Слике страница
PDF
ePub

The rule appears to be well settled in the United States that a corporation may, unless prohibited by statute, purchase its own stock, or take it in pledge or mortgage. Bank v. Bruce, 17 N. Y. 510; Taylor v. Exporting Co., 6 Ohio, 176; In re Insurance Co., 3 Biss. 452; Bank v. Transportation Co., 18 Vt. 138; Clapp v. Peterson, 104 Ill. 26; Dupee v. Water Power Co., 114 Mass. 37; Cook, Stocks, §§ 311, 312.

In the case cited from 104 Ill. the rule is stated qualifiedly as follows: "Corporations may purchase their own stock in exchange for money or other property, and hold, reissue, or retire the same, provided such act is had in entire good faith, is an exchange of equal value, and is free from all fraud, actual or constructive; this implying that the corporation is neither insolvent nor in process of dissolution," and that the rights of creditors are not thereby injuriously affected. In the case cited from 114 Mass. the court says: "In the absence of legislative provision to the contrary, a corporation may hold and sell its own stock, and may receive it in pledge or in payment in the lawful exercise of its corporate powers."

As a matter of fact, the transaction in question was not a purchase of the stock by Stuart, and a resale by him to the corporation. It was a purchase of the stock by the corporation through its directors, with intent to reissue the same, and a guaranty of payment of the purchase price to the sellers, by Stuart. The subsequent note and mortgage was given to Stuart, in consideration of the amount he had to pay on his guaranty. At the date of the purchase, the corporation appears to have been solvent. It was much more than able to pay its debts. The stock was sold above par, and the motive in selling was not so much to get rid of it, or the property and business which it represented, as a settled dissatisfaction with the management of William Reid. As evidence of this it appears that the discontents offered "to sell or buy,"-to take the stock of Reid and his associates at the same figure.

The only creditor that the corporation appears to have had at the time was the M. & S. Bank, and its president and manager was a party to this transaction, and urgent and active in its accomplishment. The purchase of the stock did not injuriously affect the interest of this creditor, nor was it so intended. It was made in good faith, to acquire the control of a valuable property free from the dissensions arising from the personal distrusts and antipathies of a dissatisfied faction of the stockholders.

Neither, in my judgment, is a purchase of stock by a corporation, even when made under circumstances or for purposes that make it voidable, generally and absolutely void, but only as against those who are injured by it, and in some proper and timely proceeding seek redress against it.

The defendants Kelly and McDonald claim to be the assignees of the M. & S. Bank, which was a creditor of the Oregon Company at the time. of the purchase of the stock, but they do not allege or prove any circumstance that tends to show that the purchase was made in bad faith towards their assignor, or with intent to injure it, or that it was thereby injured.

That the stock of the Oregon Company afterwards depreciated in value on account of losses sustained on shipments of flour, or that the debtor

of the corporation, the Scotch Company, thereafter became insolvent from like causes, does not affect the character of the transaction, or the rights of the parties thereto.

And even admitting that the Oregon Company was insolvent at the date of the mortgage, the situation of the parties was simply this: Stuart was a creditor of the corporation for money advanced for it, and the M. & S. Bank was nothing more. There being no statute to the contrary. The corporation had a right to prefer the one to the other, which it did, by giving Stuart security on its property.

4. It is not shown that the Scotch Company authorized "the making" of the mortgage to the Salem Bank, or that the seal of the corporation was affixed thereto; and said mortgage was given for a pre-existing debt, with knowledge that the mortgagor owed the Oregon Company, the debtor of the defendants, $86,892.04.

Livingstone, the agent of the Scotch Company, had a power of attorney under its seal, authorizing him to deal with this property as he saw proper, and this was sufficient authority for the execution of this mortgage. The mortgage does not profess to be the act of the corporation in person, so to speak. It is the deed of its attorney, a natural person, and is therefore well executed when signed and sealed by the latter. The seal of the corporation is affixed to its deed, the power of attorney, on which the validity of the mortgage ultimately rests.

The M. & S. Bank never had any interest in or lien on this property, nor even any pecuniary demand against the Scotch Company, and therefore it is altogether immaterial that the plaintiff's mortgage was given for a pre-existing debt, with knowledge of an existing demand of the M. & S. Bank against the Oregon Company.

