139 Ga. 625 | Ga. | 1913
The controlling question in this case is whether the Harlem Oil & Fertilizer Company, a corporation, under the laws of this State, can have specific performance of an executory contract for the purchase of farm lands, where the charter of the corporation contains no express power to execute such contract or to acquire such lands. The contract referred to is as follows:
“State of Georgia, Columbia County. Eeceived from the Harlem Oil & Fertilizer Company the sum of three hundred ($300) dollars, to be applied on the purchase-price of the following tract or parcel of land fully described in a bond for title given by Mrs. Nannie B. "Wright to C. F. Kohlruss, dated June 19, 1912, provided said sum of $300 is not repaid to said Harlem Oil & Fertilizer Company within sixty days after date. It is agreed that if said sum is not paid in the above-specified time, the said Kohlruss agrees to sell to the Harlem Oil & Fertilizer Company, who agrees to buy, said tract of land fully described in said bond for titles, at and for the sum of seventy-five hundred ($7,500) dollars, to be paid as follows: The said Harlem Oil & Fertilizer Company agrees to assume a loan of twenty-three hundred ($2,300) dollars on said land, payable to Mrs. Nannie B. Wright, the sum of fourteen -hundred and fifty ($1,450) dollars January 1, 1913, and the sum of thirty-seven hundred and fifty ($3,750) dollars January 1, 1914. All deferred payments to bear interest from January 1, 1913, at the rate of 8% per annum. It is agreed that all rents during the year 1912 are to be paid said Kohlruss, 'and the said Kohlruss shall pay all taxes on the property up to January 1, 1913. Possession of the uncultivated part of the property may be taken by the purchaser sixty (60)- days after date, provided said sum is not paid, and the remaining part of said land on January 1, 1913. In witness whereof both parties have hereunto set their hands and seal, ■this 20th day of September, 1912.
“Dr. A. B. Martin.
“W. I. Lazenby, Notary Public, Columbia Co., Ga.
C. F. Kohlruss (L. S.) Harlem Oil & Fertilizer Co. (L. S.) By Julian J. Zaehery, Prest.”
The material part of the charter of the Harlem Oil & Fertilizer Company is as follows: The petitioners seeking “the formation of a corporation to be known as the ‘Harlem Oil & Fertilizer Company/ for the purpose of conducting for pecuniary profit the business of buying and selling, both in their own right and on commission, cotton, cottonseed, and all cottonseed products and farm produce of all kinds, coal, wood, timber, and lumber; to manufacture and sell cottonseed oil and all substances and commodities obtainable from cottonseed and other agricultural products; to purchase fertilizer ingredients, to make, mix, manufacture and sell fertilizers; to manufacture ice and sell the same; to establish and operate an electric-light plant and create motive power and electric light, both for the use of said corporation and for sale to others; and to establish and operate sawmills, and to manufacture lumber,” it is ordered that said application be granted, and that the petitioners and their associates and successors be vested with “all the rights, privileges, and powers mentioned in said petition.” It will be observed from reading the above language that the charter contains no authority or power on the part of the corporation to own farm lands, or to make any contract for the purchase or holding of such property. Our Civil Code, § 2823 (5), is as follows: “Corporations thus created may exercise all corporate powers necessary to the purpose of their organization, but shall make no contract, or purchase or hold any property of any kind, except such as is necessary in legitimately carrying into effect such purpose, or for securing debts due to the company.”
The language of the statute just quoted is clear and plain. By its terms a corporation can make no contract or purchase or hold any property of any kind, except such as is necessary to the purposes of the organization. The declared purpose -of the corporation is as set out in the excerpt from the charter above quoted. Was the purchase of the farm lands necessary in legitimately carrying into effect such purpose ? Mr. Zaehery, who was the general manager, president, and treasurer of the corporation, testified that he
The members of the court concur in the rules of law above announced, but there is not unanimity as to the application of them to the facts of the present case. The opinion of the members of the court other than the writer on this subject is as 'follows: In the Civil Code, § 2216, is contained a statement of the powers common to all corporations. Among these is, “to receive donations by gift or will, to purchase and hold such property, real or personal, as is necessary to the purpose of their organization, and to do all such acts as are necessary for the legitimate execution of this purpose.” By § 2823 it is declared that corporations organized by the superior court “may exercise all corporate powers necessary to the purpose of their organization, but shall make no contract, or purchase or hold any property of any kind, except such as is necessary in legitimately carrying into effect such purpose, or for securing debts due to the company.” The word “necessary,” as employed in these.two sections, is to be given a reasonable construction, and not to be so construed as to hamper and obstruct, or practically prevent, the profitable and reasonable exercise of the corporate powers and the conduct of the corporate business. Thus many contracts may be made which are not in an absolute sense essential to the conduct of business, and yet may be legitimate as advancing the principal business or rendering it more profitable.
The writer of this opinion can not concur in the views of the majority of the court just above stated. He is of the opinion that, assuming the contract to have been for the sale of land by the ' owner thereof to the corporation, the evidence so clearly shows that it was ultra vires, because the purchase was not for a- purpose necessary to the corporate business, that as matter of law an injunction should have been granted.
Judgment affirmed.