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allowing the owner to resort to his common-law action if he so desire,
while the company has no alternative if the owner resorts to his statube
tory action, is unconstitutional, as denying the company the equal pro
tection of the laws, and as depriving it of its property without due
process of law. Wadsworth v. Union Pac, Ry. Co., 309,
See LEGISLATURE; MUNICIPAL CORPORATIONS, 5; REFORM SCHOOLS, 13
STATUTES; WATERS, 8.
80€ CONTRACTS, 1-5; GUARANTY, 1-3; DEEDS, 4; MECHANIC'S LIEN, 4, B7
TREATIES, 1; WILLS, 2.
CONTRA BONOS MORES.
See CONTRACTS, 12.
1. CONSTRUCTION.-If a contract admits of two meanings, one of which
will render it unlawful and the other lawful, the latter construction
must be adopted, and all doubtful worels or provisions must be
taken most strongly against the grantor, Wyatt v. Lurimer etc. Irr.
2. CONSTRUCTION WHEN TERMS DOUB'IFUL.- When doubt exists as to
the construction of a contract prepared by one party, upon the faith
of which the other party has incurred obligations, or parted with
property, that construction most favorable to the latter party will be
adopted; and when the contract is susceptible of two constructions, one
involving injustice and the other consistent with right, the latter must
be adopted. Hyıtt v. Larimer etc. Irr. Co., 280.
3. CONSTRUCTION WHEN AMBIGUOUS. - When the language used by parties
to a contract is indefinite and ambiguous, the practical interpretation by
the parties themselves is entitled to great, if not controlling, influence,
in ascertaining their understanding of its terns. Wyatt v. Lurimer etc.
Irr. Co., 280.
4. WATERS-CONSTRUCTION OF CONTRACT FOR.– When an irrigation com-
pany, by the terms of its contract with water-takers, having the right to
dispose of definite water rights by ambiguous expressions in subsequent
provisions of the contract reserves the power to render such rights in.
definite and uncertain as to quantity by disposing of water rights in
excess of its ability to furnish water, the contract is not only inequi.
table and unjust, but also illegal, and cannot be enforced. Wyatt v,
Larimer etc. Irr. Co., 280,
5. WATERS-CONSTRUCTION OF CONTRACT FOR. --The true intent and meaning
of a contract between an irrigation company and water-takers must be
determined from the terms used, read in the light of surrounding cir.
cumstances at the time of its execution, from the subject matter, and
the purposes and objects to be accomplished by it. Wyatt v. Larimer
etc. Irr, Co., 280.
6. PROMISE TO FORBEAR SUIT-ConsideraTION.--An order upon a third
person for the payment of a debt not due, if accepted, is sufficient con.
sideration for a promise to forbear to gue upon an obligation already
due, Staver v. Missimer, 142.
7. STATUTE OF FRAUD.-IR AN ENTIRE AND INDIVISIBLI CONTRACT LE
Partly WITHIN THE STATUTE OF FRAUDS, the whole is affected by the
statute if that part is by parole Haviland v. Sammis, 330.
8. STATUTE OF FRAUDS_COLLATERAL PAROL AGREEMENTS. If one who hus
agreed to purchase a lot of land, represented to be one handred feet
wide, on being tendered a conveyance describing the lot as being one
hundred feet in width, more or less, refuses to accept such conveyance,
and thereupon the rendor, by his agent, agrees by parol that if the
vendee will accept the deed, the vendor will pay the difference in valos
between the tract described in the deed and the tract represented, such
agreement is not within the statute of frauds, and may be enforced
Haviland v. Sammis, 330.
9. STATUTE OF FRAUDS—AN ORAL AGREEMENT BETWEEN TWO OR MORE PER.
SONS TO PURCHASE REAL Estate for their joint benefit is within the
statute of frauds. Speyer v. Desjardins, 473.
10. CONTRACTS IN VIOLATION OF Law-LICENSES.- If a statute or ordinanco
makes a particular business unlawful generally or for unlicensed persons
any contract made in such business by one not authorized is void
Buckley v. Humason, 637.
