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(41 Colo. 172) ·



(Supreme Court of Colorado.


The termination of an officer's term necessarily implies the cessation of salary. 2. MUNICIPAL CORPORATIONS-CITY ATTORNEY-RIGHT TO TERMINATE TERM.

Const. art. 5, § 30, providing that, except as otherwise provided in the Constitution, no law shall extend the term of any public officer or increase or diminish his salary after his election, does not restrict the people's power to amend the Constitution; and hence Const. art. 20, 3, providing that the terms of all officers of the city of Denver should terminate on the consolidation of the county and city, deprived the city attorney of his office and right to further salary, though the term for which he had been elected had not expired.

En Banc. Error to District Court. City and County of Denver; P. L. Palmer, Judge. Action by Harper M. Orahood against the city and county of Denver. From a judgment dismissing the complaint, plaintiff brings error. Affirmed.

T. E. Watters, W. F. Orahood, and E. W. Hurlbut, for plaintiff in error. H. A. Lindsley and Chas. R. Brock, for defendant in er


BAILEY, J. Plaintiff's complaint is substantially as follows: That the defendant is a municipal corporation. That on the 2d day of April, A. D. 1901, at the election held in the city of Denver, county of Arapahoe, plaintiff was elected to the office of city attorney in and for said city. That upon the 14th day of April, 1901, he qualified and entered upon the duties of the office, and continued to fulfill and perform such duties for the full term of two years from said 14th day of April. That on the 1st day of December, 1902, the city of Denver and the county of Arapahoe, by and under the provisions of a constitutional amendment, were merged in and became the city and county of Denver, defendant in this case, which succeeded to all the rights, powers, property, and liabilities of the said city of Denver, among which said liabilities was the obligation to pay to the plaintiff the full amount of his salary, as said city attorney, for the full term of two years. The city of Denver paid plaintiff the amount of salary due up to and including the 30th day of November, 1902, and failed and neglected to pay the amount due from December 1, 1902, to April 14, 1903, to wit, the sum of $1,861.13. That the money to pay the said salary was duly provided for by a tax upon the property of the city of Denver, and that at the time the defendant succeeded to the property, rights, and obligations of the city of Denver the tax had been levied and the money to pay said salary had been provided for by the said city of Denver, and the same by said consolidation, merger, and succession came to and is now held by the

defendant. That the charter of said city of Denver provided that the compensation of said city attorney of said city of Denver should be the sum of $5,000 per year, and that the term for which said attorney should be elected should be the term of two years. That since the 1st day of December, 1902, the defendant failed and refused to pay the said plaintiff his salary as said city attorney. To this complaint a general demurrer was filed by the defendant and sustained by the court, and judgment rendered dismissing the complaint. The action of the court is assigned as error by plaintiff in error.

Article 20 of the Constitution is the amendment mentioned in plaintiff's complaint. Section 3 of this article provides: "Immediately upon the canvass of the vote showing the adoption of this amendment, it shall be the duty of the Governor of the state to issue his proclamation accordingly, and thereupon the city of Denver and all municipal corporations and that part of the county of Arapahoe within the boundaries of said city shall merge into the city and county of Denver, and the terms of office of all officers of the city of Denver and of all included municipalities and of the county of Arapahoe shall terminate * and the district attor

ney shall also be ex officio attorney of the city and county of Denver." Section 30 of article 5 of the Constitution provides: "Except as otherwise provided in this Constitution, no law shall extend the term of any public officer or increase or diminish his salary, or emoluments after his election or appointment." It is the contention of plaintiff in error that section 30 of article 5 is controlling in this matter, and that the amendment should not receive such a construction as would diminish his salary or emoluments. The plaintiff in error relies somewhat upon the maxim, "The express mention of one thing implies the exclusion of another," and argues that, notwithstanding section 3 of article 20 terminated the right to the office, the right to the salary did not cease, because it was not expressly mentioned. This maxim is not of universal application, and great caution is requisite in dealing with it, lest we destroy the intention of the people in the adoption of the amendment, as discoverable from the instrument itself and the circumstances of the transaction. Broom's Legal Maxims, 653. If the amendment had provided that upon its adoption "the terms of office of all officers of the city of Denver shall terminate and the right of the officers to the salary attached to such offices shall cease." the latter clause would add nothing to the sentence, because "the expression of what is tacitly implied is inoperative" (Broom's Legal Maxims, 670), and the termination of the term necessarily implies the cessation of the salary.

