Citizens' Securities Co. v. Hammel
Before: Allen
Synopsis
Corporations—Lease op Booms—Furniture—Unauthorized Security por Bent—Attachment—Action Against Sheripp—Unsupported Finding.—Where one corporation leased rooms from another owning the building and was in default for rent, and the lessor took possession of the lessee’s furniture by locking the rooms, but allowed a meeting of directors of the lessee to be held therein, after which it was stated as the sense of three or four of the directors talking about it that the lessor should hold the furniture as security for the unpaid rent, whereupon it reloeked the rooms, after which, at suit of a creditor of the lessee, the sheriff seized and removed the property, and an action was brought by the lessor against the sheriff and his surety, in which the lessor recovered judgment, it is held that a finding in such action that the corporation lessee delivered the furniture to the lessor as security for rent is unsupported by the evidence.
Id.—Burden op Proop upon Plaintipp—Bight op Possession.—The burden of proof was upon the plaintiff, in order to sustain the action against the sheriff and his surety for seizure of the leased furniture, to show not only that it had possession thereof at the time of the levy, but also some right of possession. But it is held, upon the facts, that the plaintiff failed to show any right of possession of the furniture.
Id.—Authority op Oppicers op Corporation—Pledge op Property por Antecedent Debt.—The executive or managing officers of a corporation have not the authority, except upon power from the board of directors, to pledge or mortgage the property of the corporation for an antecedent debt. No director of the corporation has such power.
Id.—Power op Board op Directors—Vote When Assembled as a Board Essential.—The board of directors of a corporation may pledge its property for an antecedent debt, but that it may authorize such act it is necessary that the board shall be in session at a meeting lawfully assembled.
Id.—Burden op Plaintiff to Show Lawful Action op Directors.— Plaintiff, relying upon the right of possession as conferred by the board of directors of the corporation lessee, must affirmatively show facts from which such authority may be reasonably inferred. Seven members out of eleven would have no authority to pledge the corporate property for an antecedent debt, if it is not shown that they were legally assembled for the transaction of corporate business.
Id.—Vote or Resolution of Directors Essential—Record not Essential.—Some formal action of the board of directors by vote or resolution of a majority of the members of the board lawfully assembled is necessary to warrant the pledging of the corporate property. The vote or resolution need not be spread upon the minutes, if it is shown to have actually passed.
ALLEN, P. J.
Appeal by defendants from a judgment of the superior court of Los Angeles county, and from an order denying a new trial.
It is alleged in the complaint that plaintiff, the owner of a building in Los Angeles, leased the same to a corporation known as the Ocean View Cemetery Company; that prior to the 21st of October, 1908, the cemetery company was indebted to plaintiff in the sum of $395.50 on account of rent of said premises; that before said twenty-first day of October, as security for such unpaid rent, the cemetery company delivered to plaintiff possession of the office furniture contained in said rooms so,leased, and vacated the same; that on the 21st of October the defendant sheriff, by virtue of a writ of attachment duly issued to said sheriff in an action begun in the superior court of Los Angeles county against said cemetery company, levied the same upon the property so in the hands of plaintiff, removed said property from said premises and converted the same to his own use. The defendants deny that said cemetery company ever or at all delivered said property into plaintiff’s possession; denied that any delivery of possession was for the purpose of securing to plaintiff the payment of said unpaid rent, and denied that plaintiff on the date of the levy was in the actual or peaceable possession of said property.
Upon the trial of the action, the court found in favor of plaintiff, that the cemetery company was indebted to plaintiff in the sum claimed, and that the cemetery company in consideration thereof, delivered to plaintiff possession of the office furniture contained in said rooms and vacated the same; found the property of the value claimed and rendered judgment accordingly.
Appellants’ primary and principal contention is that there is no evidence in the record warranting the finding of the court that the cemetery company ever delivered to plaintiff possession of the office furniture as security for the debt. A careful examination of the record satisfies us that appellants’
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contention in this regard must be sustained. It was incumbent upon plaintiff to show, in order to maintain this action, not only possession, but some right to the possession. It does show actual possession of the property at the time of the levy, but introduces no evidence from which it can be said' that the right to such possession was established. The only evidence tending to show such right of possession is to the effect that shortly before the levy by defendants and when the indebtedness existed, the plaintiff, as the landlord of the cemetery association, upon failure and refusal to pay the rent, changed the lock upon the door, thus acquiring possession of the furniture contained in the rooms; that within a day or two thereafter, upon the application of the secretary of the cemetery association and upon representations that the association desired to hold a directors’ meeting for the purpose of levying an assessment, the plaintiff unlocked the doors of the rooms in which such furniture was contained and permitted certain directors of the cemetery association to hold their meeting therein. It appears from the record that the cemetery association is a corporation governed by a board of eleven directors, seven of whom were present at this meeting. It is not shown that this meeting was a regular meeting of the association, or that it was a special meeting, notice of which had been given as required by law. It does appear, however, that after the seven members of the board had assembled a conversation took place between four of the members, during which “it seemed the sense of the three or four talking about it was that the company (meaning plaintiff) should have the furniture as security for the rent,” in which conversation one Nolan, manager of the corporation, took part and acquiesced. After adjournment of the meeting one of the directors notified the plaintiff that it was the sense of the meeting to have the furniture turned over to plaintiff to apply upon the rent of said office past due, and such director further said: “You will please take possession at my suggestion in order to protect myself on the note signed jointly by myself and others, and to verify my verbal instructions made Monday last.” Upon the strength of this statement, and after adjournment of the board, plaintiff again took possession of the furniture by changing the lock on the door again and excluded the cemetery association therefrom. It
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