Banks v. Poitiaux
| Decision Date | 28 January 1825 |
| Citation | 24 Va. 136 |
| Parties | The Banks v. Poitiaux |
| Court | Virginia Supreme Court |
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Appeal from the Richmond Chancery Court.
The Bank of Virginia, and Farmers' Bank of Virginia, finding it expedient to erect buildings in the city of Richmond, for the transaction of their business, purchased a piece of ground for that purpose, and erected the buildings. After this was done, there remained a vacant space on each side of the Bank buildings, on which they determined to erect fire-proof brick houses, for the greater security of the Banks, and to sell them out to individuals. Before the houses were completed, the Banks agreed with Michael B. Poitiaux, to sell him one of the tenements for the sum of $ 15500, payable at the end of 5 years with interest. The Banks also agreed to advance to the said Poitiaux the necessary sums to prepare the house as an auction store, and to build a small house, to be added to the cost of the tenement, and to be paid for in the same manner. Bond and security, and a trust deed on the property were to be given. Poitiaux did accordingly, take possession of the said tenement, and received from the Banks $ 5000, under the agreement, which was laid out by him in the manner contemplated. But he never executed the bond with security for $ 20500, (the whole sum due,) nor a deed of trust, according to the agreement.
The Banks brought a suit against Poitiaux to compel a specific performance of this agreement.
Poitiaux pleaded the statute to prevent frauds and perjuries; alledging that no memorandum or note in writing was ever signed by him or any other person authorised by him, for the purchase of the tenement aforesaid.
He also stated, in answer to the allegations of the bill, that he had no intercourse with the committees of the Banks, with respect to the sale in the bill mentioned that a parol agreement was made between him and John Brockenbrough, president of the Bank of Virginia, for the purchase of the said tenement, for $ 15500, and such further sum as should be necessary to complete the contemplated improvements; and that this sum should constitute a part of the purchase money: that under this arrangement, the defendant went into the house when it was nearly completed: that he has drawn from the Bank, the sum of $ 5000: that in addition to that sum, he has expended on the said improvements, large sums from his own pocket: that bond and security and a deed of trust on the property, were to have been given: that in all these transactions, the defendant had no concern with the committees of the two Banks, or with any other person but the president of the Bank of Virginia, to whom, he presumes, the power to treat had been given by a subcommittee of the two committees appointed by the Banks; but of this he requires proof: that he conceives that he has been fully released from his engagement by the said president of the Bank, by a subsequent agreement: that the defendant afterwards determined to part with his contract to some other person, and agreed with Tompkins & Murray that they should take the property on the terms proposed to the defendant: that he communicated this matter to the president of the Bank of Virginia, who, as the defendant understood, consented to accept the said Tompkins & Murray as the purchasers of the property in question, and considered himself from that time, as having nothing to do with the business: that Murray afterwards employed a workman to finish the said house, advanced him $ 500, and deposited some of the necessary materials for that purpose; which, he believes was known to the said president: that the defendant has not been in possession of the premises in question, since May, 1819, up to which period he considered himself as owing rent to Tompkins & Murray: that Tompkins & Murray having failed, the president then told the defendant that he believed the Banks would have to look to him again: that no contract had been entered into under the common seal of the Banks: that the two committees of the Banks had no power to delegate their powers to a sub-committee, by a mere parol authority; and lastly, that the Banks had no power to deal in real estate, under the circumstances of that in question.
Depositions were taken, going to establish the following facts; the sale of the premises to Tompkins & Murray, as stated in the answer of Poitiaux, and the ability of Tompkins & Murray, at the time, to meet their engagements; that no communication was had between the Banks and Tompkins & Murray about the purchase of the latter of the property in question; that the object in building the houses adjoining the Banks, was to protect the Banks by fire-proof buildings contiguous to them; that Poitiaux was a director of the Bank of Virginia, and present at the board, when a report was made by a committee appointed for that purpose, stating that they had agreed to sell the property in question to the said Poitiaux, subject to the confirmation or rejection of the board: that Poitiaux expressed no dissent, though according to the practice of the board, he had a right to enter a protest if he pleased; and that the said sale was confirmed by the board of directors.
The Chancellor decreed, that the Banks had exceeded their powers in purchasing and selling the property in question, it not being necessary for their immediate accommodation in relation to the convenient transaction of their business; and referred the accounts to a commissioner.
From this decree the plaintiffs appealed.
Decree reversed.
Nicholas and Leigh, for the appellants.
Wickham, for the appellee.
On the part of the appellants, it was said, that the statute of frauds did not apply, because there was part performance, and Poitiaux took possession of the property. Clinan v. Cooke, 1 Scho. & Lefr. 41; 1 Fonb. 169; Sugd. 63, 73. Besides, Poitiaux was present at the board, saw the entry made, and did not object. Keemys v. Proctor, 1 Jac. & Walker, 349. The agreement is admitted by the answer. As to the objection that the corporate seal is not affixed to the agreement, the cases of the Bank of Columbia v. Patterson, 5 Cranch, and Legrand v. Hampden Sydney College, 5 Munf. 324, afford a full answer. The Banks had power under the charter to purchase and sell the property in question. The terms are general, and certainly authorise the Banks to do what they may think necessary for their accommodation, in relation to the convenient transaction of their business. The security of the Banks from fire, is undoubtedly comprehended within the meaning of the charter. Some latitude must necessarily be allowed in the interpretation of such indefinite words as convenience and accommodation; and, if the Banks have a bona fide intention to attain those objects only, their acts ought not to be too severely scrutinized. The buildings erected were evidently calculated to accomplish these purposes.
For the appellee, it was said, that the Banks could possess no power which they did not derive from their charters: that the power to hold real property was confined to the single case of property " requisite for their immediate accommodation in relation to the convenient transacting of their business," & c. 2 Rev. Code, 72, sec. 8, Rule 8: that the acts of a corporation, beyond its powers, are utterly void. Wilson v. Spencer, 1 Ran. 76: that if they cannot hold, they cannot acquire; because, if they acquire, they must hold, at least for a moment; and, if they cannot hold, they cannot convey, Calvin's Case, 5 Co.: that the only question is, whether this house was requisite for their " immediate accomdation in relation to the convenient transacting of their business; " and, this object is disproved by their parting with it even before it was finished. The bill states, that they bought to sell again. Parol proof cannot be introduced by the Banks, although it might by the defendant. The Banks are plaintiffs in equity, and in possession of all the documents. As to security from fire, this object would be as well attained by leaving the ground vacant. If the Court entertain a doubt of the title, they will not decree a specific performance. Stapleton v. Scott, 16 Ves. 272; Sloper v. FishVes. & Beam. 145.
January 28. JUDGE GREEN:
The contract, in this case, is distinctly proved, and has been so far executed as to entitle the appellants to a decree for its specific performance, unless the Banks are unable to give to the appellee a perfect and indefeasible legal title; or, unless a Court of Equity ought to refuse its aid to the appellants, upon the ground, that the purchase and sale of the property in question, was contrary to the policy of the law, as declared in the charters of the Banks.
The creation of a corporation, gives to it, amongst other powers as incident to its existence and without any express grant of such powers, that of buying and selling. 10 Coke 306. This power may be limited, restrained or prohibited, either by the charter creating the corporation, or by a general law, as in...
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