DocketNumber： No. 1,514
Judges： Olayberg
Filed Date： 4/27/1903
Status： Precedential
Modified Date： 11/11/2024
prepared the opinion for the court.
Before entering upon a consideration of the questions involved in this appeal, it is important to consider some of the preliminary objections presented by respondent’s counsel to the record of the case, and to "certain points relied upon by appellants in their brief. A great many questions are sought to be
1. As to the absence of notice of intention to move for a new trial:
In this case the record on appeal contains nothing aside, from a statement of the case, p-ro-perly settled and signed, and the judgment roll. The notice of intention to move for a new trial is entirely omitted, and the question is- whether this omission is proper. The consideration of this question is necessarily limited to the conditions presented by the record in this case, and to none other, and this court desires to- be understood that this opinion shall be construed as applicable only to similar conditions and cases. For a full elucidation of the question, a reference to the statute -seems necessary.
It is apparent from the foregoing provisions of the Code that the only purposes of the notice of intention to move for a new trial are (1) to. notify the adverse party of the grounds, upon which the motion will be based; and (2) to guide the judge or referee in thei settlement of the statement when proposed, in only allowing such grounds, of motion to be. stated or claimed therein as ara set forth and relied upon in the notice of intention. When the statement is prepared in puriisance of tfie notice, it must specify particularly thei insufficiency of the evidence, and the particular errors) of law relied upon in the notice of intention. It is. then made the duty of the judge or referee to “malee the statement truly represent the case,” and to settle and sign the same. In order that the statement “truly repre
We find the former decisions of this court in great confusion, as to whether the record on appeal from an order granting or refusing a'motion for a new trial should contain the notice of intention. The first case where the question wasi considered is that of First National Bank v. McAndrews, 5 Mont. 251, 5 Pac. 879, where, a motion was made to strike the statement on motion out of 'the transcript “for the reason that there is, nothing in the record to show that there was either a motion for a, new trial filed, or a notice thereof served upon; the adverse party, as required by Section 287' of the Cod© of Civil Procedure.” This court sustained the motion, and held that a decision upon motion for a new trial may not be reviewed on the record when the record does not show that any motion for a new trial was filed in tire lower court, nor that any notice of motion, designating the errors complained of, was filed or served upon the adverse party. This decision was adopted and indorsed in the case of Gum v. Murray, 6 Mont. 10, 9 Pac. 447. It was next cited with approval in Arnold v. Sinclair, 12 Mont. 248, 29 Pac. 1124.
In 1895 the legislative assembly enacted the present Codei of Civil Procedure, and by Sections 1176 and 1738 made a new requirement as to the papers necessary to be sent to this court on appeals from orders granting or refusing new trials. Section 1176 provides: “The judgment roll, and the affidavits, or bill of exceptions or statement, as the case may be, used on the hearing, with a copy of the order* made, shall constitute the record to be used on appeal from the order granting or refusing a new trial” Section 1738 provides: “On an appeal from an order granting or refusing a new trial, the appellant must furnish the court with a copy of the notice of appeal, of the order appealed from, and of the papera designated iin Section 1176 of this Code.” TJnder these sections, it is* very apparent that the only papers properly constituting the record on appeal in the present case are the judgment roll, the statement, the order appealed from, and the notice of appeal.
Recalling the fact that under Section 425, Code of Civil Procedure, Revised Statutes of 1879, and Section 438, Code of Civil Procedure, Compiled Statutes of 1887, the papers constituting the record were a copy of the notice of appeal, the undertaking on appeal, the order appealed from, and “a copy of the papers used on the hearing in the court below, ‘certified’ by the attorneys, of the parties to the appeal or by the clerk, to be correct,” we must conclude that, under the old practice, if the notice of intention was used in the court below on the bearing, a copy was required to be included in the record, certified to he correct, as provided by the statute. (Arnold v. Sinclair, 12 Mont. 248, 29 Pac. 1124.)
