Wood Hydraulic Hose Mining Co. v. King

McCay, Judge. 1. We recognize fully the doctrine that a corporation, as such, does not exist out of the jurisdiction which charters it: 1 Blatch. R., 628; 13 Pet. R., 588; 1 Black. U. S. R., 286. But, while this is true, nothing is now better settled than that a corporation may, by its agents, make contracts, sue and be sued, out of that jurisdiction which gave it birth. This State is full of agents, doing business for corporations of other States, and even for corporations of foreign States; and the authorities are now uniform that an agent of a corporation may exercise its powers out of the State incorporating it, provided there be nothing in the charter or in the [41] nature of its powers contravening it: 13 Pet. R., 588; 34 N. Y. R., 208. If one agent may thus act, there would seem to be no sensible reason why a board of agents may not do so. As the directors are only agents, the principle is broad enough to include them : See 35 Missouri R. 26; 27 Maine R. 509. The evidence is conclusive, that this corpotion was chartered by this State, and that it went into operation under the charter. Indeed, the fact that the president of the company appears and pleads to this declaration, admits the organization. Admitting that a stockholders’ meeting could not be held out of the State, we must presume that the directors were chosen according to law, to-wit, in this State. The evidence is that several of them have been acting since 1861, and there is nothing in any of the pleas, or the evidence, showing (nor was it insisted on before the Court below) that the directors were not legally chosen "We hold, therefore, that the records of the compauy, showing the acts of the directors, was good evidence to bind the company. 2. It is not necessary that the charter of a company should specify the powers granted to it, except so far as to specify the purposes of the company, and to define its franchises. Unless restrained by the charter, the grant of corporate powers carries with it the powers necessary to carry the franchise into effect. The power to contract — to incur debts, etc. — would seem to be incident to every corporation, unless the charter provides to the contrary: 5 Barbour R., 9; 25 Indiana R., 536; 1 Barb. R., 584. It would be impossible for this company to use its franchise without making contracts; and, without doubt, it may make any contract', within the scope of the object of the franchise. 3. The general rule is, that the directors of a corporation may do any act within the powers of the company, unless-restrained by the by-laws, or by the special votes of the stockholders, at their meetings: Angel & Ames on Cor.,, section 231; and there is nothing in any of the by-laws,, [42] offered in evidence, to limit the power of the directors. We are, therefore, of the opinion that the directors might lawfully authorize the treasurer to borrow money and to contract debts for the purposes of the charter. 4. But we are of the opinion that if a corporation accept the services of another, and actually receive and use monies advanced by him, it cannot set up want of authority in its charter to make the contract. It would be outrageously unjust to permit a corporation to thus practice a fraud upon one dealing with it. If a corporation undertake to exercise a franchise not granted by its charter, there is strong authority for holding the act void and permitting even the corporation to repudiate it. Since, as it is said, the act is illegal, contrary to public policy. But where the objection is not that the corporation has undertaken to exercise a franchise not granted to it, but that its officers or agents have exceeded, not the powers of the corporation, but their own powers as agents, a different rule obtains. In such cases they stand like other principals employing agents, and if they knowingly receive the fruits of the excessive exercise of authority by their agents, they are held to have ratified the act. The proof here is abundant that Mr. King advanced the money and gave his services under his undertaking with and by the consent of the directors, and the proof is equally strong that the company has received and used both his services and his money. 5. We see no illegality in allowing the credit to Mr. King of the extra interest he had to pay to raise the money. He was acting under the orders and by the consent of the directors, and the facts of the case show that this extra interest is riot a charge for the use of Mr. King’s money, but a mere return to him of money paid out by him for the use of the company. This account was audited by a committee, these items recognized, and we see no reason to disturb the account stated and agreed upon by both parties. 6. Without doubt there is a conflict in the evidence, and we are not prepared to say that the evidence does not pre [43] ponderate somewhat in favor of the company, on at least two of the issues made in this case, to-wit: whether the $1,500 was an advance by way of loan, or whether it was in part payment of stock, to be taken by Mr. King; and, second,, whether Mr. King did not specifically damage the company by failing to put the stock upon the market. But as there was evidence on both sides upon these issues, we are not disposed to disturb the verdict, sustained as it is by the refusal of the Judge who tried the ease to grant a new trial. We think the jury might well have felt themselves justified in considering the report of the auditing committee as settling these questions in favor of Mr. King, and the evidence of the present president of the company is an admission of the truth of Mr. King’s claim as it stands. We do not, therefore, think this is such a case as demands our interference. It requires a very strong case to justify this Court to overturn the verdict of a jury with the judgment of the Court sustaining, in a question of evidence. Judgment affirmed.