58 Kan. 419 | Kan. | 1897
This was an action brought by M. W. Barber, as owner, on a note of which the fol-is a
This note is made in accordance with and subject to the terms of a certain letter, dated Sept. 24, 1892, addressed to John R. Ranson by S. E. Baker. S. E. Baker. O. I. Pettibone.
KANSAS ClTY, Mo.,’
Ann nn $3,000.00
Oct. lgt> 1892<
Six months after date, we promise to pay to John R. Ranson, or order, at the National Bank of Kansas City, three thousand dollars, for value received, with interest from date at the rate of six per cent, per annum.
Solomon Solar Salt Co.
By S. E. Baker, Prest.
John R. Ranson, Sec. <& Treas.
Among other things, the answer denied, under oath, the execution of the note by the corporation, and also alleged that it was given by the officers of the Company in furtherance of a private deal between themselves in the stock of the Company, and was, therefore, ultra vires and void.
The case was tried by the court and special findings of fact and conclusions of law made, as follows :
FINDINGS OF FACT.
“1. At the dates hereinafter mentioned, the defendant was a corporation duly organized and existing under the laws of the State of Missouri, for the purpose of engaging in and conducting the business of manufacturing salt for profit, with a capital stock of twelve hundred shares of the par value of twenty-five dollars each.
“ 2. On the first day of October, 1892, said defendant had three directors, who were S. E. Baker, John R. Ranson and E. E. Porterfield; and each of said directors owned one-third of the capital stock. Said*421 Baker was president of said corporation and said Ran-son its secretary and treasurer.
“3. On the first day of October, 1892, said directors agreed among themselves that said John R. Ran-son should sell his four hundred shares of the capital stock of "said defendant to the other two directors, and that, as part payment therefor, they should execute to him the promissory note of said corporation for the sum of three thousand dollars ; and, in pursuance of said agreement, the said Baker, as president, and John R. Ranson, as secretary and treasurer, executed and delivered a promissory note of three thousand dollars, a copy of which is set forth in the plaintiff’s petition ; and as the consideration of said note said John R. Ranson transferred to said defendant his stock in said corporation.
"4. At the time said agreement and promissory note were made, as hereinbefore set forth, said S. E. Baker, John R. Ranson and E. E. Porterfield were all present and took part in, and agreed to, the making of said agreement and'note.
“ 5. On the sixth day of March, 1893, said corporation paid to John R. Ranson one thousand dollars on said note.
“ 6. On or about the twentieth day of May, 1893, John R. Ranson was indebted to the plaintiff in this action in the sum of about twenty-five hundred dollars, and, to secure the payment of the same, transferred said note to plaintiff, who was, at the commencement of this action, and now is, the owner of it.”
CONCLUSIONS 03? LAW.
“1. That said defendant executed the note in question and is legally liable for its payment.
“2. That said plaintiff is the owner of said note, and is entitled to recover thereon from said defendant the sum of $2,201, with six per cent, interest thereon from this date.”
No evidence was introduced to show that the directors of the Company, as a board, ever authorized the execution of the note ; neither was there any evidence offered to explain the memorandum written on the
It is true that stockholders have no part in the management of the company’s business. They cannot as such enter into contracts with third persons. Such contracts are to be executed by the directors in their behalf. 2 Cook on Stockholders (3ded.), §709. In this case, however, there is a personal identity between stockholders and directors, and the contract entered into by them is assimilated to, if it does not become the same as, one executed by private individuals. If the transaction in question is to be viewed in the light of the fiction of corporate entity possessed by the individuals engaging in it, it can be nothing more than a gift of the corporate property by the corporate owners, which we think without question may be made.
The corporation in this case is a mere manufactur- ,
For the error before pointed out, the case is reversed, with instruction to award a new trial.