Under the present statutes, the only way in which the notice
In determining this question, it is very important to' refer to the statutes and decisions of the supreme court of the state of California, because we find that in that state the same statutes were enacted, and the same questions arose as arise here, and had been definitely settled by the court of last resort of that state long prior to the adoption of our present Code of Civil Procedure, as hereinafter stated. Section 346, c. 5, p. 106, of the Laws of California of 1851, and Section 32, e 54, p. 64, of the Laws of 1854, were practically identical with our Section 425, Code of Civil Procedure, Revised Statutes of 1819, and Section 438, Code of Civil Procedure; Compiled Statutes of 1881. Under the Laws of 1851 and 1854, supra, the supreme court of California held (as this court held under Section 425, Code of Civil Procedure, Revised Statutes of 1819, and Section 438, Coda of Civil Procedure, Compiled Statutes of 1881), that the notice of intention was a necessary part of the record on appeal from an order granting or refusing a motion for a new trial. (Calderwood v. Brooks, 28 Cal. 151; Wright v. Snowball, 45 Cal. 654.) The legislature of California in the year 1814 adopted a new Code of Civil Procedure, changing the provisions of the old Code concerning the record on appeal from orders granting or refusing new trials, and substituting the present Sections. 661 and 952 for Section 346. These last sections did away with the requirement of certifying to the supreme court the papers used on the hearing of motion for a new trial in the court below, and only required the papers mentioned in those sections to- become parts of the record. The supreme court of California, in Dominguez v. Mascotti, 74 Cal.
In 1895, as above stated, our legislature also enacted new ¡provisions in regard toi the papers which shall constitute the record on appeals from orders granting or refusing new trials. (See Sections 1176, 1738, Code of Civil Procedure.) By the adoption of. these two sections the legislative assembly enacted practically the identical provisions of Sections 661 and 952 of the Code of Civil Procedure of California. The supreme court of that state has, since the adoption of their Coda in 1874, freu quently decided that the notice of intention need not be a part of the record on appeal. (Ferrer v. Home Mutual Ins. Co., 47 Cal. 427; Hook v. Hall, 68 Cal. 22, 8 Pac. 596; Dominguez v. Mascotti, 74 Cal. 269, 15 Pac. 773; Pico v. Cohn, 78 Cal. 384, 20 Pac. 706.)
All these decisions were made subsequent to' the, adoption of the Code of California of 1874, and prior to the change in our
Unfortunately, however, the California decisions above referred to were not called to the attention of this court when the question was first presented to it for consideration under the provisions of the Code of 1895, and by various decisions rendered since that time it has been held that the notice of intention is a necessary part of the record on appeal, and must come u'p in the statement. (Grinnell v. Davis, 20 Mont. 222, 50 Pac. 556; Harrigan v. Lynch, 21 Mont. 36, 52 Pac. 642; Carr, Ryder & Adams Co. v. Closser, 25 Mont. 149, 63 Pac. 1043; In re Reilly’s Estate, 26 Mont. 358, 67 Pac. 1121; Madigan v. Harrington, 26 Mont. 358, 67 Pac. 1121; Carr, Ryder & Adams Co. v. Closser, 27 Mont. 94, 69 Pac. 560.)
This court has also' held that the filing and service of this notice, and the omission thereof from the statement, if filed and served, is waived if the adverse party appears at the settlement of the proposed statement and offers amendments, thereto.. (Harrigan v. Lynch, 21 Mont. 36, 52 Pac. 642; In re Reilly’s Estate, 26 Mont. 358, 67 Pac. 1121.) By such decisions this court tacitly admits that the omission of the notice from the record is not jurisdictional. Is not such holding tantamount to saying that the insertion.' of tira notice in the statement is only, jurisdie-
We are of the opinion, after a careful and conscientious investigation and consideration of the statute!, and cases upon similar statutes in other jurisdictions, that the functions of the notice of intention to move for, a new! trial are fully exhausted when the statement of the case or bill on such motion is settled, and that it has no further force or effect, except in cases where an objection is made to it upon the settlement of the statement which the party making, desires to have this court pass upon. This court, in Carr, Ryder & Adams Co. v. Closser, 27 Mont. 94, 69 Pac. 560, recognizes the correctness ¡of the California decisions^, as shown by the following language: “Sections 1176 and 1738, supra, were adopted from the statutes1 of California after the supreme court of that state had interpreted them in Pico v. Cohn, 78 Cal. 384, 20 Pac. 706. While Harrigan v. Lynch and In re Reilly’s Estate, supra, were under advisement, the members of this court examined the transcript in Grinnell v. Davis, supra, and found that the new! trial proceedings were instituted after these sections had become law. It is probably true that in Gmnnell v. Davis this court should have followed the interpretation which, had been placed upon, similar sections by Pico v. Cohn, and 'that an injustice was worked by. nlot following it. Doubtless the court would havei conformed to the practice established by Pico v. Cohn, had it been advised of that decision.”
