Strouse v. Sylvester

Citations

• 6 Cal. Unrep. 798
• 66 P. 660
• 1901 Cal. LEXIS 1241

Syllabus

<p>New Trial.—On Appeal from an Order Denying a Motion for a new trial, where the judgment rendered is not appealed from, the sufficiency of findings to support such judgment will not be considered.</p> <p>New Trial.—On an Appeal from an Order Denying a Motion for a new trial, conclusions of law are not reviewable.</p> <p>Corporation—Salaries of Directors—Fraud.—The By-laws of a Mining Corporation authorized the directors to fix salaries. H., a stockholder, contracted with two others for a transfer of their stock to him for four years, without power of sale. Having thus become a majority stockholder, he presented to his brother, A., and to personal friends, M. and C., five shares, each, of his own stock. M. was in the personal employ of H. At the stockholders’ meeting shortly ensuing, H., A. and M. were elected directors, and the board 'was organized by the election of H. as president, M. as secretary and treasurer, and A. as vice-president. Later another director was removed, and C. chosen in his place. On motion of A., seconded by M., H. was given a salary of $250 per month as president, and on motion of O., M. was given a like amount. The minutes showed that both motions were carried unanimously, but later interlineations showed that H. did not vote in the first instance nor M. in the second. H. paid assessment No. 4 by offsetting his salary as president, and purchased delinquent stock in the same manner. He borrowed M.’s salary from him, giving a note, without interest, payable when the mine became productive. On inquiry by S., an innocent director, as to the payment of assessment No. 4, H. said: “The cat is out of the bag. I suppose S. will be mad, but I had to do it. It cost a good deal to get control of the mine, and I am king of the situation. Crack your whip.” Held, that the evidence was sufficient to show that the salaries voted H. and M. were a fraud on the corporation, and that their use by H. as offsets to his liabilities was ineffectual as payment. Ass