Obrázky stránek
PDF
ePub

(— Wash. —, 245 Pac. 753.)

become bound for such purpose, so that its naked promise as surety or guarantor (with or without independent consideration) could not be enforced. 3 Cook, Corp. 6th ed. § 774; 4 Thomp. Corp. § 5739; 10 Cyc. 1115. This doctrine is a mere exemplification of the established general rule that the contractual powers of a corporation are limited to objects authorized (either expressly or by implication) in its incorporation. It is upheld in Wisconsin (Madison, W. & M. Pl. Road Co. v. Watertown & P. Pl. Road Co. 7 Wis. 59; Kennan v. Rundle, 81 Wis. 212, 51 N. W. 426) and by this court, in effect, in the case entitled Re Haas Co. 65 C. C. A. 218, 131 Fed. 234."

Further on in the opinion it was also said: "The contentions that the evidence establishes liability under the contract, treated as one of guaranty on the part of the corporation, are both untenable, as we believe, for like want of supporting facts. Undoubtedly the corporation may bind itself as surety or guarantor for performance of a contract made for its benefit, or in furtherance of an object within its corporate powers and purposes (vide Winterfield V. Cream City Brewing Co. 96 Wis. 239, 242, 71 N. W. 101), but payment of debts owing by its stockholders to third parties, wherein the corporation has no interest, direct or indirect, is plainly not for its benefit, nor within its corporate objects. Re Haas Co. supra. As before stated, the transfers of real estate by the stockholders to the corporation were prior and independent transactions and for an independent consideration, wherein the payee of the note in suit neither claimed nor had any interest; and the evidence discloses no benefit granted to or acquired by the corporation in consideration of its guaranty. The further fact relied upon as proving consideration-agreement by the payee to accept from the makers, as collateral security, $100,000 of stock in place of the entire amount theretofore pledged

is without force, for the reason that it was for the exclusive benefit of the makers and the corporation had no interest and acquired no benefit in such arrangement. We believe, therefore, that the purported guaranty indorsed thereon by its officers was purely an accommodation promise, not within the corporate powers and not binding as a corporate obligation, and that no circumstances are in evidence to estop the corporation from invoking the defense of ultra vires.'

Our own cases, in so far as we have noticed the question, seem to be in accord with the general rules announced in the citation from Corpus Juris. In Washington Mill Co. v. Sprague Lumber Co. 19 Wash. 165, 52 Pac. 1067, it appears that one Nygard purchased the shares of a stockholder in the defendant corporation, incurring an obligation to the stockholder in the sum of $2,500. For this sum he gave his promissory note, signed as makers by other stockholders of the corporation. The holder assigned the note to a bank; the bank knowing the purpose for which the note was given. The note was not paid at maturity and was renewed. Later, at the request of the bank, the corporation gave a mortgage on its real and personal property to secure its payment. In the trial court, on a hearing had in the action, it was made to appear that the defendant corporation was insolvent, and a receiver was appointed for it. The receiver thereupon intervened in the action, and sought to have the mortgage to the bank declared void and canceled, on the ground that it was executed for the debt of another, and that the corporation had no authority under its articles of incorporation to become a surety. This contention the trial court sustained, and its judgment setting aside the mortgage was affirmed in this court. In the course of the opinion this language was used: "The court below found, and the proof shows, that at the time the mortgages were executed there were