This leaves a single question for determination upon this branch of the case, and that is whether, under all the circumstances, the court will now correct the doctrine as laid down in Carr, Ryder & Adams Co. v. Closser, supra. This court, in the case of Wetzstein v. Boston & Montana Consol. C. & S. Mining Co., 25 Mont. 135, 63 Pac. 1043, in treating of a question of practice, uses the following language: “The rule of stare de~
Chief Justice Johnson, of the court of appeals of New York, in a dissenting opinion in the case of Leavitt v. Blatchford, 17 N. Y. 521-544, seems, to state the rule correctly in the use of the following language: “To depart from, a decision is undoubtedly an act by which a court incurs a high degree of responsibility, and it should certainly be satisfied that its course is such that the future judgment of the enlightened profession of the law will approve its determination. But when it is satisfied that an erroneous determination has been m-ade, and that, too, with a full consideration of the merits of the question decided; when it sees that to correct it will render void no. one’s honest acts, nor disappoint any just expectation; when, in short,, it is fully persuaded that there is no one reason why such a decision should again be made, except that it was once made before — ■ then I think the court would be sacrificing substance to shadow if it refused to correct its error. Nor do' I believe that by so doing a court would disturb the public confidence in, the stability of its judgments. Courts are not inclined, any more than men out of courts, to admit that they have erred; and where the administration of justice is public, and must proceed upon reasons assigned for every judgment, there is little danger from the exercise, under the responsibilities: necessarily attending its exercise, of the power which a court possesses to, retrace its steps when it is satisfied that an error1 has been committed.”
2. As to striking the names of Cullen, Day & Cullen, as attorneys, from the answer of defendant Hauser:
We are of the opinion that this alleged! error is: not properly presented upon this appeal, for the following reasons, viz.: The statutes pcrovida that, when the motion for a new trial is based upon tins ground, it must be made upon affidavits,. (Section 1172, Code of Civil Procedure.) No affidavits of this character appear in the record. This court has said, in Cole
3. As to the alleged insufficiency of tbe evidence:
We are of tbe opinion tbat nona of these errors are properly before the court for consideration. The record does not positively or even inferentially disclose1 that it contains1 all tbe evidence introduced at the trial below, or tbe: substance thereof, bearing upon tbe errors assigned. This court, in the case of State v. Shepphard, 23 Mont. 323, 58 Pac. 868, bad occasion to state very fully and clearly the law relative to tbe requirement that tbe record disclose all the' evidence introduced at tbe trial below, or its substance, applicable to tbe errors asr-signed, in order to present the question of tbe insufficiency of the evidence to this court. A reference, to that case: upon this point would seem sufficient for the purposes of this opinion, without making extensive quotations therefrom.
A brief restatement, of tbe law is as follows, viz.: This court cannot consider errors assigned upon insufficiency of the evidence to sustain tbe findings or judgment in eases where the record does not disclose tbat all the evidence introduced before the trial court, or its substance, bearing upon the errors assigned, is contained therein. (State v. Shepphard, 23 Mont. 323, 58 Pac. 868; Currie v. Mont. Cent. Ry. Co., 24 Mont. 123, 60 Pac. 989; T. C. Power & Bro. v. Stocking, 26 Mont. 478, 68 Pac. 857.)
Under the authorities above cited there seem to' be two, ways by
The certificate of the trial judge to the statement on motion for a new trial in this case is as follows.: “I, Hénry C. Smith, judge of said district court, do hereby certify that the defendants having proposed a statement, and the plaintiff having offered certain amendments thereto, the same were settled by me, and engrossed in the foregoing statement, consisting of 117 typewritten pages, and the same is hereby allowed by me, and is correct. Done this 22d day of September, A. .D. 1899. ITenry O. Smith, Judge,”
If will be perceived that this certificate is entirely silent as to the contents of the statement, save as to the number of pages it Contains, No reference is made to the evidence; or the substance thereof. We find no declaration, or even inference, in the1 body of the statement on motion for a new] trial, tending to show that all the evidence, or its substance, bearing upon the errors assigned, is contained therein. It commences asi follows: “Be it remembered that on the 16th day of June, A. D. 1899, that being one of the days of the conrt, the plaintiff, to maintain the issues on his part, called and had sworn one Samuel T. Hauser, who testified as1 follows,” Following this appears the testimony of witness Hauser. ’ When his testimony was concluded, other witnesses were sworn, and at the completion of plaintiff’s testimony the recital appears: “Plaintiff rested.” Then it appears that certain motions for nonsuit were submitted to, and disposed of by, the court, which is followed by the recital: “And the said defendants; to maintain the issues on their part, called A. J. Seligman, who testified as follows.” Other witnesses were called for the defendants; and at the conclusion of their examination we find the recital, “Whereupon defendants rested.”
