Opinion
Gen. No. 36,069.
Opinion filed November 14, 1932.
1. CORPORATIONS — when bill of sale executed by president and not by directors binding. The provision of the charter of a foreign corporation, formed for the purpose of purchasing, dealing in, and selling works of art, including paintings, etc., to the effect that, in furtherance and not in limitation of the powers conferred by statute and of the other provisions of the certificate of incorporation, the corporation's board of directors should have authority to sell or otherwise dispose of from time to time a part or parts of the properties, assets, and effects of the corporation, less than the whole or less than substantially the whole thereof, on such terms and conditions as they deemed advisable, without the assent of the stockholders, except as otherwise required by law, only restricted the sale of the whole or substantially the whole of the corporation's property without the consent of the stockholders, and did not apply to retail sales, so as to invalidate a bill of sale of paintings, not conveying either all or nearly all of the corporation's property, although such bill of sale was executed by the corporation only by its president and not by its board of directors.
2. CORPORATIONS — when contract executed by president presumed to have been executed with authority of corporation. A contract pertaining to corporate affairs within the general powers of the corporation, executed by the president of the corporation on the corporation's behalf, will be presumed to have been executed by authority of the corporation.
3. REPLEVIN — when bill of sale makes out prima facie case for plaintiff. In a suit in replevin brought against a public warehouse company to recover possession of certain oil paintings which had been stored with defendant by the intervenor, a foreign corporation dealing in works of art, the fact of the delivery of a bill of sale of the paintings, which bill of sale was executed to plaintiff by the intervenor by its president, standing alone, made out a prima facie case in favor of plaintiff.
4. REPLEVIN — when plaintiff estopped to object to intervention. Where plaintiff in replevin filed an answer to a petition in intervention and did not move to strike such petition until after the evidence on the issue had been heard, and the court had jurisdiction of the subject matter, plaintiff was estopped to claim that intervention in replevin was not permissible.
5. REPLEVIN — when intervention allowed. The statutes of this State are silent on the subject of the right of intervention in replevin, nor, as far as is made to appear, are there any judicial decisions in this State concerning the matter, but it seems that, generally, it is recognized that a third person claiming the property involved in a replevin suit has a right to intervene therein.
6. APPEAL AND ERROR — when judgment reversed and cause remanded. Although, on an appeal by plaintiff in a suit in replevin from a judgment for the corporation intervening in such suit, it was held that the trial court erred in its ruling, which was the basis of its judgment, that the intervenor's bill of sale to plaintiff of the property involved was invalid by reason of a provision in the intervenor's charter, the reversal of the judgment would be with, and not without, a remand, where, in many respects, the case was a blind one as to the merits and the record suggested many things which needed explaining.
Appeal by plaintiff from the Municipal Court of Chicago; the Hon. HOWARD W. HAYES, Judge, presiding. Heard in the first division of this court for the first district at the June term, 1932. Reversed and remanded. Opinion filed November 14, 1932.
CHARLES H. CHAPMAN, for appellant.
ROY D. KEEHN and HARRY H. POLLACK, for appellee.
Plaintiff appeals from an adverse judgment in a replevin suit tried by the court in which right to the property was found in the intervenor. The replevin writ alleged that the defendant storage company wrongfully detained from plaintiff 30 oil paintings. Defendant answered that it was a licensed public warehouse; that J. Leger Son Company had placed in storage with it 100 oil paintings and other goods and chattels; that it had been served with summons in four separate attachment suits and also by a distress warrant issued against J. Leger Son, directed against the goods and chattels aforesaid.
J. Leger Son, a corporation organized under the laws of New York, filed an intervening petition asserting that the pictures placed in storage and claimed by plaintiff were its property and that plaintiff had no right to them. Plaintiff filed an answer controverting these allegations of the petitioner and the issues were submitted to the court upon these pleadings.
The plaintiff sought to establish his right to the pictures by a bill of sale to him purporting to be executed by J. Leger Son, Inc., by Sidney Leger, its president. The trial court was of the opinion that the bill of sale was not executed in conformity with the requirements of the charter of the intervening corporation and held it void. Leger Son introduced in evidence a receipt from defendant, the storage company, showing that it had received for storage from Leger Son 100 pictures with other chattels, which included the identical pictures sought in the replevin suit. Consequently the court entered judgment, based upon the asserted invalidity of the sale, in favor of the intervenor.
