De la Vergne Ref. Mach. Co. v. German Savings Inst. - 175 U.S. 40 (1899)
U.S. Supreme Court
De la Vergne Ref. Mach. Co. v. German Savings Inst., 175 U.S. 40 (1899)
De la Vergne Refrigerating Machine Company
v. German Savings Institution
Argued April 7, 11, 1899
Decided November 30, 1899
175 U.S. 40
Under the laws of the New York providing for the organization of manufacturing corporations, such corporations are not authorized to purchase the stock of a rival corporation for the purpose of suppressing competition and obtaining the management of such rival.
Unless express permission be given to do so, it is not within the general powers of a corporation to purchase stock of other corporations for the purpose of controlling their management.
Where an action is brought upon a contract by a corporation to purchase such stock for such purpose, it is a good defense that the corporation was prohibited by statute from entering into it, even though the corporation may be compelled, in an action on quantum meruit, to respond for the benefit actually received.
This is a consolidation of eight actions brought by the German Savings Institution and seven other plaintiffs in the Circuit Court of the City of St. Louis against the De la Vergne Refrigerating Company and John C. De la Vergne, its president and principal stockholder, personally, for a failure to deliver to plaintiffs certain stock in the Refrigerating Company.
Certain personal property was seized upon on attachment issued, a forthcoming bond given therefor, and the several actions were afterwards removed to the Circuit Court for the Eastern District of Missouri upon the joint petition of the defendants. In that court, the several actions were consolidated and submitted
upon an agreed statement of facts upon which judgment was entered for the defendants.
Pending the proceedings in the state court, and on May 12, 1896, John C. De la Vergne died, and on November 5, 1896, his death was suggested to the court, when William C. Richardson, Public Administrator of the City of St. Louis, entered his appearance, and with his consent an order was entered reviving each of such actions against him.
From the judgment so entered in the circuit court, a writ of error was taken from the circuit court of appeals, the judgment of the court below reversed, and the cause remanded with directions to grant a new trial. 70 F. 146.
Amended answers were filed in the lower court, much testimony taken, the cause submitted to the court without a jury, and a judgment entered in favor of the plaintiffs for $126,849.96.
From this judgment a writ of error was prosecuted by the Refrigerating Company, one of the defendants. The judgment was affirmed by the court of appeals by an equal division. 84 F. 1016. Whereupon the Refrigerating Company applied for and was allowed a writ of certiorari from this Court.