradner Company, a corporation, appel(Supreme Court of Washington. Dec. 5, 1924.) lant, and the Canyon Milk Products Com
pany, a corporation, jointly, upon the theory 1. Corporations C416 - Writing signed by that they were both liable.
president held insufficient to bind corporation, under statute, as guaranty of debts of another in Seattle, Wash., whose business consists
Appellant is a corporation doing business corporation. Writing, signed by corporation's president
of selling and handling eggs and dairy prodwithout authority from any corporate act, held ucts. It was incorporated on June 28, 1916, insufficient to bind corporation, under statute of by C. G. Bradner, Lucy F. Bradner, C. F. frauds, as guaranty of debts of another corpo- Bradner, L. C. Bradner, and Esther Bradner. ration,
Its capital stock consisted of $300.000, di2. Evidence Ow272-Insufficient written guar.
vided into 3,000 shares of the par value of anty held admissible as declaration against $100 each. Later there were some transfers interest.
of stock so that a corporation called the In action against milk corporation to col- Bradner Investment Company became the lect for milk sold and delivered to another cor
owner of 1,400 shares, and Messrs. Bloomporation, on theory that it was a mere adjunct quist, Cunningham, Cooper, Pease, and Rosof defendant writing, stating that defendant enfeld became owners of stock aggregating
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
1,266 shares; and it will be noted that the
"3–29—19. Bradner family still maintained control of "Mr. Bert Vandermeer, Pres. Grange Merc. appellant company by the ownership of a | Ass'n, Issaquah-Dear Sir: This is to certify large majority of the stock. From the or- that the Canyon Milk Products Company, operganization, and up to and including the year ating the condenser at Issaquah, is owned and 1923, L. C. Bradner continued to be president controlled by the Bradner Company, and we and treasurer of appellant company, and c. hereby guarantee the payment for all milk sold
to the Issaquah plant. F. Bradner secretary.
"Yours very truly, On January 31, 1919, the defendant Can
“The Bradaer Company, yon Milk Products Company was organized
"By L. C. Bradner, Pres." with a capital stock of $50,000, divided into 500 shares of the par value of $100 each, 100 This writing was upon stationery bearing shares of which were denominated "pre- the heading: ferred" and 400 shares “common" stock, the
"The Bradner Company, Wholesale Butter, incorporators of the company being L. C. Eggs and Cheese, Manufacturers Jersey CreamBradner, C. F. Bradner, F. S. Inches, J. L.
ery Butter." Tuttle, and A. J, Rhodes. Of this stock the entire $10,000 of preferred stock was origi It was signed by the Bradner Company in nally subscribed by the Bradner Company by typewriting, and by L. C. Bradner, president, L. C. Bradner, president, but this stock was in handwriting. Some doubt was attempted issued to L. C. Bradner personally, and paid to be cast upon the authenticity of the sigfor by him. Of the common stock F. S. nature of L. C. Bradner to the instrument Inches subscribed for $10,000 worth, J. L. at the trial, but there can be no doubt, after Tuttle $5,000 worth, L. C. Bradner $100 examining his signatures in the record, as worth, A. J. Rhodes $100 worth, and Cleo well as the testimony of expert witnesses, Bradner, who is shown to be the wife of that the signature was that of L. C. Bradner. L. C. Bradner, $19,700 worth. All of the This writing was exhibited by Mr. Vanderstock is shown to have been paid for on meer to respondent and his several assignors. the books of the company except the stock | It was likewise posted in the place of meetof Inches and Tuttle, who seem neither to ing of the members of the Farmers' Grange, have paid, nor to have been required to where it remained for some time, and therepay, anything. Cleo Bradner gave her proxy after it was deposited with the president of to L, C. Bradner to vote all shares of stock the Issaquah Bank for safe-keeping and for of the Canyon Milk Products Company inspection by the various farmers with standing in her name at all annual' and spe- whom the Canyon Milk Products Company cial meetings of the stockholders of the com was dealing, or expected to deal. As soon pany, and to do all things necessary and as this instrument was signed and delivered proper to carry the proxy into effect. Inches, to the president of the Grange, the milk Tuttle, L. C. Bradner, C. F. Bradner, and producers lost their reluctance to sell to the A. J. Rhodes were elected the first trustees Canyon Milk Products Company, and thereof the corporation, and qualified as such on after