11. CONTRACTS CONTRAVENING PUBLIC POLICY, AVOIDANCE OF, WAX
PROPER. — The power of the courts to declare contracts void because
in contravention of a sound public policy should be exercised only in
cases free from doubt. Barrett v. Carden, 876.
12. ContractS ARE ILLEGAL WHEN FOUNDED ON A CONSIDERATION CONTRA
Bonos Mores, or against the principles of sound public policy, or affected
with fraud, or in contravention of the provisions of some statute. In•
stances of illegal contracts are those stipulating to pay money for infla.
encing legislation, for violating public trust or office, for performance by
public officers of their duties, for procuring public offices, for stilling
criminal prosecutions, for procuring testimony to prove designated facts.
Goodrich v. Tenney, 459.
13. AN AGREEMENT TO PROCURE THE AFFIDAVITS OF DESIGNATED WITNESSES
stating that no consideration was paid at a sale alleged to be fraudulent,
and that the vendee knew of the vendor's insolvency, such affidavit to
be used on motion for a new trial, and to procure the testimony of such
witnesses of like tenor to be used upon the trial, in consideration that
the party furnishing such affidavits and witnesses should be given one-
fourth of all moneys and property realized on certain claims, and that
the fraudulent transferrer whose testimony was to be procured should
not be prosecuted, is agaiost public policy and void, and no suit can be
sustained for any relief thereon, or for any portion of the money or
property realized in consequence thereof. Goodrich v. Tenney, 459.
14. ILLEGAL. -COURTS OF JUSTICE WILL Nur ENFORCE the execution of
an illegal contract, nor aid in the division of the profits of an illegal
transaction between associates. Goodrich v. Tenney, 459.
15. ILLEGAL CONTRACTS—ENFORCEMENT.-A claim founded upon and ro
coverable only through and by virtue of an illegal contract will not
be enforced. Levy v. Spencer, 303.
16. WHEN INVALID.—Business transactions in violation of law cannot be
made the foundation of a valid contract. Buckley v. Humasom, 637.
17. Contracts Not to CONTEST Wills nor to claim under tho statute of die
tributions are not contrary to public policy. Barrett v. Carden, 876
IL CONTRACTS IN RESTRAINT OF TRADE-PERFORMANCE OF. -A party to a
contract in restraint of trade is not bound to perform it, but he may
perform it if he desires, and his doing so exposes him to no legal
animadversion. American Live Stock Co. v. Chicago Live Stock Exchange,
10. VALIDITY OP-Right Of Recovery.—No rights can spring from or
be rested upon an act in the performance of which a criminal penalty
is incurred, and all contracts which are made in violation of a penal
statute are absolutely void, and cannot be recovered upon. Young.
blood v. Bermingham Trust etc. Co., 245.
20. CONTRACTS Void Where Made and to be performed cannot be en.
forced in another state. Buckley v. Humason, 637.
21. Excuse FOR NONPERFORMANCE. -Under a contract to grow, sell, and
deliver certain quantities of specitied kinds of beans, a failure to deliver
the entire quantity is not excused by an early unexpected frost do.
stroying or injuring the crop to such an extent that the grower is uu.
able to deliver the entire quantity from beans grown by him. Anderson
V. May, 642.
22. NONPERFORMANCE_EXCUSE FOR.-If one contracts to do a thing which
is possible in itself, or when it is conditioned on any event which
happens, the promisor is liable for a breach thereof, notwithstanding
it is beyond his power to perform it. An exception to this rule ex.
ists when the contract is made on the assumed continued existence of a
particular person or thing, and such person or thing ceases to exist
Anilerson v. May, 642.
23. NonpeuFORMANCE–Excuse. — Performance of an agreement to pro.
duce, by manufacture or otherwise, a particular thing, such perform.
ance being possible in the nature of things, is not excused by the
destruction, before completion or delivery of the thing, from whatever
cause, except the act of the other party. Anderson v. May, 642.
