Grand Rapids Furniture Co. v. Grand Hotel & Opera House Co., 70 P. 838

70 P. 838 | Wyo. | 1902

Lead Opinion

Corn, Justice.

This was a.suit in replevin and arose out of the following circumstances-: The plaintiff in error, who was also plaintiff below, sold to- one H. H. Edgar a lot of chairs for his opera house, under a written contract that the title was not to pass to the purchaser, but was to remain in the plaintiff until they were fully paid for, with the right to take possession upon default in any of the payments agreed upon. Subsequently, Edgar sold the opera house property, including the chairs, to Thorpe and others,- who agreed to pay the claim of the plaintiff, amounting to $361.40. Thorpe and his associates in turn sold the property, including the chairs, to two of the defendants, Kendall and Gildersleeve, who also had notice of the claim of plaintiff. The defendants, Kendall and Gildersleeve and Revell, then procured the incorporation of the defendant, the Grand Hotel and Opera House Company, and the two former sold and delivered to it the opera house property, including the chairs. The claim of plaintiff not being paid, it made demand upon the defendant company for the chairs and, upon its refusal to deliver them, brought this suit in replevin to recover the possession. The case was submitted upon the pleadings, and agreed statement, as to a portion of the facts, and certain depositions taken at the instance of the plaintiff.’ The court found the right of property and the right of possession in the defendant company and gave judgment in favor of each of the defendants for costs.

Except as otherwise provided by statute, in sales of personal property, when by the terms of the contract of sale the title does not pass until payment is made, and in the meantime the property is to remain the property of the vendor, who, in case of default in payment, has the right to repossess himself of and remove it without legal process, the vendor may reclaim it, even though it be, in the hands of a third party, who takes it in good faith and without notice. (Warner v. Roth, 2 Wyo., 63; Bunce v. McMahon, 6 Wyo., 24.) But by Section 2837, Revised Statutes, enacted in 1895, it is provided that no sale, contract or lease wherein the transfer of title or ownership of personal property is made to depend upon any condition, shall be valid against any purchaser or judgment creditor of the vendee or lessee in possession, without notice, unless the same be in writing, signed by the vendee or lessee, and the original or a copy thereof filed in the office of the County Clerk of the county wherein the property is. The contract of sale was in writing in this case, but no attempt was made to comply with the statute by filing it with the County Clerk. The question of notice, therefore, becomes important.

It is claimed by counsel for plaintiff in error that Kendall and Gildersleeve were promoters, acting for and on behalf of the corporation; that the fact that they had notice of the plaintiff’s claim and agreed to pay it if they could not defeat an action for its recovery, and the fact that they borrowed money from the First National Bank and signed the name of the Grand Hotel Company shows that the purchase of the opera house property was made for the defendant company. And they rely upon the principle that, as stated in Alger on Promoters of Corporations, Section 208, “When the contract is made in the name or in behalf of the projected corporation, and is treated as a proposal to such corporation to be acted upon by it when it comes into existence, then, in the absence of other controlling circumstances, acceptance of benefits under • the contract justifies the inference that the corporation has accepted or adopted it.” And authorities are also cited in support of the proposition that, if an association of persons owning* property subject to equitable claims obtains an act of incorporation, the property will remain subject to these claims after it is vested in the corporate name.

We are not disposed to dissent from these statements of the law, as applied to such cases, but it would seem that the court below did not find the facts upon which to base the conclusions insisted upon by counsel. The agreed statement is not entirely clear and the court made no special findings of facts. But it clearly appears that Kendall and Gildersleeve bought the property from Thorpe and others for seven thousand one hundred and seventy-five dollars on February 25th, 1898, paid for it and received possession, and it is admitted that this was its fair value. It is also agreed by the parties that the defendant, the Grand Hotel and Opera House Company, was incorporated on the 8th of March following, the defendants, Kendall, Gildersleeve and Revell, being the incorporators, and the capital stock was $25,000, divided into 500 shares of the par value of $50; that no stock was ever sold to any person except one share each to Kendall, Gildersleeve and Revell, their original subscription; there never was an election of officers, and it does not appear who were the trustees for the first year, named in the articles of incorporation. But it is stipulated that the defendant Revell “has, by tacit consent of said defendant, the Grand Hotel and Opera House Company, acted ■as its general manager and superintendent.” It is then further stipulated in the agreed statement as follows: “That on March 8, 1898, said defendant, the Grand Hotel and Opera House Company, purchased said chairs in controversy and said real estate on which said opera house is situated and in which are situated the chairs and other personal property from said Augustine Kendall and A. M. Gildersleeve and paid them therefor the sum of eight thousand dollars in the manner following: $1,700 cash and by assuming the payment of a note for $6,300, which sum of money on the 26th day of February, A. D. 1898, said Kendall and Gildersleeve borrowed from the First National Bank sixty-three hundred dollars to aid them in paying the purchase price of seven thousand one 'hundred seventy-five dollars for said premises, chairs in controversy and other personal property, signing a note in favor of' said bank for said sum of sixty-three hundred ’ dollars, the signature to said note being as follows: “The Grand Opera House Co.that the said Kendall and Gildersleeve have not yet executed or delivered a deed conveying said real estate and premises to. the defendant, the Grand Hotel and Opera House Company, but have delivered possession of said personal property, as stated heretofore; said sum of $8,000 being a fair value of said property.”

