191 Ky. 183 | Ky. Ct. App. | 1921
Opinion op the Court by
Reversing.
The appellee, Kypawva Oil Co., is the assignee of an oil and gas lease of date February 23, 1917, executed by J. S. Grinstead and wife on a tract of forty acres of land in Warren county, and appellant, Citizens Development Co., is the assignee of a junior lease on the same property dated March 14, 1919.
Both leases were properly executed by Grinstead and wife. The lease contracts provide for yearly rentals in case development is delayed. About the end of the second year Grinstead received through the mail an envelope containing his oil lease of date February 23, 1917, and a check for $8.40, the amount of the yearly rentals due him on the original lease, but there was no letter of explanation in the envelope. This was about February 10, 1919. Grinstead immediately returned the check to the appellee company and retained the lease, which had not been recorded, thinking it surrendered by the company. On the 14th of March following, Grin-stead, not having heard further from the company holding the senior lease and thinking the lease had been intentionally surrendered 'by appellee, made a second lease
Simpson was engaged in the business of taking and selling leases. He did not work for appellant company nor Gardner, but when he found he could get a lease on the Grinstead farm at two dollars per acre he began to look for some one to whom he could sell it at a profit. After interviewing Grinstead about the lease he went to see two or three persons to sell the lease, or to get them to furnish the money to buy and pay for the lease and also to pay for his time and services. All refused the offer except Gardner, who agreed to pay for the lease and give 'Simpson ten dollars for his services. Before this Simpson had no connection whatever with Gardner. According to the evidence Gardner bought the Grin-stead lease entirely on his own account and paid for it
In the absence of proof to the contrary we must assume that Gardner acted for himself as an individual in buying the Grinstead lease as set forth in his testimony. If he did so act and afterwards sold and transferred the lease to appellant, Citizens Oil Co., for a valuable consideration, neither his nor Simpson’s knowledge of the existence of the senior lease can be imputed to the company.
Appellee company insists that Gardner had no right, he being secretary of the Citizens Development Co., to sell a lease to the company at a profit or to deal in any Avay in oil leases while his •company Avas engaged in like business, but this contention cannot be sustained. An officer can deal with the corporation if he does so fairly and honestly and the corporation was represented by other competent and authorized officers or agents, 14a C. J. 115. There is nothing whatever in the record in the case before us to indicate that Gardner did not deal
Moreover the secretary of a corporation is merely a ministerial officer who keeps the books and minutes of the stockholders’ and directors’ meetings and has charge of the seal of the company. He has no power to act for the corporation in the purchase of property, without special authority so to do. The presumption in the absence of a, contrary showing is that the secretary performs only the usual and customary duties of such official to a corporation and no more, 14a C. J. 94.
As the trial court reached the erroneous conclusion that Gardner was the agent of the Citizens Development C'o. in the purchase of the Grinstead lease, and the knowledge of Simpson, subagent, was the knowledge of the company, thus rendering the company a purchaser with constructive knowledge of the defects in the title of Grinstead to the lease, ^and lack of power in him to make the second lease, the judgment must be reversed with directions to set it aside and enter in lieu thereof a judgment sustaining the second lease, for as the first lease was not recorded and the development company was an innocent purchaser for value of the second lease, the equities are largely on its side.
Judgment reversed.