The case of Marquis v. City of Santa Ana, 103 Cal. 661, 37 Pac. 650, relied upon by plaintiff in error, is not in point. In that

case the city relieved the assessor of the performance of his duties and then sought to avoid paying his salary. Under a statute which provided that the compensation should not be diminished during the official term, it was held that the city was bound to pay the salary, even though it had made other provisions for the performance of the duties. Here, by article 20 of the Constitution, the people in their sovereign capacity terminated the term of office of plaintiff in error. Uzzell v. Anderson, (Colo.) 89 Pac. 785, 1056. So that plaintiff no longer held the office the salary of which he seeks to obtain. In the case of County of Cook v. Sennott, 136 Ill. 314, 26 N. E. 491, which is relied upon by plaintiff in error, it appears that the Constitution of Illinois (section 11, art. 9) prohibits the increase of the compensation of the clerk of the probate court during his term of office, and it was held that an act of the Legislature increasing such salary was void. This does not apply here, because the act complained of was by an amendment to the Constitution itself.

It cannot be asserted that section 30 of article 5 prohibits the people from amending their own Constitution. The section of the Constitution which prohibits the diminution of the salary of any public officer also inhibits the extending of the term or the increasing of the salary. Yet, in the year 1881, an amendment to the Constitution was proposed, and afterwards adopted by the people, which provided for the increase of the salaries of the Governor, his private secretary, the Judges of the Supreme Court and the judges of the district court. Since the time of its adoption each of these officers has been receiving salaries in accordance with that amendment, and those in office at the time of its adoption immediately began to receive such increase. By the amendment to the Constitution proposed in 1901, and adopted by the people in 1902, the terms of office of the district attorneys, county judges, and the various county officers were extended. By the amendment to the Constitution which provides for the consolidation of the Court of Appeals and the Supreme Court, the term of office of one of the judges was extended for a period of one year, and the term of office of two of the judges was decreased for the period of three months. So it is seen that the people have repeatedly exercised the power to do those things prohibited by section 30 of article 5. The inhibitions mentioned in this section are restrictions upon the legislative branch of government, and not against the power of the people to amend the Constitution. In Taylor & Marshall v. Beckham, 178 U. S., at page 577, 20 Sup. Ct. 901, 44 L. Ed. 1187, it is said: "Nor does the fact that a Constitution may forbid the Legislature from abolishing a public office or diminishing the salary thereof during the term of the incumbent change its character or make it property. True, the restrictions limit the

power of the Legislature to deal with the office, but even such restrictions may be removed by constitutional amendment."

Plaintiff in error contends that, notwithstanding the fact that by constitutional amendment the people terminated the term of his office, he was still entitled to the salary for the full term for which he was elected. In State v. Frizzell, 31 Minn. 460, 18 N. W. 316, the court said: "Public offices, in theory at least, are held and exercised for the benefit of the public, and not of the incumbent. Therefore it is in all cases competent for the people, in their sovereign capacity, to abolish an office or shorten a term, or reduce or take away entirely the salary attached to it, without regard to the interests of expectations of the incumbent as to the prospective compensation. Cooley, Const. Lim. *276; County of Hennepin v. Jones, 18 Minn. 199 (Gil. 182); Conner v. City of New York, 2 Sandf. (N. Y.) 355. And when an office, or the term of an office, ceases, the salary ceases." See. also, Jones v. Shaw, 15 Tex. 577; Throop on Public Officers, § 475; Alexander v. McKenzie, 2 S. C. 81.

Inasmuch as the prohibitions contained in section 30 of article 5 cannot restrict the power of the people to amend their Constitution, and inasmuch as the right to the salary ceases when the right to the office terminates, it necessarily follows that the demurrer to plaintiff's complaint was properly sustained. The judgment of the district court will therefore be affirmed. Affirmed.

(41 Colo. 158)


1 Mills' Ann. St. § 491, provided that certain domestic corporations should annually. within 60 days from the 1st of January, make and file with the recorder of deeds of the county where the business was carried on a report stating certain facts, and for a failure so to do the directors should be jointly and severally liable for debts created during the year next preceding when such report should have been filed, and until it was filed, unless the capital has been fully paid in and a certificate filed. Held, that directors, during the period the corporation was in default for failing to file such statutory report, were personally liable for indebtedness incurred during such period.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations. §§ 1460-1467.] 2. SAME.

The fact that a director of a domestic corporation did not become such until after the expiration of the period when the corporation's annual report should have been filed, as required by 1 Mills' Ann. St. § 491, did not relieve him from liability for indebtedness incurred thereafter, during his administration while the corporation continued in default.


