California National Supply Co. v. Flack

WILBUR, J.

This is an action brought upon a promissory note executed on behalf of the. corporation by the president and secretary of the Gate City Oil Company to recover from the directors of that corporation, acting as trustees, after the forfeiture of the corporate charter for nonpayment of the license and franchise tax. The plaintiff recovered judgment and two of the defendants appeal. The note sued oh was given in renewal of notes executed for the purchase price of supplies furnished by the plaintiff to "the defunct corporation. Only two points are presented on the appeal: First, that the court erred in refusing to

[125]

permit evidence of the lack of authority of the president and secretary to execute the note in question; second, that an action had been previously brought upon the same note against the Gate City Oil Company, and that the judgment therein obtained against that company for the amount thereof was a bar to this action.

[1]

As to the first point it is sufficient to say that it is admitted that several months after the execution of the note the corporation paid $250 on account thereof. Such payment constituted a ratification thereof, and that therefore the question of the previous authority on the part of the president and secretary to execute the same becomes immaterial. (10 Cyc. 1081.) The second point depends upon the legal effect of the failure to pay the corporate taxes. The statutes of 1915 provide that the failure to pay the corporate license tax

ipso facto

terminates the corporate

existence

and that the forfeiture occurs on the Saturday preceding the first Monday in March (i.e., March 4,1916), at 6 o’clock P.M. (Stats. 1915, secs. 7, 10, 12, pp. 422, 425, 426. See

Rossi

v.

Caire,

174 Cal. 74, 81, [161 Pac. 1161];

Keyser Land and Fruit Co.