DocketNumber: No. 936
Citation Numbers: 1 Cal. Unrep. 335
Judges: Currey, Rhodes, Sander, Sawyer, Shafter, Son
Filed Date: 12/20/1866
Status: Precedential
Modified Date: 1/12/2023
Ejectment to recover the possession of certain ditch property situate in the county of Nevada. The defendants set up an equitable title to the ditch older than the legal title of the plaintiff, both titles being derived from the Eureka Lake Company, as a common source. The trial was by the court, and the judgment was in favor of the defendants. The appeal is from the judgment and from an order overruling the plaintiff’s motion for a new trial. The appeal from the order is of no avail, for the evidence is not set forth in the statement, and the exceptions relied on are so imperfectly “explained” therein (Practice Act, see. 190) that we cannot say that the rulings to which they relate are erroneous; and
The facts of the defendants ’ equity, as found by the court, are as follows: In 1859, and for several years before that time, the Eureka Lake Company was the owner and in possession of the ditch in controversy. At the same time another corporation, duly organized, called the “Miner’s Ditch Company,” owned certain other ditches in Nevada county. In the spring of 1859 a meeting of the stockholders of the Eureka Lake Company was held at Moore’s Flat, their usual pi ace of business, for the purpose of considering the project of uniting the property and business of the two corporations. All the stockholders were notified of the meeting and all the stock- was represented, and it was agreed and determined by the stockholders, unanimously, that they would unite with the Miner’s Ditch Company, on condition that the property of the two corporations should be thrown together and managed in common, and should be owned in the proportion of two shares to the Miner’s Ditch and three shares to the Eureka Lake; and the president was authorized to communicate this overture to the Miner’s Ditch Company. In May, 1859, there was a meeting of the Miner’s Ditch Company, held for the express purpose of acting upon this proposition, at which meeting all the stock was represented, and the proposition was accepted by a formal vote.
In accordance with this agreement the two companies commenced acting in common and as one body on the 29th of June, 1859, and from that time until the fall of 1860 the property of both corporations was managed by common agents who had full possession and control of it all. Business was done in the joint names of the two companies. During this time large amounts of money were expended in improving the common property — over thirty-five thousand dollars on ditches of the Eureka Lake Company alone. This arrangement was only temporary, the intention being to effect finally -a complete and legal union of the property and business of the two cor
About this time the members of the Eureka Lake Company were informed by counsel that their corporation had never been perfected; that there was no such corporation as the Eureka Lake Company in existence, and that the only way in which they could convey the property was by a deed signed by each member of the company in his individual capacity; and in accordance with that advice a deed signed by the individual stockholders of the Eureka Lake Company was executed- October 25, 1860, purporting to convey all the said property of the Eureka Lake Company to -the Eureka Lake Water Company, and from that time, viz., October 25, 1860, to January, 1863, the new company had complete possession and control of the property, claiming it as its own, no one interfering with or disputing its title or possession, but no deed of conveyance was ever given to the Eureka Lake Water Company by the Eureka Lake Company as a corporation.
Immediately after the formation of the Eureka Lake Water Company stock-books of that corporation were, opened and stock was issued to all the stockholders -of the two old companies in the proportions agreed upon. After the new com
The general question is, whether these facts show a contract on the part of the Eureka Lake Company, as a corporation, to convey its ditch and water rights to the Eureka Lake Water Company, in consideration that the Miner’s Ditch Company would make a like conveyance of its property to the same grantee; the new company being the instrument or agency through which the common purpose was to be carried into effect.
It may be admitted, for the purposes of argument, that the votes passed at the meetings of the stockholders of the Eureka Lake Company and the related votes of the stockholders of the Miner’s Ditch Company were absolute nullities — the power of making contracts binding upon the corporations, respectively, being vested in the respective boards of trustees by the act under which the corporations were organized — leaving the question of whether the contract attempted to be made by the two sets of stockholders was or was not subsequently ratified by the respective corporations as the principal matter or point to be decided.
That a corporation may ratify a contract made by persons assuming to represent it without authority, and that its power is in that particular coextensive with that of natural persons, unless taken away by charter, or restricted by it to some particular formulary or mode, is admitted by both parties. That this power was exercised by the Miner’s Ditch Company, at
A ratification may be either express or implied, and in the latter event the implication is usually, if not always, based upon conduct. The conduct 'may consist either in acts or in omissions to act, or it may lie in both. The facts found in the ease at bar show a ratification in both forms by the Eureka Lake Company of the action of its stockholders.
It appears that the “arrangement” first attempted by the stockholders was a “temporary one — the intention being to effect finally a complete and legal union of the property and business of the two corporations.” It is further found that “in accordance with this agreement the companies commenced acting together in common as one body, and on the 29th of June, 1859, the property of both corporations was managed by common agents who had the full possession and control of all. Business was done in the name of the Eureka Lake and Miner’s Ditch Company. During this time large amounts of money were expended in improving the common property— over thirty-five thousand dollars being expended on the ditches of the Eureka Lake Company alone.” It will be observed that the acts here enumerated were not, according to the findings, the acts of the stockholders, but of the companies, and, in the matter of quality, they were the very acts which the agreement of the stockholders contemplated or called for; and it is found in terms that these acts were performed by the respective companies, not outside of or irrespective of that agreement, but “in accordance with it.”
