Carey-Halliday Lumber Co. v. Cain

Campbell, C. J., delivered the opinion of the court. The court erred in excluding the bill of sale and the proposed testimony of the witness, Gray, and in the general instruction for the plaintiffs. It is a mistake to suppose that a corporation may not speak or act except by a seal, or that agency for it may not be proved as for a natural person, or that authority conferred by a corporation may not be implied as in other cases. Woodworth was the manager of the business of the corporation in this state, its sole representative here, and the person through whom the plaintiffs had become creditors of the corporation for the debt in suit; and, prima fade, he had authority to sell the property of the corporation to pay its debts, as he had authority to contract the debt with the plaintiffs. If the Church Hill Lumber Company owed the appellant, and sold its property to the latter in good faith to pay this debt, there was nothing wrong in the transaction, even if there was an understanding between the agents that the property would be reconveyed when the vendee was fully paid. The testimony of Sullivan amounts to no more than that he learned from Woodworth and Gray that the sale was to pay a debt, and that the buyer did not desire the property, and would part with it when fully paid for its purchase. It seems probable that the transaction was a legitimate one, and full inquiry should be permitted to learn its true nature. If the one owed the other, and a sale was agreed on for the purpose of paying or securing the creditor, the fact that the creditor was willing to reconvey, when paid, or knew there were other creditors, and was anxious to have the transaction for its security or payment consummated before interference by others, does not cause condemnation of the sale. The [634] law requires good faith, but it does not pronounce it bad faith for on'e to look to his own interests, and protect them, requiring only that in doing that he must not do any thing in fraud of other creditors. Reversed, and remanded for a new trial.