the bonds or the deed, and there is no ground, therefore, for holding them void ab initio. On their face they are regular and prima facie valid. That they were voidable at the election of the corporation, or its stockholders, would seem to be clear; but neither the corporation nor the stockholders have complained, and a stranger, like Marchand, can not. There may be authority for holding, that a deed which purports to have been executed by the grantee as agent for the grantor, is absolutely void as to all the world; but where, as in this case, bonds are issued and a mortgage given to a third party, though for the benefit of the agent or trustee, they are not void, but merely voidable at the election of the cestui que trust. If he repudiates the transaction within a reasonable time, it will be set aside by a court of equity, upon the ground that he has been defrauded, and this, as a matter of course, without inquiring whether he has been actually injured or not. But if he chooses to acquiesce in the transaction, a third party, who can not pretend to have been injured thereby, will not be heard to complain of it. (See antborities cited in notes to secs. 210, 211; Story on Agency, 8th ed.)

The cases cited by counsel for Marchand (49 Cal. 290; 44 Id. 112) are not in conflict with this view. In both instances it was the cestui que trust who raised the objection of fraud, and whatever expressions occur in the opinions in those cases must be understood as having been used with reference to that fact.

Our conclusion is, that the decree of the District Court should be so modified as to order the sale of so much of the mortgaged premises as may be necessary, and the application of the proceeds, after the payment of the costs and expenses of the litigation and sale, first, to the payment of the whole fifty thousand dollars of bonds and interest due to the bondholders of the company; and, second, to the payment of the claim of Marchand. It is therefore ordered that the District Court modify its decree accordingly.

Decree modified.




(55 California, 164. Supreme Court, 1880.)

Party to action-Day in court-New trial. In an action to foreclose a

mechanic's lien against Hall and others, composing the firm of the San Gorgonio Fluming Co., a corporation of the same name, appeared answered and judgment was rendered against it. Held, that the corporation had never been made a party to the action, and had not had its day in court, and that a motion for new trial was erroneously denied.

Appeal from a judgment for the plaintiff, and from an order refusing a new trial, in the District Court of San Bernardino, Eighteenth Judicial District.

Actions against Hall and others, composing the firm of the San Gorgonio Fluning Co., to foreclose a mechanic's lien on a flume. The defendants commenced the construction of the flame October 18, 1876, and the plaintiff's performed labor thereon from October 19, 1876, to July, 1877. On the 13th day of February, 1877, the San Gorgonio Fluming Co. was incorporated. The corporation answered, and judgment was rendered against it. The appeal was taken by the corporation.

J. D. Boyer and BICKNELL & Wurte, for appellants.

Talbott & Harris, for respondents.

By the Court.

The decree and order denying the motion for a new trial reversed, so far as concerns the San Gorgonio Fluming Company, a corporation. The findings and decree seem to be based upon the fact that the company is a corporation, and as such is indebted to the plaintiffs, and its property is decreed to be sold. The corporation has never been made a party to the action, and has not had a day in court.

Judgment reversed.

1. The assumption of a corporate name (The Anglo-American Gold Mining Association) and issue of transferable stock is not a nuisance or public grievance at common law: Harrison v. Heathorn, 6 Scott N. R. 735. Nor does it deprive the associates of remedies against each other: Sheppard v. Oxenford, 1 Kay & J. 491; Post RECEIVER.

2. Grant to association not having legal existence: Vermont Co. v. Windham Bank, 44 Vt. 489; 3 M. R. 312.

3. Organization upon fictitious capital-consideration of mines paid pro forma by checks not drawn on value: Bradley v. Poole, 98 Mass. 169; Post FRAUD.

4. Subsequent legislative recognition cures defects in organization: Kanauhn Co. v. Kanawha Co., 7 Blatchf. 391.

5. False recitals in the preamble of a legislative charter are no ground of action, by means of which to make the stockholders liable to the creditors:

Matthewes v. Stanford, 17 Ga. 543. 6. A single corporation may be formed for “the mining of gold, silver and lead.” It is not three kinds of business: People ex rel. v. Beach, 57 How. Pr. 337.

7. Power to make an irrevocable agency: Daris v. Flagstaff Co., 2 M. R. 660.

8. Corporate power limited by charter: Jd.

9. The secretary is the proper custodian of the corporate seal: Evans v. Lee, 11 Nev. 194.

10. Corporation may alter seal at pleasure; may adopt a private seal: Richardson v. Scott Co., 22 Cal. 150.

11. Status of title held by incorporators under contract to convey to the company: San Felipe Co. v. Belshaw, 49 Cal. 655; Post EJECTMENT.

12. Disabilities of foreign corporations in Pennsylvania: Green v. Ashland Co., 62 Pa. St. 97; Post RerlevIN; Runyan v. Coster, 14 Peters, 122.

13. Foreign corporation may lawfully mine in Ohio: Neuburg Co. v. Weare, 27 Oh. St. 343; Hanna v. International Co., 23 Id. 622.

14. A foreign corporation is precluded from disputing the sufficiency of the certificates, etc., required by local law to be filed: Id.

15. Foreign corporation can not plead statute of limitations in Nevada: Barstov v. Union Co., 10 Nev. 386; Robinson v. Imperial Co., 5 Id. 44; Post MILL SITE.

16. A court of New York will not entertain suit between two corporations, both foreign, to set aside deed recorded in another State: Cumber land Co. v. Hoffman Co., 30 Barb. 159.

17. New York corporation quarrying in New Jersey not recognized, and the associates composing it treated as partners: Hill v. Beach, 12 N. J. Eq. 31.

