Nelson v. Caddo-Texas Oil Lands Co.

The following opinion was filed January 10, 1922: Owen, J. The only defense interposed to the action was that the plaintiff waived his salary which had accrued up to December 31, 1919, which alleged, waiver is predicated upon the following state of facts: On the 5th day of January, 1920, there was submitted to a meeting of the board of directors held 'on that day, by the secretary of the company, a statement which showed an undivided profit of $5,036.08.. This statement did not show the accrued portions of the annual salaries of the directors and officers of the corporation. It is claimed that if such accrued salaries had been disclosed by the statement it would have [329] revealed a loss instead of a profit. There is evidence to show that the fact that the financial statement did not reveal the accrued and unpaid portion of the annual salaries of the directors and officers of the corporation was discussed, and the secretary stated that such. salaries did not become a liability of the corporation until the end of the year, and that the amount thereof would not properly appear on the statement. With this financial statement before it the board of directors declared a dividend of two per cent., amounting in the whole to $1,325. In view of the fact that the counterclaim, which set up a cause of action for the recovery of the amount of this dividend from the plaintiff, was dismissed it is unnecessary to consider, the legality of the dividend then declared, and it leaves as the only issue raised by the pleadings the question whether the plaintiff waived his salary by his participation in the meeting of the board of directors January 5, 1920. A waiver is the voluntary relinquishment of a known right. Intent to waive is an essential element of waiver. While the intent to waive may be inferred as a matter of law from the conduct of the parties (Pabst B. Co. v. Milwaukee, 126 Wis. 110, 117, 105 N. W. 563), it is to be determined as a question of fact where the inference does not conclusively arise as a matter of law. Robinson v. Pennsylvania F. Ins.. Co. 90 Me. 385, 38 Atl. 320; Fishback v. Van Dusen, 33 Minn. 111, 22 N. W. 244. The argument of appellant is to the effect that the financial statement submitted to the board of directors when the dividend was declared failed to disclose the earned portion of the annual salaries of the directors and officers; that this fact was called to the attention of the directors; that if this item had appeared upon the financial statement it would have revealed a loss rather than' a profit; that by declaring the dividend the directors must be held to have acted upon the assumption that profits existed out of which the dividend could have been paid, which fact could exist only upon the [330] theory that the amount of their salaries which had then accrued was waived. We do not think this inference necessarily follows. Numerous motives might have induced them to vote the dividend. They might have done it deliberately, knowing that there were no profits. They could voluntarily assume the liability which the law imposes upon them for so doing if they chose. They might have thought that it would be to the benefit of the corporation tO' declare a dividend even in the absence of profits, and there is evidence in the record to indicate that it was considered by the directors that by so doing future stock sales would be made easier. They might have thought that the future earnings of the company would be ample to pay their salaries when due, and that they were not impairing the capital stock of the company by declaring a small dividend, which by no means absorbed the entire surplus of the company as disclosed by the financial statement. Under such circumstances, an intent to waive their salaries, is not necessarily imputed to the directors by reason of the paying of the dividend. Whether the plaintiff intended to waive his salary by his participation in the directors’ meeting and voting to declare the dividend is a question of fact which was properly submitted to the jury, and the judgment rendered on the verdict of the jury cannot be disturbed. By the Court. — Judgment affirmed. A motion for a rehearing was denied, with $10 costs, on March 14, 1922.