Vermont Mining & Quarrying Co v. Windham County Bank

The opinion of the court was delivered by PeCK, J. It is objected on the part of the defense that the court of chancery improperly allowed the amendment. As the three orators let in by the amendment own the whole stock of the Vermont Mining and Quarrying company, and as they paid the whole consideration to Kendall for the premises in question, which he conveyed to the corporation, and took the whole stock of the corporation, the order permitting the amendment is but allowing these stockholders to prosecute the same right in their own names, which they commenced to prosecute in the name of the supposed corporation, the court of chancery having failed to find such an organization as to enable the suit to be maintained in the corporate name. It is not a prosecution of a new ■ and distinct right, but the same right under a different name, and in the name of the persons who have all the equitable or beneficial interest, whether the corporation has a technical existence or not. It was within the power of the court of chancery to allow the amendment, in its discretion; and in the view that court took of the evidence as to the organization of the complainant corporation, that discretion was properly exercised. It is insisted here, as in the court of chancery, on the part of the defense, that the proof does not show an organization of the Vermont Mining and Quarrying Company. The act of incorporation in evidence creates certain persons by name, their associates and successors, a corporation by the name of the Vermont Mining and Quarrying company, with power, <&c. This is sufficient to enable the corporation to'take a grant so as to vest in it the title. A corporation may have such an existence by the force of the act of the legislature creating it, as to give it a capacity to take a grant, before it has such an organization and appointment of officers as to enable it to enter upon the transaction of its general business. But we think, in addition to such capacity by the char [498] ter as enabled it to take the title to the premises by the conveyance from Kendall, the proof shows an organization of the corporation, an existing organization that it has not lost. It organized, chose officers, a majority of directors living in this State, a clerk residing in this State, &c., &c., and paid taxes on the premises in question. Even if in consequence of the stock being substantially all owned by three persons, they did not practice having formal votes of directors acting as a board, and continue to re-elect their officers, but proceeded informally, they did not cease to be a corporation defacto, nor thereby lose their right to the premises, upon the facts proved in the case. But whether the equitable interest is in the corporation, or in the three individual orators who own all the stock, is immaterial as to the merits of the case as between the orators and the defendants. These three stockholders paid the $7,200 to Kendall for the premises, and for it took a conveyance of the premises to the corporation, and took certificates of the stock of the corporation. They are the equitable owners, either as' equitable beneficiaries by way of a resulting trust, or as stockholders in the corporation. It is also insisted by the defendants’ counsel, that the amendment so changes the record that the evidence taken and filed before the amendment cannot be read on the hearing. Whether evidence filed before new parties are added by amendment, can bo read on hearing after such amendment, depends on the circumstances of the case and the issues involved. In this case the issues were substantially the same after the amendment as before, and no new defendants were introduced by the amendment to be affected by testimony taken when they had no opportunity to be present and participate in the examination of the witnesses. All the defendants had this opportunity, and no reason appears to justify excluding the evidence. It does not appear that any objection was made to the testimony in the court of chancery, but on the contrary it is conceded that it was there read without objection, and it is too late to object to it in this court. It is cleai’ly shown that the bank had notice of the deed from Kendall to the plaintiff corporation, before the attachment of the premises by the bank. Notice to Keyes, who made the deed, and [499] wbo saw the record of it in the town cleric’s office, and as at-' torney for the bank there examined it, with a view to bringing a suit for the bank and attaching the land, and levying upon it as the property of Kendall, is sufficient notice to the bank. So is the notice to Waite, proved in the case, he being cashier of the bank, and acting for the bank in procuring the attachment to be made, and receiving the notice while acting in that business. It also appears from the deposition of Burrows, that he was a director of the defendant bank at the time the bank attached the premises and made the levy, and that before the attachment by the bank, and while he was director, he had notice of the conveyance by Kendall, and that Kendall had received the price of the land. Actual notice to the bank of such defective deed, (although defective in having but one witness,) was notice of whatever right the grantee might have to a perfect deed 'from Kendall. Such defective deed is evidence of an agreement to execute a valid deed ; and the proof shows that Kendall was under obligation to the grantee to perfect that deed, and a court of chancery would compel him to do so. Hence the bank, by its attachment and levy, stands in no better condition in respect to title than Kendall did, and is under the same obligation to convey the title and interest acquired by its levy, that rested on Kendall before that levy was made. It is urged that the bank had no notice at the time of its attachment or levy, that Brown, Clark and G-ladding, or either of them, owned any stock in the plaintiff corporation, or that they had any interest in the premises, either as stockholders or otherwise. But it is immaterial whether the bank had any such notice or not. It had notice of the deed on record from Kendall to the Vermont Mining and Quarrying Company, and that is sufficient. It is immaterial whether they knew who the stockholders were or not. It is claimed by the counsel on the part of the orators, that as the bank is a levying creditor in virtue of an antecedent debt, and not a purchaser advancing the consideration at the time of the purchase, upon the faith of a good title, the bank would have acquired no title as against the orators, even had the attachment and levy been made without notice to the bank, of the deed to the [500] orators. As we find notice to the bank proved, we have no occasion to express an opinion on this point. It is claimed by the defendants’ counsel, that if the orators have an equity paramount to that of the bank, the bank have a right to redeem. We see no ground on which any such right can rest. The deed executed by Kendall to the orator corporation was not a mortgage ; it was not executed to secure a debt; it was an absolute sale. Kendall therefore had no right to redeem, and we have already seen that the bank acquired by its levy no greater rights than Kendall had after he executed the deed to the Vermont Mining and Quarrying company. The bank has no more right to redeem than it would have, had the deed from Kendall been perfect in its execution. The decree of the court of chancery is reversed, and case remanded to that court with mandate to decree for orators according to the prayer of the bill, with costs.