18. Proof of president's authority to contract for the company: Steel v. Solid S. Co., 3 M. R. 155; Sharer v. Bear R. Co., 2 M. R. 337.

19. Corporation may repudiate contract in which directors have a secret interest: Wardell v. U. P. Co., 4 Dill. 330; Post FRAUD.

20. Contract between mining company and national bank; ratification by failure to disavow acts of agent: Union Co. v. Bank, 1 M. R. 432.

21. A mining corporation has the power to purchase and use a steamboat to transport its coal: Callaway Co. v. Clark, 32 Mo. 305.


22. Contracts and purchases ultra vires of a mining corporation. The vendee must know of the unlawful purpose: Miners ('o. v. Zellerbach, 37 Cal. 543. Purchase of proper subject matter not vitiated by improper subject-matter forming parcel of the contract: Moss v. Averell, 10 N. Y. 419; Moss v. Rossie Co., 1 M. R. 289, and note p. 295.

23. Proof that a party was officer de facto of a corporation is sufficient on prosecution for illegal issue of notes: McGurgell v. Hazleton Co., 4 W. & S. 424.

24. The Act of 1850, restraining corporations from issuing bills, notes, etc., or other evidence of indebtedness construed not to extend to paper issued as the ordinary evidence of a loan: Magee v. Mokelumne Co.,5 Cal. 258.

25. A director's acceptance of his office is presumed: Nimmons v. Tappan, 2 Sw. (N. Y.) 652.

26. Non user does not ipso facto dissolve a corporation: Id.

27. The corporation is not a proper party to contracts between its stockholders concerning its business and stock: Peru Co. v. Merrick, 79 Ill. 113; see Merrick v. Peru Co., 3 M. R. 583.

28. Parties to suits involving the rights of the company and stockholders and the duties of the corporate officers: Burke v. Flood, 1 Col. L. R. 71; Post EQUITY.

29. A corporation is liable for the acts of its agents though the corporate name be not disclosed, unless credit was given to the agent exclusively: Conro v. Port Henry Co., 12 Barb. 27.

30. A party can not sue a corporation for conversion of his shares, and at same time in another suit claim rights as a stockholder: Hughes v. Vermont Co., 72 N. Y. 207.

31. Organizers pretending to sell to stockholders at first cost of property: Simons v. Vulcan Co., 61 Pa. St. 202; Post FRAUD.

32. Organization of new company by part of stockholders of an older company, with intent to exclude other stockholders: Titus v. Minnesota Co., 8 Mich. 184.

33. A co-purchaser with a director of a corporation is affected by all the legal disabilities of such d rector: Hoffman Co. v. Cumberland Co., 16 Md. 456.

34. Action against director for false representations in prospectus: Clarke v. Dickson, 6 C. B. N. S. 453; Post FRAUD.

35. Fraud of agent extends to corporation formed by him: Cumberland Co. v. Sherman, 1 M. R. 322.

36. Provisions of late California consiitution regulating stock issues construed: Ewing v. Oroville Co., 56 Cal. 649.

37. For detective organization or abuse of corporate powers the State only can interfere: Doyle v. Peerless Co., 44 Barb. 239; Post Trust.

38. Control of mine, as between superintendent and his employing company: Sherman v. Clark, 4 Nev. 1:38; Post INJUNCTION.

39. A stockholder is not a corporate agent: Hopkins v. Roseclare Co., 72 Ill. 373.

40. Admissions of corporate officers and agents--to what extent binding: Shay v. Tuolumne Co., 6 Cal. 74; Post EVIDENCE; Overman Co. v. Amer. icon Co., 2 M. R. 251; Green v. Ophir Co., 4.5 Cal. 522; Post PRACTICE; Hanorer Co. v. Ashland Co., 84 Pa. St. 279; Post MEASURE OF DAMAGES.


(19 New Jersey Equity, 537. Court of Errors and Appeals, 1868.)

Notice of covenant in title papers. The law conclusively charges the

purchaser of lands with knowledge of a covenant in the deeds which constitutes the muniments of his title, that no marl should be sold froin

off such premises. Incidents annexed to land-Contracts in restraint of trade. A covenant

by the vendor of real estate that neither he nor his assigns will sell marl from off a tract adjoining the demised premises, will not be enforced in equity against the purchaser of such tract, because, 1. On the same principle incidents could be annexed to the land, as multiform

as human caprice. 2. It is a plain contract against trade and traffic. Rights incident to land enforced against purchaser with knowledge.

Cases reviewed, illustrating the principle of preventing the alienee of lands, having knowledge of the just rights of another from defeating such rights, aside froin the existence of an easement, or covenant adhering to the title.

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The injunction in this case restrains the defendant, Marshall, from selling or removing from the farin conveyed to him by the defendant, Cheeseman, known as the Swope farm, any marl, and from digging any marl on it except for the use of the farm. The defendants have filed their answer, and move to dissolve the injunction.

The defendant, Cheeseman, was, in 1841, seized of a farm in the county of Gloncester, known as the Swope farm, on which there were valuable beds of marl. On the 23d of February, in that year, he conveyed to James W. Lamb two tracts of that farm, one a tract of forty-eight acres, lying east of the Cross Keys road, which divided the farm, and another of twelve and a half acres, lying west of the road, on Great Timber Creek, and which, in the deed, is described as “twelve acres and a half of marl Jand.” The deed grants a right of way over a strip twenty feet in width from the road to the creek along the marl lot, and contains, in the description of the premises after the description of the way, these words: “Also the said George Cheeseman, his heirs or assigns, are not to sell any marl, by the rood or quantity, from off his premises adjoining the above property."

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