Court Opinion

ID: 6913159
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:31:18.844903+00
Date Added: 2024-06-11T16:06:34.267389
License: Public Domain

PHILLIPS, Circuit Judge
(dissenting in part).
Plaintiffs below have appealed from a single judgment adverse to them, entered in three cases, which had been consolidated for trial.
On June 28,1949, Amen commenced an action in the United States District Court for the District of Kansas, numbered 3495 on the docket of such court, against William H. Black and Dale G. Ives. There were other defendants whose presence as parties is no longer material.
The action was brought as a class action for the benefit of Amen and all other stockholders of the Black-Marshall Oil Company, an Illinois corporation, hereinafter called the B-M Company, similarly situated. Certain former stockholders in the B-M Company intervened. In an amended complaint it was alleged that Black and Ives entered into a conspiracy to acquire the stock and assets of the B-M Company for Black’s own use and benefit; that Black and Ives falsely represented to the plaintiffs that *27a sale of a large portion of the assets of the B-M Company had been arranged for an amount equal to $11 per share; that certain undeveloped oil and gas leases of the B-M Company would not be included in the sale, but would be retained for the benefit of the stockholders of the B-M Company; that induced by such false representations the plaintiffs, in 1944 and 1945, endorsed in blank and delivered to Black and Ives stock certificates representing their respective shares in the B-M Company and received therefor $11 per share; that Black and Ives effected a sale of the stock and assets of the B-M Company to the National Cooperative Refinery Association, hereinafter referred to as the Cooperative Association, at a price, which, when prorated among the shareholders of the B-M Company, excluding the plaintiffs, resulted in a distributive portion per share substantially in excess of the price paid by Black and Marshall to the plaintiffs for their shares. The plaintiffs did not learn of such fraudulent conspiracy and acts until May, 1949. The plaintiffs prayed for the recovery of their proper and lawful distributive shares of the purchase price paid by the Cooperative Association for stock in the B-M Company.
It was further alleged in the amended complaint that Black caused to be issued to himself for his benefit, at the time of the original issue of the stock of the B-M Company, shares of stock for which Black gave no consideration, and that Black withdrew large sums of money from the treasury of the B-M Company for his own use and benefit and employed B-M Company funds to finance his personal business ventures. For the alleged wrongs to the corporation, Amen and the inter-veners prayed for relief on behalf of the corporation.
On September 25, 1950, Walker and Windish, co-receivers of the B-M Company, filed a complaint in intervention in No. 3495 in which they alleged that Black, at the time of the original issue of stock in the B-M Company, caused to be issued and transferred to him shares in the B-M Company for which he paid no consideration, and that Black withdrew large sums of money from the treasury of the B-M Company for purposes other than proper corporate purposes and for his own use and benefit and to finance his personal business ventures for his personal profit. The co-receivers prayed for relief on behalf of the corporation.
On July 14, 1950, the co-receivers filed an action in the United States District Court for the District of Kansas, numbered W-143 on the docket of such court, against William H. Black, in which they alleged substantially the same facts as they had alleged in the intervening petition in No. 3495, and sought redress from the defendant on account of the stock alleged to have been issued to Black without consideration and the use of funds of the B-M Company by Black for his personal benefit.
Prior to July 15, 1949, Amen, Wad-leigh, Danford, Robinson, Hall and Riley commenced an action in the District Court of McPherson County, Kansas, against William H. Black and other defendants, whose presence as parties is no longer material. The action was brought for the benefit of the plaintiffs and all other stockholders of the B-M Company similarly situated. On the date last mentioned, such action was removed by the defendant to the United States District Court for the District of Kansas, where it was numbered 3509 on the docket of that court. On July 25, 1950, an amended complaint was filed in No. 3509, which alleged essentially the same facts as those alleged in the amended complaint in No. 3495.
Thus, it will be seen that in No. 3495 and No. 3509 certain former stockholders in the B-M Company, either as parties plaintiff or as interveners, sought relief in their individual behalf from William H. Black on account of the alleged fraudulent representations that a sale of the assets of the B-M Company had been effected, whereby they were induced to deliver their stock endorsed in blank to William H. Black, who subsequently sold such stock to the Cooperative Association at a much larger price per share. They, *28in effect, affirmed the sale of their stock to Black and prayed that Black be required to account for the moneys he received from the sale of the stock of plaintiffs and interveners to the Cooperative Association. It will be further observed that the plaintiffs and interveners in No. 3495 and No. 3509 undertook to join with their original action a stockholders’ derivative action in which they sought to recover on behalf of the B-M Company for the injuries to the B-M Company alleged to have resulted from the issue of stock to Black without consideration and the alleged use by Black of the corporate funds for his personal benefit.
At the close of plaintiffs’ evidence in the trial below, the co-receivers who had intervened in No. 3495 elected to stand upon their action No. W-143 for redress of the alleged wrongs to the B-M Company.
