Ebaugh v. Eastern B. & L. Ass'n

The opinion of the Court was delivered by Mr. Justice Gary. The facts of this case are fully set forth in the report of the master and decree of the Circuit Judge, which will be incorporated in the report of the case. Contracts similar to that which gave rise to the action herein have recently been construed by this Court in the cases of Williamson v. Eastern B. & L. Assn., 54 S. C., 582, and Welling v. Eastern B. & L. Assn., 56 S. C., 280. See, also, cases cited in the notes to Williamson v. Eastern B. & L. Assn., reported in 71 Am. St. Rep., 822. The appellant contends that the contract must be construed with reference to the laws of New York, and attempts to differentiate this case from those just mentioned, on the ground that the answer alleges, and the testimony establishes, the fact, that under the laws of that State, the by-laws of the association, and not its express agreement, must prevail in the interpretation of the contract between the parties. Both the master and Circuit Judge found as matter of fact that the laws of *88 New York did not forbid the defendant from entering into an agreement by which the shares of stock would mature in a definite time. In his report, the master says: “The question as to whether this promise was in excess of the charter powers, was not expressly decided by the Supreme Court, but that Court did decide that even though it were in excess of its charter powers (in the language of B. B. R. R. Co. v. McDonald, 60 Am. St. Rep., 172), ‘The general rule is that where a private corporation has entered into a contract, not immoral in itself and not forbidden by any statute, and it has been in good faith performed by the other party, the corporation will not be heard on a plea of ultra vires/ This proposition is fully sustained by the decisions of New York. The plaintiff introduced in evidence the following decisions of that Court: Whitney Arms Co. v. Barlow, 63 N. Y., 62; DeGrand v. American Linen Thread Co., 21 N. Y., 124; Diamond Match Co. v. Roeber, 106 N. Y., 473. This constituted the only evidence before me as to what was the law of New York touching this point. I find as'a matter of fact that the law of New York is that where a corporation enters into a contract, that is in excess of its charter powers, or is unauthorized by law, it will, nevertheless, be bound to perform its agreement as contained in the contract, if it suffers the other party to perform his agreement and receives the benefits and retains them. This being the law of New York, it is conclusive of the case at issue.” The report of the master was confirmed in all respects by the Circuit Judge. As this is an action at law, the foregoing findings of fact are not subject to review but are conclusive on this Court. As the laws of New York are not in conflict with the construction which this Court has placed upon contracts similar to that upon which the action herein is founded, we fail to discover any facts causing us to differentiate this case from those hereinbefore mentioned. It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.