H. K. McCann Co. v. Denny

RICHARDS, J.

In this action the plaintiff sought to recover certain sums alleged to be due to it from the defendants upon the stockholders’ liability of said defendants and each of them as stockholders of The Luthy Company, a California corporation, which had been organized for

the

purpose of manufacturing a certain automobile storage battery, and which had entered into certain agreements with the plaintiff, a national advertising agency, for the performance of certain services by the latter in conducting an advertising campaign and in preparing and placing the advertising to be done by The Luthy Company, in the course of marketing its products, in periodicals and upon sign-boards throughout the

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country. The complaint is in two counts, in the first of which the plaintiff seeks to recover from said defendants the proportionate sums claimed to be due from each under their aforesaid stockholders’ liability on account of certain payments of money which were made by the plaintiff to various periodicals with which it had placed the advertising of its principal, The Luthy Company, from time to time, and the bills for which the plaintiff had paid under the terms of its arrangement with its principal, wherein it was in substance agreed that the bills for advertising were to be sent by the publishers thereof to said advertising agency, and when paid by it were to be charged to the account of its principal. The evidence in the case shows and the court finds that while the aforesaid agreement between the plaintiff and The Luthy Company was entered into in April, 1921, the first advertising contracts placed by said agency thereunder bore a date not earlier than August 22, 1921, and such advertising thereafter continued to be placed with various publications up to April 6, 1922, when The Luthy Company, having become involved in financial difficulties, ceased advertising. Between the two foregoing dates the plaintiff, as shown by its bill of particulars, paid on account of its principal the several advertising bills, the sum of which furnishes the basis of recovery sought by the first count of plaintiff’s complaint herein. The main defense urged by the defendants herein is that of the statute of limitations embodied in section 359 of the Code of Civil Procedure, relating to the liability of stockholders of corporations. The trial court sustained the defendants’ plea in that regard and by its judgment determined that as to the plaintiff’s first alleged cause of action it should take nothing, but that said defendants were entitled to have judgment in their favor for their costs.