Davidson v. Cannabis Manufacturing Co. — 99 N.Y.S. 1018

Majority

p. 1018

DAVIDSON v. CANNABIS MFG. CO.

(Supreme Court, Appellate Division, Second Department.

June 15, 1906.)

Headnote

1. Specific Performance—Corporations—Contracts—Sale op Real Estate.

Where a corporation whose business was that of holding and selling real estate contracted for the sale of land to plaintiff, which contract was in the name of the corporation, signed by its president and secretary in their

p. 1019

official capacities, and sealed with the corporate seal, the transaction being practically identical with ail other transactions of the corporation, which were either approved or not disturbed by the directors during several years, such president and secretary being held out to the public as authorized to transact the business of the corporation, and the $1,000 paid on the contract by plaintiff being accepted and retained by the treasurer or assistant treasurer of the corporation for more than one month, plaintiff was entitled to specific performance of the contract.

2. Same—Judicial Discretion.

Specific performance is a matter resting in sound judicial discretion.

[Ed. Note.—For cases in point, see vol. 44, Cent. Dig. Specific Performance, §§ 17, 18.]

Appeal from Special Term, Kings County.

Action by David Davidson against the Cannabis Manufacturing Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

Argued before HIRSCHBERG, P. J.,and WOODWARD, JENKS, RICH, and GAYNOR, JJ.

Hector M. Hitchings, for appellant.

Benjamin F. Feiner (Louis Salant, on the brief), for respondent

It appears that the defendant corporation is organized under the law of New Jersey ostensibly as a manufacturing or business corporation, but that practically its only business has been that of holding and selling real estate. It also appears that substantially all of the stock of this corporation is owned by another corporation, the president of the two corporations being the same individual at the time the contract in suit was made. This is of no material bearing, except as bearing upon the theory of the defense, which is that the transaction between the plaintiff and the defendant is void, because of a lack of authority on the part of the president and secretary of the defendant to enter into the contract. This contract was for the sale of certain premises in the borough of Brooklyn, and was made and entered into in the name of the corporation, the contract being signed by the president and secretary in their official capacities, and the same being sealed with the corporate seal; the transaction being practically identical with all other transactions of the corporation, which were either approved or not disturbed by the board of directors during a period of several years.

We have carefully examined the record in the light of the elaborate discussion of counsel, and we are unable to discover any reason why the judgment of the court at Special Term should be disturbed. The plaintiff, so far as the evidence discloses, entered into a contract for the purchase of the premises, dealing with the principal officers of the corporation, who were held out to the public as being authorized to transact the business of the corporation. He paid $1,000 upon such contract, and this payment was accepted and retained by the treasurer or assistant treasurer of .the corporation for more than one month, and when a new board of directors was chosen this $1,000 was tendered to the plaintiff, and the defendant refused to complete the transfer of the property. We know of no rule of law or equity which would permit a corporation thus entering into a contract within the scope of its apparent and conceded powers to repudiate such a contract, and while

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it is true that specific performance is a matter resting in sound judicial discretion, we are convinced that, under the facts as they appear in this case, it would have been a denial of substantial justice to refuse the plaintiff the relief which he demands, and which the judgment grants.

The judgment appealed from should be affirmed, with costs. All concur.