Buford v. Keokuk Northern Line Packet Co.

Corporation: stockholder estopped by corporate act. A stockholder in a corporation will not be allowed to deny the validity of stock issued by the corporation in consideration of the acquisition of property, so long as the corporation retains the property.

Appeal from St. .Louis Court of Appeals. The transfer of the assets of the Keokuk Packet Company to the defendant company in exchange for 1,520 shares of stock in the latter, was void, and can be successfully impeached in this suit. 1. The Keokuk Packet Company was an Illinois corporation and in case of consolidation, was bound to observe the requirements of the Illinois statute. This was Dot done when the consolidation took place with the Keokuk Northern Line Packet Company. There was no special meeting of stockholders called or held to authorize consolidation, and no official notice' given of the consolidation after it took place, as required by the statute. Gross’ Rev. Stat. 111. 1869, p. 451. 2'. The transfer of assets to the defendant company not being authorized • by the charter of the Keokuk Packet Company, was ultra vires and would not have been valid even if assented to by all the stockholders. Salomons v. Laing, 12 Beav. 877; Winch v. Birkenhead, &¡c., 5 De G. & Sm. 562; Sharon Canal Go.v. Fulton Bank, 7 Wend.'412; Abbott v. American Co., 88 Barb. 578; Kean v. Johnson, 9 N. J. Eq. 410; Pearce v. Madison, §c., B. B. Co., 23 How. 441; Zabriskie v. Hackensack B. B. Co., 18 N. J. Eq. 178; Goodin v. Cincinnati, fyc., Canal Co., 18 Ohio St. 169; Black v. Delaware, ¿x., Canal Co., 24 N. J. Eq. 455. Suppose the Keokuk Packet Company had no power to sell the stock to Davidson. It was sold to. him and transferred on the books of the Keokuk Northern Line Packet Company to him, with the assent of the stockholders of the Keokuk Packet Company, and the whole matter was approved expressly or tacitly acquiesced in by them; it was, therefore, no business of Buford to complain. The Keokuk Northern Line Packet Company could not complain without offering to rescind the contract and return the property, nor could any stockholder of the Keokuk Northern Line Packet Company complain in such a case. If the plaintiff had desired to complain he should have done so promptly. He could not take stock in the new company, engage actively in promoting its organization and operations, accept the office of assistant superintendent, sell his stock, and afterwards set up objections to its existence and organization. Gregory v. Patchett, 33 Beav. 595; Kent v. Jackson, 14 Beav. 384; Gray v. Chaplin, 2 Russel Ch. 126; Samuel v. Holladay, Woolworth 415; Graham v. Birkenhead, 2 MacN. & G-. 158; High Inj., § 771, p. 457; Hodgson v. Powis, 1 De Gex, MacN. & G. 12. Acquiescence in an act is a bar to any relief against it. Abbott Corp., § 108, p. 780; Hodges v. New Eng. S. Co., 3 R. I. 9; Task v. Adams, 10 Cush. 252; Hoyt v. Thompson, 19 N. Y. 207; ■Woodbridge v. The Proprietors, $*c., 6 Vt. 204; Walworth v. Farmers, $■<?., 16 Wis. 629.