Crocker v. Cumberland Mining & Milling Co.

139 N.W. 783, 31 S.D. 137, 1913 S.D. LEXIS 106
CourtSouth Dakota Supreme Court
DecidedFebruary 10, 1913
StatusPublished
Cited by3 cases

This text of 139 N.W. 783 (Crocker v. Cumberland Mining & Milling Co.) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crocker v. Cumberland Mining & Milling Co., 139 N.W. 783, 31 S.D. 137, 1913 S.D. LEXIS 106 (S.D. 1913).

Opinion

WHITING, J.

This- action was 'brought to recover sums claimed to be due for services rendered defendant by plaintiff during a term of several years, during which time plaintiff was; the president and general manager of defendant. Plaintiff obtained a judgment by default against the defendant, which .judgment was afterwards opened up and the defendant allowed to answer herein. Such answer denied the express contract set forth by the plaintiff, and denied generally and specifically the claims of plaintiff to the amounts claimed under plaintiff’s several causes of action, and, by way of affirmative defense, alleged that plaintiff had received for defendant large sums of money, and had failed to account for the same, and that an accounting would show a large balance due the defendant; corporation from -the plaintiff. Defendant asked that such an accounting he had, and for judgment for such sum as should be found due it. To this answer a reply was interposed. The cause was tried to the court, without a jury, and findings made and entered in favor of the defendant, upon which findings conclusions of law were entered and judgment rendered fot defendant, from which judgment and order denying a new trial the plaintiff has .appealed.

[ i ] The appellant complains, in that the trial court made and entered findings of fact without notice to him and without giving him an opportunity to except to the same, or to propose other findings and conclusions. This court will consider such findings and conclusions excepted to thus putting the appellant -in a position where he cannot be prejudiced by the alleged error of which he complains. The appellant assigns a large number of alleged errors in the court’s rulings upon the admission and rejection of evidence, and specifies numerous particulars wherein he claims the evidence insufficient to support the several findings. In the absence of any printed abstract, we have carefully gone over the entire record herein, and believe that we have a clear understanding of the merits of this case as the same is revealed by such record. We have been unable to find any reversible error in the ruling of the court upon the admission or rejection of evidence, and we believe that the evidence received fully warrants the findings of the trial court.

The appellant bases his claims upon certain resolutions which, it is claimed, were passed by the directors of respondent corporation at some time during each year of the period from the organiza[145]*145tion of said corporation down to the year 19x0, and which resolutions each purported to grant to him a salary of $10 per day as general manager of said corporation. The respondent claims that $10 per day for each and every day, regardless, of whether its mine was in operation or not, was an excessive and unreasonable allowance for salary; that its stockholders were willfully kept in ignorance of the attempt on the part of the board of directors to allow such salary; that appellant had agreed and represented to the stockholders that no officer was receiving any salary, or would receive', any salary, until the corporation had been put upon a paying basis, which conditions had never existed; and also claims that, even if there were resolutions passed as maintained by appellant, it was the intent and purport thereof that appellant be allowed $10 per day as salary only for such days as the mine was in operation. It is conceded that appellant was at all times, the holder of a majority of the stock of said corporation, and that he, his son, and one Madill were, at all times, members of the board of directors of said corporation. This board, under the by-laws, was composed of four members, though' during a part of the time covered by appellant’s claims, there was an attempt to add to said board two more members.

It is unnecessary to recite in detail the findings of the trial court. Among other things, the court found that appellant’s son and Madill were selected and elected to the board of directors by appellant for. the purpose of advancing appellant’s interests; that they ‘acted under the influence and suggestion of appellant; that they never were the actual owners or holders of any stock in the corporation, and never paid any valuable consideration for any stock; and that they were directors merely in name and for the sole benefit of appellant. It is undisputed that these directors, received their stock without consideration therefor, the same being' given them, by appellant out of capital stock of the corporation not belonging to appellant; and it also appears that no certificates of stock were ever delivered to Madill or to appellant’s son. Certificates made out in their names appear in the stock book, but they were never detached. therefrom; nor were they ever signed by the officers of the company. The court found that the several resolutions allowing a.salary to appellant were passed at the request and direction of appellant, and by the votes of his son and Madill, and that their [146]*146votes were necessary to pass said resolutions. It appears that there never was a quorum of the directors of said corporation present, unless there be counted, as making up. said quorum, the appellant, his son, and Madill, or some one or two thereof. It also appears that at the directors’ meetings when nonresident directors were present no action was had on the question of salary of general manager. The court found that $10 a. day was a reasonable allowance to appellant as salary for those days when the mine was in operation, and that $50 a month was a reasonable allowance for his services at all other times; that the resolutions, as passed by said directors, were, under the circumstances surrounding the.company and the services to be rendered, unfair, unreasonable, and unconscionable. The court also found that appellant had not faithfully performed the trust imposed .upon him as president and general manager of said corporation, in that he failed to make certain reports. The court made findings in relation to the time for which appellant should be allowed a salary of $10 per day and the time for which he should receive $50 per month, as well as to the amount of money received and disbursed by him. It found that he .had been in truth and fact, not only the president and general manager of the corporation, but, during most of its existence, the real secretary and treasurer thereof; and it found a balance due from appellant to the corporation.

[2, 3] The appellant contends that the court’s conclusions of law were unsupported by the findings. These conclusions "were to the effect that appellant was not entitled to recover; that the alleged coxitracts growing out of the resolutioxrs allowing salary were illegal axrd void; that there was a certain sum due the corporation under the accounting; and that the default judgment should be vacated. The appellant is certainly in error in such contention. The law is that, while a director may enter ixito a binding contract with the corporation, when such contract is in- all things fair and equitable, and the corporation is represented by a majority of its dix-ectors, each of whom is actixig as a free agent and under no controlling influence or restraint on the part of the contracting director, yet, even if there is such majority of free and independent directors acting for the corporation, such contract will not be binding upon the corporation if it is unfair or unequitable; and, furthermore, no matter how fair and equitable the contract xnay be, [147]*147it will be void, unless there is a majority of free and independent directors acting for such corporation.

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Bluebook (online)
139 N.W. 783, 31 S.D. 137, 1913 S.D. LEXIS 106, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crocker-v-cumberland-mining-milling-co-sd-1913.