228 Pa. 648 | Pa. | 1910
Opinion by
On December 22, 1908, the Elk County Brewing Company, a Pennsylvania corporation, proposed to the St. Mary’s Brewing Company, a like corporation, to purchase from it all of its franchises and property, real, personal and mixed, for the sum of $250,000. This was not to be paid in money, but in bonds of the purchasing company, running for thirty years and secured by a first mortgage on all of its property, rights and franchises. It further agreed to assume all the liabilities of the St. Mary’s Brewing Company and that said company should retain from its cash assets $35,000 for the payment of dividends to its stockholders. On or about the date that the proposition was made the board of directors of the St. Mary’s Brewing Company accepted it, subject to the approval of the stockholders, who were duly notified to meet on February 27, 1909, for the purpose of taking action upon the proposed salé. On February 26 — the
Complaint is mad® of the court’s refusal to allow the appellants to show, in support of their allegation of fraud, that the price offered was inadequate. Gross inadequacy of price is at times a badge of fraud in connection with a sale, but in a sale like this, made by one corporation to another, in accordance with the provisions of the Act of April 17, 1876, P. L. 30, inadequacy of price, standing alone, with nothing else to support the charge of fraud and collusion, is not in itself any evidence of fraud and is not sufficient to enjoin or set aside the sale. In the absence of fraud or collusion on the part of the majority stockholders, the minority stockholders of the St. Mary’s Brewing Company are not to be heard to complain of inadequacy of price, for they knew when they became stockholders that the board of directors of the company could, with the consent of a majority of the stockholders, sell for such price as they might in good faith agree to take for the corporate property. They knew that, as to
But the complaint of the appellants is not confined to fraud and collusion. It extends to that condition of the sale which requires them to take for their holdings, bonds
A sale is “an agreement by which one of two contracting parties, called the seller, gives a thing and passes the title to it, in exchange for a certain price in current money, to the other party, who is called the buyer or purchaser, who, on his part, agrees to pay such price:” 2 Bouvier’s Law Dictionary (Rawle’s Revision), p. 943. “A sale may be defined as a contract, founded on a money consideration, by which the absolute or general property in the subject of the sale is transferred from the seller to the buyer:” 24 Am. & Eng. Ency. of Law (2d ed.), p. 1022. A sale is a transfer of the absolute or general property in a thing for a price in money: Benjamin on Sales (6th ed.), sec. 1. “A sale is a word of precise legal import, both at law and in equity. It means at all times a contract between parties, to give and to pass rights of property for money, which the buyer pays, or promises to pay, to the seller for the thing bought and sold:” Williamson v. Berry, 8 Howard, 544; Huthmacher v. Harris’s Admrs., 38 Pa. 491; Bigley v. Risher & Wilson, 63 Pa. 152. It is not to be pretended that these definitions
But it is contended that because in Williamson v. Berry, supra, and other cases cited by counsel for the appellees, a sale is said to be “for money which the buyer pays or promises to pay,” this sale ought not to be interfered with, as the bonds of the Elk County Brewing Company are promises to pay. This in effect means, and counsel for appellees so contend, as we understand them, that, as the act of 1876 confers upon majority stockholders unrestricted and unlimited power to sell, they may sell not only for money, but for a promise to pay
It is to be remembered that, as to these appellants, the sale to the Elk County Brewing Company was an involuntary one. This seems to be entirely overlooked by the appellees. A promise to pay is, of course, the same as money when a seller voluntarily takes it. By his acceptance of it, or his agreement to accept it, in a contract of sale, he is estopped to say that it is not money for the purpose of sustaining or enforcing the sale; but not so when one sells involuntarily, being compelled to do so by the law, as in the present case. The right then is to get money for that which the owner is compelled to part with, or what,, under the circumstances, a chancellor ought to regard as the equivalent of money. If the equivalent is a promise to pay, it must be a promise to pay
On the reargument of this appeal counsel for appellees stated that, while they still insisted that the appellants should be compelled to take the bonds of the Elk County Brewing Company, they were willing to have the decree dismissing the bill affirmed upon condition that the appellants be paid cash for their proportionate shares of the purchase price. This was very prudent, and the decree is affirmed, upon condition that the appellees pay, or cause to be paid, to the appellants within sixty days, cash for their respective interests in the purchase price of $250,000, for the sale and transfer to the Elk County Brewing Company of the franchises and corporate property of the St. Mary’s Brewing Company, the costs below and on this appeal to be paid by the appellees.