Central Ohio Natural Gas & Fuel Co. v. Capital City Dairy Co.

• Decision Date: 28 March 1899
• Court: Ohio Supreme Court
• Parties: CENTRAL OHIO NATURAL GAS & FUEL CO. v. CAPITAL CITY DAIRY CO.

53 N.E. 711

60 Ohio St. 96

CENTRAL OHIO NATURAL GAS & FUEL CO. v. CAPITAL CITY DAIRY CO.

Supreme Court of Ohio.

March 28, 1899

Error to circuit court, Franklin county.

Action by the Capital City Dairy Company against the Central Ohio Natural Gas & Fuel Company. There was a judgment for plaintiff, and defendant brings error. Affirmed.

Spear J., dissenting from second and third paragraphs.

Syllabus by the Court

1. The implied powers which a corporation has in order to carry into effect those expressly granted, and to accomplish the purposes of its creation, are not limited to such as are indispensable for these purposes, but comprise all that are necessary, in the sense of appropriate, convenient, and suitable, including the right of reasonable choice of means to be employed.

2. Acts of a corporation, which, if standing alone, or engaged in as a business, would be beyond its implied powers, are not necessarily ultra vires when they are incidental to, or form part of, an entire transaction, that, in its general scope is within the corporate purpose. The validity of such a transaction is to be determined from its general character considered as a whole, rather than by segregation into individual parts, and each regarded as distinct from the others.

3. Where a corporation formed for the purpose of manufacturing and dealing in a particular line of goods, instead of incurring the delay and expense incident to the construction of a new manufacturing plant and building up of an independent business, in good faith, with a view of promoting the interests of the corporation, chooses to purchase of an existing partnership engaged in a like business its established plant and assets, including its outstanding claims, among which is one for damages to the property caused by another's negligence, the corporation acquires a valid title to the claim for damages, as against the party liable and may maintain an action thereon.

Outhwaite & Linn and A. L. Thurman, for plaintiff in error.

Thomas E. Steele, for defendant in error.

WILLIAMS, J.

In May 1893, a co-partnership owning a plant, in the city of Columbus, equipped for the manufacture and sale of oleomargarine, was engaged in carrying on that business under the firm name of the Capital City Dairty Company, and then had an established trade. At that time the Central Ohio Natural Gas & Fuel Company, a corporation organized under the laws of this state for the purpose of furnishing and selling natural gas to the inhabitants of the city, was prosecuting its business of supplying gas through pipes, some of which were laid in close proximity to the manufactory of the co-partnership. That property and its contents were damaged by an explosion of the gas, occasioned by the negligence of the corporation, for which it was liable to the co-partnership. Shortly afterwards, in July, 1893, the property and business of the co-partnership, with its accounts and bills receivable, including its demand for the damages resulting from the explosion, were sold and transferred to a corporation organized in this state by the members of the co-partnership and some other persons. This corporation was formed for the purpose of continuing the business of the co-partnership, adopted its name, and thereafter carried on the business at the same place; and in September, 1893, it commenced the action below against the plaintiff in error to recover the damages resulting from the gas explosion, the demand for which, it was alleged had been sold and assigned to the plaintiff as already stated. Issue was joined by denial of the alleged transfer of the demand, as well as of the allegations of the defendant's negligence, and the cause was submitted to the court upon the evidence and the following agreement of the parties: ‘It is stipulated and agreed by and between the parties hereto that the amount of damages caused by the explosion set out in plaintiff's second amended petition herein was, as of the date of that explosion, the sum of $800, and that said damages were caused by the explosion of natural gas in the pipes of, and belonging to defendant, and was caused solely by defendant's negligence. It is further stipulated and agreed by and between the parties that, as to all other questions in issue between the plaintiff and defendant, a jury may be, and it is hereby, waived, and said issues may be tried by the court.’ This agreement left no issue of fact for trial, except that relating to the alleged transfer of the cause of action to the plaintiff, which the court found in favor of the plaintiff, and rendered judgment accordingly. The judgment was affirmed by the circuit court. The legal question to which our attention is directed concerns the corporate capacity of the plaintiff to acquire the demand sued on, and enforce it by action against the defendant. The plaintiff corporation was formed, as declared in its articles of incorporation, ‘for the purpose of manufacturing, selling and dealing in oleomargarine and the materials and utensils employed in the manufacture, storage and transportation thereof, and all things incident thereto.’ And the contention is that the purchase of a chose in action-especially one founded on negligence or other tort-is so...