We find here no evidence tending to show that the purchase of the property was made for the defendant company. But, upon the contrary, it is expressly admitted and agreed that Kendall and Gildersleeve, themselves, purchased and paid for it; the corporation was not then in existence and no mention was made of it. Nor do we find any evidence tending to show that the contract of purchase was treated as a proposal to the corporation to be accepted by it when it came into existence, or that it accepted any benefits under the contract: But, upon the contrary, it is expressly admitted and agreed that it bought the property and paid for it its fair value, and seventeen hundred dollars of the purchase price was paid in money. It is true it seems to be urged that Kendall and Gildersleeve- borrowed money by signing the name of the corporation to a note for $6,300, and that the money so obtained went as part payment upon the purchase from Thorpe and others. But the agreed statement does not bear out this claim. Upon the contrary, it appears that the money -was borrowed by Kendall and Gil-dersleeve on February 26th, prior to the incorporation of the company, and paid over to Thorpe and others. The company, upon purchasing the property, assumed the payment of this amount to the bank, and it seems from the agreed statement that it did so by executing a new note to the bank, signed “The Grand Opera House Co.” Who signed the name of the company does not appear. But it may perhaps be assumed to have been either Kendall, Gil-dersleeve or Revell, as no other persons appear to have exercised any authority in connection with its operations. Indeed, so far as appears, neither Kendall or Gildersleeve ever assumed to act in any way for the company. They, together with Revell, acted as incorporators and, so far as appears from the evidence, their connection with the company then ceased. No officers were' elected and there is no intimation that they were the trustees named in the articles of incorporation. Revell was general manager and superintendent, but there is no proof whatever that he had notice of the plaintiff’s claim or any knowledge of it.

Under this state of facts, we do not think the court below would have been justified in finding- that the purchase of the property by Kendall and Gildersleeve was made for the defendant company; nor that it was the case of an association of persons obtaining an incorporation and transferring the title to their property to the corporation in exchange for the capital 'stock. But it is admitted that the company paid for the property, seventeen hundred dollars of the purchase price being, paid in cash. And, while it does not appear from what source this money came, there is no intimation that it was furnished by Kendall or Gilder-sleeve, or that they obtained it in any way for the company.

It is also insisted that, no officers ever having been elected, the defendant company was a mere “naked body,” without capacity to hold property or do any other corporate act, and that, therefore, the plaintiff was entitled to a judgment against Kendall, Gildersleeve and Revell, the possession of the property being in them as the promoters and not in the corporation, which had no legal existence. But this contention again is met by the agreed facts in the case, for it is not only admitted that the company was duly organized and incorporated under the laws of this State; that it had money and paid it out for the opera house property, and that the defendant Revell acted as its general .manager and superintendent, indicating that it was conducting some part, at least, of the business for which it ways organized, but it is also expressly admitted and stipulated that, at the institution of this suit, it was in the possession of the property in controversy. In the face of these admissions, we are unable to see how the plaintiff can claim a judgment against the personal defendants upon the theory that they and not the company were in possession of the property.

If it even appeared that Kendall and Gildersleeve were trustees of the defendant company, or that Revell, the general manager, had notice of plaintiff’s claim, we should be disposed to hold, under all the other facts of the case, that there was notice to the company. But there is no proof whatever of either • of these facts, and we see no escape from the conclusion that the defendant company was a purchaser without notice under the statute. The judgment will be affirmed. Affirmed.

Potter, C. J., and Knight, J., concur.

---

Rehearing

on petition eor rehearing.

Corn, Chiee Justice.

The court in its former opinion in this case intimated that, if it appeared, that Kendall and Gildersleeve were trustees of the defendant company, we should be disposed to hold that there was notice to the company; but we reached the conclusion that there was no proof whatever that such was the fact. Counsel for plaintiff in error now strenuously insists, as the law provides that the trustees of a corporation shall be stockholders and the trustees for the first year shall be named in the articles of incorporation, that, therefore, as Kendall, Gildersleeve and Revell were the only stockholders, they must be presumed to have been the trustees named for the first year, and the court must act upon this as one of the established facts in the case in reaching its conclusion. The principle relied upon is stated to be that all persons are presumed to obey the law.