4. As to the sufficiency of the general denial of allegations of value:
We are of the opinion that this court cannot consider this suggestion. Both parties to the suit tried the case upon the theory that this denial was sufficient. Testimony was introduced pro and con. This court said in the case of Hamilton v. Huson, 21 Mont. 9, 53 Pac. 101, “in- the court below the parties treated the denial (a general one) as good and! sufficient, and the ease was tided on that understanding. This question cannot be raised now, the parties having treated the pleading as sufficient in the court below.” See, also, Sweeney v. Great Falls & Canada Ry. Co., Mont. 523, 29 Pac. 19, and eases cited.
5. As to the errors assigned upon the instructions to the jury;
We are of the opinion that none of these; errors can be considered on this hearing. This is an equity ease, and the law is well settled, by various decisions of this court, that the verdict of the jury is merely adlvisory to the court, and that this court will not review -errors assigned upon' the instructions of the court to the jury. It is therefore noi longer an open question in this state. (Lawlor v. Kemper, 20 Mont. 13, 49 Pac. 398, and cases cited; Sanford v. Gates, Townsend & Co., 21 Mont. 217, 53 Pac. 749, and cases cited.)
Counsel assign as error the ruling of the court below in refusing to grant their motion for a nonsuit. In the argument in the original brief filed by them, we find -no reference to, or reliance upon, this alleged error. No reference was made to it
Wé therefore conclude — distinguishing' the substantial from the unsubstantial, the substance from the shadow, in the record presented — that there are only two questions' properly presented to this court for consideration, viz.: (1) Was error committed in the admission or rejection of evidence!? (2) Was error committed in the rulings of the court below upon the question of statute of limitations, as pleaded by defendants?
As to the evidence:
Numerous errors are assigned as to the admission of what is claimed to have been incompetent evidence, but, under the view of the case which we have taken, all of these assignments can be considered and disposed of together. Befare entering upon such consideration, for a better understanding of the principles of law! involved, we deem it important to' refer again briefly to the nature of the suit, and the condition of the record upon which these appeals are presented: The suit, as shown hy the statement of the case preceding this opinion, was one in equity, brought by a judgment creditor of the Pony Gold Mining Company to recover from the defendants amounts unpaid upon the capital stock of that company, which are alleged to have been unpaid because of conveyances of property by the defendants to the company in consideration of the issue of a certain amount of fully paid capital stock, which property was of a value much less than the par value of such stock.
We have decided that the record does not disclose positively, or even inferentially, that it contains all of the evidence introduced at the hearing, and that therefore the appellants'cannot attack the finding of the court otn the ground of the insufficiency of the evidence. These findings are therefore conclusive upon
It is the well-settled law that in an equity case the mere admission of incompetent evidence will not be sufficient to warrant a reversal, because of the presumption that the court below only considered competent evidence in making up its findings. (Merchants’ Nat’l Bank v. Greenhood, 16 Mont. 395, 41 Pac. 250; Forrest v. Forrest, 25 N. Y. 501-510; Sawyer v. Campbell, 130 Ill. 186, 22 N. E. 458; Gardner v. Gardner, 23 Nev. 207, 45 Pac. 139; McDonald v. Jacobs, 85 Ala. 64, 4 South. 605; Salt Lake F. & M. Co. v. Mammoth Min. Co., 6 Utah, 351, 23 Pac. 160; Monroe v. Reid, 46 Neb. 316, 64 N. W. 983; King v. Murphy, 49 Neb. 610, 68 N. W. 1029.) There is: the following exception to this rule: Where it! clearly appears from the record that the court actually considered the incompetent evidence in making u,p its findings, or where the record, containing all the evidence, does not disclose sufficient competent evidence to warrant the findings. It is not clearly apparent, however, in this case, that the court considered incompetent evidence; and, as we have already held the record not purporting toi contain all the evidence, we cannot presume that there was not competent evidence before the court sufficient to sustain the findings.. So that it appears that the exception above stated does not apply in this’ case.
Again, one of the most important allegations of the complaint was to the effect that the board of trustees of the Pony Gold Mining Company, of which the appellants were members, by resolution duly adapted, purchased certain property of appellants and one Samuel T. Hauser, and agreed, in consideration therefor, to issue to appellants, and Hauser 499,991 shares of the full-paid capital stock of the company, and! to give to said defendants the company’» three notes; of $50,000 each; secured by mortgage from the company, on all the property so' pur-
There were also various errors assigned to the rulings of the court upon tho cross-examination of witnesses, but we doi not perceive how any injury to appellants could have been occasioned by any of such rulingsi Besides', there is no showing in the record wha,t the answers would have been to¡ the questions which were excluded. Neither 'do the questions give any indication of the specific evidence sought to be adduced. This court will not reverse a easel upon such uncertain ground.
