Court Opinion

ID: 6727911
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:06:24.917627+00
Date Added: 2024-06-11T16:01:37.039698
License: Public Domain

This action was originally begun in the Summit Common Pleas against The Portage Construction and Finance Company by one of the following lien holders: Gardner Abbott and William L. David, Receivers of The Cleveland Discount Company; The Midland Bank, Successor to Charles J. Forbes, Trustee; The Brown-Graves Company; The Herberich Realty Company; Jacob Ulmer and Joseph M. Berne, doing business as Ulmer and Berne; Charles Byers; Kelley Weiss; The Kinnear & Russell Plumbing and Heating Co.; M. H. Ram; L. Ram; M. H. Ram and L. Ram, doing business as Ram and Ram; and The Zindle Plumbing and Heating Company, for foreclosure and marshalling of liens, particularly upon three parcels of land improved by large apartment houses.
At the time of the transactions, upon which the claimed liens rest, the Portage Construction Co., now known, by reason of a change of its name, as the Portage Construction and Finance Co., was an Ohio corporation with a capital stock of $50,000, whose purpose clause read that it was incorporated for the purpose of “engaging in the general contract business.” Thus incorporated and capitalized it purchased land, binding itself by deed of conveyance to use the land for the erection, as owner, of three large, apartments, thereby becoming indebted for over $50,000 for the purchase price. Notes and mortgages were then executed for financing the erection of apartments, making its obligations amount to about $1,000,000.
The Common Pleas held the liens to be valid and awarded foreclosure to the lien claimants, which decree was affirmed by the Court of Appeals.
Rogers, as receiver, here contends:
1. That because the amount borrowed was so much greater than the borrowing limit prescribed by the statute, the corporation exceeded the limit prescribed upon its'power in that behalf and hence that its attempted engagements thus in excess were void.
2. That since 'its purpose was that of a contracting company and these attempted engagements were in furtherance of activities wholly without that purpose they were entirely. outside the powers of the corporation and, therefore, wholly void.