But for the earnest manner in which these latter objections to this mortgage are urged, they would not have been deemed worthy of consid eration.

And, lastly, if the Oregon Company was a defendant in this suit, it could not by means of an answer, and without a cross-bill, assert the claim made here by Kelly and McDonald, that it had a grantor's lien on this property, or that the Scotch Company took the same in trust, or "impressed" with a trust, to pay the debts of the former. An answer is a means of defense, and not attack. It is a shield, and not a weapon. Resort must be had to a cross-bill in such case. Langd. Eq. Pl. § 115 et seq.

There must be a finding that the Scotch Company is indebted to the plaintiff in the sum of $30,000, with interest from November 17, 1886; and to the defendant Stuart in the sum of $71,940, with interest from August 2, 1884; and that the mortgages given by the Oregon and Scotch Company, as set forth in the amended and cross-bill herein, to secure the payment of said indebtedness, are valid first liens on the property therein described in the order of their execution; and that the same be sold by the master of this court, and the proceeds applied to the satisfaction of the same, with the costs and disbursements of this suit.

v.39F.no.2-7

FABRIC FIRE HOSE Co. v. BIBB MANUF'G Co.

(Circuit Court, S. D. New York. June 5, 1889.)

PLEADING ANSWER-MOTION TO STRIKE OUT.

In an action for the price of corporate stock sold by plaintiff to defendant the defense that plaintiff agreed to deliver stock of a certain kind, which he has not done and cannot do, may be made under a general denial, and a paragraph of the answer setting up those facts will be stricken out.

At Law. On motion to strike out

Alfred Ely, for plaintiff.

D. M. Porter, for defendant.

LACOMBE, J. The plaintiff moves to strike out the second paragraph of defendant's answer to the amended complaint as irrelevant, false, and sham, or that said paragraph be made more definite and certain by stating and alleging therein the date when the special statute referred to in such paragraph was enacted and approved, together with the title to the said act. Upon the hearing an amendment making such paragraph more definite and certain, by inserting such date and title, was ordered, and the answer amended in open court. The plaintiff also moves that the third paragraph of defendant's said answer be stricken out as irrelevant, hypothetical, and sham. Such paragraph is as follows:

"Third. For a third defense the defendant avers, upon information and belief, that if the contract alleged to have been made between the parties to this action was made by and entered into between them, that it was and is a part of the alleged contract that the plaintiff should deliver to the defendant stock fully paid up and stock upon which this defendant could not in any way be liable except for the wages of employés, and that at the time the alleged contract is alleged to have been entered into the plaintiff was not and has not at any time since been able to deliver any such stock to this defendant, but has made default and has thereby broken its contract."

The motion to strike out this paragraph is granted. Upon the argument, defendant's counsel insisted that without it he could not avail of the defense that the plaintiff had not correctly set forth the alleged contract whose making even was contested by the defendant. There seems to be no ground for any such apprehension. Plaintiff can recover only secundum allegata et probata. It must show the making of a contract such as it has set forth in the amended complaint, and fulfillment of such contract (or readiness to fulfill) upon its part. If the contract between the parties provided for the delivery of full paid-up stock, that fact will appear when the contract is proved; and if the stock which plaintiff has tendered is not the kind of stock which the contract provided for, such tender will not be a compliance with its terms. Under the general denial, therefore, which puts in issue the making of the contract and its fulfillment by plaintiff, the defendant can avail of the defense set out in the third paragraph, if there be such a defense, quite as well as if the same were expressly pleaded.

In re MURNANE et al.

(Circuit Court, S. D. New York. April 18, 1889.)

IMMIGRATION—Board of ComMISSIONERS-Delegation of POWERS.

The board of commissioners of emigration, who by act Cong. Aug. 3, 1882, are required to examine into the condition of immigrants, cannot delegate to a committee the power to determine whether such immigrants shall be permitted to land.

Habeas Corpus for the release of detained immigrants.

Alfred Steckler, for petitioners.

Kelly & Macrae, for Board of Emigration Commissioners.
Abram J. Rose, Asst. U. S. Atty., for Collector.