We think the contention of counsel is based upon a misconception of the principle involved. Unquestionably a condition found to exist, which presupposes the performance of other acts necessary to make such condition lawful, raises a presumption that such other acts were performed. So a man acting in a public office will be presumed to have been properly elected or appointed, entries found in public books will be presumed to have been made by the proper officer, if a person acts notoriously as cashier of a bank and is recognized by the directors as such, a regular appointment will be presumed and his acts will bind the bank, and the like. These things afford presumptions, from acts done, of what might have preceded them as matters of right and duty. (Bank v. Dandridge, 12 Wheat., 70.) The preceding acts are necessary in order to account legally and regularly for the existing condition, and, therefore, they are presumed.

But counsel in his argument carries the principle much further, and asks that we invert the'process of reasoning and hold that, the antecedent acts being shown,' we must presume the existence of the subsequent acts and conditions. This we do not understand to be the law, and counsel has not enlightened us by reference to any authorities sustaining it. Given the superst-ruction of a building and we may presume a foundation. But, upon proof merely of a foundation, it would be unsafe and illogical to indulge the presumption of a superstructure without other evidence of its existence. If it be admitted, therefore, that Kendall, Gildersleeve and Revell were stockholders, and the only stockholders, in the absence of all evidence that they were named in the articles as trustees, or ever acted as such, we think no presumption arises that they were trustees.

But there is another consideration which makes it clear that no such presumption ought to, or can, be indulged. At the time the articles were filed, they were not and could not be stockholders. At that time the corporation was not in existence, and it is quite manifest that stock cannot be owned or held in a corporation which has itself no legal existence. As pointed out in a New York case, a construction of the statute which would require the trustees named in the articles to be stockholders before there is any legal organization must necessarily defeat the creation of any corporation under it. It is contrary to reason and the settled rules of construction to ascribe to a statute such a meaning as will nullify its operation if it is capable of any other interpretation. The language of the statute does not require such a construction and it will not be so construed. (Davidson v. Westchester Gaslight Co., 99 N. Y., 565.)

Counsel for plaintiff in error again insists that the defendant company was not a corporation or capable of taking or holding property; that it could not be a bona tide purchaser, or a purchaser at all, of the property in controversy, and cites authorities in support of the proposition that the defendant company, under the evidence, was not a corporation de facto. There is absolutely no question in this case involving the existence of the defendant company as a corporation de facto. The plaintiff in error, as plaintiff in the lower court, alleged in its petition “that at all times herein mentioned since March 7th, A. D. 1898, the. above named defendant, the Grand Hotel and Opera House Company, were and are now a corporation duly organized and existing under and by virtue of the laws of the State of Wyoming.” And in the agreed statement of facts it is stipulated that the defendant company was duly organized and incorporated under the laws of the State of Wyoming on March 8th, 1898; that, ever since its incorporation,- the defendant Revell has been its general manager; that it purchased the property in controversy from Kendall and Gil-dersleeve and paid them eight thousand dollars therefor, and that this was its fair value; that they delivered possession of the property to the defendant company, and it was in possession at the time the suit was instituted. In view of these admissions that the defendant company was an existing corporation, any question of the sufficiency of the evidence to show a corporation de facto is immaterial. And in the face of these admissions we are asked to say that the District Court erred in failing to find that the admissions were not true; that is to say, that in the.,face of the stipulation of the parties to the action that the defendant company was in possession of the property, the court should have found that it was not in possession; though it is stipulated that it bought the property and paid eight thousand dollars for it, the court should have found that the defendant company never purchased the property, never had any funds and never paid anything for it; and, though plaintiff avers in its petition that the defendant company was an existing corporation at all times mentioned in the action, and it is stipulated by the parties that it had a general manager, bought property and paid out money, we are asked to say that the District Court erred in failing to find that it had no existence and could not acquire or hdve possession of any property whatever. This we find ourselves unable to do.

Counsel for plaintiff in error further insists that the burden of proof was upon the defendant company to show that it had no notice of plaintiff’s lien, and that there is no evidence, or insufficient evidence, that it had no notice. In the agreed statement of facts it is stipulated “that the only notice the defendant, the Grand Hotel and Opera House Company, had as a corporation that- the plaintiff had or claimed a lien upon the property in controversy is such as is disclosed by the depositions of Chiles, Swanson and Chalice and the rest of the statement of fact, if such depositions and statements of fact disclose notice to defendant, the Grand Hotel and Opera House Company.” There is but one possible construction of this stipulation, and that is, if the court shall find that notice is not disclosed by certain designated evidence, then it is agreed between the parties that there was no notice. The court has so found, and it, therefore, stands as a stipulation that there was no notice. We do not think counsel will contend that where the existence of a fact is stipulated any question can arise as to the sufficiency of the evidence by which it is sought to be established.

The application for a rehearing is denied.

Knigi-it, J., and Potter, J-, concur.