See ATTORNEY AND CLIENT,,10-12; BUILDING CONTRACTS: CONSPIRACY, 2,
3; CORPORATIONS, 2, 16, 17; DoWER, 2; EVIDENCE, 8; EXPECTANCIES;
FRAUD, 2; INJUNCTIONS, 3, 4; IRRIGATION COMPANIES, 2; LIMITATIONS
Op Actions, ); MISTAKE; MUNICIPAL CORPORATIONS, 1-4, 6, 7; SALES,
4; SURETYSHIP; Usory.
See DEEDS; EXPECTANCIES; MORTGAGES,
1. UNREGISTERED SALE AND TRANSFER OF CORPORATE Srock, which either
by statute or charter is declared to be transferable only on the books
of the corporation, is effectual to pass the title to the property as
against subsequent attaching creditors of the vendor, who have notice
of the transfer before any sale is made under their writ. Lund v.
Wheaton Roller Mill Co., 623,
L. A CONTRACT FOR THE PURCHASE BY ONE CORPORATION OF THE STOCK OF
ANOTHER FOR THE PURPOSE OF ENABLING IT TO CONTROL AND MAN.
Age the business of the latter, though both corporations are engaged
in a similar business, is against publio policy, and void. No rights de.
pendent upon such a contract can be enforced in this state. Marble
Ca V, Harvey, 71.
2. SUBSCRIPTION TO STOCK IN ANOTHER CORPORATION.-One corporation
cannot subscribe to the capital stock of another corporation. Denny
Hotel Co. v. Schram, 130.
EFFECT OF UNAUTHORIZED ACTS OF AGENT-ESTOPPEL.-In an actioa
against a corporation on a note signed in its name by its president,
secretary, and treasurer, without express authority from, or ratification
by, the corporation, it is estopped from asserting that such officers acted
outside of their authority, if it appears that all of the business of the
corporation, including the kind in question, has universally been trans.
acted by such officers and informally ratified by the corporation by pay.
ments made and otherwise. Duggan v. Pacific Boom Co., 182.
6. AN OFFICER'S KNOWLEDGE Derived AS AN INDIVIDUAL, and not while
acting officially for the corporation, cannot operate to its prejudice.
Heuce, if a note is executed wbich appears to be the note of certain
persons, but which was in fact intended to be the note of a corpora-
tion of which they were officers, and such note is negotiated to a
banking corporation, the latter is not chargeable with notice that the
note was intended to be the note of the former corporation from the
fact that one of its directors was also a director of the banking corpora-
tion. The directors did not owe any duty to parties executing the in.
strument appearing to contain their individual promise to explain that
the note was not intended to be the obligation of the persons so signing
it, but of the corporation of which they were officers. Casco Nat. Band
v. Clark, 705.
6. A CORPORATION Is Not CHARGEABLE WITH THE KNOWLEDGE OF ITS
PRESIDENT OR OTHER OFFICER unless it is shown that such knowledge
way acquired by the officer, not casually and through his individual re-
lations to other parties, but in an official capacity, and because of the
necessity for him to inquire and know the facts with knowledge of which
it is sought to charge the corporation. Hence, if he is the president of
a banking corporation and a note is offered to it for discount purporting
to be the individual promise of the persons signing it, he is under no
obligation to state what his opinion is as to the liability of the persons
appearing as makers of the note. Merchants' Nat. Bank v. Clark,
7. CORPORATION HAS PRESUMPTIVE Notice of FRAUDULENT ACTS OF ITS OF.
FICERS who are also the officers of a bank, and who have misappropriated
the funds of the bank and invested them in the property of such cor-
poration. Farmers' elc. Bank v. Kimlad Milling Co., 739.
8. DIRECTORS AS AVENTS_POWER TO BIND CORPORATION.— The direct.
ors of a business corporation are its agents, and exercise func-
tions of a fiuiuciary character disqualifying them froin binding the
corporation in a transaction in which they are adversely interested,
without the full knowledge and free consent or acquiescence of such
corporation. O'Conner Mining etc. Co. v. Coosa Furnace Co., 251.
