Iowa Lumber Co. v. Foster

Seevers, J.

I. It is conceded by counsel for appellant that this cause is not triable de novo in this court. It, therefore, follows that the judgment below can only be reviewed on exceptions duly taken, and errors properly assigned. There was a finding of facts made by the court, which was duly excepted to. But such finding stands as the verdict of a jury, and cannot be disturbed if the evidence is conflicting, or there is testimony upon which such finding can be reasonably sustained. Upon this branch of the case we are relieved of any difficulty, because counsel for appellant do not complain of the findings of fact in the court below, nor urge “that the preponderance of the testimony is adverse to such findings.”

The only questions, then, for consideration are whether or not the court erred in applying the law to the facts found, for no other errors are assigned.

II. It is assigned as error that the court erred in finding there was any valid contract to take back Foster’s stock, and for rendering judgment for him for the amount found due for said stock. It will be observed that the first portion of this assignment is more in the nature of a complaint that the finding of facts in reference to the stock is not sustained by the testimony, than that there has been any erroneous ruling as to the law. It is the judgment rendered on the facts only we need discuss, in view of the concessions of counsel before referred to.

1. corporation: purchase of their own stock: contract. The ultimate fact found by the court on this branch of the case is as follows: “On the counter-claim and cross-demand of said Foster against said company for the claim of value of his ono hundred shares of stock upon the original agreement. to take said stock of him, and pay him back the value of said stock and its earnings, I can come to no other conclusion than that there was such an agreement.” The court then proceeds to group together the evidence, or refers to the testimony on which he founds his conclusion, but this cannot be said to be any portion of the facts found, nor would it change the result, unless we could look at the testimony and therefrom conclude differently. Taking it for granted that the finding of fact is sufficiently supported by the evidence, the judgment is undoubtedly correct, unless the contract or agreement was ultra vires, and to that question we turn our attention. In Green’s Brice’s Ultra Vires, 98, it is said in the text that “corporations cannot, whatever the nature of their business, without express and very clear power in that behalf, deal in their own shares.” In a note by the American editor, on page 99, it is said: “American authorities hold that there is at common law nothing to prevent a corporation from taking its own stock in payment or satisfaction of ’debts, and some even hold that at common law a corporation may purchase its own stock, provided the transaction is bona fide, and not in fraud of creditors.” In support of this doctrine the following cases are cited: Barton v. P., J. & U. F. Plank-road Co., 17 Barb., 397; Cooper v. Frederick, 9 Ala.; Verplanck v. Mer. Ins. Co., 1 Edw. Ch., 84; Hartridge v. Rockwell, R. M. Charlton, 260; Gillett v. Moody, 3 Coms., 479; Taylor v. Miami Exporting Co., 6 Ohio, 176; State Bank v. Fox, 3 Blatch., 431; Bank of Columbus v. Bruce, 17 N. Y., 507.

We do not deem it necessary to ascertain and determine what the true rule is when the charter accurately defines and limits the objects of the corporation, as the powers of the corporation in question, without serious doubt, we think, are sufficient to cover and include the act in question. In this State, persons desiring to form a corporation do so under a general law, and may assume such powers, and define and limit the extent thereof in such manner, as is deemed advisable, provided such powers and privileges do not exceed those possessed by natural persons. Code, § 1058.

The articles of incorporation provide as follows: “The general and principal business shall be the manufacture and dealing in lumber, lath, shingles, and other articles as the company may from time to time direct. The company may acquire and transfer, purchase and hold, sell or exchange any real estate or other property that may be deemed desirable in the transaction of its business. ” It must be presumed the word “property” was understandingly used, and with reference to the meaning attached thereto in the statutes of this State. “Property” includes personal and real property, and “personal property” includes money, goods, chattels, evidences of debt, and things in action. Code, § 44, subdivisions 9 and 10.

The provisions of the charter in question are much broader and more comprehensive than those contained in the charter of the banking company, in reference to which the decision-; was made on which the doctrine in the text in Green’s Brice’s' Ultra Vires is based, before referred to. Express power is given the plaintiff to buy or sell any and all kinds and species of property which may be deemed advisable and'for the best interests of the corporation by the officers thereof.

Under this power a contract was made to purchase the defendant Foster’s stock. There is no pretense of fraud or bad faith in the transaction; nor, so far as shown, are the rights of creditors injuriously Affected. The only objection urged is the want of power. That is to say, the contract was made in good faith, but the power to do so did not exist. This objection cannot be permitted to prevail. After assuming the powers above specified it does not lie in the mouth of these corporators to raise or insist on this objection.

II. The court found there was a certain amount due Palmer & Johnson, and rendered judgment therefor. The plaintiff claimed this indebtedness had been paid, and the court found it had not.

'There was evidence in support of the finding, and we cannot interfere therewith.

III. The court found that Poster was entitled to interest on money furnished or .advanced by him for the plaintiff. The only reasonable meaning to be attached to this finding is, that Poster should be allowed interest on all advances made over and above the several amounts received by him. Poster had credited himself with one thousand two hundred and twenty-five dollars and ninety cents, as interest due him. He was allowed in the decree seven hundred and ten dollars and thirty cents, making in all one thousand nine hundred and thirty-six dollars and twenty cents. There is no conflict in the testimony on this subject. It is strictly a matter of computation.

As careful an examination of the matter as we have been able to give satisfies us that Poster is not entitled to both these sums, and that the amount found due by the court is about correct. The appellant, however, in a calculation furnished us, makes the amount séven hundred and ninety-four dollars and seventy-six cents, and we adopt that as the true amount. This will leave Poster due the plaintiff, on interest, four hundred and thirty-one dollars and fourteen cents.

The decree fixes the amount due from Poster to the plaintiff, for money appropriated to his use, at three thousand five hundred and ninety-two dollars and eighty-seven cents. To this must be added the amount found due as interest aforesaid, making the sum of four thousand and twenty-four dollars and one cent, with interest thereon. With this modification the judgment below will be affirmed, and a decree may be entered in this court, or the cause will be remanded, with directions to enter a decree in the court below in accordance with this opinion. Appellant is entitled to costs in this court.

Modified and affirmed.

Adams, J., having been counsel, took no part in this decision.