The general rule that, where a statute imposing a liability is repealed by a subsequent act containing no saving clause, all rights under the repealed statute are lost, was abrogated by

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Laws 1891, p. 366, § 1, provides that the repeal of any section of any statute shall not affect in whole or in part any penalty, forfeiture, or liability which shall have been incurred before the repeal, unless the repealing act shall so expressly provide. Held, that Laws 1901, p. 121, c. 52. § 11, repealing 1 Mills' Ann. St. § 491, imposing liability on directors of a corporation for failing to file annual reports, etc., without a saving clause. was not in any sense inconsistent with the general saving statute of 1891, and therefore did not preclude an enforcement of liabilities incurred under the repealed section.


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An alleged erroneous finding of fact prejudicial to appellee cannot be reviewed unless a cross-error is assigned thereon.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 3053.]


Where, in a suit to charge directors of a corporation for debts because of the failure to file annual reports, there appeared to be merit in the contention of one of them that he did not become a director until after the indebtedness was incurred, the court, on appeal, on reversing a judgment in favor of both, would not direct judgment against them, but would demand the cause for a new trial.

[Ed. Note. For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 4599.]

Appeal from District Court, City and County of Denver; Frank W. Owens, Judge.

Action by Edward J. Cavanaugh against Frank G. Patterson and other. From a judgment for defendants, plaintiff appeals. Reversed and remanded.

The question presented by this appeal is the liability of directors of a corporation for indebtedness incurred thereby after the lapse of the period when, in accordance with the provisions of section 491, 1 Mills' Ann. St., such corporation should have filed its annual report. This section, as it existed at the time when such indebtedness was created, provided, in substance, that every such corporation shall annually, within 60 days from the 1st day of January, make and file with the recorder of deeds of the county where its business is carried on a report, stating the amount of its capital and the proportion thereof actually paid in, together with a statement of its existing indebtedness. The section further provides that the failure to file such report within the time specified renders the directors of the defaulting corporation jointly and severally liable for the debts of such corporation created during the year

next preceding when such report should have been filed, and until it is filed, unless the capital stock of the corporation has been fully paid in, and a certificate to that effect filed, as provided in section 487, Id. In 1894, the Fish Creek Gold Mining & Land Company was incorporated under the laws of this state, and on the 8th day of March, 1901, its certificate of incorporation was amended by changing the name to the Freeland Mercantile & Mining Company. No certificate of full paid-up stock was filed, as provided by section 487, nor was the annual report, required by section 491, made and filed. On March 13, 1901, the corporation created an indebtedness of $1,000. Suit was brought thereon by appellant against the appellees. The court found as a fact, in addition to those above recited, that appellees were directors of the corporation at the time the indebtedness sued upon was created, and, specifically, that Mr. Taggart had been such director from February 5, 1901, and Mr. Patterson from March 8, 1901, but determined as a conclusion of law that the defendants were not liable. The plaintiff appeals.

Skelton & Morrow, for appellant. John R. Smith, for appellees.

GABBERT, J. (after stating the facts as above). The report for 1901 was due 60 days from the 1st day of January of that year. Directors of a domestic corporation during the period it is in default, in failing to file the annual report required by the statute, become personally liable for the indebtedness incurred by such corporation during that period. The statute in question has been so construed in numerous decisions of the Court of Appeals and this court, among which we cite Colo. Fuel & Iron Co. v. Lenhart, 6 Colo. App. 511, 41 Pac. 834, and Austin v. Berlin, 13 Colo. 198, 22 Pac. 433. New York has a similar statute, and the courts of that state have given it a similar construction. Boughton v. Otis, 21 N. Y. 261; Shaler & Hall Quarry Co. v. Bliss, 27 N. Y. 297.

From our conclusion under the facts we are considering, both defendants were liable. and the district court erred in holding to the contrary. No certificate of paid-up stock was filed. The annual report required by the statute had not been filed when the indebtedness sued upon was created, and both defendants were directors of the debtor corporation at this time. The fact that Mr. Patterson was not a director until after the expiration of the period when the annual report for 1901 should have been filed did not relieve him from the liability imposed by the statute, for indebtedness incurred thereafter under his administration while the corporation was in default. The duty devolved upon him, when he became a director, to see that the law with respect to the filing of the annual report was obeyed, and, having neg lected this duty, he became liable for the

penalties imposed by the statute for this neglect.

