from 5 to 12 of the two-wheel graders on the job at irregular periods as necessity required. The two Maney graders were not purchased to do the entire job. Therefore the 25 per cent. of the cost of doing the entire job is not the proper measure of damages. Hall's rejected testimony was merely speculative and, under the rule of recovery herein stated, was properly excluded. The court's instructions Nos. 3 and 4 are as follows: "3. This leaves for the consideration of the jury the following features: (1) Has the warranty contained in the contract of sale heretofore mentioned been broken by the plaintiff? (2) If it has been broken, how much less in value were the machines worth at the date of the sale than in the purchase price of same to the extent of the unpaid balance, namely, $440 and interest as aforesaid? may, if they find such breach of warranty ex(3) The jury isted and that the graders were worth less thereby, counterclaim or set off said amount of said diminished value against the notes, subject, however, to the following considerations: Evidence has been introduced on the part of the defendants that the said machines were worth the sum of $20 each, or $40 for the two machines. Your verdict, therefore, will be in favor of the plaintiff for not less than the sum of $40 and interest from the time of their delivery, and not more than the amount of the two notes, being $440 with interest as already stated. "4. The issues as thus narrowed down are comparatively simple. The execution and delivery of the notes is admitted and that they are unpaid. The contract and warranty are admitted, and there is nothing therefore for you to consider in that respect. The only matter for your determination is: Was the warranty by the plaintiff that 'these machines to be guaranteed to effect a saving of at least 25 per cent. over a like number of No. 2 wheelers when operated in accordance with the instructions of the manufacturer and under like conditions' broken by the plaintiff? In other words, whether said machine complied with the terms of said warranty, and, if the machines did not comply with said warranty, how much less were the machines worth by reason of said failure to comply with the terms of said warranty? As before set forth, the defendants have admitted that the graders purchased were worth $20 each, and therefore your verdict must be in favor of the plaintiff and against the defendants for at least the sum of $40 and interest from the date of their delivery to the defendants. On the other hand, your verdict against the defendants and in the favor of the plaintiff under the instructions of the court, in view of the matters withdrawn from our consideration as stated, cannot exceed the amount of the notes sued on, which are dated May 5, 1916, and bear interest at 8 per cent., namely $440 with interest and attorneys' fees." [4] From what we have said it appears clearly that these instructions are erroneous, and, in view of the fact that a new trial must be ordered, it becomes unnecessary to discuss other assignments of error; they being without merit. Costs will abide the final outcome of the case. Reversed and remanded for new trial. MOUNT and MACKINTOSH, JJ., concur. CHADWICK, J., concurs in the result. (Wash. (103 Wash. 625) JOHNSON v. GOODENOUGH et al. (No. 14802.) (Supreme Court of Washington. Sept. 30, 1918.) 1. APPEAL AND ERROR 47(3)-ORDERS APPEALABLE-AMOUNT IN CONTROVERSY. and recovers a judgment for less than $200, the Where plaintiff sues for more than $200 sued for, under Const. art. 4, § 4, and defendamount in controversy is the original amount ants can appeal. 2. APPEAL AND ERROR 562-MATTERS RE- nature cannot well be attached to the state- reservation that he should participate in a div- that, in order to participate in a division of AMOUNT EVIDENCE. COMPUTATION OF recovery cannot stand where there is not suffi- Court, Adams County; Edward C. Mills, Goodenough and another. Burcham & Blair, of Spokane, and Adams & Naef, of Ritzville, for appellants. Chas. W. Johnson and Edward A. Davis, both of Pasco, for respondent. The or FULLERTON, J. In 1909 the respondent Johnson, with others, organized a corporation known as the Producers' Union Warehouse Company; the respondent subscribing for eight shares of stock therein. ganizers of the corporation were wheat growers, and the object of the corporation was to buy and sell wheat and deal in fuel and such other commodities as its organizers ordinarily used. Two forms of dividends of the earnings of the corporation were provided for in the by-laws of the organization. one a flat dividend on the corporate stock not, to exceed 12 per centum of the face value of the stock, and the other a division of the surplus remaining after deducting the 12 per centum, a sum to cover depreciation and bad debts, and such further sum as the directors might deem it advisable to set aside as a reserve account; the sum so remaining to "be divided among the members in proportion to the volume of business, wheat expressed in bushels, merchandise in dollars, done by each member with the company." In the year 1914, the respondent, while a stockholder, delivered and sold to the corporation some 15,000 bushels of wheat. On February 24, 1915, he sold his shares of stock to the appellants, Goodenough and Minnick, six