The trial court correctly found that Mr. Sidney Leger was president of J. Leger Son, Inc. The bill of sale recites that, pursuant to certain conditions and agreements, J. Leger Son, Inc., sold and transferred to the plaintiff the 30 pictures in controversy. J. Leger Son vouched themselves to be the true and lawful owners of the pictures, with lawful authority to dispose of the same. It was dated January 5, 1931, and signed "J. Leger Son, Inc., by Sidney Leger, its president."
The charter of J. Leger Son stated that its purpose was to purchase, sell, dispose of and deal in works of art, including antiques, paintings and prints; to do business outside of the State of New York, but the office to be located in that city and State; that any contract, transaction or act of the corporation "or officers of the corporation" which shall be ratified by certain stockholders shall be valid and binding as though ratified by all stockholders, "but the foregoing shall not limit or prejudice the validity or binding force of any contract, transaction or act not so approved." The particular words of the charter which it was thought prohibited the sale of the pictures by the president are these:
"In furtherance and not in limitation of the powers conferred by the Statute and of the other provisions of this Certificate of Incorporation, the Board of Directors is expressly authorized:
"(a) To sell, exchange, assign, convey or otherwise dispose of, from time to time, a part or parts of the properties, assets and effects of the corporation, less than the whole or less than substantially the whole thereof, on such terms and conditions as they shall deem advisable, without the assent of the stockholders, except as otherwise required by law."
This was construed to mean that all sales of any of the chattels of the corporation must be made by the board of directors only. We cannot accept this construction. To hold that every retail sale, no matter how small, must be made by the board of directors would make it almost impossible for the corporation to carry on its business of selling paintings, antiques, prints, works of art, etc. We hold that the language of this section is designed only to restrict the sale of the whole or substantially the whole of the corporation's property without the consent of the stockholders, and does not apply to retail sales. This is a reasonable construction and is consistent with the purposes of the business of the corporation. A contract pertaining to corporate affairs within the general powers of such corporation, executed by the president on behalf of the corporation, would be presumed to be by authority of the corporation. Green v. Ashland Sixty-third State Bank, 346 Ill. 174; Bloom v. Vehon Co., 341 Ill. 200; Quigley v. Macqueen Co., 321. Ill. 124; Lloyd Co. v. Matthews, 223 Ill. 477; Nagle v. Hanson Co., 262 Ill. App. 160.
It was sufficiently proven that the bill of sale to plaintiff did not convey all or nearly all of the company's property. The warehouse receipt showed the storage of 100 oil paintings with other chattels. Six months after the bill of sale the intervenor was still conducting its business in New York City. We therefore conclude that the section of the charter invoked by the intervenor does not apply and that the delivery of the bill of sale, standing alone, made out a prima facie case in favor of the plaintiff.
Plaintiff's counsel suggests in his argument, although the point is not made in the brief, that J. Leger Son, Inc., had no right to intervene, on the ground that intervention in a replevin suit was unknown at common law and is purely of statutory origin, and that plaintiff's motion to strike its petition from the files should have been allowed.
Plaintiff filed his answer to the intervenor's petition and no motion was made to strike the petition until after the evidence upon the issue had been heard. The court had jurisdiction of the subject matter, and, as we have said under similar circumstances, plaintiff was estopped to assert that the proceedings were invalid. Hall Printing Co. v. Wells Warehouse Forwarding Co., 241 Ill. App. 146. The statutes of Illinois are silent on the right to intervene in replevin, and so far as we are advised there are no decisions in this State on this point. In 23 R. C. L. 925, it is stated that the right of a third party claiming the property to intervene in a replevin suit is generally admitted. See also Stieff v. Bailey, 27 Del. 508, 89 A. 366; Inventions Corp. v. Slease, 159 N.Y. S. 548.
We are asked to reverse without remanding. This is in many respects a blind case as to the merits. The record suggests many things which need explaining. The attorney for the intervenor stated at the opening of the trial that he proposed to show "that one of the rankest frauds ever perpetrated" had been imposed upon the intervenor and its president. The case went off upon the ruling of the trial court as to the validity of the bill of sale before the intervenor's attorney was called upon to prove his charges. All of the material facts should be presented upon the second trial.
The judgment is reversed and the cause is remanded for further proceedings consistent with what has been said in this opinion.
Reversed and remanded.
MATCHETT and O'CONNOR, JJ., concur.