LACOMBE, J., (orally.) The return presented by the commissioners of emigration in this case was prepared so as to state a legal conclusion, it being contended in their behalf that the action of the Castle Garden committee, to whom by resolution they have undertaken to delegate their powers, is of the same legal effect as would be the action of the commissioners themselves. Their counsel, however, in open court, concedes that, except so far as said Castle Garden committee has taken action in regard to these immigrants, there has been no action had by the board of commissioners of emigration. That board, in fact, have not had a meeting since the arrival of relators, on April 10th. The next regular meeting day will be April 25th. Attention has been called to the decision of Judge BROWN in Re Bracmadfar, 37 Fed. Rep. 774. There, however, the present point was neither raised nor argued, and the suggestion at the close of the memorandum is wholly obiter. The second section of the act of August 3, 1882, requires the determination as to the condition of immigrants to be had by the board of commissioners. For the purpose of enabling and assisting them to make such examination, they are authorized, either individually or through persons whom they may appoint, to go on board any ship or vessel bringing immigrants to this port, but this permission is not to be construed as authorizing them to delegate to any persons other than themselves the important functions-quasi judicial in their characterwhich are by that act confided to them. Of course, a reasonable time should be allowed the commissioners of emigration to examine into the facts, which they may gather either by their own observation as a body, or by their individual exertions, or from the reports made to them by the agents they may employ. It is hard to say in advance what in each particular instance should be considered a reasonable time, but in view of the fact that their action in this particular case has been framed to meet the suggestion contained in the case above cited, and that a meeting of the commissioners at which action can be had will take place within a week, and that their agents have already reported to them adversely to the application of the relators in this case, a delay until the

day after such meeting of the commissioners will not be unreasonable. The relators will therefore be remanded, and further proceedings upon this writ suspended, until the 26th of April, at 11 A. M.

UNITED STATES v. ALLEN et al.

(District Court, E. D. Virginia. June 15, 1889.)

CUSTOMS DUTIES-EXPORT BONDS-BREACH.

Act Cong. June 9, 1880, (21 St. at Large, 167,) provides that exported articles shall be entered on the outward manifest of the ship taking them abroad, but is silent as to who shall perform that duty. Held, that where goods are consigned to the collector of customs at the port of shipment, to be by him shipped abroad, and he gives a personal receipt therefor, reciting that "the said merchandise was duly inspected and marked at this port, and laden on board the foreign-bound steamer W., * * * and that said vessel and cargo were duly cleared from this port," the exporters had a right to presume that the goods had been entered on the ship's outward manifest, and the fact that they had not been so entered was not a breach of the export bond. The fact that in the collector's receipt, which was on a printed form, the clause expressing the entry of the goods on the outward manifest is struck out, is immaterial when such receipt is not given until after the vessel has cleared.

At Law. Debt by the United States against Allen & Ginter.

J. C. Gibson, U. S. Dist. Atty., and Jas. Lyons, Asst. U. S. Dist. Atty., for plaintiffs.

Legh R. Page, for defendants.

HUGHES, J. The United States sues Allen & Ginter, tobacco manufacturers of Richmond, Va., for the penalty of an export tobacco bond. This penalty, $53, is double the amount of $26.50 which would have been chargeable on the tobacco if it had been sold for consumption in the United States. The tobacco which was the subject of the bond having been intended for exportation, and actually exported, no tax could be laid upon it by the government of the United States; clause 5 of section 9 of the first article of the constitution, providing that "no tax or duty shall be laid on articles exported from any state." All the provisions of the law and regulations of the treasury department of the United States were complied with by the defendants in shipping the tobacco in regard to which they are now sued, both in transmitting it from their factories in Richmond by Coast Line steamer to New York, and shipping it thence to Antwerp, Holland, except one, which will be mentioned in the sequel. In the bond on which the defendants are sued they stipulated in its penal clause that the collector of internal revenue at Richmond should receive, within 45 days from the 3d of September, 1887, the detailed report from the proper inspector of customs required by regulations, and a certificate from the collector of customs at the port of New York, that the tobacco intended to be exported had been received by him, and that the tobacco had been duly laden aboard

« ПретходнаНастави »