Court Opinion

ID: 6564069
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:18:13.811732+00
Date Added: 2024-06-11T15:56:39.325640
License: Public Domain

On Petition for Rehearing.

Appellee’s brief in support of its petition for a rehearing is largely a re-statement of the same arguments made at the original hearing. Nothing new is presented which calls for a change in the opinion, but some additional observations, explanatory of the facts and the particular points how urged, may possibly more clearly show the fallacy and injustice of plaintiff’s contentions.
In the original opinion it was stated that the complaint averred that the appellee had received notice of the assessment, for failure to pay which its stock was sold, hence it was a departure in the replication to deny receipt thereof by alleging an omission of the defendant to publish notice of the assessment, as required by the by-laws. Plaintiff now says that no’ advantage can be taken by defendant of the alleged departure, because the same was waived by its treating such failure as an issue in the case. We were in error in stating that such averment was in the complaint. It is silent in that particular. But the legal effect is the same. The accurate statement is that the complaint did not rely upon, or allege, the failure to give the prescribed notice, and in his own *507testimony plaintiff’s president acknowledged receipt of personal notice thereof.
We did state in the opinion, and again say, that it was improper for plaintiff, in its replication, to change position and rely upon failure to publish notice of the assessment, after silence upon that point in the complaint. But nothing prejudicial to plaintiff was predicated upon the departure, and defendant was not seeking to avoid the effect of no publication by invoking a rule of pleading that had been violated. We immediately proceeded to add that if such an issue was properly in the ease, the plaintiff for the reasons we then gave, was not in a position to take advantage of the failure. This brings us to a consideration of the point again raised by plaintiff, that the failure to publish notice of the assessment in some newspaper in G-rand Junction for one week, was fatal to the' assessment and the subsequent sale of the stock for its non-payment.
Counsel cited in his original brief, and again calls to our attention, certain authorities which he says sustain the proposition that, where the by-laws of a corporation require the publication of notice of making an assessment, actual notice thereof will not render an assessment valid that is made without such publication. We did not comment upon these authorities, or question the correctness of the legal propositions advanced, under the' facts of those cases, because we were satisfied that they are not applicable to the facts of this case. It is pertinent here to emphasize that plaintiff is not questioning the due regularity of the proceedings relating to the actual sale and forfeiture of stock, which the by-laws prescribe as a remedy to collect delinquent assessments, but the sole grievance alleged is that defendant did not publish notice of an assessment which a by-law directed. The due giving of that notice was not essen*508tial to the validity of the assessment, but must be given after the levy to afford opportunity of payment, which could not be enforced by suit or sale until given or received.
In passing, however, we observe that, in Lewey’s Island R. R. Co. v. Bolton, 48 Me. 451, which is one of the authorities relied upon by appellee that strict compliance as to notice must be had, the court indicated that the doctrine. there laid down was not applicable to a case like that before us. In that case the by-laws of the company required that notices of the time and place of sale should be posted in two conspicuous public places in the city of Calais. The testimony was that they were published in two public places, but the court held that posting notices in a public place, without saying in a public and conspicuous place, as required by the statute, was insufficient, but the court added, and this is the statement to which we have adverted: “Perhaps, if it had been shown that a notice properly signed had been given in hand to defendant, that fact, as to him, might have been sufficient, notwithstanding the defect in proof as to the posting.”
At the trial here the secretary of the defendant company testified, and there was no evidence to the contrary, that it has been the uniform practice of defendant since its organization not to publish notice of assessments, but it has relied upon the giving of personal notice, in response to which the plaintiff company and other- stockholders . have uniformly made payment. The testimony upon this point clearly established, in our judgment, that the company, with the full acquiescence of the stockholders, had given only personal notice of assessments, and thus virtually that portion of the by-law requiring publication thereof for one week in some newspaper in Grand Junction is repealed. The authorities which *509we cited clearly sustain the proposition that, since this provision of the by-laws was for the benefit and protection of the stockholders themselves, they might .waive it, and such by-law, as to them, would be repealed by their acquiescence in the uniform practice of the company in disregarding it.