shares to the first named and two to the last. At the time of the sale, the respondent had misplaced the certificate issued by the corporation evidencing the shares, and made affidavit to that effect, also executing to each of the purchasers a bill of sale of the number of shares transferred to them severally. The bills of sale purported to convey the stock absolutely, without reservation of any kind. purchased the stock from him with the express understanding and agreement that any dividends due upon the stock sold should remain in the seller and would be paid to him; further alleging that the defendants received the dividend and converted it to their own use. The appellants answered separately, denying the material allegations of the complaint. The cause was tried to a jury. In his evidence given at the trial, the respondent did not contend that the dividend paid on the face value of the shares of stock was reserved in the transfer of the stock, but only such sum as might be paid on the distribution of the surplus profits, the second form of dividend provided for in the by-laws. At the conclusion of the trial, a challenge to the sufficiency of the evidence to justify a verdict was interposed by the appellants, which the trial court overruled. The cause was later submitted to the jury and a verdict returned, finding against the appellant Goodenough in the sum of $216 and against the appellant Minnick in the sum of $102.60. On the return of the verdict, the appellants moved for judgment in their favor non obstante. The court denied the motion, but Subsequent to the sale of his stock by the held that the verdict against Goodenough respondent to the appellants, the corporation should not have exceeded $190.21 and that sold its business to another corporation. At against Minnick $89.37, and tendered to the about the same time it declared and paid a respondent the alternative of taking judgdividend upon its stock to its then stock-ment against the appellants severally for the holders of 12 per centum on the face value thereof. This left a surplus of $10,789, $10,500 of which was divided among the stockholders under the second form of dividend provided in the by-laws. This dividend, because based upon the number of bushels of wheat delivered to the corporation by the participating members as well as upon the amount of business transacted by the member with the corporation, was not distributed on the basis of an equal percentage to each member. While it is stated that some 17 members participated in it, the per centum of the sum divided received by the several members other than the appellants is not shown. In the division Goodenough received a sum total of $1,711.67, and Minnick a sum total of $799.82. In making the dividends the respondent Johnson was treated as a nonstockholder; neither the amount of the wheat delivered by him to the corporation, nor the amount of business transacted by him with it prior to the sale of his stock, be ing taken into account. respective amounts or submitting to a new trial. The respondent elected to take judgment for the reduced sums, and judgment was entered accordingly. This appeal is from the judgment so entered. The respondent moves to dismiss the appeal on the grounds: First, that the amount in controversy is not within the jurisdiction of this court; and, second, because the statement of facts does not contain all of the evi dence. [1] The first ground of the motion seems to be based on the contention that the amount of the recovery, not the amount in controversy, determines the jurisdiction of this court on an appeal. But such is not the rule. The Constitution (article 4, § 4) provides that this court shall have appellate jurisdiction in all actions and proceedings, excepting that its appellate jurisdiction shall not extend to civil actions at law for the recovery of money or personal property when the original amount in controversy or the value of the property does not exceed the sum of $200. The presThe present action was instituted by John- ent action manifestly is a civil action at law son in May, 1916. He sued the appellants for the recovery of money in which the origijointly, and after alleging in his complaint nal amount in controversy exceeds the sum his former ownership of shares of stock in of $200. The amount in controversy is dethe warehouse company, his delivery to the termined by the allegations of the complaint, company of 15,000 bushels of wheat, and the and the allegations therein relating to the sale of his stock to the appellants, further amount will be held to govern in determining alleged that he was entitled to a dividend the right of appeal, unless it is clear they or participatory profit on such delivery were made in bad faith or in attempt to conamounting to $1,350, and that the appellants | fer jurisdiction when it otherwise would not exist. The respondent, of course, does not¡ clearly he cannot maintain an action at law assert that his demand for $1,350 was not made in good faith. against these appellants for the corporation's account, at least until he shows that he has exhausted his remedies against the corporation or that pursuit of the corporation would be useless. This he has not done. On the contrary, his proofs expressly show that he has made no attempt to pursue the