Court Opinion

ID: 8821853
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:36:04.248823+00
Date Added: 2024-06-11T17:04:39.577810
License: Public Domain

Mr. Justice Baker delivered the opinion of the court. The parties in making the above contract acted in their own names and on their own behalf and did not purport to bind the Company, whose right to the property mentioned in the contract they assumed to ignore. The subject-matter of the contract was the property of a corporation and not of either of the parties to the contract. The fact that the J. F. Schmidt Company was a “one man corporation,” the stock of which was owned and the corporation controlled by John F. Schmidt, does not affect the question of the right of the stockholders by a contract between themselves to make a valid contract for the sale or disposal of the corporate property. We regard the case of Sellers v. Greer, 172 Ill. 549, as decisive of "the questions in this case. In that case the 1,000 shares of the capital stock were held by Sellers and Greer equally except two shares held in the names of the" respective sons of the parties, and it was held that the sons were mere nominal shareholders, but that a contract by appellant Sellers to sell to Greer certain patents and other property belonging to the corporation had no binding effect; that a court of equity cannot enforce specific performance of a contract by a stockholder to dispose of the corporate property, made without the authority of the corporation and not afterwards ratified; that a bill for the specific performance of an agreement to sell property will not be retained to assess damages for a breach of the contract, when the complainant knew when he filed his bill that the vendor had parted with the title to the property. In this case, the complainants knew when they filed their bill that John F. Schmidt had transferred the property and good will of the contracting business in which he was engaged to the corporation and that he had therefore parted with the title to the property which he agreed to transfer to them. Knowing these facts the complainants could not maintain a bill for specific performance, nor for an injunction of the character here sought and decreed. The dismissal of the bill against the corporation was right, but the bill should have been dismissed against all the defendants for want of equity. The decree of the Circuit Court is reversed and the cause remanded with directions to dismiss the bill for want of equity. Reversed and remanded with directions. Mr. Justice McSurely dissents.