Plant v. Macon Oil & Ice Co.
| Decision Date | 23 March 1898 |
| Citation | 30 S.E. 567,103 Ga. 666 |
| Parties | PLANT et al. v. MACON OIL & ICE CO. et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
A private corporation has the power to temporarily rent its property to individuals for the purpose of raising money necessary to pay a pressing indebtedness, which could not be otherwise met, when it appears that such a temporary disposition of its property is necessary for its protection was entered into in good faith, and was to the interest of all the stockholders; and when it further appears that there was no purpose of the corporation to abandon its franchises or corporate powers, but, on the contrary, its manager, under the contract of rental, was to remain in charge of the property, and look after the interest of the corporation during the term of the tenancy.
Error from superior court, Bibb county; W. H. Felton, Jr., Judge.
Petition by R. H. Plant and another against the Macon Oil & Ice Company and others for an injunction. Judgment for defendants, and plaintiffs bring error. Affirmed.
Dessau Bartlett & Ellis, for plaintiffs in error.
Estes & Jones, for defendants in error.
This was a petition filed by R. H. Plant and W. E. McCaw, as minority stockholders of the Macon Oil & Ice Company, a corporation, against that company, E. N. Jelks, R. J. Taylor, and the Southern Phosphate Works, for an injunction to prevent the corporation from making or carrying into effect a lease of its property and franchises, which petitioners contended was ultra vires.
The petition alleged, in substance: That the Macon Oil & Ice Company was about to consummate a lease of all its property powers, and franchises, whereby the control of same would pass completely from it, and be lodged in some other person or corporation. That this intended lease was beyond the charter powers of the corporation. That under the charter it has the power to manufacture and sell oil of cotton seed, and all other materials, to manufacture and sell ice, to conduct a refrigerator and cold-storage business, and to manufacture and sell guano and fertilizers; but that it has no power to lease or dispose of its corporate rights, powers, franchises, or property, as it was about to do. That this contemplated action was a fraud upon the rights of petitioners and all other stockholders of the corporation. It further appeared from the petition that the contemplated lease, if consummated, would be the result of the action of the majority, if not all, of the board of directors of the corporation, and would be in accordance with the wishes of those owning a majority of its stock. There were other allegations in the petition charging fraudulent management of the affairs of the corporation by those in control of the same, but it is unnecessary to set forth these allegations in detail, as there was no testimony to support them; and the injunction prayed for was not insisted upon, except on the ground that the contemplated lease by the company was in the exercise of a power not conferred by the charter, and was, therefore, void. Attached to the petition was a copy of the order of the court incorporating the Macon Oil & Ice Company, and the application therefor. The charter provided that the corporation be authorized "to carry on in its corporate name the manufacture and sale of oils of any and all kinds, from cotton seed and all other materials, and to sell the same in any quantity, either at wholesale or retail, in any and all markets and places; and to manufacture ice, and sell the same, in any quantities, to consumers, in any market or place; to establish and conduct the refrigerating and cold-storage business in all its branches, with the right to take in storage, and charge therefor, such goods, wares, and merchandise as may be offered; to rent out space and privileges therefor, and to furnish cold storage and refrigeration, either at their place of business or elsewhere, and to charge therefor; to manufacture and sell guano and fertilizers from any and all materials suitable for the purpose, in any quantities; to establish agencies and appoint agents, and to establish a branch or branches of any of its said business in any and all places for the sale and disposition of any of the above-named products, as they may deem best for the interest of said corporation; to acquire, by purchase or otherwise, and to sell, such real estate, personal property, and patent rights, and at such places, as may be deemed necessary to the successful conduct of its said business in all its branches; to sue and be sued; to contract and be contracted with in its corporate name; to have and use a common seal; to adopt such constitution, by-laws, etc., as may be deemed necessary and proper for the conduct of the said business; to elect such officers as it may deem necessary, and prescribe their powers, duties, and terms of office, with power to hold meetings of the board of directors of said corporation, either within or without this state, as may be determined by said board of directors; and to have all the rights, powers, and privileges accorded to like corporations by law, as may be necessary in its operations, not inconsistent with law, and usually incident to such corporations." The Macon Oil & Ice Company answered, denying the material allegations of the petition, and alleging that the truth of the transaction complained of was as follows: The officers and agents of the company had rented to E. N. Jelks and R. J. Taylor, and not to the Southern Phosphate Works, for the term of one year, beginning October 1, 1897, the property of the company, for $2,500, payable quarterly in advance in four payments of $625 each; and, in addition to this rental, the tenants were to pay all taxes on the property for the year 1898, and the ground rent due by the company to the Central Railroad, amounting to $131.86 per quarter, and were to return the property at the end of the year in the same condition as when received, usual wear and tear excepted, giving bond for the faithful performance of the contract; that the above was the entire transaction, and had been consummated between the parties before the filing of the suit. The application and order incorporating the Macon Oil & Ice Company on the hearing was introduced in evidence by the plaintiffs; also its constitution and bylaws, from which it appeared that the board of directors had supervision of all the affairs of the company. Plaintiffs further proved that the property which the defendant company claimed to have leased was all of its property; also proved that they were stockholders in the company,--one to the amount of $5,400, and the other to the amount of $5,000. The defendant introduced testimony showing the rental of certain property belonging to the Macon Oil & Ice Company to Messrs. Jelks and Taylor for the space of a year, as alleged in their answer. Also testimony to the effect that at the time of this rental there were sundry claims against the corporation, which had begun to mature; that the manager of the company was continually pressed for their payment, without any ability to satisfy the demands; that among the claims demanding payment was one for ground rent due the Central Railroad, which claim was very vigorously pressed by the attorneys for the road, who threatened to distrain; and that under these circumstances it was absolutely impossible to profitably run the mill, and in consequence of these conditions a temporary rental of the property was made, in...
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