various creditors of the lumber company whose claims have never been paid. These creditors were represented by the receiver, and, if the mortgages were void as to them, or any of them, the court was right in setting them aside. Bump, Fraud. Conv. 4th ed. § 34. And we are of the opinion that they were void as to existing creditors at least, and all bona fide creditors are therefore entitled to participate in whatever funds the receiver may procure as the proceeds of the property of the corporation. Wait, Fraud. Conv. 3d ed. § 104; Bump, Fraud. Conv. 4th ed. § 297. It is true that our statute in relation to corporations authorizes them to mortgage, sell, and convey real and personal property (1 Hill's Code, § 1500, subd. 3, Bal. Code, § 4253), but that does not change the law as to the rights of creditors. Nor does that section authorize corporations to mortgage their property for all conceivable purposes and under all circumstances. A corporation, being the mere creature of the law, possesses only those powers which the statute, or its articles of incorporation, confer upon it, either expressly or as necessarily incidental to the purposes for which it was created. Green's Brice's Ultra Vires, 29; Bank of Augusta v. Earle, 13 Pet. 587, 10 L. ed. 307; Dartmouth College v. Woodward, 4 Wheat. 518, 4 L. ed. 629; Beach v. Fulton Bank, 3 Wend. 583. Our statute also provides that corporations shall have power to carry on all kinds of business within the objects and purposes of the company, as expressed in the articles of incorporation. 1 Hill's Code, § 1500, subd. 7 (Bal. Code, § 4253). The articles of incorporation of the Sprague Lumber Company provided that the object and purposes of the company were 'to manufacture, buy, and sell lumber, and of engaging in the lumber business, and selling all kinds of building material.' And, as incident to the business therein specified, the company might have bought lumber on credit and properly mortgaged its property to se

cure the payment of such debt. But manifestly it had no power to mortgage all its property, without consideration, to secure the debt of any, or all, of its stockholders, to the injury of its creditors. It was no part of its business to become surety for the accommodation of others. Green's Brice, Ultra Vires, p. 252; Lucas v. White Line Transfer Co. 70 Iowa, 541, 59 Am. Rep. 449, 30 N. W. 771. See also Madison, W. & M. Pl. Road Co. v. Watertown & P. Pl. Road Co. 7 Wis. 59. And every person dealing with it was charged with notice of its powers. When a corporation enters into a contract which under no circumstances it has power to make, such contract is void as to its creditors, although assented to by all of its stockholders."

In Spencer v. Alki Point Transp. Co. 53 Wash. 77, 132 Am. St. Rep. 1058, 101 Pac. 509, the court, speaking to a similar situation, used this language: "A corporation has no power to enter into a contract of suretyship or guaranty, or otherwise lend its credit to another, unless the power is expressly conferred by its charter, or unless such a contract is reasonably necessary or is usual in the conduct of its business. Ordinarily the simple act of becoming surety or guarantor for the contract or debt of another person or corporation is not within the implied powers of a corporation.' 7 Am. & Eng. Enc. Law, 2d ed. p. 788. See also Washington Mill Co. v. Sprague Lumber Co. supra. There is no evidence that the Alki company derived any power from its charter to engage to pay the debt of another, nor is there any evidence that it had theretofore entered into such engagements. It is also urged that a corporation, having received the benefit of such a contract, will not be heard to urge that it was ultra vires. This rule may be conceded in proper cases. It is unavailing to appellant. The evidence that it received a benefit, and, if so, to what extent, is too vague and uncertain to become the foundation of any right."

(Wash., 245 Pac. 758.)

In Hoffman v. Gottstein Invest. Co. 101 Wash. 428, 172 Pac. 573, it appears that one Gottstein was indebted to one Wolff and gave his promissory note for the indebtedness. Gottstein was in the mercantile business, and later formed a corporation to which he sold the business with the stock on hand. Wolff thereupon demanded that the corporation execute a note in lieu of the personal note to Wolff. This note was executed, and the action was by the executor of Wolff against the corporation to recover on the note. The trial court held there could be no recovery, and this holding we affirmed. In the opinion it was said: "Looking to the record as a whole, we cannot escape the conclusion that this transaction was, in legal effect, nothing but an effort on the part of M. Gottstein to pay his own personal debt by the execution and delivery to Wolff of the note of the corporation in lieu of his personal note, and it seems to us equally plain that Wolff was bound to take notice of this as the legal effect of the transaction he then had with Gottstein. Our decision in Mooney v. Mooney Co. 71 Wash. 258, 128 Pac. 225, seems to us decisive of this case in favor of respondent, investment company. On page 264 of that decision we quoted with approval from the language of the decision of the New York Court of Appeals in Wilson v. Metropolitan Elev. R. Co. 120 N. Y. 145, 17 Am. St. Rep. 625, 24 N. E. 384, as follows: Undoubtedly the general rule is that one who receives from an officer of a corporation the notes or securities of such corporation, in payment of, or as security for, a personal debt of such officer, does so at his own peril. Prima facie the act is unlawful, and, unless actually authorized, the purchaser will be deemed to have taken them with notice of the rights of the corporation.'"

