Northland Produce Co. v. Stephens
| Decision Date | 10 November 1911 |
| Docket Number | 17,165 - (20) |
| Citation | 133 N.W. 93,116 Minn. 23 |
| Parties | NORTHLAND PRODUCE COMPANY v. A.D. STEPHENS |
| Court | Minnesota Supreme Court |
Action in the district court for Beltrami county to cancel a deed of certain premises and have the title thereto decreed to be in plaintiff, as against defendant.
The complaint alleged that the deed was executed for the sole purpose of securing an indebtedness from plaintiff to defendant and that the instrument, though in form a warranty deed, was in fact a mortgage and was so understood by the parties; that it was further understood and agreed that when the debt of plaintiff to the Merchants National Bank of Crookston should be paid, defendant would reconvey the premises; that plaintiff had paid the bank its total indebtedness, principal and interest; that it duly demanded a reconveyance from defendant in accordance with the agreement but that defendant refused to convey.
The answer, among other matters, set out the incorporation of plaintiff as a reorganization of the Northern Trade Company alleged that at or about the time on which incorporated the company named owed the bank on certain notes the sum of $1,800; that the company conveyed to plaintiff all its assets in Beltrami county, including the real estate described in the complaint; that defendant agreed to make the advances desired by plaintiff to complete its cold-storage warehouse and to accept a deed of the property as security for the loan to be made and the amount already borrowed by the Northern Trade Company; that the sum of $1,800, except $100 paid on account, was still unpaid.
The reply alleged that the Northern Trade Company and plaintiff were two entirely separate corporations, in no way related to each other; that the former had nothing whatsoever to do with the latter and was in no way interested in its business. It also set up that if the agreement alleged in the answer was entered into between defendant and Lunn, as an officer of the plaintiff, the same was never authorized by its stockholders or board of directors and was not authorized by its articles of incorporation, was not its agreement and was ultra vires.
The case was tried before Stanton, J., who made findings and as conclusion of law ordered judgment of dismissal of the action. Plaintiff's motion for amended and additional findings was denied. From an order denying plaintiff's motion for a new trial, it appealed. Affirmed.
Payment -- finding sustained by evidence.
Findings of the trial court that a debt, to secure the payment of which plaintiff executed and delivered to defendant a deed of certain property, had not been paid in full, held sustained by the evidence.
Estoppel of plaintiff corporation.
Plaintiff, a corporation, in consideration of a loan of money to carry on its business, in addition to the repayment of the money borrowed, agreed to pay an indebtedness to the lender of another corporation, to whose property, good will, and business plaintiff had succeeded. It is held that, since plaintiff received and retained the benefits of the transaction, it will not be heard to allege its want of authority or power to enter into the contract.
Minutes of corporation -- evidence.
The minutes of a private corporation are at most only prima facie evidence against third persons, and are open to contradiction or explanation in an action involving transactions of which the minutes purport to be a record.
Reynolds & McClearn, for appellant.
Martin O'Brien, for respondent.
The evidence in the case shows and tends to show the following facts: The Northland Trade Company was a corporation organized under the laws of this state, originally located and doing business in Wadena county. It transferred its business to Bemidji, and for a year or more prior to the time of the transaction involved in this action conducted its affairs at that place. For some reason, not clearly disclosed by the record, the officers and directors of the corporation conceived the idea of a reincorporation under a new name, the new concern to take over all the property and business of the old at Bemidji. This was apparently for the purpose of infusing new life into the enterprise and continuing and extending the business. The Northland Produce Company was then incorporated by the officers and stockholders of the trade company and others, and subsequently took over the entire property, good will, and business of the old concern at Bemidji, which, though not dissolved, ceased to do business at that place. The trade company was at this time indebted to the Merchants National Bank of Crookston, of which defendant herein was cashier, in the sum of about $2,000.
Prior to and during the proceedings for the reorganization, negotiations were had between the officers of the corporation and defendant Stephens, representing his bank, for a loan of money to enable the new concern to complete the construction of a cold storage plant which the trade company had commenced, but had not completed. After the organization of the produce company, the secretary thereof, after so negotiating with Stephens, reported to the board of directors, at a meeting held on March 9, 1907, that Stephens, for the bank, would advance to the new concern money to complete its plant, on condition and consideration that the produce company convey to him certain real property received by it from the trade company, upon which was situated the cold storage plant referred to, as security for the repayment of advances to be made and also the payment of the $2,000 indebtedness of the trade company.
That the proposition was then submitted to the board of directors there is no substantial controversy. That it was at that meeting accepted by the board two members of the board affirmatively declared. The third member, who was called as a witness, said that the matter was discussed, but he had no recollection of an acceptance being made at that time. The court was justified in finding that soon after this meeting Stephens was informed of this acceptance; and, while the evidence is not as clear as might be desired, it sufficiently appears that he was so informed prior to March 23, 1907.
On that date there was another meeting of the directors of the produce company, at which the following resolutions were adopted:
But the resolutions, which were recorded in the minutes of the meeting, were never called to the attention of Stephens or the bank, and there is no evidence that Stephens knew anything about them. But the evidence does show -- at least tends to show -- that the transaction was completed, the property deeded to Stephens, and the money advanced by the bank, upon the basis of the proposition which was accepted at the March ninth meeting of the board of directors. The secretary of the produce company, who was also its general manager, and who, acting for the corporation, closed the transaction, Stephens, and MacGregor, who as the then cashier of the bank accepted the deed, all so testified. The bank thereafter advanced from time to time $5,000 to the produce company, and the same has been repaid in...
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