April 6, 1901, the General Assembly passed an act providing for a different kind of report than that mentioned in section 491, and by this act repealed that section, without any saving clause as to penalties which had attached thereunder. Laws 1901, p. 121. c. 52, § 11. Counsel for defendant urges that, because there was no saving clause to the repeal of section 491, therefore all rights under this statute fell with its repeal. This is the general rule, but it has been abrogated by statute passed in 1891 (Laws 1891. p. 366), which provides that: "The repeal, revision, amendment or consolidation * of any * * * section * * of any statute shall not have the effect to release, extinguish, alter, modify, or change, in whole or in part, any penalty, forfeiture, or liability, either civil or criminal, which shall have been incurred under such statute, unless the repealing, revising, amending or consolidating act shall so expressly provide.

This act does not attempt to interfere in any manner with future legislation, but provides that the repeal of a statute prescribing a penalty shall not prevent a recovery of such penalty unless the repealing statute so provides. Its purpose was to save the right to penalties incurred when the repealing statute was silent on that question, and hence, by virtue of its provisions, the repeal of a statute imposing penalties under certain conditions, without any saving clause, does not prevent the recovery of such penalties when it appears that the repeal and subsequent statute are not inconsistent with its purpose. Wilson v. People (Colo.) 85 Pac. 187: State v. K. C.. Ft. S. & G. R. Co. (C. C.) 32 Fed. 722. The new act providing for reports of corporations merely goes more into detail as to what corporations shall file such reports, and what they shall contain. It is entirely silent with respect to the effect of repealing section 491 on penalties incurred thereunder. but relates to the same general subject which that section covers, provides penalties for failure to file the reports thereby prescribed, is no sense inconsistent with the general saving statute of 1891. and indicates no intent on the part of the Legislature to interfere with any rights which attached under section 491 prior to its repeal and the enactment of a substitute. We are therefore of the opinion that the right to recover the penalties incurred by the defendants from their failure to file the annual report of the corporation of which they were directors was saved by that statute.

Counsel for appellees challenges the finding of the trial court as to the dates when they became directors. It appears to be conceded that Mr. Taggart became a director on March 5, 1901. and therefore, for reasons already stated, it is immaterial whether he became a director on that date, instead of February 5th preceding, as found by the court.

On behalf of Mr. Patterson, it is contended that he did not became a director until May 1. 1901. Of course, if that is true, under our construction of the statute he would not be liable, because the indebtedness sued upon was incurred before that date (Austin v. Berlin. supra): but we are precluded from investigating the question of the date when, according to the evidence, he became a director, because no exception was taken to the finding of the trial court on this issue, nor crosserror assigned thereon. It appears, however, that there may be some merit in the claim. on behalf of Mr. Patterson, that he did not become a director until May 1, 1901, and we therefore decline to direct the trial court to enter judgment against the defendants, as requested by counsel for plaintiff, but shall remand the cause for a new trial as to both defendants.

The judgment of the district court is reversed, and the cause remanded for a new trial.

Reversed and remanded.

STEELE, C. J., and CAMPBELL, J., con


(19 Okl. 21)

GUTHRIE & W. R. CO. v. RHODES. (Supreme Court of Oklahoma. June 25, 1907. Rehearing Denied Oct. 12, 1907.)

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Under the laws of this territory, the execution of a contract in writing supersedes all the oral negotiations or stipulations concerning its companied the execution of the instrument; terms and subject-matter which preceded or achence, where a note is given as subscription to a railroad corporation to aid in the construction and building of said road, any representations made prior to or contemporaneous with the execution of the note are inadmissible to contradict, change, vary, or add to the conditions plainly incorporated into and made a part of said note.


In the absence of any proof that the signer of a note or written instrument is unable to read, an answer which admits the execution of a subscription note sued upon. but alleges that the person procuring the note had misrepresented the conditions of the same and the extent of the liability that the defendant would incur in signing the same, where the note is in plain language and unambiguous in its terms, such answer will be insufficient to constitute a defense. (Syllabus by the Court.)

Error from District Court, Logan County; before Justice John II. Burford.

Action by the Guthrie & Western Railroad Company against W. L. Rhodes. Judgment for defendant. and plaintiff brings error. Reversed and remanded.