The agreement “to unite the business and property” of the two companies — not their powers and franchises — was clearly a finality in the understanding of the respective stockholders, and the Eureka Lake Company, by voluntarily fulfilling its provisions in co-operation with the Miner’s Ditch Company, must, in the absence of any finding to the contrary,' be presumed to have ratified the contract as it was made or projected by the stockholders. The “arrangement” was “temporary”
The point cannot be maintained for want of facts. The court has not only not found the facts essential to the charge, but has found two, at least, out of agreement, if not incompatible, with its truth, viz., that the plaintiff was not a creditor at the date of the ratification of the contract by the Eureka Lake Company, and that large sums of money were raised and applied by the new company in payment of debts of the old one. It is a mistake to suppose that it devolved on the defendants to prove, as a part of their own case, that the contract was not ratified by the Eureka Lake Company for the purpose of defrauding its creditors. The burden of proving that it was so ratified was unquestionably upon the plaintiff. Nor, if he had the evidence at command, could he have been embarrassed in using it at the trial on the ground that he was excused under our system from the necessity of specially replying the fraud on the record. He was at full liberty to make the reply'ore tenus at the bar, and that instead of being an embarrassment, was in the nature, at least, of a positive advantage.
Third. It is further claimed for the appellant that the contract to convey, treating it as the contract of the Eureka Lake Company, was null and void, for the reason that the company had neither the right nor the power to sell all of its ditches and water rights.
•Corporations aggregate have at common law an incidental right to alien or dispose of their lands and chattels, unless specially restrained by their -charters or by statute (4 Co. Litt. 44a, 300c; 1 Sid. 161, note at the end of case; 1 Ky-d, 108; Reynolds v. Commissioners etc., 5 Ham. 166; 2 Kent’s Com. 108), and though a corporation alien all its goods and possessions, yet the corporation continues: 1 Com. Dig., tit. “Franchise.” By the fourth section of the act under which the Eureka Lake Company was organized, it was authorized “to purchase, hold, sell and convey such real and personal estate as the purposes of the corporation should require.” It will be observed that no distinction is taken between real and personal estate, and that the jus disponendi as related to both
Further, it may well be questioned whether it is competent for the plaintiff to raise the objection. The point of the objection is, that the corporation was guilty of a misuser of its franchise by overworking its admitted power to sell. But such misuser would be a cause of forfeiture, and it would seem to be settled, though it is not necessary here to pass upon the question, that a cause of forfeiture can be taken advantage of by the government alone and in proceedings instituted for the purpose: Leazure v. Hillegas, 7 S. & R. 319; Baird v. Bank, 11 S. & R. 418; Goundie v. Northampton Water Co., 7 Barr (Pa.), 239. The Banks v. Portiaux, 3 Rand. (Va.) 136, 15 Am. Dec. 706, was a bill for the specific performance of a contract for the purchase of lands made by an individual with the plaintiffs. The defense set up was that the charters of the banks, after authorizing them to purchase, hold and enjoy lands and tenements, goods and chattels to a specified value, and sell and dispose of them, provided that the lands it should be lawful for them to hold should be only such as were for their immediate accommodation or acquired in satisfaction of debts. The court of appeals decided “that though if, in purchasing the land in question the banks violated their charter, they might for that cause be dissolved by a proceeding at the suit of the commonwealth, yet that any conveyance made before dissolution would pass an indefeasible title to the purchaser ; that the charter did not prohibit the purchase of real property by the banks, but only limited the extent to which they should be allowed to hold such property; and that the question whether they had exceeded their limits or not was not fit to be tried in the suit before them, at the instance of the party before them”: Silver Lake Bank v. North, 4 Johns. Ch. (N. Y.) 370; Barrow v. Nashville & Charlotte Turnpike
Fourth. We have stated that the “errors of law occurring at the trial” are so imperfectly developed in the statement that we cannot get behind the rulings complained of. To this, however, there may be a single exception. It appears that one Creegan had testified on the part of the defendants to the contract agreed upon at the meeting of the stockholders of the Eureka Lake Company in September, 1860, and that for the purpose of corroborating the evidence of the witness as to the scope and character of that contract, the defendants offered in evidence a deed subsequently executed to the Eureka Lake Water Company of all the property belonging to the old company, which deed was signed by the stockholders and by its trustees as such. It was not on its face the deed of the company. The deed was objected to but was received, and the plaintiff excepted.
The defendants relied upon a subsequent ratification by the company of the unauthorized contract of its stockholders, and the instrument was admissible for the purpose of proving the existence and character of the contract so subsequently ratified.
All the other questions raised in the discussions have not been considered, but there are none of them of sufficient interest to require special notice.
Judgment affirmed.