Fremont Carriage Mfg. Co. v. Thomsen

• Decision Date: 01 July 1902
• Citation: 65 Neb. 370,91 N.W. 376
• Parties: FREMONT CARRIAGE MFG. CO. v. THOMSEN.
• Court: Nebraska Supreme Court

65 Neb. 370

91 N.W. 376

FREMONT CARRIAGE MFG. CO.

v.THOMSEN.

Supreme Court of Nebraska.

July 1, 1902.

Syllabus by the Court.

1. A corporation, when not prohibited by its articles or by statute, may buy and sell its own stock, and hold, reissue, or retire the same, provided such act is done in entire good faith and in no manner injures the rights of its creditors or its stockholders.

2. A contract with a corporation by which it sells certain of its shares of stock, and agrees to repurchase the same upon the happening of a certain specified event, is not ultra vires; and for a breach thereof the purchaser may recover of the corporation the amount agreed upon as the price of such repurchase.

3. Where such a contract has been made, by the corporation, by and through its president and general manager, it will not be permitted to receive and retain the benefits of a portion thereof, and repudiate and reject the remainder. Bank v. Pence, 81 N. W. 623, 59 Neb. 579.

4. A contract for the purchase of certain shares of stock in a corporation, and for the repurchase of the same upon the happening of a certain event, where it has been fully performed by one of the parties thereto, is not within the statute of frauds.

5. Where one acting as the agent of a corporation makes a contract on its behalf which is binding upon it, his acts in that behalf create no individual or personal liability against him.

Commissioners' opinion. Department No. 2. Error to district court, Dodge county; Grimison, Judge.

Action by Chris Thomsen against the Fremont Carriage Manufacturing Company. Judgment for plaintiff, and defendant brings error. Affirmed.F. Dolezal, for plaintiff in error.

Stinson & Martin, for defendant in error.

BARNES, C.

On the 6th day of February, 1899, Thomsen filed his petition, in the district court of Dodge county, against the Fremont Carriage Manufacturing Company, a corporation duly organized and existing under the laws of this state, and one John Bunt, to recover the sum of $800 and interest thereon from the 4th day of September, 1897. It was alleged in his petition that the Fremont Carriage Manufacturing Company was a corporation; that on or about the 1st day of February, 1894, he entered into a contract with the said Fremont Carriage Manufacturing Company, by and through its president and general manager, John Bunt, and with the defendant John Bunt jointly and severally, by the terms of which it was agreed that the plaintiff should purchase eight shares of the capital stock of the Fremont Carriage Manufacturing Company, from the defendants named in the petition, at the par value of $100 per share. And in consideration of such purchase the defendants agreed to furnish the plaintiff employment in the shops of the said defendant company, in the city of Fremont, Neb., at a salary of $35 per month, which was to be increased as the ability of the plaintiff and the business of the corporation increased. It was alleged that it was further agreed between the parties that, if the defendants should, at any time, desire to discharge the plaintiff, and terminate the contract to furnish him employment in the shops of said corporation, they might do so by purchasing from the plaintiff the eight shares of capital stock owned by him at par value; that on February 5th the plaintiff, under said contract, did purchase said shares of capital stock of the corporation from the defendants, and paid therefor the sum of $800; that he commenced work in the shops under said agreement on or about the 5th of February, 1894, and at a salary of $35 per month; that about the 1st of April, 1894, his salary was increased to $40 per month; that he continued to work, under said contract, for the defendants, until on or about the 4th of September, 1897, when the defendants, without any just cause, discharged him, and broke said contract, and refused to purchase from him the eight shares of capital stock of the corporation which were purchased by him and held under said contract; that the defendants have ever since, and still do, refuse to purchase from the plaintiff the said eight shares of capital stock, though he has often requested them so to do, and has tendered to them the said stock, and demanded the payment of the money therefor. The petition concluded with a prayer for a judgment against the defendants for the sum of $800, with interest thereon from the 4th of September, 1897, together with costs of the action. To this amended petition the Fremont Carriage Manufacturing Company filed an answer admitting its incorporation; admitted that it employed the plaintiff, and that plaintiff was in its employment for the time alleged in his petition. It also admitted the fact that it sold to the plaintiff the eight shares of its capital stock, but denied that either the employment or the sale of the stock was under the contract set forth in plaintiff's petition, and denied the contract set forth therein. It further alleged that its said shares of capital stock were sold to the plaintiff without any condition to purchase or repurchase the same, and that, so far as the corporation was concerned, it never had any notice or knowledge, or was never informed by any one, that the stock was not sold absolutely and without condition. It further alleged that it had parted with its capital stock, and had accepted the moneys therefor from the plaintiff, in the belief and upon the reliance that the same was sold absolutely and unconditionally, all of which said plaintiff knew at the time. It was further alleged that the stock was placed on sale, under and pursuant to an order of the board of directors; that it was sold absolutely and without condition; and that the sale was reported to the defendant as an absolute and unconditional sale; all of which was well known to the plaintiff at the time he took the said stock, and paid the money therefor to the defendant. The separate answer of John Bunt denied every allegation contained in the petition except that the plaintiff purchased eight shares of the capital stock of the defendant the Fremont Carriage Manufacturing Company, which was admitted. It was also admitted that the plaintiff was in the employment of the company, but it was denied that said purchase of stock and said employment were under the contract set forth in the plaintiff's petition; and it was denied that there was in existence, at any time, the contract alleged in said petition. It was further alleged in his answer that the Fremont Carriage Manufacturing Company is, and at all times therein mentioned was, a corporation duly organized and existing under and by virtue of the laws of the state of Nebraska. It was also averred that the plaintiff, on or about the 5th of February, 1894, was employed by the defendant the Fremont Carriage Manufacturing Company, and remained in the employ of said company until on or about the 4th of September, 1897; that in said hiring, and the contract therefor, he, the defendant Bunt, acted as the agent and employé of the said company, under orders given by the corporation, about the duties of the plaintiff in his employment; that he did not act at any time in his own individual capacity; all of which was well known at the time to the plaintiff. It was denied by said Bunt that he ever employed the plaintiff for himself, or in his own behalf, and it was denied that plaintiff ever performed any labor or duty for or on his behalf. It was further stated in said answer that the plaintiff purchased eight shares of the capital stock, of and from the defendant the Fremont Carriage Manufacturing Company, at and for the price of $100 per share; that, in making said contract of sale between said company and said plaintiff, he, said Bunt, acted solely as the agent and on behalf of...