Many of the individual plaintiffs and interveners in No. 3495 and No. 3509 resided in, or in the vicinity of Aledo, Illinois, and may be referred to as the Ale-do Group.
Involved in the consolidated actions were four claims:
1. The claim of the Aledo Group against William H. Black, predicated on the alleged false representations of Black, acting through his agent, Ives, to recover the amount that Black received from the sale of the stock of the Aledo Group to the Cooperative Association in excess of the $10 and $12 per share, respectively, which the Aledo Group received from their stock;
2. The claim in the nature of a derivative action by the original stockholders and an original action by the co-receivers to recover on behalf of the corporation on account of 32,457.5 shares of stock alleged to have been issued to Black without consideration and sold by him in 1947 to the Cooperative Association for $51.06 a share;
3. A claim asserted by the co-receivers for recovery of profits alleged to have been realized by Black from the use of B-M Company funds in personal business ventures; and
4. The claim of the co-receivers for profits realized by William H. Black for transactions in which B-M Company funds were used for Black’s personal profit.
That Ives made the alleged false representations with respect to the sale of the assets of the B-M Company to members of the Aledo Group is conceded. The trial court found that such representations were made by Ives without solicitation by William H. Black and without the knowledge of William H. Black. However, Black testified that he told the Aledo Group that Ives was his agent in all matters with respect to the B-M Company, and especially for the purpose of furnishing information to the Aledo Group. Therefore, it is my opinion that Black was estopped to deny Ives’ agency and that Ives had apparent or ostensible authority to furnish information on Black’s behalf to the Aledo Group with respect to the B-M Company and that the representations made by Ives to the Ale-do Group were within the scope of the apparent or ostensible authority of Ives and Black was bound thereby.1 On that ground and that ground alone, I concur in the majority opinion, insofar as it reversed the judgment below, with respect to the claim of the Aledo Group to recover from William H. Black for the injuries *29suffered by the Aledo Group on account of the alleged false and fraudulent representations of Ives.
The majority opinion affirms the judgment below, with respect to the third and fourth claims. It also affirms the judgment below, with respect to the derivative stockholders’ action (Claim Two) and the claims asserted by the co-receivers ii cause No. W-143. However, on a theory which, in my opinion, has neither basis in law nor justification in equity, the majority opinion holds that the Aledo Group may obtain redress against William H. Black for the wrong alleged to have resulted to the corporation from the issuance to William H. Black of the 32,457.-5 shares of stock.
The Petroleum Investment Company was a partnership or a joint venture, formed in 1938. Its members were Black, Ives and the members of the Aledo Group. From $21,000 invested in the venture by members of the Aledo Group, nine dry holes were drilled in Illinois and Indiana. That unsuccessful venture was completed in early 1939. Thereafter, in the spring of 1939, William H. Black and D. J. Marshall formed a partnership, which thereafter acquired five oil and gas leases in Kansas. That partnership drilled a well on a lease known as the Esfeld lease, which came in as a producer in July, 1939, and established such lease as one of the most valuable leases in the State of Kansas. The funds for acquiring the lease and drilling and equipping such well were furnished by Black and Marshall, with the exception of $9,000, which Black borrowed on his own credit and which was ultimately assumed by the B-M Company.
Up to August 23,1939, the Aledo Group made no advancements of funds to the Black-Marshall partnership. After the Esfeld lease had been developed as a commercial producer and from August 23, 1939, to December 7, 1939, the Aledo Group advanced to the partnership $17,-650 and Black advanced $28,415. Subsequent to the latter date, the Aledo Group advanced additional funds, both before and after the incorporation of the B-M Company, to carry on the development of the Kansas leases.
The first meeting of the incorporators of the B-M Company was held in Aledo, Illinois on January 11, 1940. The minutes of that meeting recite that the chairman presented a subscription agreement bearing subscriptions for 122,500 shares of common stock and 9,055 shares of preferred stock of the B-M Company and that a resolution was unanimously passed accepting such subscriptions on behalf of the corporation. At the same meeting a proposal was presented from the Landowners Oil Association, owned by a Chicago, Illinois group, to exchange at least 75 per cent of the outstanding stock of Landowners for 20,000 shares of common stock and 2,000 shares of preferred stock of the B-M Company and that a resolution was adopted approving such proposal.
The five Kansas leases were assigned to the B-M Company in exchange for the entire subscription of 122,500 shares of common stock and 9,055 shares of preferred stock. Undoubtedly, it was originally contemplated that 10,000 shares of common stock and 1,000 shares of preferred stock would be issued to Black and 10,000 shares of common stock and 1,000 shares of preferred stock would be issued to Marshall, but it developed that Black and Marshall were unwilling to assign the leases to the B-M Company, unless they received, in addition to the 20,-000 shares of common stock and 2,000 shares of preferred stock, 64,870 shares of common stock.
