Case Name: MANVILLE v. THE BELDEN MINING COMPANY
Court: United States Circuit Court for the District of Colorado
Jurisdiction: United States
Decision Date: 1883-06-23
Citations: 3 Colo. L. Rep. 558
Docket Number: 
Parties: MANVILLE v. THE BELDEN MINING COMPANY.
Judges: 
Reporter: Colorado Law Reporter
Volume: 3
Pages: 558–560

Head Matter:
MANVILLE v. THE BELDEN MINING COMPANY.
(In the United States Circuit Court, District of Colorado,
June 23, 1883
On demurrer to answer).
Corporation—Liable for Money had and Received, though contrary to By-Laws. A corporation sued for money had and received will not be heard to answer that the following by-law was in force at the time of the transaction: “No debt shall be contracted for or in the name of the company except by the order of the board of directors, and then not in excess of the funds actually in the treasury,” and that the board of directors did not authorize the creation of the liability, and there were at the time no funds in the treasury. It is not material whether or not, by the law of the home of the corporation, such by-law has the force of a statute. A corporation that has receive money or property from another and appropriated it, cannot be heard to refuse to account for it, on the ground that it had no power under the charter to take it.

Opinion:
McCrary, Circuit Judge
(orally).
The plaintiff declares, first, upon a promissory note executed in the name of the defendant corporation, by an agent, and as a further and separate cause of action, he avers, in paragraph three of the complaint, that during the years 1881 and 1882, this plaintiff, at the special instance of the defendant, advanced to said defendant, and for its use and benefit, at different times, various sums of money, amounting in the aggregate to the sum of $3,166, no part of which has ever been paid, or the interest accrued thereon, except the sum of $275.
To this defendant answers, among other things, that it is a corporation, and that one of its by-laws isas follows: "No debt shall be contracted for or in the name of the company, except by order of the board of directors, and then not in excess of the funds actually in the treasury."
It is averred that the debt set out in the said third paragraph of tire complaint was not contracted by order of the board of directors, and that at the time it purports to have been contracted, there 'was no money in the treasury of the company. To this portion of the answer the plaintiff demurs. I consider the third paragraph of the complaint as a claim for money had and received by the defendant from the plaintiff. It avers that the plaintiff advanced money to the amount of $3,166 to said defendant at its special instance and request, and for its use and benefit. Under this allegation it will be competent for the plaintiff to prove that he furnished, advanced or loaned money to the defendant, which the defendant received and used; and if this proof is made, it will be no answer to show the limitation of the powers of the defendant contained in the by-law above quoted. It is insisted that under some peculiar provisions of the statute of Maine, under which this corporation was organized, its by-laws have the force and effect of charter provisions; that all persons must take notice of them. I do not inquire into the soundness of this claim, as, even if it be admitted, if the third paragraph of the complaint is true, the defendant is liable. A corpora tion, like a natural person, may be compelled to account for the benefits received from a transaction, even if it be one not enforceable by reason of the fact that its agents have no rigid to make it, unless it be in its nature illegal or immoral. If the agreement under which the corporation has received money or property cannot be enforced, an action may be sustained without reference to the agreement, to recover whatever money be justly due for the value received. A corporation that has received money or property from another, and appropriated it, cannot be heard to refuse to account for it on the ground that it had no power under its charter to take it. See rule 14, page 121, Morawetz on Private Corporations, and cases cited.
The demurrer to so' much of the answer as sets up the defendant's want of power, as a defense to so much.of the complaint as is contained in the third paragraph, is sustained.