Franco-Texan Land Co. v. Laigle
| Decision Date | 27 April 1883 |
| Docket Number | Case No. 4719. |
| Citation | 59 Tex. 339 |
| Parties | THE FRANCO-TEXAN LAND CO. v. LOUIS LAIGLE. |
| Court | Texas Supreme Court |
OPINION TEXT STARTS HERE
APPEAL from Parker. Tried below before the Hon. A. J. Hood.
The decision was upon an agreed case, as follows:
“The appellant was duly incorporated, under the general law of this state, on the 26th day of July, 1876; the articles of association naming the directors for the first year, who served the company as such for that period of time.
The purposes for which the incorporation was formed are, in the language of the charter, as follows:
‘1st. The acquisition, by purchase or otherwise, and the subdivision of lands, the management and leasing thereof, and the sale and conveyance of same in lots and subdivisions, or otherwise.
2d. The division of the net proceeds of said lands, when sold, among the owners of the capital stock of said company, and the distribution of said lands among said stockholders by conveyance of the same in exchange for said stock, on such terms as shall be determined by said company. 3d. The promotion of immigration, with a view to the settlement, subdivision and sale of any and all lands that may be owned by this corporation.'
Article 3 of appellant's charter is in the following words:
Article 7 of the charter provides:
‘That each share of stock issued by said company shall be received in payment for lands purchased of the company at prices fixed by the board of directors, so as to procure a pro rata division of the lands, or their value, among the stockholders.’
The power to enact by-laws is given to appellant's board of directors by the charter.
Article 54 of the by-laws reads:
On the ____ day of ____, 1879, the stockholders assembled in Paris, France, where they had been in the habit of assembling for such purpose, and elected a board of directors for the year 1880. In 1880, the board of directors, so elected in 1879, amended a by-law, by which they fixed the price of land, when the land was selected by the stockholder, and to be paid for in stock, at three times the price for which the land would be sold for cash, and further prescribed the mode of exchanging stock for land, as follows:
‘When a stockholder desires to exchange his stock for lands belonging to the company, he shall deposit his shares of stock with the president of the company in Texas (if the stockholder lives in America), taking the president's receipt therefor.
The president shall at once forward the shares of stock so deposited to the Paris office in France, that the same may be compared with the stubs, and otherwise verified, so as to test its genuineness.
If the stock so forwarded shall be found genuine, then, upon advice of the Paris office, the Texas president shall convey to the stockholder the amount of land selected by him, and to which his stock entitles him.'
Appellee Louis Laigle is a native Frenchman, and immigrated to Texas from France in October, 1880. The amended by-law above referred to, regulating the mode of exchange, was enacted by the board of directors of appellant, which board was elected at an election held by the stockholders of appellant in 1879, in Paris, France, and appellee, though not personally present at said election, was represented at said election by his power of attorney, and his stock was voted.
Louis Laigle, appellee, owned eight (8) shares of stock, purporting to be issued by the appellant, The Franco-Texan Land Company.
On the 4th day of October, 1881, Louis Laigle applied to the president of appellant at Weatherford, to exchange his eight shares of stock for land belonging to the company, pointing out the particular land he desired to exchange his stock for, and proposed to give three times the price fixed for a cash sale of said land, thus complying with the by-laws of appellant regulating the mode of exchange prior to 1880.
The president offered to receive his stock, receipt for same, forward same to the Paris office for verification, and when notified of its genuineness, agreed to convey to appellee the land selected by him--that the amended by-law of appellant, amended by the board of directors in 1880, required this action on the part of its president.
Appellee Laigle demanded a conveyance at once to him of the land he had selected, and declined to deposit his eight shares of stock with the president, as required by the company's amended by-law, amended in 1880 by the board of directors of appellant.
It was agreed that appellee Laigle did comply with the by-law of appellant, regulating the mode of exchange, as the said by-law existed prior to its amendment by the board of directors in 1880.
Appellant's president refusing to permit an exchange of stock for land, except in compliance with said amended by-law, amended by the board of directors in 1880, appellee Laigle, on the 13th of October, 1881, instituted this suit to force a title to the land described in his petition, from the company.
Appellee Laigle, in bringing this suit, relied upon the by-laws of appellant as they existed prior to the said amendment, adopted by the board of directors in 1880, regulating the mode of exchanging stock for land; and further, that the said amended by-law was null and void and of no binding force, because the stockholders had no legal right to elect a board of directors outside of Texas; that the election of directors was a corporate act, which could only be legally done, under the charter of appellant, in the state of Texas; hence the board of directors elected in Paris, France, had no power to bind the stockholders by any by-law enacted by them.
Appellant relies upon the third article of its charter for authority to do any character of business in Paris, France, and also that appellee cannot attack the legality of the election of appellant's board of directors in 1879, collaterally; also upon the fact that appellee, having participated in the election of the board of directors which enacted the amended by-law referred to, is not in a situation to deny the board's authority.
A jury being waived, this cause was submitted to the court, and the court decided the election of the board of directors in Paris, France, was void, and invested them with no authority to make by-laws which would bind the stockholders, and that appellee Laigle was not estopped, by participating in the election of directors of appellant, to deny their authority to enact by-laws for said company, and gave Laigle judgment for the land.
It is agreed that the only questions involved in this case for the decision of the supreme court are:
1st. Can appellee attack the legality of the election of appellant's board of directors, collaterally?
2d. Whether, under the third article of appellant's charter, a legal election for a board of directors of appellant could be held and conducted in Paris, France.
3d. As Laigle, by his power of attorney, participated in the election of said board of directors which passed the amended by-law referred to, is he estopped from denying its authority to enact by-laws which shall be binding upon him?
The parties in the above entitled cause agree to the above statement of the case, and respectfully ask of the supreme court a decision of the questions submitted.
E. P. NICHOLSON,
Of counsel for appellant The Franco-Texan Land Company.
A. J. BALL,
Of counsel for appellee Louis Laigle.”
E. P. Nicholson, for appellant, cited Ang. & Ames on Corp., §§ 286, 287; Minor v. Mechanics' Bank, 1 Pet., 46;Cooper v. Curtis, 30 Me., 488;Dispatch Line of Packets v. Bellamy Manuf'g Co., 12 N. H., 205; Baird v. Bank of Washington, 11 S. & R., 411; Field on Corp., sec. 146; Ohio & Miss. Railroad Co. v. McPherson, 35 Mo., 13;Trust. of Vernon Society v. Hill, 6 Cow., 23; All Saints' Church v. Lovett, 1 Hall (N. Y.), 198-9; 2 Blackf., 367; Ang. & Ames (3d ed.), 104-5; Cornish v. Abington, 4 Hurl. & N., 549; 6 Wait's Act. & Def., 689, § 2; Eakright v. Logansport R. R. Co., 13 Ind., 404;Atlantic R. R. Co. v. Johnson, 70 N. C., 348;Walker v. Fleming, Id., 483;Steinmetz v. Versailles, etc., T. Co., 57 Ind., 457; 1 Redf. on Railways, p. 200, § 4.
A private corporation, whose charter has been granted by one state, cannot hold meetings or pass votes,...
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