Black signed the stock certificates in blank. The certificates for 64,870 shares made out to Black, et al. (The omission of Marshall’s name was for reasons personal to Marshall) were not signed by Ives and not actually delivered to Black and thereafter Ives reissued such stock to Black and Marshall at about the time of the stockholders’ meeting January 1, 1941, to enable Black to transfer to members of the Aledo Group a portion of such shares, which they had purchased from Black. While Black admitted he could not explain why Ives failed to sign the *30original certificates made out to Black, et al., his testimony made it very clear that Black and Marshall were unwilling to assign the Kansas leases for 20,000 shares of common stock and 2,000 shares of preferred stock.
Common stock was issued to the investors in the Petroleum Investment Company on the basis of one share of common for each $2 invested, and one share of preferred for each $4 invested, both in the Illinois venture and by advancements to the Black-Marshall partnership in Kansas.
Certainly, Marshall was under no obligation, legal or moral, to bail the Aledo Group out from their non-profitable venture in Illinois. No wrongdoing by Black with respect to the Illinois venture was claimed, and it follows that Black was under no legal or moral duty to aid the Aledo Group in recouping their losses in the Illinois venture. Under all the facts and circumstances, it is a reasonable inference that Black and Marshall would be unwilling to assign the Kansas leases in exchange for 20,000 shares of common stock and 2,000 shares of preferred stock.
The original five directors of B-M Company were Black, Marshall and three members of the Aledo Group; Ives, Boyd and Stevenson. At the second annual meeting of the stockholders of the B-M Company, held in January, 1941, Black and Marshall and five members of the Aledo Group; Ives, Stevenson, Berglund, L. E. Robinson and Sherrard were elected as directors of the B-M Company. At the annual meeting of the directors, held on January 7,1941, an audit report covering the first fiscal year, ending July 31, 1940, was examined and approved. Such audit report showed that on January 20, 1940, the Board of Directors authorized the issuance of 122,500 shares of common stock, including the 64,870 shares of stock issued to Blaek and Marshall in exchange for five leases and the assumption by the corporation of liability existing against the said leases in the amount of $8,827.93. At the next annual meeting of the board of directors, held in 1942, when the directors were Black and Marshall and Ives, Berglund and Sherrard of the Aledo Group and Allen James of the Landowners Corporation, an audit report for the period ending July 31, 1941, was examined and approved. That audit report also showed the issuance of the above-mentioned shares. At the next annual meeting of the board of directors, held in January, 1943, when the directors were Black and Marshall and Ives, Berglund and Sherrard of the Aledo Group and Ranney of the Landowners Corporation, an audit report for the year ending July 31, 1942, was examined and approved. The report also showed the issuance of the above-mentioned stock. Like audit reports covering subsequent years were presented, examined and approved at stockholders’ meetings, held in January and December, 1944.
The minutes of the annual meeting of the stockholders of the B-M Company, held on January 20, 1942, which were read and approved at the annual stockholders’ meeting in 1943, showed Black as the owner of 70,000 shares of B-M Company common stock. The same is true with respect to the minutes of the stockholders’ meeting, held on January 27, 1943, which were read and approved at the stockholders’ meeting in January, 1944.
At the annual meeting of the stockholders, held on December 6, 1944, the stockholders adopted a resolution authorizing the purchase from Marshall of 38,-978.75 shares held by him and on the same day the board of directors adopted a like resolution and a written contract was entered into for the purchase of such shares from Marshall.
Finally, many of the audit reports referred to above were furnished to a number of persons who were members of the Aledo Group.
The trial court found that Black and Marshall were issued 20,000 shares of common stock, 2,000 shares of preferred stock, and an additional 64,870 shares of common stock in exchange for the Kansas leases and that the corporate records reflected these facts.
That the corporate records reflected such facts was established by uncontro-*31verted written evidence. That such stock was issued to Black and Marshall in exchange for an assignment of the Kansas leases was unequivocally testified to by Black.
Since the trial judge has the opportunity of observing a witness while testifying and his demeanor on the witness stand, ordinarily the questions of the credibility of the witness and the weight to be given his testimony are peculiarly questions for determination by the trial court.8
Under Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., an appellate court may not set aside findings of fact by a trial court, unless clearly erroneous, and due regard must be given to the opportunity of the trial court to judge the credibility of witnesses. When there is evidence to support a finding, the reviewing court may not set it aside as clearly erroneous, unless, on a consideration of the entire record, the reviewing court is left with the definite and firm conviction that a mistake has been committed.2
3
Under the existing facts and circumstances, it would have been strange, indeed, if Black and Marshall would have been willing to have transferred to the B-M Company the Esfeld lease, the large value of which already had been established by development, and the other four leases, which gave much promise, for 20,000 shares of common stock and 2,000 shares of preferred stock in the B-M Company.
I think it may not be said that this court, on a consideration of the entire evidence, is left with the definite and firm conviction that the finding of the trial court, last above adverted to, was clearly erroneous.