See also Mooney v. Mooney Co. supra; Payne v. White Swan Auto Co. 126 Wash. 550, 219 Pac. 32.

But the appellant contends that neither the respondent First Na

tional Bank of Everett nor the receiver is in a situation to urge successfully the want of authority on the part of the defendant corporation to execute the note and mortgage here in question. He argues that the obligations are valid as between himself and the corporation, and that, since the bank is a subsequent creditor, and since the receiver represents subsequent creditors, the doctrine of estoppel is applicable, as the obligations they represent were incurred with constructive, if not actual, knowledge of his note and mortgage. The case from this court principally relied upon to support the contention is Roy & Co. v. Scott, H. & Co. 11 Wash. 399, 39 Pac. 679. The opinion in the case does, indeed, contain expressions which seem to support the claim, but what was said must be construed with reference to facts presented, and these differ widely from the facts of the present case. The obligation there in question was the obligation of the corporation, and the mortgage and bill of sale attempted to be set aside were given to secure the obligation. They were attacked, not on the ground that the obligation secured by them was not the obligation of the corporation, but on the ground that one of the officers executing the instruments was also an officer of the corporation to whom they were given, and that the officer was personally bound on the obligation. With reference to these facts, it was said, arguendo, that, since the instru

ments were voidable rather than belong only to persons who had an void, the right to avoid them would interest in the property before their execution, not to subsequent creditors. But the language of the opinion must be construed with reference to the facts before it, and, so construing it, it cannot be said to militate against the subsequently decided cases.

There is a difference of opinion among the courts from other jurisdictions on the question, but we think it unnecessary to review them. Plainly, our own cases, where the

question was necessary for decision, announce the rule that an obligation given by a corporation for the personal debt of its stockholder, with no consideration moving to the corporation, is void as against those having claims against the corpora

Corporations

gage.

tion, whether these validity of mort- be claims prior or subsequent to the assumption of the obligation. It follows, therefore, that there was no error in the judgment of the trial court on this branch of the case.

We think, however, there was error in the judgment in so far as it allowed a recovery for the sums paid on the notes. These were paid by the personal checks of Bell, drawn on his individual deposit in a bank, at a time when the corporation was a going concern, and, in so far as any one knew, while the corporation was in a flourishing condition. In McDonald v. Williams, 174 U. S. 397, 43 L. ed. 1022, 19 Sup. Ct. Rep. 743, it was held that a receiver could not recover from a stockholder of a national bank a dividend paid to him while the bank was a going concern and not insolvent, although the dividend was paid "not at all out of profits, but entirely out of the capital," when the stockholder receiving the dividend acted in good faith, believing the same to be paid out of the profits. For a much stronger reason, it would seem, there could be no recovery where the money was paid by the personal check of the debtor,

Trusts-corporation-right to recover money paid out of capital.

drawn on a personal deposit, even though the deposit

came from the capital stock of a

corporation of which the payer was an officer. Whether knowledge of the source of the deposit would make a difference in the rule, we need not determine, for here, notwithstanding the formal finding of the court to the contrary, we find no evidence to show that the appellant at the time he received the payments had any such knowledge.

To sustain this part of the recovery, the respondents contend that the reduction of the capital stock of the corporation was illegal, and that the appellant, Hess, is indebted to the corporation in a sum greater than the judgment against him. But we think we need not follow the argument urged in support of the contention. Passing the question whether it is open to the respondents to urge the contention, we find in it no merit. As we have said, the proceedings had in that behalf were regular upon their face, and we see nothing in the evidence which warrants the conclusion that the proceedings were not had in entire good faith. It was

Corporations

tion of capital.

a proceeding ex- right of receiver pressly authorized to attack redueby the statute (Rem. Comp. Stat. § 3830), and the capital stock was not diminished to an amount less than its then debts and liabilities, the only restriction on the right to reduce the statute contains.

The judgment of the trial court is reversed, and the cause is remanded, with instructions to modify the judgment in accordance with this opinion.

Tolman, Ch. J., and Holcomb, Mitchell, and Main, JJ., concur.

ANNOTATION.