sold large quantities to it. At the time February 11, 1919. L. C. Bradner was made the Canyon Milk Products Company became president of the Canyon Milk Products Com- | insolvent and discontinued business, and pany, J. L. Tuttle secretary, and F. S. Inch - Inches had disappeared from the community, es treasurer. No minutes of any proceed- these parties had sold and delivered someings of the stockholders or trustees of the thing over $6,000 worth of farm products, Canyon Milk Products Company were en- | which had been reduced by payments to tered on the books of the company after a the amount involved in this suit. resolution dated “2–1819," which au It appears from the account book of the thorized Inches as treasurer to make depos- Canyon Milk Products Company that appelits in the Union National Bank of Seattle, lant had advanced large sums of money to and to draw and indorse checks upon the the Canyon Milk Products Company for the account in that bank, and authorizing L. C. purpose of meeting pay rolls and paying for Bradner, president, to do the same thing. products that company had bought, and othFrom that time on minutes of that corpora- erwise keeping it going. Appellant company tion seemed unnecessary. Inches seemed to produced no record of its transactions with have had the management of the business of the Canyon Milk Products Company except buying milk products for the Canyon Milk the records of the Milk Products Company Products Company at Issaquah and else- itself; appellant's president testifying that where in King county. It seems that the milk | their books had not been kept for so long producers in the vicinity of the place of busi a time, and that the books of the Canyon ness of the Canyon Milk Products Company Milk Products Company showed the reverse were reluctant to sell their products to it, entries of the transactions with Canyon Milk not being sure of receiving pay therefor. Ac- Products Company, which would have been cordingly Inches procured from L. C. Brad- shown in their books. ner as president of appellant company an in The theory of respondent at the trial, and strument as follows:
now is, that the oral testimony produced at
(230 P.) the trial, the books of the companies, and, junct to it, the courts will look beyond the the written instrument set forth above, es- legal fiction of distinct corporate existence, tablish such connection between appellant as the interests of justice require; and and the Canyon Milk Products Company as where stock ownership is resorted to not for to show that the Canyon Milk Products Com- the purpose of participating in the affairs pany was nothing but a subsidiary company of the corporation in the customary and or an adjunct to that of appellant; that usual manner, but for the purpose of conthe Canyon Milk Products Company was so trolling the subsidiary company so that it dominated and controlled by the principal may be used as a mere agency or instrumenand dominating stockholders of appellant, tality of the owning company, the court will and was made use of for appellant's own not permit itself to be blinded by mere corpurposes to such an extent as to render ap- porate form, but will, in a proper case, dispellant itself liable. The principal conten- regard corporate entity, and treat the two tion of appellant is as to the materiality and corporations as one. 1 Fletcher, Cyc. of Coreffect of the writing above set forth.
porations, p. 63, § 45; Id., 1921 Supplement, It is vigorously contended that a mere in- vol. 10. p. 11, § 45 ; Spokane Merchants' spection of the writing makes it apparent | Ass'n v. Clere Clothing Co., 84 Wash. 616, that it is not a sufficient writing under the 147 P. 414; Clere Clothing Co. v. Union statute of frauds to answer for the debt, de- Trust & Savings Bank, 224 F. 363, 140 C. C. fault, or miscarriage of another person, and | A. 49; Advance-Rumley Thresher Co. v. that in any event it is not shown to have Geyer, 40 N. D. 18, 168 N. W. 731. See, also, been authorized by the appellant company, In re Eilers Music House (C. C. A.) 270 F. and, if its president executed and delivered 915; Id. (C. C. A.) 274 F. 330; Luckenbach it without such authority, it is not binding s. s. Co. v. W. R. Grace & Co., Inc. (C. C. upon appellant. It is also contended that A.) 267 F. 676; Hunter v. Baker Motor Vethere is no fraud or fraudulent intent shown hicle Co. (D. C.) 225 F. 1006. on the part of appellant in its dealings with The above cases cite many other cases susrespondents, or holding out of the Canyon taining the principle here announced, but Milk Products Company as its agent or sub- they are too numerous to extend this opinion sidiary.