This was a civil action, tried in the dis trict court of Logan county, to collect a promissory note executed by the defendant in error to the plaintiff in error, of which the following is a copy: "$500.00. Guthrie. Okla. January 9, 1900. On completion of the railroads of the Guthrie & Western Railway

Company and the Kingfisher & Guthrie Railway Company from Kingfisher, Oklahoma, from a point on the Chicago, Rock Island & Pacific Railway at or near Kingfisher, to a point on the main line of the Atchison, Topeka & Santa Fé Railway Company .at or between the stations of Seward and Guthrie, for value received, in consideration of the construction of said railroads, I promise to pay to the order of the Guthrie & Western Railway Company five hundred dollars ($500.00) at the Guthrie National Bank, Guthrie, Oklahoma, with interest at 10 per cent. per annum from completion of said railroad. I hereby waive presentment for payment, notice of nonpayment, protest, and notice of protest. If suit be instituted, I agree to pay 10 per cent. additional as attorney's fee, and in case of judgment said attorney's fee to be included in said judgment. [10 cent Int. Rev. Stamp.] W. L. Rhodes." The petition is in the usual form, declaring on the note, and alleging specifically that the plaintiff had fully complied with all the terms and conditions of the contract.

To this petition an answer was filed. The answer pleads, first, a general denial. For a second defense the answer admits the execution of the note, but alleges that the execution was procured by misrepresentation and fraud, and pleads as the facts constituting the fraud that the plaintiff resides in the city of Guthrie, and is a property holder and interested in the growth and development of the city; that at the time the note was given the Atchison, Topeka & Santa Fé Railroad was the only railroad running in or out of said city; that for commercial purposes it would tend to enhance the value of property in the city to get new lines of railroads constructed into it; that at the time the said note was given the Chicago, Rock Island & Pacific Railway Company was operating a line of railway about 35 miles west of Guthrie, and that said railroad had extensive lines of railway, and was of great benefit to cities into which it ran its road; that at the said time property owners in the city of Guthrie were anxious to secure other lines of railroads in addition to the Santa Fé for said city, and were willing to pay money in order to get such lines into the city; that a short time prior to January 9, 1900, public notice was given in Guthrie that there would be a mass meeting for the purpose of hearing a proposition submitted by the Rock Island Railroad to build its line into Guthrie; that said notice was circulated by Henry Asp and J. B. Beadles, and other persons, who acted for the subsequently incorporated plaintiff; that on the evening announced for the meeting the defendant and a large number of citizens assembled, and persons there present, representing the interest afterwards incorporated into the plaintiff, made speeches concerning the purpose of the meeting and laying before the people a proposition to raise money to induce the

Rock Island Railroad to build into Guthrie; that it was stated by Henry E. Asp and several others, afterwards incorporated under the name of the Guthrie & Western Railroad Company, that if the citizens of Guthrie would donate the sum of $15,000 raised by subscription, the Rock Island would build and operate a line of railway from Kingfisher to Guthrie; that the advantages of such a connection to the city of Guthrie were set forth in those speeches for the purpose of inducing those present and other citizens to subscribe for said bonus; that the speakers claimed to have information that, if the subscription was raised, the Rock Island would build from Kingfisher to Guthrie; that subscriptions were then called for, and various persons subscribed, and that the name of this defendant was called, and he was requested to subscribe $500, when he said that he would subscribe $500 if one J. M. Brooks would do the same; that Brooks refused, but that several people at the meeting cried out that Brooks would subscribe the $500, although Brooks continued to refuse; that defendant does not know whether Brooks subscribed $500 or not, but that he made his subscription on the condition that Brooks did so subscribe, and that he had the impression that Brooks had subscribed the $500; that the defendant signed the note set out in the petition in haste, and did not read it, except he saw it was for the sum of $500, and defendant supposed that the note conformed to the statement which had been made by Mr. Asp and others at the meeting; that it was stated at the meeting that the road might be built under another name, but it really was the Rock Island road; that at the time he signed said note he believed that his subscription was for the purpose of inducing the Rock Island road to build into Guthrie, and that he formed this opinion from what was said at the meeting, and that nothing was said at said meeting which would intimate that the Santa Fé Railway had anything to do with the project, but it was stated that it was not a Santa Fé project, but a Rock Island enterprise; that de fendant had no information on the subject, except what he got at the meeting; and that he believed and relied on these representations, and, if the representations had not been made, he would not have signed the note. Defendant further alleges, in this paragraph of his answer, that the Rock Island road has never built into Guthrie, and that in fact the Guthrie & Western Railway is not part of the Rock Island system, but is a branch of the Santa Fé road; that it was well known to the persons who presented the proposition to the people of Guthrie and to the defendant to raise said bonus that the Rock Island road had no intention of building into Guthrie, and that the road intended to be built would be a part of the Santa Fé system, and not of the Rock Island system; that the person making these representa

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