The record-union., 1892-10-04
LIABILITY OF SHAREHOLDERS.
Decision Rendered by the Supreme
Court in a YoIo Case.
The Judgment Rendered Against the
Stockholders of the Woolen
Factory Must Stand.

A decision has been filed in Deputy
Clerk Govan's office by the Supreme
Court in the case of the Bank of \ olo VS..
| n. NJ. Weaver and others, appellants.
The action was brought to recover of
certain stockholders of a corporation de-
signated as the woodland Woolen Manu-
featuring Company" their proportionate
shares of certain moneys alleged to have
been borrowed from the plaintiff, the
Bank of Yolo. Judgment was given in
favor Of the plaintiff, from which, and
from an order refusing a new trial, the
appeal was taken.
The Supreme Court says: "The facts
surrounding the transaction seem, in
brief, TO be that the Woolen Manutactur-
ing Company was in need of money TO
get into operation, and by written resolu-
! ton of its Board of Directors, spread upon
| its minute-book, ordered that its Presi-
| dent and Secretary give a note to the
| Bank of \ olo for fifteen thousand dollars
as security for oVerdraits. At the time
| this action was Instituted the manufacture
ing corporation owed the Bank OF Golo
| Sl9,247 81 for moneys drawn from the
bank, portion OF the SAME in pursuance
| OF the written resolution authorizing the
note, and the balance Of the borrowed
money by the vote or resolution OF the
! Board of Directors, which vote or resolu-
ton was not spread in writing upon the
minutes in the corporations book.
But the evidence is insufficient to
show, as we think, that all OF this money
was borrowed from the bank by the au-
| thority OF the Board Of Directors Of the
man nutacturing corporation and used by
it for its exclusive benefit. Therefore the
objection made by the defendants to the
! introduction in evidence of a resolution
of the Board OF Directors, and entered in
| the minutes, after suit brought, ratifving
the acts Of the Treasurer in borrowing
and using, for The purposes OF the corpo-
ration, all of the money sued for in this
action in excess of what the written reso-
luton called for, authorizing the note, is
| untenable.
''The right of recovery here did not de-
pend upon this alleged ratification; it de-
pended primarily upon the authorization
OF the board, IN writing, as to $4,000, and
as TO the balance upon the vote or reSOlu-
ton of the directors, not reduced to writ
ing, and upon the fact that this money
was borrowed and applied to the uses of
the corporation.
| such corporation cannot receive the
benefits and uses OF an executed contract
and then deny its obligation Here a
number of cases are cited.l
Therefore, whether the resolution of
ratification, made after suit was brought.
was improperly admitted or not-Which
we do not decide-lS immaterial, as the
cause was tried by the court, and the
evidence was ample without it to fix the
liability of the defendants, and it does not
appear that the court rested its decision
upon that resolution. (Mitchell VS.. Beck
man, GA Cal. l23.)
''But the appellants further object that
the complaint did not state facts sufficient
to show cause of action, in that it does
inTntl ,l, h,N1,
were subscribed for, so that from such
statement and the statement of what
number OF shares each defendant owned
it can be determined what was their pro-
portionate share of the Indebtedness or
liability.
''The allegation objected 10 runs thus:
| That 305 shares of the capital stock of
said Woodland Manufacturing Company,
and no more, were taken, subscribed and
fully paid for This, we think. was suffi-
cient under the demurrer filed. (Bidwell
VS.. Babcock, 81 Cal. 29.)
''We perceive nothing of merit in the
point raised as to the supplemental COM
plant. If not good as such complaint,
it stated a good cause of action as an
amended complaint.
''It is further alleged that Mr.. Walker.
one of the defendants, owned twenty
shares more of the stock than the court
| found he owned, and that he should have
been held tor a proportionate share of
the Indebtedness on those shares of stock.
ut is true that the evidence is that he
subscribed for those shares, but it does
not appear that he bought them on credit.
| but rather that he was to pay for them at
once, and it also appears that he did not
pay or offer to pay for them, and that no
certificate of them was ever issued to
him, and that they never were really sold
| to him. While the evidence is not so
convincing as to render it absolutely GER
tain that such was the state of facts, vet
it tends, as we think, to show that he did
not own them, hence we do not feel dis
posed to recommend the disturbance of
the finding as to that matter.
Upon the whole record we perceive no
preiudicial error, and therefore advise
that the judgment and order be af-
tirmed."
ANOTHER YOLo DECISION.
In the case of t. M. Prior vs. M. Digps.
respondent the action was brought on
November "a, 1888, to recover damages in
the sum of s., 900 for the alleged breach OF
a written contract.
ness good will of the saddlery, harness
| and carriage-trimming business in Wood
land, agreeing not TO engage i'll the same
| business there himself. The case was
tried before jury and a verdict rendered
in favor of defendant and the latter ap-
pealed.
After going over the case at great length
the Supreme Court affirms the decision of
the lower court.
NEW TRIAL ORDERED.
The case of James Brusie VS.. Samuel
Gates, respondent, was an action brought
to quiet title to land. The defendant
moved for non-suit, which was granted.
in which it is held by the Supreme Court
that the lower court erred. The judg-