Among the authorities which we cited to the point that actual notice is sufficient is Railroad Company v. Gaster, 20 Ark. 455, which is cited with approval by Judge Thompson at 10 Cyc. 498, as taking the sensible view. In that case the act of incorporation provided that the payment of the shares of capital stock shall be made in such sums and at such periods as shall be fixed by the board of directors, provided that sixty days’ notice be given of each call, published in at least two newspapers in South Arkansas, and one in the city of Little Eock. The court, by Compton, J., in passing upon this statute, said that the provision was for the benefit of the stockholder, and the object was not only to notify him that assessments had been made, but also to allow sixty days in which to make payment. It appeared that the defendant in that case had received personal notice of the assessment more than sixty days before suit, and was requested to make payment. It also appeared that- sixty days ’ notice was not given by publication in newspapers, as required by the charter, and the question was squarely presented whether the mode of giving the notice, as well as the notice itself, is a condition precedent to the plaintiff’s right to recover. The court held that the giving of sixty days’ notice was imperative, because it was of the essence of the thing required to be done, but that the mode of doing so is directory, because not of the essence, and held that if the defendant had received actual notice sixty days before the suit was brought, that was sufficient, although no publication *510in a newspaper was made as prescribed by the charter. The reasoning of the court is entirely satisfactory to us, and in summing up it said.: “This rule of construction is supported by authority, and certainly no reason can be given why actual notice, in such a case, would not be as good as- that of publication, which would be but constructive notice.”
The facts in the present case are that the plaintiff company received through the mail actual notice of the levying of the assessment of $.80 per share, and the president of the company testifies that, in the fall of the year, and before the sale of the stock was made, he saw upon the books of the company what he calls the order of rebate, what we called the second assessment of $.65 per share, and it is not material whether the latter was merely a reduction of the first, or an entirely new and different assessment. No claim is made that he and his company did not have actual notice of both for the full time allowed before payment could be lawfully enforced.
In view of these considerations, that the by-law, as to publication, was repealed, by implication, that plaintiff had actual notice, and did not, when actual notice of the assessment .was received, object to payment on the ground of a failure of publication, but solely upon the ground, as alleged in the complaint in the first action and repeated in the complaint in the pending one,"that the assessment made was illegal because it was for an illegal purpose, we are clearly of opinion that the failure of the defendant company to publish for one week in a newspaper in Grand Junction notice of these assessments was not fatal to the sale.-
Appellee further says that the judgment ought to have been affirmed because the defendant, in its answer, admitted the invalidity of the assessment, for failure to pay which plaintiff’s stock was sold, and in *511support of the contention quotes 'a sentence from the answer. The answer should be considered in its entirety, and our construction of that pleading is that the defendant did not intend to admit, and, as a matter of law and fact, did not admit, the invalidity of any assessment, except so far, as the court’s holding in the first action necessarily implied that it was illegal to the- extent that it was made for, or to be devoted to, an illegal purpose. The entire .framework of the answer,- and the position consistently maintained by the defendant in its pleading and proof, were that only so far as the assessment was to •be devoted to an illegal purpose was it adjudged to be invalid. Such, also, was the position taken by the appellee here in its complaints in both actions. The original decree shows upon its face, and it cannot be contradicted by appellee, that there was no decree declaring, and no intention upon the part of the court in such decree to adjudge, the assessment illegal or invalid for all purposes, but the intention was merely to prevent the application of any assessment to the carrying out of the illegal contract which the com-' plaint charged the defendant company was seeking to perform. Moreover, the alleged admission in the answer was clearly intended to be applicable to the original, or first, assessment of $.80 per share, and not to the alleged rebate, or reduction, or what might be called the second assessment, of $.65 per share, for failure to pay which the forfeiture and sale of the stock were made.
Appellee now says that the evidence relating to Brockway’s ownership of the stock of plaintiff company, which the court took from the jury after having admitted it, was properly withdrawn because, inter alia, it was, if anything, an equitable defense, constituting new matter which should have been affirmatively pleaded in the answer, and as there are *512no such, affirmative averments in that pleading, the evidence is not admissible nnder a general denial. This contention comes with poor grace from appellee, and it is difficult to perceive how it can be made in good faith. There were such affirmative averments in the answer when it was filed, and appellee moved to have them stricken, on the ground that the same are irrelevant, redundant and immaterial, and because, if relative at all, they could be proved under the denials of the answer. Certainly, appellee is estopped to be heard upon this point.
Other propositions advanced by counsel for appellee in his present brief have been sufficiently considered, and we think satisfactorily answered, in the original opinion.
Petition for rehearing heard by the court en bcmc, and denied, all the justices concurring.

Remanded.