by citing them all. We have our own cases  We concede that the instrument set of Mitchell v. Lea Lumber Co., 43 Wash. out above lacks authority by any corporate 195, 86 P. 405, 9 L. R. A. (N. S.) 900, 10 Ann. act of appellant to bind it as a contract in Cas. 231; Roberts v. Hilton Land Co., 45 writing under the statute of frauds. Indeed, Wash. 464, 88 P. 946. These cases follow the respondent disclaims any such character in same principle as was followed in the Clere the instrument. It was not sued upon as a Clothing Company Case, supra. contract.
The cases cited by appellant from this  But under the circumstances here we court (Crown Paving & Construction Co. v. think that this instrument was certainly ma- Walla Walla County, 122 Wash. 144, 210 P. terial and relevant as a declaration against 357, Parr v. Pacific Storage Warehouse, 124 interest which the president of appellant Wash. 26, 213 P. 677, and Mansfield State could make either orally or in writing, and Bank v. Leslie Hardware Co., 126 Wash. thus bind the company when others acted 562, 219 P. 15, 222 P. 901), are not in point, upon it to their prejudice. There can be no these cases being cases where the writings doubt in this case that others acted upon executed by an unauthorized officer were this instrument to their prejudice.
sued upon as such; and in the last-cited  It is well-settled law that the president case it was mere accommodation paper, or of such a corporation may bind it by his dec- paper executed for an unlawful purpose, and, larations and admissions, where it involves as was pointed out, no one had been injured matters within the scope of his duties, and by reliance thereon. are pertinent to the issues involved. 2 We feel bound to conclude that in this case Thompson on Corporations, $ 1629; Id., respondent made a case to go to the jury Cumulative Supplement 1922, § 1629.
upon the writing in evidence as a declaraFrom September 10, 1917, to December 27, tion or admission against interest and the 1919, or over two years, there never was a other evidence introduced, making appellant meeting of the stockholders. L. C. Bradner liable for the debts of the Canyon Milk Prodcontinued in office as president and treasur- ucts Company to respondent and his aser, thus manifestly being the guiding spirit signors. and manager of appellant. The writing in That being the case, the instructions given question was given March 29, 1919.
by the trial court and complained of by ap It is also well-settled law that, while pellant were correct. in general, a corporation is a separate legal The judgment is affirmed. entity, nevertheless when one corporation so dominates and controls another as to make MAIN, C. J., and TOLMAN, MACKINthat other a simple instrumentality or ad- TOSH, and BRIDGES, JJ., concur.
opposing candidate shall be printed on such STATE ex rel. ONSTINE v. BARTLETT et al. ballot in opposition to such candidate, but one (No. 18972.)
space shall be left following such name in which
the voter may insert the name of any person (Supreme Court of Washington. Dec. 4, 1924.) for whom he wishes to cast his ballot.” 1. Judges On 3 -- Statutory provision as to The law also provides the method by which
method of nominating and electing judges held a majority shall be determined. The relator not invalid as violating constitutional require- attacks the two provisions contained in this ment of a superior court in each county.
section, alleging that each of them is unconRem. Comp. Stat. § 5212, relating to nomination and election of judges of superior court,
stitutional does not violate Const, art. 4, § 5, providing for
(1) First. The provision for the separaa superior court in each county; such “court" tion of the superior court into positions for being one entity, of which there may be several the purpose of election is attacked, on the judges.
