Thames v. Central City Insurance

PETERS, C. J. — The bill is filed by a stockholder in an incorporated company, to compel the company to restore him to his membership therein. The ground of equity alleged seems to be somewhat peculiar. The company is charged with practising a fraud on the complainant, by a misrepresentation or concealment of facts, which led to an injurious withdrawal by the complainant from the company. The answers fully and explicitly deny all fraud, or fraudulent suppression of the facts, on the part of the company or its agents; and we think, as the learned chancellor thought, that the evidence fully sustains the answers. 1. The bill alleges that White, the secretary of the company, in notifying the complainant of the proceedings of the stockholders’ meeting held on the 19th day of February, 1868, failed to include the fourth resolution adopted by them ; and that, in consequence of this failure, the complainant acted without a full knowledge of all the facts which ought to have been made known to him when he paid the balance on his stock required to discharge him from further liability to the company, surrendered his stock, and had his stock note can-celled, as authorized by the first resolution adopted at said stockholders’ meeting; that is, he acted under a deception, brought about by the company, through its secretary, White. But the testimony shows that the complainant was represented at that meeting by Washington M. Smith, as his proxy, who, while voting his own stock for the resolutions, voted the complainant’s stock against their passage. In this Smith acted for himself and also for the complainant. In such a case, the knowledge of the proxy, or agent, is brought home to the principal. What Smith knew, he knew as well for his principal as for himself. What was notice to the proxy, was notice to the stockholder whom he represented in the meeting. It is a common principle of all agencies, both at law and in equity, that one who acts by another, acts by himself. Story on [581] Agency, §§ 140, 451; Smyth v. Oliver, 31 Ala. 39; Wiley, Banks & Co. v. Knight, 27 Ala. 336. Moreover, Smith informed his principal, by letter, on the day these resolutions were adopted, of what had been done. Very clearly his letter of the 19th September refers to the stockholders’ convention, and to what they had resolved upon. This was actual notice to the complainant. 2. The proceedings of the company were accessible to all its members; and all are presumed to take notice of such proceedings when they «participate in the meeting at which they may have been transacted. This was the condition of the complainant in this instance. He must have known that the stockholders acted by resolution; and if he had wished to be better informed as to the contents of their resolutions than he had been by his proxy, he could have procured copies of the' proceedings, or he might have inspected the records of the company in person. But no inquiry was made; no effort to be better informed was attempted. In such a case, the mere failure of the secretary of the company to communicate the resolutions of the stockholders to a member who participated by proxy in their passage, is not a fraud, nor a badge of fraud. Steamboat Belfast v. Boon & Co. 41 Ala. 68, 69. There is no pretence of fraud shown or attempted, except the omission of White to communicate said fourth resolution. But, even if this resolution had been communicated in White’s letter, the board of directors had not at that time taken steps to act upon it. It was not until the 9th April, 1868, after the complainant had surrendered his stock, and gone out of the company as a stockholder, that the board of directors passed their resolution to carry into effect the purpose of the stockholders, as indicated in their proceedings of the 19th February, 1868. The complainant had no rights under this resolution. He was not a stockholder in the company when it went into effect; and it seems to have been intended only for the benefit of stockholders. He does not ask in his bill for any relief beyond that afforded by this resolution of the board of directors; and this relief he is not entitled to have, either as a stockholder still remaining in the company, or as one who had paid forty per cent, of his stock and withdrawn. He does not occupy either of these positions. His misfortune is of his own seeking, and not the result of any fraudulent action of the company or its officers. The decree of the learned chancellor is in conformity with law, and must stand as the decree of this court. At the same time, it may be admitted that, under a different code of morals, where a more generous appreciation of justice is acknowledged than that which has yet been reached in the edicts of legislation, [582] which are the rules of the money changers, the complainant might have just grounds to feel injured. But the law has not yet attained that elevated and serene sense of right which imposes the obligation to treat others as we would wish to be treated by them. The decree is affirmed, with costs.