Steiner v. Steiner Land & Lumber Co.

• Decision Date: 15 August 1898
• Citation: 26 So. 494,120 Ala. 128
• Court: Alabama Supreme Court
• Parties: STEINER ET AL. v. STEINER LAND & LUMBER CO.

26 So. 494

120 Ala. 128

STEINER ET AL. v. STEINER LAND & LUMBER CO.

Supreme Court of Alabama

August 15, 1898

Appeal from chancery court, Butler county; Jere N. Williams Chancellor.

Action by the Steiner Land & Lumber Company against Steiner & Lobman for cancellation of certain conveyances of real estate. On the final submission of the cause upon the pleadings and proof, the chancellor rendered a decree granting the relief prayed for, and ordering that the deeds executed by the Steiner Land & Lumber Company, by J. M. Steiner, president to the defendants, be set aside and annulled. From this decree the defendants appeal, and assign the rendition thereof as error. Affirmed.

Thos H. Watts, for appellants.

J. C. Richardson, C. E. Hamilton, and Lane & Crenshaw, for appellee.

BRICKELL C.J.

The bill of complaint in this cause was filed by the Steiner Land & Lumber Company, and sought to have set aside and canceled a deed alleged to have been executed in the name of the corporation by J. M. Steiner, its president, without authority and without consideration, by which several thousand acres of land were attempted to be conveyed to Steiner & Lobman, the defendants. Joseph Steiner died in January, 1889, leaving a will by which, after making provision for his widow and several special bequests, he devised and bequeathed the remainder of his property, consisting of many thousand acres of land and much personal property, to his eight children, J. M. Steiner, S. J. Steiner, R. E. Steiner, J. T. Steiner, Bernard Steiner, J. H. Steiner, Estelle Steiner (now Mrs. Otts), and Mrs. M. C. McGehee. At the time of his death he was a member of the firms of Joseph Steiner & Sons, J. M. Steiner & Co., and Steiner Bros. & Co., and by the terms of his will he directed that the several partnerships should be continued after his death for a period not exceeding three years. The personal property of his estate, at the time of his death, was sufficient to pay all his debts, and in June, 1893, all his children, together with the firms of Steiner Bros. & Co. and Joseph Steiner & Sons, which were then composed of J. M. Steiner, S. J. Steiner, R. E. Steiner, and J. T. Steiner, organized the Steiner Land & Lumber Company, the complainant, with a capital stock of $192,800, all of which was subscribed for and taken by the above-named children and co-partnerships, who paid for the same by conveying to the corporation their respective interests in the land which had been devised by said will. On June 8, 1893, in a suit in the federal court at Montgomery, wherein Eppinger & Russell were plaintiffs and J. M. Steiner, S. J. Steiner, R. E. Steiner, and J. T. Steiner, as executors of the state of the said Joseph Steiner, deceased, were defendants, a judgment was rendered in favor of Eppinger & Russell for the sum of $5,984.83, and, upon an appeal to the circuit court of appeals at New Orleans, Louis Steiner and Nathan Lobman, composing the firm of Steiner & Lobman, became sureties on the appeal bond. The judgment having been affirmed, judgment was rendered against said sureties and principals, which judgment, with interest, amounting to $6,091.05, the said Steiner & Lobman paid on May 15, 1894, taking an assignment of the judgment to themselves. In the summer of 1893, after the organization of the Steiner Land & Lumber Company, and more than three years after the death of Joseph Steiner, the firm of Joseph Steiner & Sons became indebted to the Bradley Fertilizer Company in the sum of $10,000, for which it gave two notes, of $5,000 each,-one indorsed by Steiner Bros. & Co., Steiner & Lobman, and R. E. Steiner, and the other signed by Steiner Bros. & Co., and indorsed by Joseph Steiner & Sons, J. M. Steiner & Co., Steiner & Lobman, and R. E. Steiner. These notes were subsequently paid by Steiner & Lobman, but, before they were paid, in May, 1894, Joseph Steiner & Sons gave to Steiner & Lobman two notes, for $5,000 each,-one dated back to December 18, 1893, and the other dated February 3, 1894, and payable, respectively, December 1, 1894, and January 1, 1895,-and Steiner Bros. & Co. gave them their note for $899.31, dated April 23, 1894, and payable October 16, 1894. The first two of these notes were given to secure Steiner & Lobman against liability on their indorsement of the Bradley Fertilizer Company notes, and the third was given in settlement of an indebtedness for goods sold by Steiner & Lobman to Steiner Bros. & Co., but at what date this indebtedness was incurred is not shown. Each of these three notes was indorsed: "We guaranty and indorse the within notes till paid. The Steiner Land & Lumber Co., by J. M. Steiner, Prest." On or before November 5, 1894, before these notes became due, Steiner & Lobman agreed with J. M. Steiner, president of the Steiner Land & Lumber Company, to accept, at an agreed valuation, a certain number of acres of land, particularly described, belonging to said corporation, in full payment and satisfaction of the three notes above described, indorsed by said corporation, and of the Eppinger & Russell judgment, the whole indebtedness amounting to $17,026.97; and on November 5, 1894, the said J. M. Steiner, in the name of the Steiner Land & Lumber Company, executed and delivered to Steiner & Lobman a deed conveying to them the lands agreed to be accepted in payment of said indebtedness. A few days thereafter Steiner & Lobman complained that the land was not worth the amount of said indebtedness, whereupon J. M. Steiner gave them a description of 1,400 acres of additional land, and told them to insert it in the deed, which was done without any re-execution or re-acknowledgment of the deed. Several days later Steiner & Lobman, learning that the deed was invalid as to said additional 1,400 acres, applied to J. M. Steiner for a new deed embracing all the land, including said 1,400 acres, which deed was executed by J. M. Steiner, in the name of the Steiner Land & Lumber Company, on November 23, 1894. Said notes were indorsed and said deeds executed in the name of the corporation, by J. M. Steiner, without the knowledge of the other directors and stockholders; and on November 28, 1894, the directors of the company, still having no knowledge of the indorsements, but having learned of the execution of the deed, repudiated the transaction, and directed the president to institute legal proceedings to have it annulled.

