Shaver v. Bear River & Auburn Water & Mining Co.

Terry, C. J., after stating the facts, delivered the opinion of the Court Field, J., concurring. The first question presented is as to the capacity of defendants to enter into the contract. By the law under which they were incorporated, defendants are authorized to purchase and hold “ such real and personal property as may be necessary to enable the company to carry on their operations.” It is contended by respondents that the property in question was not necessary to the operations of defendants, and for this reason the contract was without authority, and void. But upon this point there appears to be no evidence, and the law presumes in favor of the validity of contracts. Besides, it does not follow because an agent purchases property which is not absolutely necessary for the purposes of the company that the latter can, after receiving the property, avoid the payment of the purchase-money. This question arose in the case of Moss v. The Rossio Mining Company, (5 Hill, 137,) Cow-en, Justice, in delivering the opinion of the Court, said: “lam [401] not aware that a corporation, more than another, can purchase and convert an article to its own use, and then object that it acted beyond the statute power. It is itself a sort of agent, and must be the judge as between itself and the vendor whether the article be wanted or not. The vendor can not pronounce on the question. * * * Purchasing a shop for the purpose of keeping goods and carrying on trade is objected to. But is the loss to fall on the grantors of the shop or the vendors of the goods ? The goods to be purchased, for aught Moss and Knapp knew, might be wanted by the workmen of the company in payment for labor, and been even more acceptable than cash.” This authority applies directly to the case before us. It was certainly necessary that defendants should have an office in which to keep the papers and books of the corporation, and which would serve as a place of meeting for the trustees, and it was probably thought advantageous to the defendants to have a place at which the hands employed by them could be boarded. Considerable stress is laid by the respondent, on the fact that the house purchased was a hotel, and it is said “ it was certainly no part of the objects of the corporation to embark in hotel-keeping.” . It is true, the house is called in the conveyance the “ Empire Hotel,” but the description of it in the evidence, as well as the price for which it was sold, raise a strong presumption that it was susceptible of being put to other uses. The authority of Nixon to make the contract, as the agent of the company, we think, sufficiently appears; and if this point were doubtful, the acts of the company amounted to a ratification. Nixon, as agent of the defendants, entered into possession immediately after the purchase; the trustees held their meetings in the house, and nothing is said as to his want of authority till some six weeks afterwards, when, at a meeting held on the premises, the resolution approving the contract was offered and rejected. The entry of this resolution comes in a very questionable shape, and is entitled to but little weight, as it contains erasures and interlineations which materially vary its meaning, and is, at least, a very singular mode of repudiating a contract. It would have been more in accordance with correct notions of propriety and justice, if a resolution refusing to accept the contract had been passed, accompanied by an offer to cancel the deed, which had not been recorded, and return the property of which they were in possession. The arrangement between Mixon and the tenant was void, because the tenant, being a married woman, had no capacity to contract, and any agreement on the part of plaintiff to accept her as purchaser, and. release the company, was void, for want of consideration. The objection to the parol proof of the existence of the debt in [402] tended to be secured by the mortgage, is answered by the decision of, this Court in Bennett v. Solomon, (6 Cal., 134.) There is no doubt that the mortgage itself, being in contravention of law, is void, but it is not perceived that this fact invalidates the debt it was intended to secure. (Sherwood v. Dunbar, 6 Cal., 52.) Our conclusion from the record is, that plaintiff is entitled to recover from the defendants the sum of $2000, with legal interest from the time when the several payments became due under the contracts. Judgment reversed and cause remanded, with directions that the Court below enter a judgment in conformity with this opinion.