Validity of obligation given by corporation for a personal debt of officer or stockholder. [Corporations, § 72.]

Cases dealing with the authority or power of an officer of a corporation, as distinguished from the corporation itself, to obligate it for debts of its officers or stockholders, are not within

the scope of this annotation, but the cases herein are included on the assumption-for the purposes of the point, at least-that the officer or employee who executed the obligation

had authority to do so, if it was within the power of the corporation to bind itself or its creditors by such an obligation.

As to the power of corporations to guarantee for accommodation the contracts of its customers or vendors with third persons, see the annotation in 11 A.L.R. 554 [Corporations, § 72]. A corporation is not only incapable of making contracts which are forbidden by its charter, but in general it can make none which are not necessary, either directly or indirectly, to effect the objects of its creation, 7 R. C. L. 589.

Validity as against creditors.

Like the reported case (HESS v. CEDARHOME LUMBER Co. ante, 71), most of the following cases deal with the validity of obligations given to secure the purchase price of stock, and also, like that case, deny its validity as against creditors: Gilbert v. Seatco Mfg. Co. (1899; C. C.) 98 Fed. 208; Re Haas Co. (1904) 65 C. C. A. 218, 131 Fed. 232; First Sav. & T. Co. v. Romadka (1914) 132 C. C. A. 357, 216 Fed. 113; Re Stucky Trucking & Rigging Co. (1917; D. C.) 243 Fed. 287; Hunter v. Garanflo (1912) 246 Mo. 131, 151 S. W. 741; Stough v. Ponca Mill Co. (1898) 54 Neb. 500, 74 N. W. 868; Heidler v. Werner & Co. (1925) 97 N. J. Eq. 505, 128 Atl. 237; Washington Mill Co. v. Sprague Lumber Co. (1898) 19 Wash. 165, Pac. 1067; Payne v. White Swan Auto Co. (1923) 126 Wash. 550, 219 Pac. 32.

Mortgages on the real and personal property of a corporation, executed by it to secure the purchase price of stock sold to a third party by the majority stockholder, are without consideration moving to the corporation, and "while possibly valid as to the corporation,

and valid as to its trustees and stockholders consenting to their execution, they were, before foreclosure, voidable at the suit of the creditors of the corporation," and therefore also voidable by a trustee in bankruptcy, their representative. Payne v. White Swan Auto Co. (1923) 126 Wash. 550, 219 Pac. 32. But where the mortgagee had foreclosed one mortgage, it is res

judicata, and cannot be subsequently attacked in collateral proceedings by a receiver appointed upon the insolvency of the corporation.

Notes given for the purchase price of a certain amount of the stock of a corporation purchased by a third party from a stockholder, and for which the corporation received no benefit or consideration whatever, are ultra vires contracts, and unenforceable against the bankrupt corporation, for in one aspect the legal effect of such a transaction would be to constitute the seller a creditor rather than a stockholder of the corporation, without the latter receiving any benefit therefor, and in another it would amount to a loan to the buyer, a stockholder and officer, in violation of the State Incorporation Act. Re Stucky Trucking & Rigging Co. (1917; D. C.) 243 Fed. 287.

A corporation has no authority to use its credit for the benefit of a stockholder, and a mortgage executed by it upon its property to secure the purchase price of its stock sold by one stockholder to another is a transaction entirely beyond its corporate powers, is not a valid lien on the real estate of the corporation, and is unenforceable against an assignee under the state involvent laws. Hunter v. Garanflo (1912) 246 Mo. 131, 151 S. W. 741.

Where the issuing of the notes of a corporation was an assumption of the liability of purchasers of its stock to the vendors thereof under a conditional sale contract, to whom the money had been given, and who applied it in payment of their individual indebtedness to the vendors, the notes are ultra vires and void, and unenforceable against a receiver subsequently appointed for the corporation, the state

incorporation statute forbidding cor

porations to pay dividends, except from net profits, or to divide, withdraw, or in any way pay to its stockholders, or any of them, any part of the capital stock of the company. Gilbert v. Seatco Mfg. Co. (Fed.) supra. The court said: "It would be just as much a violation of this statute to pay the individual debt of a stockholder out of corporate funds, when there are

« PředchozíPokračovat »