55 So. 567 | La. | 1911
The present suit is by the stockholders of the defendant company, a corporation domiciled in New Orleans, to set aside, as unauthorized and fraudulent, a sale made by the president of the company to F. A. Glover and wife of a certain so-called “lease” which the company held on the land ■of the same F. A. Glover and wife,, situated in the parish of Washington; also to set aside a sale made thereafter by F. A. Glover and wife of the same land to the defendant Le Sassier, as having been made in pursuance of the same alleged fraudulent scheme to defraud the defendant company; also to set aside, on the same ground, a mortgage executed by Le Sassier on the land in question in favor of the defendant Landry.
The lower court sustained plaintiff’s demand, and Le Sassier alone has appealed.
The so-called lease in question gave to the defendant company the right to operate a sand and gravel pit on the land in question for 49 years in consideration of a royalty -of one cent per cubic yard of material removed from the land. Though made to the defendant company, it was entered into before the defendant company had' come into existence. It was executed on April 6, 1909; and the charter of the defendant company was not signed until April 19, 1909, 13 days later. This discrepancy, however, has not given rise to any question in the case. After the lease had been obtained, the person who had obtained it, one Johnson, set about organizing the defendant corporation. The incorporators were himself and two others, Calhoun and McGampbell. Johnson was made president; McCampbell, treasurer; and Calhoun, secretary. The three constituted the first board of directors, to hold office until the first Monday of April, 1910. The corporation was capitalized at $20,000, divided into 40 shares of $500 each. Subsequently nine of these shares were issued to the plaintiffs, and fully paid. This was all the capital the company ever had. The incorporators themselves never contributed one cent. They, or perhaps it would be more accurate to say Johnson, managed the affairs of the company. The company had an office in New Orleans. Johnson, for the company, made a show of going about establishing a plant for operating the gravel pit. He bought some tools and mules and lumber, and constructed a barge, and began the construction of a spur track to the nearest railroad, and ordered machinery. What amount of money was invested in these tools, mules, lumber, and barge, the record does not show. Very little work had been done on the spur track by the time the company had reached the stage of being, in the words of its president, “down and out.” This was in the latter part of June, 1909, two months after the signing of the charter. Calhoun had resigned and retired. One Newman had been elected in his place, but, apparently, had never consented to serve. Two thousand dollars had been borrowed from the Metropolitan Bank, and $2,392 of debts created in addition. The company had not a dollar in its treasury. The clerk in charge of the office had never been paid one cent of his salary. The workmen employed on the spur track had quit work because unpaid. The shareholders then began to take an interest. One
Le Sassier and Glover knew nothing of the plan to sell out to Coleman and Settoon. The record leaves no doubt that they acted in perfect good faith. It leaves also no doubt that Johnson was a mere chevalier d’industrie, and that his obtaining this lease and organizing the defendant company-was nothing more, so far as he was concerned, than a mere scheme for doing what he eventually did — get all the money he could lay his hands on by selling the stock of the corporation and borrowing money in its name and then leaving for parts unknown. So far as known, he is now in jail in Canada.
Glover had become aware that Johnson had obtained the lease from him by misrepresentation; that, whereas Johnson had represented that he had $18,000 with which to establish a plant and operate the sand and gravel pit, and within 60 days would be moving 1,000 cubic yards a day, and paying $10 a day royalty, he was in fact, a mere impecunious adventurer. And Glover, upon learning of the penniless condition of Johnson and his company, had consulted his attorney, and been advised that the contract with the company could be easily set aside, it having been obtained by misrepresentation; and had decided to bring a suit for that purpose.
All the evidence as to these misrepresentations of Johnson and as to Glover’s having consulted an attorney and been advised of the infirmity of the company’s contract and of his intending to bring suit was objected to by plaintiffs on the ground that it tended to contradict and vary the terms of the contract by which Glover purchased this lease from the company.
We think the evidence was clearly admissible for the purpose of repelling the imputations of fraud which the plaintiffs are casting upon this sale. Glover testifies that this sale to him was in the nature of a compromise; he thinking that his paying $500 to free his property of this lease would be cheaper than a lawsuit.
The sale by Glover to Le Sassier was brought about by Johnson. It was he who, as already stated, proposed it to Le Sassier.. In like manner, he approached Glover, told him that his company was “broke,” but that he knew a man who would pay him $1,000 for the land, and in addition give him and his son employment at $75 per month.
The two sales in question — that of the company to Glover of the contract, and that of Glover to Le Sassier of the land — were-genuine transactions. The prices, $500 in the one instance, and $1,000 in the other,, were duly paid. They were in good faith.
Rut this good faith will not defeat plaintiff's action, if, as contended, the sale was. unauthorized. The reasons why it is said not to have been authorized are: First, that the resolution of July 28th, purporting to authorize it, was adopted at Franklinton, away from the domicile of the company, and was therefore void under section 741, Rev. St.;, second, that the board of directors was without power to sell this contract, which was the main asset of the defendant company and indispensable to it for carrying on its. business.
The question of whether the making of this sale was beyond the powers of the board of directors must be determined by reference to the charter of the company, and the state of t'he company’s affairs at the time it was made. Article 3 of the charter reads:
“The objects and purposes for which this corporation is formed and the nature of the business to be carried on by it are declared to be, to buy, and deal in gravel, sand and building materials of all descriptions, and to build and erect buildings, and improvements in general.”.
It is thus seen that the exploiting of this sand and gravel pit, or the carrying out of the contract in question, was not the sole purpose and object of the organization of the corporation. There were other objects and purposes.
As against the defendant Le Sassier, the judgment appealed from is set aside, and the suit of plaintiffs is dismissed, at their costs.