Browning v. Hinkle

• Decision Date: 08 March 1892
• Citation: 48 Minn. 544,51 N.W. 605
• Parties: BROWNING v HINKLE.
• Court: Minnesota Supreme Court

48 Minn. 544

51 N.W. 605

BROWNINGvHINKLE.

Supreme Court of Minnesota.

March 8, 1892.

(Syllabus by the Court.)

The declarations or representations of individual directors or officers of a corporation, relating to its affairs, but not shown to have been made in the course of or connected with the performance of their authorized duties as agents, are not binding on the corporation.

Appeal from district court, Hennepin county; POND, Judge.

Action by Emmett P. Browning, assignee of the Price-Condit Fence Company, a corporation, against William H. Hinkle, to recover the price of 50 shares of the company's stock. Verdict for defendant by direction, and judgment thereon. Plaintiff appeals. Reversed.

Davis & Farnam, for appellant.

Keith, Evans, Thompson & Fairchild, for respondent.

DICKINSON, J.

This is an action by a receiver of an insolvent corporation, the Price-Condit Fence Company, to recover the price of 50 shares of the stock of the corporation which were issued to the defendant, and for which, as is alleged, only partial payment has been made. It is admitted on the part of the defendant that he did not pay to the corporation the price of the stock, but it is claimed that he did not purchase the stock from the corporation, but from one Foote, one of its members, and that Foote, being entitled to receive the stock, transferred his right to the defendant, and that the corporation issued the stock to the defendant in place of Foote, in accordance with the agreement of the parties. It is also claimed that the stock was fully paid for by Foote and his associates, the original incorporators, by the transfer by them to the corporation of certain patent-rights and property at a valuation agreed upon, which, with some money paid, amounted to $80,000, which was designated in the articles of incorporation as the amount of the capital stock.

Upon the case as presented at the trial the court directed a verdict for the defendant. The reason upon which the court acted was that the evidence was deemed to show, without contradiction, that before the defendant purchased the stock, or the interest represented by it, he made inquiry of some of the officers of the corporation, and that they stated to him that the stock had all been paid for in the manner above indicated; and that the defendant was thus induced to purchase from Foote, and to receive the certificate of stock from the corporation; and it is upon this ground that the respondent here seeks...