Bottle Mining and Milling Co. v. Kern

Corporations—Assessment on Paid-up Stock—Personal Action.— Under the statutes of this state an assessment may be levied upon the paid-up stock of a corporation to meet its liabilities and current expenses within the limit allowed therefor, and such assessment, when valid and delinquent, and the remedy by sale is subsisting, may be enforced by personal action.

Id.—Absence of Implied Power—Statute Part op Stockholder’s Contract—Mode to be Strictly Pursued.—Corporations have no implied power to levy assessments upon paid-up stock. The power must depend upon the statute in force when the stock was issued, which becomes part of the stockholder’s contract with the corporation, subject to the rule that when power is given by statute, the mode provided must be strictly pursued.

Id.—Limitations of Power—Amount of Levy—Identical Procedure. The sections providing limitations of power in the levy of assessments upon stock indicate that, except in respect to the amount that may be levied, there is no distinction between an assessment upon unpaid stock and one upon fully paid-up stock. The procedure for levying and collecting the assessment and for sale of delinquent stock, is the same, whether it be a “call” for subscription or an assessment on paid-up stock, to pay debts and expenses.

Id.—Mining Corporations Subject to Same Rules.—There is nothing in the Civil Code which takes mining corporations out of the same rules which apply to assessments upon the stock of corporations in general.

Id.—Waiver of Sale—Time of Waiver—Election of Remedy by Action.—The corporation, though it cannot waive a right which is lost, may waive a sale and elect to proceed by action, if the proceeding to sell is alive and going when the election was made, and the stock was delinquent at the time of the election to sue.

Id.—Resolution Vacating Invalid Notice—Publication and Service of New Notice—Construction of Pleading.—When, owing to an invalid first notice of assessment, the directors of the corporation vacated all proceedings subsequent to the assessment, and passed a resolution for a new notice, fixing new dates for delinquency and sale, and the complaint, in an action upon the delinquent assessment, alleged service of such new notice by publishing the same “upon making the resolution aforesaid,” it is to be construed as importing that it was published immediately thereupon, without delay or lapse of time, and an allegation therein that notice of such assessment was mailed to each stockholder “forthwith” is to be construed as referring to the time of the passage of such resolution.

Id.—Period of Prior Publication not Fixed—Sufficiency of Pleading.—Since the statute does not fix a period for publication of the notice of assessment prior to the date of delinquency and date of sale, the apparent defect in the statute cannot be supplied by the courts, and a complaint averring that the notice of assessment was published at the places and for the duration of. time prescribed by the statute is sufficient to support the plaintiff’s right to sell.