ground that section 5, article 4, of the state 2. Elections fm22_Statutory provision as to Constitution, provides that in each of the
printing name of candidate for superior court counties of this state there shall be a sujudge on ballot held not unconstitutional, perior court. Under this provision, in State
In view of Rem. Comp. Stat. $8 5212, 5272, ex rel. Lytle v. Superior Court, 54 Wash. 378, 5282, permitting elector to write on ballot name 103 P. 464, a law was declared unconstituof person for whom he wishes to vote, provi- tional which attempted to delegate to counsion of section 5212 that majority nominee for superior court judge shall be printed without ty commissioners the power to divide counopposing candidate, with blank space following, ties into judicial districts, and to establish a in which voter may insert any name, is not con- superior court in each district. But confutrary to Const, art. 4, § 5, requiring judges to sion should be avoided between “judges" and be elected at general state elections, and arti- "courts.” Shephard v. Gove, 26 Wash. 452, cle 6, § 8, designating time of general elections. 67 P. 256; State ex rel. Romano v. Yakey,
43 Wash. 15, 85 P. 990, 9 Ann. Cas. 1071; Department 2.
In re Newcomb, 56 Wash, 393, 105 P. 1042. Appeal from Superior Court. Spokane The court is one entity of which there may be County; Webster, Judge.
several judges, and, the Legislature having Proceeding by the State of Washington, on been given power to designate the number of relation of Burton J. Onstine, for mandamus judges constituting a court in each county, against Elmer H, Bartlett and others. From there seems no reason why the same body judgment for respondents, relator appeals. may not enact such reasonable procedure as Affirmed.
it sees fit for the election of these several
judges. Fred M. Williams, W. C. Jones, and Del
The Supreme Court of Iowa, in Cary Smith, all of Spokane, for appellant. Schaffner v. Shaw, 191 Iowa, 1047, 180 N. John H. Dunbar and E. W. Anderson, both
W. 853, said: of Olympia, and Chas. H. Leavy and E. J.
"The judges are but organs of the court, the Farley, both of Spokane, for respondents.
conduits through which it speaks. The court and judge are by no means
The increase or diminution of the number of MACKINTOSH, J. As far as material to judges * is of the
judges, but be considered here, section 5212, Rem. Comp. not of court. Stat., provides that:
If the relator's argument is correct, the su“Where there are to be elected at any general perior court in each county, as provided by election one or more judges of the superior the Constitution, is a single office, and the court of any county or judicial district the can- various acts which increase the number of didates for each respective office whose names are to be placed on the general election ticket judges in the counties of the state would shall be determined as follows: Not less than have been unconstitutional, as providing more ten days before the time for filing declaration courts than called for by the Constitution. of candidacy, the secretary of state or the The true interpretation is that the court in county auditor, as the case may be, shall des- each county is a single entity, of which there ignate by number each position to be filled are as many oflicers as there are judges, proupon the superior court of the county or judi: vided by law. In 15 C. J. 869, it is said : cial district. Each candidate at the time of the filing of his declaration of candidacy shall "It frequently happens that a court is didesignate by the number so assigned, the posi- vided into a number of different departments, tion for which he is a candidate and the name parts, or divisions, and the Legislature has of such candidate shall appear on the ballot power so to regulate the business of a court, only for such position. * * Where any in the absence of any constitutional prohibition, candidate for such office shall receive a ma But the court remains a unit, notwithstanding jority of all votes cast at such primary election such a division.'' for such office, the name of such candidate receiving such majority shall be printed sepa This court, in State ex rel. Shepard v. rately on the general election ballot under the Superior Court, 60 Wash. 370, 111 P. 233, designation 'Vote for One' and the name of no 140 Am. St. Rep. 925, said :
For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexen