Judson Manufacturing Co. v. Wyckoff

LANGDON, P. J.

This is an appeal by the plaintiffs from a judgment against them in an action brought under section 309 of the Civil Code. Plaintiffs are creditors of the Keystone Construction Company and seek to charge the defendants’ testator with liability for the indebtedness of the said company, which indebtedness, it is alleged, is over and above the amount of its subscribed capital stock, aiid was incurred while defendants’ testator was a director of said corporation. The action was originally brought against J. A. Elston in his lifetime, but upon suggestion of his death, the executors of his last will and testament were duly substituted as defendants in his place and stead.

The following facts were stipulated and agreed to as evidence in the case: At all times herein mentioned, down to 1912, the Keystone Construction Company was a corporation duly organized and existing under the laws of this state, with •a total authorized capital stock of $25,000, divided into

250

shares of the par value of one hundred dollars each, fully subscribed and issued at the times mentioned. On

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March. 31, 1911, W. A Haekley, P. B. Haekley and R. C. Hackley were the owners of all of the capital stock of said company. On said last-named date there was held a special meeting of the board of directors of said corporation. The minutes of said meeting recite that there were present W. A. Hackley, P. B. Hackley, and R. C. Hackley. By resolution Guy Hyde Chick was employed as general manager of the corporation, such employment to continue until the completion of certain outstanding contracts which the company had entered into. By resolution duly carried the three Hackleys were then employed to act as superintendents in the construction work being carried on by the company, and the president was authorized to borrow, from time to time, from the First National Bank of Berkeley such amounts of money for the use of the company as he might deem necessary, such loans not to exceed the aggregate sum of $10,000. Thereupon P. B. Hackley tendered his resignation as a director and vice-president of the corporation, which was accepted, and J. A. Elston was, thereupon, unanimously elected director and vice-president. Mr. Elston, thereupon, took his place as a member of the board and the meeting continued. R. C. Haekley tendered his resignation as director and secretary of the corporation, which resignation was accepted and R. R. Smith was elected to serve in his place. Thereupon the following resolution was unanimously adopted: “Resolved that all checks and drafts executed by or in favor of this corporation, be signed by the president, W. A. Hackley and countersigned by the secretary R. R. Smith or Guy Hyde Chick.” The meeting then adjourned. At the time of said meeting (March 31, 1911), the debts of the Keystone Construction Company amounted to approximately $105,587.95. Between April 1, 1911, and September 8, 1911, Guy Hyde Chick, acting in his capacity as manager of said corporation, incurred debts amounting to $66,757.27. The details of this indebtedness are immaterial under our view of the rights of the parties.