Case ID: ad_113/html/0664-01.html
Source: Caselaw Access Project
Author: {"author": "Woodward, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David Davidson, Respondent, v. Cannabis Manufacturing Company, Appellant.
    Second Department,
    June 15, 1906
    Real property—when corporation will be compelled specifically to perform contract to sell land; . "
    . ' A foreign corporation which, though ostensibly organized as a manufacturing . corporation, has dealt chiefly in real estate, will be compelled specifically to . perform a written contract to sell real estate which was made in the name of the corporation, signed by the president and secretary, and sealed with the corporate seal, when the..vendee-has paid’a deposit thereon which was accepted and retained by the officers of the corporation.
    Appeal by the defendant, the Cannabis Manufacturing Company, from, a judgment of the- Supreme Court in favor of the plaintiff, entered in the office of the clerk of 'the county of Kings on the 28th day of April, 1905, upon-the decision of the court, rendered after a trial at the Kings County Special Term,, directing, the specific performance by the defendant of a contract for the sale of certain real property. • .
    
      Hector M. Hitchings, for the appellant.
    
      Benjamin F Feiner [Louis Salant with him on the brief], for the respondent.
   Woodward, J.:

It appears that the defendant corporation is organized under the laws 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 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 importance, except, as bearing upon the theory of the defense, which is that the transaction between the plaintiff and 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 were 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 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.

Hirschberg, P. J., Jenks, Gaynor and High, JJ., concurred.

Judgment affirmed, with costs.