Erb v. Yoerg
| Decision Date | 20 May 1896 |
| Docket Number | 10,040--(131) |
| Citation | 67 N.W. 355,64 Minn. 463 |
| Parties | D. S. ERB v. ANTHONY YOERG, Assignee |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from an order of the district court for Ramsey county, Charles D. Kerr, J., denying a motion for a new trial. Affirmed.
Order affirmed.
Pinch & Whaley, for appellant.
The corporation was prohibited from appropriating funds or directing its operations to any other purpose than expressed in its articles of incorporation. G. S. 1894, § 2807. A violation of this provision is punishable by fine and imprisonment. G. S. 1894, §§ 2793, 2796. It was prohibited from purchasing the cigars or appropriating money to pay for them. National Inv. Co. v. National S. L. & B. Assn., 49 Minn. 517, 52 N.W. 138; Delaware F. M. F Ins. Co. v. Wagner, 56 Minn. 240, 57 N.W. 656. The contract was void. Solomon v. Dreschler, 4 Minn. 197 (278); Ingersoll v. Randall, 14 Minn. 304 (400); Bisbee v. McAllen, 39 Minn. 143, 39 N.W. 299; Handy v. St. Paul Globe Pub. Co., 41 Minn. 188, 42 N.W. 872. No title passed. Benjamin, Sales, §§ 503a, 504, note c. The assignee stands in the same position as the corporation. Davis v. Stewart, 8 F. 803. Either party may withdraw so long as no injustice results. 2 Morawetz, Priv. Corp. §§ 685, 689; Spring Co. v Knowlton, 103 U.S. 49.
O. E Holman, for respondent.
A transfer of property to or by a corporation may not be set aside simply on the ground that it was unauthorized on the part of the corporation; in such cases, the state alone may object. 27 Am. & Eng. Enc. Law, 377, and authorities cited in note; 2 Morawetz, Priv. Corp. § 689, et seq.; Whitney Arms Co. v. Barlow, 63 N.Y. 62. The contract having been executed on one side is binding. See 2 Morawetz Priv. Corp. §§ 698-701.
On January 21, 1894, the Ware Tobacco Works, a corporation organized under the laws of this state, ordered from plaintiff 10,000 cigars, for the price of $ 500, to be paid for in four months. On March 8, plaintiff shipped the cigars from Boyertown, Pennsylvania, to the Tobacco Works at St. Paul, Minnesota, where it received them on March 23. On the next day, March 24, 1894, it made a deed of assignment to the defendant, for the benefit of its creditors, under the insolvency law of 1881, [2] which deed was filed March 27; and the assignee then qualified and entered on the discharge of his duties. This is an action of replevin, brought to recover possession of 9,500 of the cigars in the hands of the assignee. On the trial before the court, without a jury, the court found for defendant. From an order denying a new trial, plaintiff appeals.
Appellant sought to recover on two grounds:
1. One of the grounds on which he sought to recover is that, when the tobacco works purchased the cigars, it was insolvent, knew itself to be insolvent, and purchased with intent not to pay for the cigars. Outside of the facts above stated, the only evidence offered by appellant on the trial to prove such insolvency was Exhibit E, "the schedule filed in the matter of the assignment of the Ware Tobacco Works," and Exhibit F, being the book of its "sales account." These were received subject to the objection of defendant. Thereupon plaintiff rested, and the settled case then states: "Upon the trial of the case, the court, without objection by plaintiff, struck out the evidence introduced by plaintiff to show insolvency, including plaintiff's Exhibits E and F." Whether this evidence, or any of it, was properly stricken out, is a question that is not before us. But see Hahn v. Penney, 60 Minn. 487, 62 N.W. 1129. With all the evidence as to insolvency stricken out, it is hard to see how appellant could recover on this ground.
2. The other ground on which he sought to recover is that, under its articles of incorporation, the tobacco works had no authority to purchase cigars; that its attempted purchase was ultra vires, and punishable under G. S. 1894, § 2793, as a "diversion of corporate property to...
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