I will now assume, without conceding, that the 32,457.5 shares, one-half of the 64,870 shares issued to Elack and Marshall, were issued to Black without consideration. If that occurred, the wrong was a wrong to the B-M Company, the corporation, and not a wrong to its stockholders, although they might suffer indirectly because thereof. It gave rise to a claim which only the corporation could assert, or the stockholders in a proper case as a derivative action. In legal effect a derivative action by a stockholder or stockholders is one conducted by a stockholder or stockholders as the corporation’s representative.4
The stockholder is only a nominal plaintiff. The corporation is the real party in interest.5
Where the plaintiff does not seek to enforce relief for the benefit of the corporation, it is not derivative.6
Unless otherwise provided by statute, a stockholders’ derivative action is always one in equity.7
In a derivative action the stockholder stands in the corporation’s shoes and must base his action on the corporation’s rights and a wrong to it.8
A stockholder cannot sue unless there is, at the time he brings the suit, a cause *32of action which could be instituted by the corporation if it so desired.9
The relief granted will be exactly the same as the corporation might have had if it had been plaintiff.10
Any recovery belongs to the corporation. Direct relief to the stockholders cannot properly be granted.11
Any defense, affirmative, or for want of facts, that would be good if the corporation itself was plaintiff is also good in a stockholders’ derivative action.12
A judgment against the corporation in an action brought by it involving the same subject matter ordinarily is a defense to a derivative action.13
The majority holds that the Aledo Group could not maintain the derivative action and that the co-receivers could not maintain a direct action for the benefit of the corporation on account of the alleged issue to Black of the 32,457.5 shares of stock for reasons set forth in the majority opinion.
The action by the co-receivers, cause No. W-143, was commenced more than six years after the directors and certainly many of the stockholders had full knowledge of the fact that 64,870 shares of stock in the B-M Company had been issued to Black and Marshall, purportedly in exchange for transfer of the Kansas leases.
Section 60-306, G.S.Kan.Anno.1949, in part provides:
“Third. Within two years: An action for trespass upon real property; an action for taking, detaining or injuring personal property, including actions for the specific recovery of personal property; an action for injury to the rights of another, not arising on contract, and not hereinafter enumerated; an action for relief on the ground of fraud — the cause of action in such case shall not be deemed to have accrued until the discovery of the fraud.”
Even if it can be said to be an action for fraud, the suit must have been commenced within two years after the discovery of such facts as could on reasonably diligent inquiry or investigation lead to the knowledge of the fraud.14
It seems clear to me that the corporate action was barred by the Kansas statute of limitations. Likewise, it is clear that on June 28, 1949, when the derivative action was commenced, an action brought by the corporation would likewise have been barred by the Kansas statute of limitations.
Under facts clearly established in the evidence, it certainly is beyond the realm of possibility that the Aledo Group, as *33stockholders, and a portion of them as directors, did not know, at least more than four years from the time the first of the actions was commenced, all of the facts with respect to the issuance of the 64,870 shares of stock to Black and Marshall.
Applying the statute of limitations by analogy, the derivative action was clearly barred by laches.
If the 32,457.5 shares of stock were wrongfully issued to Black, a like amount of the stock was wrongfully issued to Marshall, yet the Aledo Group, in 1944, not only knew of the issuance of such stock to Marshall, but they joined as stockholders and a portion of them as directors in the adoption of resolutions which ultimately resulted in the purchase of such stock from Marshall, thus acquiescing in the original issue of stock to Black and Marshall.
The majority, conceding that neither the corporate action nor the derivative action may be maintained, hold that certain persons who compose only a portion of the stockholders at the time of the alleged wrongful issue of such stock to Black, but who are no longer stockholders in the corporation, may recover the indirect or consequential damages suffered by them on account of the wrongful issue of such stock. They thus permit recovery by a limited group of former stockholders for a wrong done to the corporation, which resulted not only in indirect injury to such former stockholders, but to other stockholders, such as the Landowners Association and their successors.
If the 32,457.5 shares of stock issued to Black were, in fact, issued without consideration in 1940, the wrong was a primary wrong to the corporation, which resulted in indirect injury to all of the stockholders of the B-M Company at that time.
Since the wrong complained of was a wrong to the corporation, resulting in immediate and direct injury to it and only indirect or consequential damage to all of the stockholders, a stockholder or stockholders could not maintain an individual action to recover damages for such wrong.15
A stockholder cannot maintain an action in his own name and in his own behalf to recover loss resulting from depreciation of the value of his stock caused by an injury to the corporation itself.16
It is only when the injury to the shares of the stockholder is peculiar to him alone and does not fall alike upon other stockholders that he can recover as an individual.17
The theory upon which such relief is given by the majority opinion to the Ale-do Group is contrary to the theory of recovery for such alleged wrong set forth in the pleadings and to the theory upon which the case was presented, both in the trial court and in this court.
For the reasons indicated, I respectfully dissent from that portion of the opinion which directs the granting of relief to the Aledo Group, because of the issuance of the 32,457.5 shares of stock to Black.