corporation, and show further that the corporation has on hand funds ample to meet the obligation if the recovery against the appellants measures his true right. [2] The second ground for dismissal is also without merit. The evidence pointed out in the brief as not in the record is a certain exhibit numbered 4, but we find it in the record. True, it is not physically attached to the statement of facts; from its bulky nature it could not well be so attached, but it is referred to in the statement, and the trial judge has attached thereto a certificate to the effect that it is an exhibit in the case, making reference to the particular page of the state-red from a right of recovery by the by-law ment of facts wherein is contained the record of its admission in evidence. This is sufficient. [4] Again, we think the respondent is bar A sale of of the corporation before referred to. This by-law, as will be seen, imposes two condi tions on the right to share in a participat[3] On the merits of the controversy it is ing dividend: First, the person claiming difficult to see on what principle a recovery the right must be a stockholder in the corcan be had against the appellants. Since poration; and, second, he must have transthe respondent does not claim a reservation acted business with the corporation. A of the dividends paid upon the face value of stockholder is thus permitted to participate the stock, and since the second form or par- in this dividend because of his status. While ticipatory dividend was made without ref- the ownership of the stock is made necessary erence to the number of shares of stock held in order to so participate, the dividend is by the stockholder, but upon the number of in no sense a dividend on stock. bushels of wheat the stockholder delivered the stock without a sale of the rights folto the corporation and the amount of bus-lowing it, therefore, merely destroys the iness he transacted with it, it is plain that the appellants acquired no advantage over other stockholders in virtue of their purchase of the respondent's stock. In other words, the number of shares held by the individual stockholder was not taken into ac count when making the dividend. Nor did the appellants by the purchase of the respondent's stock acquire directly any of the rights the respondent would have had in the participating dividend had he remained a stockholder. The respondent sold his shares before the participating dividend was made, and in making the dividend he was treated by the officers of the corporation as a nonshareholder. By purchasing the stock, therefore, the appellants acquired only an indirect benefit; that is to say, by the elimination of the respondent's interests the amount of the dividends was distributed over lesser interests than it otherwise would have been, and the appellants received their proportionate shares of the difference. status; it does not carry with it anything more than the results usually following sales of stock. As the by-law was not a new creation, but was enacted when the respondent was a stockholder in the corporation, he was bound to take notice of it, and could not by his own contracts change its purport or effect. When therefore he parted with his stock, he did not reserve to himself any right to the dividend, since ownership of the stock and the right were not separable. [5] But were we to waive the foregoing objections, a recovery must fail for want of sufficient data upon which to compute the amount of the recovery. Since the problem for determining the sum due has as one of its factors the entire amount of business transacted with the corporation by the participating members plus the amount of business transacted with the corporation by the respondent, it was incumbent on the respondent to show the sum total of such business. This he did not do. He showed only the sum But the fact that the dividends of the ap- total of his own business and the percentage pellants may have been increased in this in- awarded the participating members, seemingdirect manner by the purchase of the rely in the belief that the percentage of disspondent's shares does not, we think, give him a right of action against them. It may be that the respondent in the sale of his shares could have vested the right in the purchaser to collect the dividend for his use, and could have recovered against them had they done so; but this he did not do. He sold the shares, reserving the right to participate in the dividends, thus preventing the purchasers from claiming his proportionate share. Any claim he has for this share therefore must exist against the corporation, and tribution would remain the same were his business also taken into the account. It, of course, requires no mathematical demonstration to show that this method of making the calculation leads to an incorrect result. For the reasons stated, the judgment is reversed, with instructions to grant the appellants' motion for judgment notwithstanding the verdict. MAIN, C. J., and MITCHELL, PARKER, and TOLMAN, JJ., concur. (103 Wash. 690) KAUFMAN et al. v. McMILLAN et al. (No. 14701.) (Supreme Court of Washington. Oct. 14, 1918.) lief demanded in the complaint. Defendants appeal. The facts were stipulated, and for the purposes of this case are as follows: A petition was presented to