Court Opinion

ID: 3986615
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:45.51871+00
Date Added: 2024-06-11T14:18:19.354743
License: Public Domain

ADDENDUM.
The view is expressed in the dissenting opinion of Mr. Justice Ephraim Hanson that the complaint is fatally defective in that it affirmatively appears that the alleged transaction relied upon by plaintiff for recovery contravenes the provisions of article 12, § 5, of the Constitution of Utah, and certain statutory provisions calculated to give effect to such constitutional provisions. The argument is made that the Rio Tinto Copper Company was, as a matter of law, precluded from giving away any of its treasury stock. That *Page 71 
such is the law generally may readily be conceded. It is, however, an easy matter to conceive of exceptions to the general rule. An illustration will serve to make clear what we have in mind. Thus, if owners of mining property desire to create a corporation for the purpose of developing their property, and, instead of having issued to themselves shares of capital stock of the corporation in payment for mining claims conveyed to the corporation, they conclude, and so provide in the articles of incorporation, that some of the stocks shall be held by the corporation and later given away as directed by the incorporators, such an arrangement may not be said to offend against the provisions of the Constitution or the laws referred to in the dissenting opinion. In such case neither the corporation nor the creditors thereof would have any just cause to complain because the stock was transferred to the donees rather than to the incorporators. Plaintiff, in the absence of a showing to the contrary, had a right to assume that the defendant Rio Tinto Copper Company had authority to perform its alleged contract. The complaint here brought in question is silent as to what was or what was not contained in the articles of incorporation of the defendant Rio Tinto Copper Company at the time complained of. Courts do not take judicial notice of such matters. If the defendants, or either of them, desire to interpose the defense that the defendant Rio Tinto Copper Company was without authority to enter into the alleged contract here sued upon, they may do so by answer. The complaint does not affirmatively show that such a defense is available to defendants.
Moreover, this action was brought against the personal defendants Ogden C. Chase and S.F. Hunt as well as the corporation defendants. It is alleged in the complaint that the contract sued upon was made with the Rio Tinto Copper Company, Ogden C. Chase, and S.F. Hunt. The mere fact that the defendant Rio Tinto Copper Company may be precluded from giving away its stock would not preclude plaintiff from recovering, from the personal defendants, compensation *Page 72 
for services lawfully rendered pursuant to the contract of employment. Even though the defense of ultra vires is available to the defendant company, it is difficult to perceive how such a defense is available to the individual defendants. The contract declared on is for services alleged to have been rendered and not for the enforcement of a promise to make a gift. No provision of law would be broken and no public policy would be infringed by the individual defendants paying plaintiff for lawful services. If, therefore, the purposes sought to be accomplished by the contract of employment were lawful, the individual defendants would not be relieved from liability merely because the defendant company may have exceeded its authority in entering into the alleged contract. In this connection it may be noted that the defendants do not attack the complaint either by their demurrer or in their briefs upon the ground that the complaint shows on its face that the defendant Rio Tinto Copper Company exceeded its authority in entering into the alleged contract of employment.
The position is also taken in the dissenting opinion that the allegations in the complaint do not affirmatively show that no consideration was to be paid for the stock other than, and in addition to, the allegations with respect to the levy of future assessments. Apparently counsel for the respondents do not so construe the allegations of the complaint. The cause was argued on the theory that the transaction set out in the complaint constituted a gift unless the allegations with respect to the understanding as to future assessments made it otherwise. Counsel for the parties having so construed the complaint and having based their argument on such construction, we should dispose of the question presented for review upon such theory, unless the language of the complaint demands a different construction. Moreover, plaintiff was not required to negative the possibility that the contract sued upon is beyond any attack that may be urged against it upon the ground that it is illegal. Where a contract is shown to have been entered into, it will *Page 73 
be presumed to be binding upon the parties unless it affirmatively appears otherwise.
"Where the language of an instrument in writing or the facts of a transaction are of a character to leave in some doubt what the party thereto intended should be the precise nature of the legal effect thereof, the contract is not to be so construed as to render it invalid if it is reasonably susceptible of construction that will render it valid. If reasonably possible the contract will be so construed as to make it lawful. It will not be presumed that the parties intended to violate the law." 2 Elliott on Contracts, p. 796, § 1520.
So, also, the general rule is that:
"The law does not presume that parties to a contract intend by it to accomplish an illegal object, but it rather presumes that they intend to accomplish a legal purpose."
The complaint does not show upon its face that the transfer of the stock to the transferees was a sale within the meaning of the act.