Mt. Nebo Anthracite Coal Co. v. Martin

Hill, C. J. Edward J. Martin discovered that a coal mine near Russellville could be purchased at a profit, and interested some of his relations, Frank Hoblit, Charles E., Samuel H. and Clinton D. Martin, the latter three being brothers, in the venture. The mine was purchased, and E. J. Martin placed in charge of it as manager; and part of the time Clinton Martin assisted him. Mrs. Minnie C. Martin served as clerk in the company’s store. This partnership was merged into a corporation, under the name of the Mt. Nebo Anthracite Coal Company. The property of the coal company was subsequently sold to William Hay and his associates, who were to form a corporation under the laws of Michigan to carry on the mining business purchased from the Mt. Nebo Anthracite Coal Company. The purchase price was partly in cash and partly in stock in the new corporation, which was styled the R.ussellville Anthracite Coal Mining Company, and was to be apportioned among the stockholders of the former corporation in proportion to their holdings. The sale was made, and the new corporation formed, and a disagreement arose between the parties as'to the settlement of their respective interests, and E. J. Martin and Minnie C. Martin, his wife, brought suit in the Pope Chancery Court against the Mt. Nebo Anthracite Coal Company, Frank Hoblit, Samuel H. Martin, Charles E. Martin, Clinton D. Martin, the Russellville Anthracite Coal Mining Company, and William Hay, wherein the history of the transactions was set forth and their respective claims against the Mt. Nebo Anthracite Coal Company were sought to be enforced. The prayer was for the dissolution of the Mt. Nebo Anthracite Coal Company and a settlement of its affairs and the payment of the sums owing to plaintiffs and distributing the remaining assets among the stockholders; and that the Russell-ville Anthracite Coal Mining Company and William Hay be restrained and enjoined from delivering the stock to Clinton B. Martin which was to be part payment for said property of the Mt. Nebo Anthracite Coal Company,.and that it be held by the court so as to be subjected to the satisfaction of the judgment sought in this case. Issue was made upon all the allegations of the complaint, and there were amendments and a shifting of issues in the case in the progress of the litigation, which finally resulted in a decree finding that E. J. Martin was entitled to salary from the Mt. Nebo Anthracite Coal Company from the first of October, 1899, to the 15th of December, 1904, at the rate of $100 per month; and that said Minnie C. Martin was entitled to salary for forty months at the rate of $40 per month; and that said Company was indebted to the said plaintiffs in the sum of $4,778 on account of said salaries, which was shown in detail in the master’s report, which was approved by the court. Judgment was rendered in favor of E. J. Martin for himself and his wife for said sum, and orders made for the enforcement of it against the assets of said Mt. Nebo Anthracite Coal Company, including the stock in the Russellville Anthracite Coal Mining Company which was to be part payment of the purchase price of the former corporation, and the defendants appealed. There is abstracted only the testimony relating to the issue of the salaries of Martin and his wife; and a sharp conflict of evidence is found. It was contended by C. D. Martin and his side of the controversy that the agreement was that E. J. Martin was to have his expenses and one-fourth interest in the mining venture as his compensation, and that, while it was known that Minnie C. Martin was working at the store it was not known that she was working for a salary; and that E. J. Martin had told him that she was helping him, and he was paying her something alone, but said nothing of a salary, and it was understood that she was working to help her husband make a good showing in the business. On the other hand, E. J. Martin testifies to an agreement that he and Clint Martin were to have salaries at the rate of $100 per month, and that this was regularly charged on the books — first of the partnership and afterwards of the corporation — and that his wife was employed as clerk in the store with the knowledge and acquiescence of the others, and her salary charged on the books; and these books were open to the other side and frequently examined by them. While the number of witnesses is against this version of the transaction, yet there is some corroboration of it by witnesses, and the books strongly corroborate it; and the chancellor has accepted it as true, and it cannot be said that it is against the preponderance. Objection is made to the amendments to the complaint and the shifting of the causes of action; but the court is unable to see that there was any abuse of discretion in this regard, or that any rights were prejudiced thereby. It is insisted that there was a misjoinder of parties, in having husband and wife as joint plaintiffs for the recovery of separate salaries. The chancellor evidently regarded it so, as he caused the complaint to stand amended so as to claim on behalf of E. J. Martin to recover for his own salary and also in behalf of his wife, and the judgment was rendered accordingly. It is sought to sustain this action upon the theory that when the wife does not elect to sue for her separate earnings under the statute giving that right to her, the common-law rule permitting the husband to sue, and recover for them prevails. It is unnecessary to go into this question, because this was a suit to wind up the affairs of a corporation which had gone out of business, to dispose of its assets and distribute the proceeds among the holders of the stock. “Every person interested as owner of stock or creditor of the concern was a proper party, and should have been admitted to assert any rights.” Randolph v. Nichol, 74 Ark. 93. Mr. Martin and Mrs. Martin were each creditors of the- corporation, and were each a proper party to the suit to assert their respective and separate rights; and there was no misjoinder of them, and no reason why separate judgmenfs should not have been rendered in favor of each of them separately. The only party who could complain is Mrs. Martin, but §he was a party to the suit, and permitted her rights to be asserted in the name of her husband, and is here asking an affirmance of the judgment in his favor for her salary. She has elected to treat the suit as his for the joint benefit of himself and herself, and this election is binding on her, and will make her husband’s satisfaction of the judgment her satisfaction of it. Opinion delivered July 13, 1908. Opinion delivered September 28, 1908. The court disallowed the claim for salary during the existence of the partnership, on the theory that E. J. Martin had not .proved a contract that would be binding upon the partnership; but allowed salary for the time that the corporation existed. Authorities are cited to show that directors are not entitled to salaries as such; but these same authorities show that when a director is acting as a manager or in any other capacity outside of his duties as director he is entitled to receive a salary, either by contract or upon quantum meruit, according to the circumstances of the case. The decree is affirmed.