the board of county commissioners of Whatcom county asking that 1. HIGHWAYS 28(2)-IMPROVEMENT-PETIa part of what is known as the northwest diTION-STATUTE. Under the Permanent Highway Law, a peti-agonal road to be improved by a hard surface tion for a highway improvement, signed by the owners of two-thirds of the lineal feet of the land adjoining the highway, but not by the owners of two-thirds of the land in the assessment district, was sufficient. driveway. In the petition the board of county commissioners was asked to make a dis trict not more than three miles in width and that 50 per cent. of the cost of the improve 2. HIGHWAYS 140-IMPROVEMENT-METH-ment be paid by the district, the remainder OD OF ASSESSMENT. to be paid out of the permanent highway An assessment, under the Permanent High-fund. The petition was signed by the owners way Law, was not arbitrary or fundamentally wrong, because each parcel in the subdivisions of more than two-thirds of the lineal feet of of the assessment district was assessed accord- lands, other than lands of the state or of ing to the relation of its area to the total the United States fronting upon and toucharea of the subdivision instead of in proportioning the highway; but the petition was only 148-IMPROVEMENT RIGHT signed by owners of land actually touching and bordering upon the highway. The total area of the district, three miles in width, is to the benefits to each tract. TO AVOID OR RESTRAIN ASSESSMENTS-STAT- If the Permanent Highway Law is broad enough to require or permit the property owner to present to the board of equalization the question of benefits, landowners, assessed for a highway improvement, and who did not avail themselves of a statutory plan, are entitled to no relief in their action to declare void and restrain collection of assessments. 4. HIGHWAYS 148-IMPROVEMENT-SUIT TO AVOID AND RESTRAIN ASSESSMENTS. If the Permanent Highway Law does not contemplate a hearing by the board of equalization on the subject of benefits from a highway improvement as compared with assessments, the fact is no basis for affording relief to property owners, suing to avoid and restrain collection of assessments. 5. HIGHWAYS 148 IMPROVEMENT-BENEFITS AND BURDENS-RESORT TO COURTS. If corporate authorities propose to assess property within a highway improvement district beyond the amount of special benefits thereto, and the law under which they act does not safeguard the rights of the owner in such respect, he can resort to the courts. about 9,500 acres, and the petitioners were and are the owners of not more than 1,500 acres. In due time the prayer of the petition was granted, and a district three miles in width created, one and one-half miles on each side of the highway. The board of county Commissioners caused the highway to be improved. After the highway was constructed, for the purpose of making assessments against the lands in the district the district was divided longitudinally on each side of the center of the improvement into three subdivisions, each one-half a mile in width, and 50 per cent. of the cost of the improvement was apportioned to the subdivisions as follows: Seven-fifteenths to the first subdivision, five-fifteenths to the second subdivision, and three-fifteenths to the third subdivision; and each parcel or tract of land situate within the district and within the respective subdivisions thereof was assessed, to determine the benefits to each parcel of land, by the county engineer according to the relation of Action by W. H. Kaufman and others the area thereof to the total area within the respective subdivision within which the same against J. B. McMillan and others, as members of the Board of Equalization of What-be assessed against each acre of land in each was situate. That is to say, the amount to com County, Washington, and J. A. Miller, as Auditor, Alex Van Wyck, as Assessor, and subdivision was found by dividing the total Charles A. Lindbery, as Engineer of the cost apportioned to each subdivision by the County. From judgment for plaintiffs, de-number of acres embraced within such subdivision; and by such manner of assessment fendants appeal. Reversed, and cause remanded, with direction to enter judgment an acre of land touching and adjoining the highway was assessed the same as another that plaintiffs take nothing. acre of land in the same subdivision, no matW. P. Brown, of Bellingham, for appel-ter where it was situated. The assessments lants. Brown, Peringer & Thomas, of Bell-made in the other subdivisions were made in ingham, for respondents. the same manner. Department 1. Appeal from Superior Court, Whatcom County; William H. Pemberton, Judge. Prior to the establishment of the district MITCHELL, J. Respondents brought this and the making of the improvement, no meetaction to have declared void and to restraining was had by the board of county commisthe collection of assessments levied against sioners for hearing protests against the estheir lands for a permanent highway im-tablishment of such improvement or against provement. The trial court upon issues the creation of the district. After the disframed and hearing had granted all the re-trict was created, the improvement made, and the assessment returned, a notice of the meeting of the county commissioners as a board of equalization