9. SAME DIRECTORS ACTING FOR Two CORPORATIONS-EFFECT OF.-If the
same persons as directors of two different corporations represent
both in a transaction in which their interests are opposed, such trans-
action may be avoided by either corporation or at the instance of a
stockolder in either, without regard to the question of advantage
or detriment to either corporation and no matter how fair and open the
transaction may be shown to be O'Conner Mining etc. Co. v, Coona Pur.
nace Co., 251.
10 TRANSACTIONS BETWEEN, WHEN REPRESENTED BY SAME DIRECTORS,
Dealings between corporations represented by the samo persons as
directors may be accepted as binding by each corporation and the
stockholders thereof. Such dealings are not absolutely void, but are
voidable at the election of the respective corporations, or the stock.
holders thereof, and they become binding if acquiesced in by the core
porations and their stockholders. O'Conner Mining etc. Co. v. Coosa Pur.
nace Co., 251.
II, TRANSACTIONS BY DIRECTORS OF-RIGHT OF CREDITORS TO IMPEACH.
The duty which disqualities the directors of a corporation from bind.
ing it by a transaction in which they have an adverse interest is one
owing to the corporation and its stockholders, and does not extend
to its creditors in the absence of fraud, and when a disposition of tho
property of a corporation is assailed by its creditors, they are not
clothed with the right of the corporation or of its stockholders to set
aside the transaction regardless of its fairness or unfairness on the
ground that it was entered into by representatives who had put them.
Belves in a relation antagonistic to the interests of their principal,
Corporation creditors can only impeach such transaction upon proof of
the insolvency of the corporation at the time of its consummation, or
that it was entered into with intent to hinder, delay, or defraud them.
O'Conner Mining etc. Co. v. Coosa Furnace Co., 251.
12 CONVEYANCES BY—Righty OF CREDITORS. —The fact that a corporation
in disposing of its property deals with persons who at the same time
are charged with the duty of representing its interests, does not of itself
render the transaction fraudulent as to its creditore. O'Conner Mining
etc. Co. v. Coosa Furnace Co., 251.
13. TRANSFERS BETWEEN-RIGHTS OF CREDITORS. —When the property
of one corporation is transferred to another corporation represented
by the same directors the transaction cannot be set aside by cor.
poration creditors except upon proof of fraud, but the fact of such
relationship calls for clearer and fuller proof of a valuable and adequate
consideration, and of the good faith of the parties, than would be
required if the grantee were a stranger. O'Conner Mining etc. Co. v. Coosa
Furnace Co., 251.
14. CAPITAL STOCK-LIABILITY OF SUBSCRIBER.-A subscriber to the stock
of a corporation is not liable for the amount of his subscription, if the
corporation fails to obtain subscriptions to the full amount of its entire
capital stock. Denny Hotel Co. v. Schram, 130.
16. CAPITAL STOCK-LIABILITY OF SUBSCRIBERS. -If the capital of a corpo-
ration is fixed by its charter, and it has no authority to begin business
until the whole amount of such capital has been subscribed, its stock.
holders cannot be required to pay subscriptions until the full capital
stock is subscribed. Denny Hotel Co. v. Schram, 130.
16. A CONTRACT ULTRA Vires in the proper sense is wholly void, and
cannot be ratified by either party, because it could not have been au.
thorized by either. No perforınance on either side can give it validity.
Marble Co. v. Harvey, 71.
17. AGREEMENTS-ULTRA VIRES--ACTIONS IN FURTHERANCE OF.-If an
agreement is made whereby the stock of one corporation is to be trans-
forred to a trustee of another, and the purpose of the transfer of stock
is to enable the former corporation to obtain the management and con.
trol of the latter, and it is part of the agreement that the transferor
Au. Sr. REP., VOL. XXXVI. -63