124 Iowa 107 | Iowa | 1904
The relief sought by the plaintiff is twofold: He prays that the contract between the Lucas Prospecting Company' and the Inland Coal Company, and the transfer of the Lucas Company’s property to the Inland Fuel Company pursuant to said contract, ’be set aside and declared void, because ultra vires, and that the mortgages executed by the Lucas Company to the coal company be declared void so far as they exceed the limit of indebtedness fixed by the articles of incorporation of the former company.
It is argued further that such has been held to be the rule in this State,, and we therefore find it necessary to review the cases which it is claimed so hold. In Dunham v. Isett, 15 Iowa, 294, the sole question was whether a railroad company had the power to mortgage its property and earnings for borrowed money, and it was held that it had such power. In Buel v. Buckinham & Co., 16 Iowa, 284, the contest was between the creditors of the corporation and the purchaser of all of its property. It was held that its charter and by-laws impliedly authorized the sale. The proposition that all of the property of a private corporation may be sold, with the assent of the shareholders, is universally held. Thompson v. Lambert, 44 Iowa, 239, was a case where the corporation had
It is said, also, that the transaction in question amounts .to a consolidation of the two corporations, and that, if upheld, it virtually compels the plaintiff to enter a corporation with greatly enlarged powers, and subjects him to liabilities .which he did not undertake to assume; in other words, that it makes a new contract for him. There is nothing in- the transaction which prohibits the Lucas Company from still prosecuting the business for which it was organized, but, if it be conceded that the sale of this property amounted to a consolidation of the two ■ corporations, in fact, it was entirely competent for them to consolidate, if the charter so provided, or if the power therein conferred naturally and inevitably led to such a result. Mayfield v. Alton Ry., Gas & Electric Co., 198 Ill. 528 (65 N. E. Rep. 100). The plaintiff does not become a shareholder in the fuel company. Nor is he obliged to take any of the stock issued by it He does not assume any of its liabilities by retaining his stock in the Lucas Company, because his liability is fixed and determined by its charter. It is true that the prosperity of the Lucas Company may depend upon the earning capacity of its fuel company stock, and that through this channel the plaintiff’s. stock in the Lucas Company may he affected. But the value of the plaintiff’s stock, has at all times depended upon the property and prosperity. of the Lucas Company, and, unless it has been guilty of fraud which will affect the value of his stock, he must take his chances in its investments. There is nothing in the record in this case even tending to show that the transaction was not fair and honest, and for the .best interests of the Lucas corporation and its stockholders. Indeed,
We reach the conclusion that the sale and transfer were not beyond the charter powers of the corporation, and that it was fully authorized to sell the same for the stock of the other corporation. See, also, Miners’ Ditch Co. v. Zellerbach, 37 Cal. 543 (99 Am. Dec. 300).
In view of the conclusions which we have reached on the main proposition urged by counsel, we do not deem it necea
The judgment is affirmed.