was published, as required by statute, directing all owners of property affected by such assessment to appear on a day therein specified to make their objections. A meeting of the board of equalization was held pursuant to said notice, and the assessment roll prepared by the county engineer was approved. The respondents or either of them did not appear at said meeting or file any protest or make any oral protest or objections at said time to the assessments levied against their lands. ion in which had not yet been filed at the time the record and briefs in the present case were received by the clerk of this court. [1, 2] The above-mentioned propositions 1 and 2, made by respondents, were considered by us in the case of Lindstrom v. McMillan, supra, and determined adversely to respondents' contentions; but, because counsel have now more fully discussed them, we have been led to re-examine them, with the result that we are quite satisfied with that decision. [3, 4] As to respondents' third point, it appears unnecessary to determine if their claim as to the scope of the law is correct. If it is Respondents herein knew of the proposed | broad enough to require or permit the propconstruction and improvement of said high-erty owner to present to the board of equaliway prior to the inception of the work and zation the question of benefits, respondents knew of its construction as the work progressed. Respondents are the owners of real property situated in the district, and the same was included in the assessment roll. Appellants were threatening to file said assessment roll with the county treasurer at the time of the commencement of this action. The district was created, improvement made, and assessments levied under the pro[5] It was well said in East Hoquiam Co. visions of section 5879-1 et seq., Rem. Code, v. Hoquiam, 90 Wash. 210, 155 Pac. 754: known as the Permanent Highway Law. "Taxation by special assessment is defensible Respondents find fault with the law, how-only upon the theory of corresponding special benefits to the property assessed." are entitled to no relief in this action; for, confessedly, they did not avail themselves of that plan. On the other hand, if the Permanent Highway Law does not contemplate a hearing by the board of equalization on the subject of benefits as compared with assessments, that fact affords no reason for success to respondents in this suit. If in any case it is proposed by corporate authorities to assess property within an improvement district beyond the amount of special benefits to the property assessed, by reason of the improvement, and the law under which such corporate authorities act contains no provision safeguarding the rights of the property owner, in the respect mentioned, there is the opportunity, nevertheless, to resort to the courts for such protection and deAs already observed, this suit presents no such issue. fense. ever, as understood by the county officers, and mark such disapproval by the following points: (1) That the petition for the improvement should have been signed by the owners of two-thirds of the lands within the district rather than by only the owners of two-thirds of the lineal feet of the lands, other than lands of the state or of the United States adjoining and touching upon the highway; (2) that the assessment was made arbitrarily or upon a fundamentally wrong basis, because each parcel of land in any one of the subdivisions was assessed according to the relation of its area to the total area within that subdivision, rather than ratably in proportion to the benefits to each tract within the subdivision; and (3) that by the terms of the Permanent Highway Law the scope of the hearing on the assessment roll by the board of equalization is unduly limited to ascertainment if the official making the assessment has made any clerical error in distributing the assessments according to the basis of area-thus not allowing the property owner to be heard with reference to the mat-(Supreme Court of Washington. Oct. 8, 1918.) ter of benefits as compared with the assessment. With respect to the whole case, it is to be noticed there is no evidence, nor claim, that respondents' lands are not benefited by the improvement to the extent of the assessments. manded, with direction to the superior court The judgment is reversed, and the cause reto enter a judgment to the effect that respondents take nothing by the action. MAIN, C. J., and FULLERTON, PARKER, and TOLMAN, JJ., concur. (103 Wash. 669) BOE v. HODGSON GRAHAM CO. (No. 14754.) 1. BAILMENT 31 (1)-Loss OF BAILED PROPERTY-BURDEN OF PROof. Where the possession by the bailee of bailed property is not exclusive, the burden of proof is not upon the bailee to show that the property was lost without negligence on his part. 2. SHIPPING 54-LOSS OF VESSEL-POSSESSION AND CONTROL. This case, although brought by different Where the owner of a gasoline launch charparties and landowners, involves the same ters it to another for the purchase and transpublic improvement and assessment district portation of fish, he cannot recover from the charterer for the loss of the launch, where the referred to in the case of Lindstrom v. Mc-loss was occasioned by the negligence of his Millan, 98 Wash. 608, 168 Pac. 463, the opin-own servant who was in charge. |