. Faber-Musser Co. v. William E. Dee Clay Mfg. Co., 291 Ill. 240, 126 N.E. 186; 2 C.J.S., Agency, § 96, pp. 1205-1220; See also: Anheuser-Busch v. Grovier-Starr Produce Co., 10 Cir., 128 F.2d 146; Greep v. Bruns, 160 Kan. 48, 159 P.2d 803; Siedhoff v. Campbell, 141 Kan. 255, 40 P.2d 404; Nelson Development Co. v. Ohio Oil Co., D.C., 45 F.Supp. 933; Spann v. Commercial Standard Ins. Co. of Dallas, Texas, 8 Cir., 82 F.2d 593; Metropolitan Life Ins. Co. v. Henderson, 9 Cir., 92 F.2d 891; Ferro Concrete Const. Co. v. United States, 1 Cir., 112 F.2d 488, certiorari denied 311 U.S. 697, 61 S.Ct. 136, 85 L.Ed. 452; Roth v. Hyer, 5 Cir., 133 F.2d 5, certiorari denied 318 U.S. 782, 63 S.Ct. 859, 87 L. Ed. 1149.

. Zimmer v. Acheson, 10 Cir., 191 F.2d 209, 212; Brown v. American National Bank, 10 Cir., 197 F.2d 911, 914.

. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746; H. F. Wilcox Oil & Gas Co. v. Diffie, 10 Cir., 186 F.2d 683, 696.

. Eriksson v. Boyum, 150 Minn. 192, 184 N.W. 961, 963; Morris v. Elyton Land Co., 125 Ala. 263, 28 So. 513, 516. Fletcher Cyclopedia Corporations, Perm. Ed., Vol. 13, § 5939.

. Thomson v. Mortgage Inv. Co., 99 Cal. App. 205, 278 P. 468, 471; Smith v. Lewis, 211 Cal. 294, 295 P. 37, 39; Hayden v. Perfection Cooler Co., 227 Mass. 589, 116 N.E. 871, 872; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 5939.

. Spear v. H. V. Greene Co., 246 Mass. 259, 140 N.E. 795, 798; Moore v. Las Lugos Gold Mines, 172 Wash. 570, 21 P.2d 253, 263; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, §§ 5908, 5939.

. Moore v. Las Lugos Gold Mines, 172 Wash. 570, 21 P.2d 253, 263; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 5944.

. Lawrence v. Southern Pac. Co., C.C., 180 F. 822, 825; Turner v. Markham, 155 Cal. 562, 102 P. 272, 275; Caldwell *32v. Eubanks, 326 Mo. 185, 30 S.W.2d 976, 980, 72 A.L.R. 621; Waters v. Horace Waters & Co., 201 N.Y. 184, 94 N.E. 602, 604; Smith v. Lewis, 211 Cal. 294, 295 P. 37, 39; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 5947.

. Kessler v. Ensley Co., C.C., 123 F. 546, 550, certiorari denied 205 U.S. 541, 27 S.Ct. 788, 51 L.Ed. 921; Smith v. Lewis, 211 Cal. 294, 295 P. 37, 39; Seitz v. Michel, 148 Minn. 80, 181 N.W. 102, 105, 12 A.L.R. 1060; Cochran v. Shetler, 286 Pa. 226, 133 A. 232, 234; Outing v. Plum, 212 Iowa 1169, 235 N.W. 559, 560; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 5947.

. Collins v. Penn-Wyoming Copper Co., D.C., 203 F. 726, 729; Morris v. Elyton Land Co., 125 Ala. 263, 28 So. 513, 516; Reid v. Robinson, 64 Cal.App. 46, 220 P. 676, 680; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 6027.

. Jacobs v. First Nat. Bank of Shreveport, D.C., 35 F.2d 227, certiorari denied 284 U.S. 634, 52 S.Ct. 18, 76 LEd. 540; Joyce v. Congdon, 114 Wash. 239, 195 P. 29, 30; Caldwell v. Eubanks, 326 Mo. 185, 30 S.W.2d 976, 980, 72 A.L.R. 621; Harris v. Pearsall, 116 Misc. 306, 190 N.Y.S. 61, 75; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 6028.

. Kessler v. Ensley Land Co., D.C., 148 F. 1019, 1020, certiorari denied 205 U.S. 541, 27 S.Ct. 788, 51 L.Ed. 921; Fletcher Cyclopedia Corporations, Perm.Ed., Vol. 13, § 5859.

. Hawkins v. Glenn, 131 U.S. 319, 329, 9 S.Ct. 739, 33 L.Ed. 184.

. See City of Coffeyville v. Metcalf, 134 Kan. 361, 5 P.2d 807, 810; Woodworth v. Kendall, 172 Kan. 332, 239 P.2d 924, 926.

. Seitz v. Michel, 148 Minn. 80, 181 N.W. 102, 105, 12 A.L.R. 1060; Wells v. Dane, 101 Me. 67, 63 A. 324, 325, 326; Niles v. New York Cent. & H. R. R. Co., 176 N.Y. 119, 68 N.E. 142, 144; White v. British Type Investors, 130 N.J.Eq. 157, 21 A.2d 681, 683.

. Green v. Victor Talking Mach. Co., 2 Cir., 24 F.2d 378, 380, 59 A.L.R. 1091, certiorari denied 278 U.S. 602, 49 S.Ct. 9, 73 L.Ed. 530; Stinnett v. Paramount-Famous Lasky Corp., Tex.Com.App., 37 S.W.2d 145, 149; Bartlett v. New York, N. H. & H. R. R. Co., 221 Mass. 530 109 N.E. 452, 453; Caldwell v. Eubanks, 326 Mo. 185, 30 S.W.2d 976, 980, 72 A.L.R. 621; Niles v. New York Cent. & H. R. R. Co., 176 N.Y. 119, 68 N.E. 142, 144; Baillie v. Columbia Gold Mining Co., 86 Or. 1, 166 P. 965, 969, 167 P. 1167; 18 C.J.S., Corporations, § 559, p. 1272.

. Oliphant v. Woodburg Coal & Mining Co., 63 Iowa 332, 19 N.W. 212, 214, 215; Dudley v. Armenia Ins. Co., 115 App.Div. 380, 100 N.Y.S. 818, 820.