Case ID: ohio-cc-ns_11/html/0584-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ULTRA VIRES ACTS BY DIRECTORS.
    Circuit Court of Hamilton County.
    Baldwin v. Egan et al. 
    
    Decided, December 5, 1908.
    
      Corporations — Good Faith of Directors — Ultra Vires Agreements and Purchases of Property — Will not he Ordered Rescinded, When.
    
    Where the necessities of a corporation required the rentention of real estate which had been acquired under an ultra vires contract and compromise of pending suits, a court will not in the absence of fraud or bad faith order that the agreements be rescinded and a reconveyance made.
    
      Charles B. Wilby, for plaintiff in error.
    
      Morison B. Waiie, contra.
    Gifeen, J.; Swing, P. J., and Smith, J., 'concur.
    
      
       Affirming Baldwin v. Egan et al, 5 O. L. R., 476.
    
   The contract of February 16, 1893, although referring to the purchase of -the real estate by the .pronoun 1 ‘ I ” is signed by “The Egan Company. Thos. P. Egan, Pres’t,” and is therefore the contract of the company..

The agreement to pay $30,000 in stock of the J. A. Fay & Egan Company for the real estate and the agreement to repurchase the stock on or before ten years from date at $45,000 constituted one indivisible contract, and was assumed by the J. A. Fay & Egan Company when it purchased the business — assumed and agreed to pay the debts and liabilities-of the Egan Company.

The contract could not, although ultra vires, be rescinded without a tender and ultimate reconveyance of the real estate.

The necessities of the company justified the retention of the' real estate, and a compromise of the pending suits to recover •the $45,000 on return of the stock, and in the absence of fraud and bad faith the judgment will be affirmed.