Jordan & Co. v. Collins & Co.

HEAD, J. This is a statutory claim suit interposed by B. L. Jordan & Co., by which they claim title to certain goods levied on under attachment at the suit of O. S. Collins & Co. against Jordan Grocery Company. The goods had belonged to Jordan Grocery Company, but claimants claimed tohave purchased them on Oct. 31st, 1892, prior to the levy of the attachment, in December, 1892. The validity of Ihe alleged sale is attacked by the plaintiffs on two grounds : 1st, That there was no corporate authority from Jordan Grocery Company to the president to make the sale to the claimants and, 2d, That the 'sale was made with intent to hinder, delay or defraud the creditors of the Jordan Grocery Company. As to the first objection, the undisputed evidence shows that the only directors and stockholders of the selling company were Leo Jordan, L. Jordan and A. Jordan, Lee Jordan being president, and this sale being made by him as such; and that before the sale was made these parties agreed that it should be made, though the agreement was not at aregular directors’meeting. We think this was sufficient authority. The shareholders constitute the corporate association. — Morawetz on Corp., 227. No question of public policy, or statutory mandate intervening, the corporation, that is, all,its shareholders, may-even agree to, and render binding, acts of officers and agents which are ultra vires — acts without the charter powers ; and such acts when done without authority may be ratified and validated by the shareholders, and such ratification may be by silent acquiescence on their part. Morawetz, §§ 618 to 635. But such ratification cannot .impair intervening rights of others. § 620. Hence the ratification, in this case, made after the levy of the at [577] tachment can not avail claimants anything. — Norton v. Alabama Nat. Bank, 102 Ala. 420. The prior agreement, however, of all the stockholders is available. The undisputed evidence shows that the sale was made to the parties and on the terms, as so authorized by all the directors and stockholders, on the 31st day of Oct., 1892. See the uncontroverted testimony of Lee Jordan and B. L. Jordan. The question whether the sale was fraudulent as to creditors, was, under the evidence, clearly one for the jury, hence the general charge requested by the claimants was^ properly refused. The 5th charge requested by the claimants goes too far, as an instruction, in defining the degree of participation in the fraud, by the buyer, essential to invalidate the sale. It asserts in strong terms that the buyer must have participated in the fraud for the purpose of defrauding plaintiff and other creditors. The law is that if the seller intended fraud, and the buyer knew, or ought to have known, of such intent, the sale will be avoided, although the latter had no desire or purpose whatever to defraud the former’s creditors ; and the charge is wrong, also, in asserting that there must have been a purpose to defraud plaintiff. If-there was a general intent to defraud creditors, or a particular intent to defraud any particular creditor, plaintiff may avail himself of it, though he might not have been a creditor at the time of the sale. Upon this latter principle charge 6 was also properly refused . We are of opinion charge 7 ought to have been given. If the claimants showed they paid a valuable consideration for the goods, then the burden of proof was on the plaintiff to prove the alleged fraud ; and, we think, the elements of fraud essential to avoid the sale are fairly stated in the charge. The 2d, 3d, and 8th charges are bad for reasons too obvious to require discussion. The practicability of proving, at the time of the interposition of the claim, the then separate values of the different articles levied on, had no pertinency whatever to any issue involved in the trial. Tho 4th charge is a mere argument and was properly refused. The 9th charge is too clearly erroneous to justify .comment. [578] The charge given at the request of the plaintiffs is clearly correct. The'failure of the jury to assess the value of the several articles, separately, is not ground for a motion in arrest of judgment.- The statute requires this to be done only when practicable, and the record failing to show it was done, it will be presumed, on motion in arrest of judgment, that it was not practicable. For the error in refusing charge No. 7, the judgment is reversed and the cause remanded. Reversed and remanded.