As to the statute of limitations:
We shall consider’ all the errors assigned upon this question together, because all are directed to the same end, and therer fore will be disposed of by the same decision.
In order to decide this question, we must fully understand the nature oif the liability sought to' be avoided. One of the fundamental questions applicable to the consideration of all statutes of limitation is, when did the cause of action arise, and, therefore, when did the statute begin to> run ? If, under the statute imposing the liability, a suit might have been instituted against the stockholders immediately and directly, then such statute would at once have commenced to run. If, however, under the statute, it was necessary that suit be instituted and concluded against the corporation, and execution returned unsatisfied, before there could be said to be a liability against the stockholder, then the cause of action against the stockholder would not arise until that time, and the" statute would only them begin to run. In other words, was the liability of the stockholder direct and primary, or secondary ?
This court, in Kelly v. Clark, 21 Mont. 291, 53 Pac. 959, 42 L. R. A. 621, 69 Am. St. Rep. 668, says^ “Tho shareholders are only secondarily liable,” etc.
The liability of the stockholder’ in this case is' based upon the provisions of Section 457 of the Pifth Division of the Compiled Statutes of 1887, which is as followis: “The stockholders of every company incorporated under the provisions of this
Plaintiffs claim that the trustees issued stock as full paid to the appellants: on the purchase of property from them, very much in excess of “the amount of the value: thereof,” and that under the decision of this court in Kelly v. Clark, 21 Mont. 291, 53 Pac. 959, 42 L. R. A. 621, 69 Am. St. Rep. 668, there was unpaid upon said stock the difference between the actual value of the property and the par value of the stock. The theory of the enforcement of this statutory liability is that this unpaid balance on the stock is an asset of the corporation, and a trust fund for the benefit of its: creditor*®. The bill filed is, in the nature of a creditors’ bill to reach and apply a portion of this equitable trust fund to the indebtedness. The indebtedness was against the corporation, and not against the stockholders. By this statute they are “liable to the creditors of the company in which they are stockholders to: the amount of unpaid stock held by them respectively, for all acts: of and contracts made by such company.” Under the: statute the enforcement of this rinpaid balance is to: be aecompjlished by the same means as would be .used in case the1 stockholders] had subscribed for the
In tke fourth edition of bis excellent work on Corporations, at Section 200, Mr. Cook discusses this question as follows: “Although it may be considered settled law, at least in the United States, that unpaid subscriptions to' the capital stock of corporations constitute a trust fund for the benefit of corporate creditors, yet such unpaid balances of subscription are not the primary or regular fund for the payment of corporate debts. Persons transacting business with a corporation look to the corporation itself for the payment of their debts. Credit is given to the corporation, not to the stockholders; and' it is the natural order of business that the creditors of the corporation are to’ he paid by the corporation from funds in the corporate treasury. Ordinarily corporate creditors have no knowledge or concern about the subscription list, and unpaid or partially paid subscriptions ara a matter .entirely between the corporation and the subscribers. So long as the corporation meets its obligations in the ordinary course of business, corporate creditors have no need to concern themselves about unpaid subscriptions of stock. But when the corporation is in default and embarrassed, oa< for any reason fails to pay its debts, then its creditors have rights with reference toi such unpaid subscriptions’. They then have the right to know whether all the subscriptions for stock have been fully paid in, and, if not, they have the right to compel such payment. It accordingly becomes important to know at what point, in their efforts to collect what is due them’, corporate creditors may cease to pursue the corporation, and proceed directly against its delinquent members. The well-established rule upon this point is that a corporate creditor’s suit to enforce payment of unpaid subscriptions can be properly brought only after a judgment at law has been obtained against "the corporation, and an execution returned unsatisfied. * * * By this is meant that judgment shall have been duly recovered against the corporation, and execution issued and
Of course, if the corporation has been declared a bankrupt, or is utterly insolvent, or has been dissolved, no proceedings need be taken against such company, because -the law does not contemplate useless acts.
It is apparent, therefore, that the cause of action against appellants did not arise until after the execution against the company was returned unsatisfied, and that the rulings of the court upon the question of the statute of limitations were correct.
We are therefore of the opinion that the judgment and order appealed from should be affirmed.
Píse Cueiam. — Nor. the reasons stated in the foregoing opinion, the judgment and order denying motion for new trial, appealed from, are affirmed.