It is now contended that the corporation had no power to indorse these notes, and that J. M. Steiner, as president, had no authority to indorse them, or to execute the deeds in discharge of the liability incurred by the indorsements. The original powers of the Steiner Land & Lumber Company conferred by its charter, in addition to those granted by the general laws, were to manufacture, buy, and sell all kinds of lumber, laths, shingles, and woodenware; to own and operate commissioners; to build, own, and operate steamboats and railroads in connection with and for the purpose of carrying on its business; to build, sell, and lease houses; and to lease its lands. Afterwards a petition to the probate judge was prepared, praying that the charter of the corporation be amended so as to give it additional powers, but this petition was never filed, and the charter was not amended. This petition was signed by J. M. Steiner, S. J. Steiner, R. E. Steiner, Bernard Steiner, J. H. Steiner, Joseph Steiner & Sons, and Steiner Bros. & Co., but was not signed by or for the other stockholders, J. T. Steiner, Mrs. Otts, or Mrs. McGehee. Subsequently, at a meeting of the stockholders of the company, at which were present J. M. Steiner, S. J. Steiner, J. T. Steiner, Bernard Steiner, and J. H. Steiner, held on a date which is not shown, but which was prior to the indorsement of said notes and the execution of said deeds, the substance of this petition was embodied in a resolution, which was adopted as an amendment to the by-laws, by which it was attempted to give to the corporation the following additional powers: "First. To buy and own gristmills, gins, and ginneries, and to conduct the business of same, charging toll therefor; to rent and to receive rent for the use of said gristmills and gins; to buy and sell coal; to own and operate a cotton compress; to buy and sell cattle; to own and operate an orange grove; to deal in wagons, carriages, harness, and buggies; to buy and sell fertilizers; to own stock in, or to own entirely, a plant for making gas and electric light, one or both; to own stock in, or the plant of, a waterworks. Second. To give its note in payment for anything it may do, or to indorse bonds, coupons, or notes for others; to become security or indorsers upon notes, bonds, or mortgages. Third. To sell and dispose...