Leudinghaus Bros. v. Dant & Russell

1. The legal principles contended for by defendant’s counsel are sound and sustained by the authorities cited. The defense is founded upon the theory that the Northwest Lumber Agency is a “blind” corporation and that in the sale and purchase of lumber by that company it was the agent of, and acting for, the owners of the different mill companies which owned or held stock in the Northwest Lumber Agency; that a sale to that company was in truth and fact a sale to the individual stockholders of the company and that because the plaintiffs were personally stockholders, and one of them president of the company, they are liable to the defendant for the amount of its unpaid claim against the Northwest Lumber Agency. The onus probandi was on the defendant. Much latitude was allowed by the trial court.

2. The plaintiffs were not incorporators and there is no testimony that they were original stockholders of the Northwest Lumber Agency or that they ever owned more than four of the fifty shares of its capital stock, which they acquired November 13,1914, and for which they paid par value. Neither is there any evidence that their dealings and relations with the Northwest Lumber Agency were at all different-from those of *595any other stockholder, and there is no more testimony against the plaintiffs as to liability on the counterclaims than there is against any other officer or stockholder. The orders for the lumber were placed with the defendant by the Northwest Lumber Agency with instructions to attach a sight draft to the bill of lading for 90 per cent of the invoice price. This was done with all but the last order, and the drafts were paid. The last invoice, to which through an oversight the draft was not attached, and the remaining 10 per cent of the former invoices, for which the defendant claims that the plaintiffs are liable, have never been paid.

We have carefully read and considered all of the testimony which was produced and offered, and while it may be true that some of the stockholders of the Northwest Lumber Agency, including the plaintiffs, as individuals did indirectly receive the benefits of the unpaid balance, there is no testimony which tends to show or from which a jury could find that in the placing of such orders the Northwest Lumber Agency was acting for or as the agent of the plaintiffs, or that the plaintiffs ever contracted for the lumber or authorized any contract to be made for them, or that they are liable on the counterclaims. Speaking in mining parlance, we are of the opinion that the defendant was oh a blind lead in which his counsel after a vigorous and exhaustive search found a few colors, but never did find the pay-streak. The defendant’s claim was and is against the Northwest Lumber Agency.

The judgment of the Circuit Court is affirmed.

Affirmed.

Concurring. — The utmost the defense has shown by its testimony is that it sold lumber to the Northwest Lumber Agency, a corporation in which the plaintiffs had four shares of stock. All the witnesses who spoke on the subject say that the plaintiffs did not receive any of the lumber sold by the defendant or any of the proceeds of the sale thereof. There was no error in denying the defendant’s offer of the unsigned draft of an agreement to the effect that thirteen lumber firms, including the plaintiffs, should sell their output exclusively to the Northwest Lumber Agency as it might require, with draft for 90 per cent of the price attached to each invoice. Such a contract would not make that concern agent for any of the parties agreeing to the arrangement. Moreover, even if they did sell to the Northwest Lumber Agency it seems that the defendant went and did likewise. It does not lie in the mouth of the latter to charge its fellow-sufferers with the default of the insolvent corporation by which they all came to grief. The defendant extended credit to the Northwest Lumber Agency. The stockholders of that corporation are not liable directly for its debts, nor in any event, except to the extent of their unpaid subscriptions to its capital stock: Article XI, Section 3, Oregon Constitution. Although such a liability may exist, it cannot be enforced in this action: Macbeth v. Banfield, 45 Or. 553 (78 Pac. 693, 106 Am. St. Rep. 670); Patterson v. Lynde, 106 U. S. 519 (27 L. Ed. 265, 1 Sup. Ct. Rep. 432). For these reasons I concur in the result of the opinion of Mr. Justice Johns.