96 Ga. 506 | Ga. | 1895
The Towers Excelsior and Ginnery Company, a private business corporation chartered by the superior court of Eloyd county for the purpose of carrying on “ the manufacturing of and buying and selling of the product known as ‘excelsior,’ also the business of ginning cotton and the buying and selling of cotton in lint or seed,” purchased from the VanWinkle Gin and Machinery Company an ice machine for the purpose of manufacturing and selling ice. Part of the purchase money was paid in cash, and the purchaser gave its promissory n'otes, secured by mortgage, for the balance. One of the notes was sold by the payee to Inman before maturity. In-man knew when he purchased the note that it was given for an ice machine. The note was not paid when due, and suit was brought thereon by Inman, The maker filed several pleas, all of which were stricken by the court except the general issue and the plea of ultra vires; and the court charged, in substance, that if the contract between the purchaser of the machine and the seller had been executed by the making and delivery of the machine to the purchaser, the latter could not set up the defense of ultra vires against the seller, unless it tendered back the machine within a reasonable time or gave some good reason why it could not do so. The court also held that a tender on the ground that the machine did
1. It was contended by counsel for the plaintiff in error, that although Inman bought the note before maturity, he knew it was the note of a corporation, and was bound to take notice of the corporate powers and ascertain whether the corporation had power to purchase an ice machine or not. It was contended on the other hand that, the maker of the note being a private business corporation, the purchaser of the paper was not bound to inquire into the powers granted by the charter, and that if he bought without any notice of a failure of consideration, he was protected. Under the view we take of the case, it is not necessary to decide which of these contentions is true. Speaking for myself, I am inclined to think that whoever deals with a corporation, whether private or not, must ascertain for himself what powers are granted the corporation by its charter. In this case, however, we think it makes no difference that the corporation had no power to buy the machine. "We place our decision upon the broad and just principle, that where a private corporation exceeds its powers and purchases property, takes possession of it, uses and keeps it, the corporation cannot set up the defense of ultra vires to avoid paying for it. The contract in question was not strictly an illegal contract; it was not prohibited by the charter. The charter authorized the corporation to make and issue commercial paper, and there was no evidence of illegality on the face of the note. Mr. Jus
2. At the trial the defendant sought to prove that it offered to rescind the contract on the ground that there were certain defects in the machine, and that there was a breach of warranty by the vendor. The court excluded the testimony, and held that a tender on any ground other
3. There was no error in striking the pleas. The first and second pleas stricken do not allege that Inman had notice of the failure of the consideration, but only allege that he had notice of the consideration. The plea that the note was procured by fraud, even if good against the original vendor, was not good against a bona fide purchaser without notice. Other errors complained of in the motion for a new trial are, in the view we take of the case, immaterial. The verdict, under the facts appearing in the record, must necessarily be for the plaintiff, and the court did not err in refusing a new trial. Judgment affirmed.