MACHINE COMPANY, Petitioner, ing which the circuit court of appeals desired DE LA VERGNE REFRIGERATING the advice of this court was certified, and, on the contrary, the decree of the circuit court was affirmed by the judgment of the circuit court of appeals, with costs. The case is not before us on certiorari, but on appeal, and an appeal does not lie in those cases in which the judgments or decrees of the circuit courts of appeals are made final by the statute. Among those cases are [39] cases "arising under the *revenue laws," and as this is such a case the appeal cannot be maintained. It is true that under the act of June 10, 1890, an appeal would lie directly from the circuit courts to this court if the circuit court should be of opinion that the question involved was of such importance as to require a review of its decision by this court, and that in the order allowing this appeal the circuit court of appeals stated "that the question involved is of such importance as to require a review of said decision and decree by the Supreme Court of the United States;" but this is not an appeal from the circuit court, and, moreover, the judiciary act of March 3, 1891, prescribes a different rule as to the prosecution of appeals. In United States v. American Bell Teleph. Co. 159 U. S. 548, 40 L. ed. 255, 16 Sup. Ct. Rep. 69, it was held that this court had ju risdiction by appeal over a decree of a circuit court of appeals in a suit brought by the United States in the circuit court to cancel a patent for an invention. บ. GERMAN SAVINGS INSTITUTION et al. (See S. C. Reporter's ed. 40-60.) Power of corporation to purchase stock of rival corporation to suppress competition. 1. A conveyance of all the assets of a corporation is not within the power of the stockholders, even though they all sign it, without formal action at a meeting held for that purpose. 2. 3. 4. 5. It is not within the general powers of a corporation to purchase the stock of other corporations for the purpose of controlling their management, unless express permission be given them to do so. Authority to purchase "other property nec esary for their business," given to manufacturing corporations by N. Y. act June 7, 1853, does not extend to the purchase of stock of similar corporations. The purchase by a manufacturing company of the stock of an insolvent rival concern which has ceased to do business, and whose stock is bought for the evident purpose of preventing a reorganization and of obtaining its patronage, is not authorized by N. Y. act April 28, 1866, chap. 838, making it lawful for a manufacturing company to hold stock in the capital of any corporation engaged in the business of mining, manufacturing, or transporting such matters as are required in the prosecution of the business of the former company, so long as they shall furnish or transport such materials for the use of such company and for two years thereafter, and no longer. No action can be maintained against a corporation on a contract prohibited by its charter. 6. A contract with stockholders of a corpora- 30, 1899. N WRIT OF CERTIORARI to review a The argument was pressed that the appeal could not be maintained because the decrees of the circuit courts of appeals were made final by the act in cases "arising under the patent laws," and that that was such a case. In view of the fact, however, that the United States instituted the suit as a sovereign in respect of alleged miscarriage in the exercise of one of its functions as such, it was thought that considerations of public policy forbade imputing to Congress the intention to include the case in that category. Argued April 7, 11, 1899. Decided October We observed that actions at law for infringement, and suits in equity for infringement, for interference, and to obtain patents, judgment of the Circuit Court of Apbeing brought for the vindication of rights created by the patent laws, were clearly cases arising under those laws, and came strictly within the avowed purpose of the act of March 3, 1891, to relieve this court of that burden of litigation which operated to impede the disposition of cases of peculiar gravity and general importance. But there was nothing in the objects sought to be attained and the mischiefs sought to be remedied by the act which furnished foundation for the belief that Congress intended to [40] place a limitation on our appellate *jurisdiction in a suit in which the United States were plaintiffs and appellants, and which was brought in effectuation of the superintending authority of the government over the public interests. We do not think the present appeal comes within the ruling in that case. Appeal dismissed. 175 U. S. U. S.. Book 44. NOTE. As to estoppel of corporation to set up plea of ultra vires,-see notes to Central Transp. Co. v. Pullman's Palace Car Co. 35 L. As to power of corporations to deal in the A corporation engaged in business of a public character will not be allowed to gain control of the stock of other corporations engaged in the same business, and so create a monopoly. People ex rci. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798. A railroad company has no implied power to purchase stock in another railway company for the purpose of controlling its management. Cen5 65 peals for the Eighth Circuit, which by equal division affirmed the decision of the Circuit Court in favor of plaintiffs in an action for breach of a contract to deliver stock in a corporation. Reversed. prosecuted by the Refrigerating Company, one of the defendants. The judgment was affirmed by the court of appeals by an equal division. 49 U. S. App. 777, 84 Fed. Rep. 1016, 28 C. C. A. 681. Whereupon the Reallowed a writ of certiorari from this court. See same case below, 49 U. S. App. 777, frigerating Company applied for and was 84 Fed. Rep. 1016, 28 C. C. A. 681. Statement by Mr. Justice Brown: [40] *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 Jolin 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 up 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 [41]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. 36 U. S. App. 184, 70 Fed. Rep. 146, 17 C. C. A. 34. 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 tral R. Co. v. Collins, 40 Ga. 582; Hazlehurst v. Savannah, G. & N. A. R. Co. 43 Ga. 13; son v. Concord R. Corp. 62 N. H. 537. Messrs. Frederick W. Lehmann and Charles H. Aldrich argued the cause and, with Mr. Charles Nagel, filed a brief for petitioner: The assets of the consolidated company, insolvent, being in the hands of an assignee under the insolvent laws of Illinois, and in due process of administration, the stock owned by the respective respondents was the only thing attempted to be delivered under the contract, and must therefore be deemed the subject of the contract. Humphreys v. McKissock, 140 U. S. 304, 35 L. ed. 473, 11 Sup. Ct. Rep. 779; Smith v. Hurd, 12 Met. 371, 46 Am. Dec. 690; Chicago, R. I. & P. R. Co. v. Howard, 7 Wall. 392, 19 L. ed. 117; Whistler v. Forster, 14 C. B. N. S. 248; Fawcett v. Osborn, 32 Ill. 411, 83 Am. Dec. 278; Burton v. Curyea, 40 Ill. 320; Story, Sales, 3d ed. §§ 188, 423; Lunn v. Thornton, 1 C. B. 379; Huling v. Cabell, 9 W. Va. 522, 27 Am. Rep. 562; Low v. Pew, 108 Mass. 349, 11 Am. Rep. 357. The stock of the Consolidated Ice Machine Company was a part of the consideration for the promise of the De la Vergne Company to pay $100,000 in its own stock or in cash. The contract was ultra vires of the vendee company, and therefore illegal and void. N. Y. Laws 1848, chap. 40, § 8; N. Y. Laws 1890, chap. 564, § 40; Boone, Corp. § 107; Green's Brice, Ultra Vires, p. 91, note b; Morawetz, Priv. Corp. §§ 431, 433; People cx rel. Peabody v. Chicago Gas Trust Co. 130 111. 268, 8 L. R. A. 497, 22 N. E. 798; Milbank v. New York, L. E. & W. R. Co. 64 How. Pr. 20; Talmage v. Pell, 7 N. Y. 328; St. Louis, V. & 7. H. R. Co. v. Terre Haute & 1. R. Co. 145 U. S. 393, 36 L. ed. 738, 12 Sup. Ct. Rep. 953; Central Transp. Co. v. Pullman's Palace Car Co. 139 U. S. 24, 35 L. ed. Even where a corporation has the statutory Pear-right to purchase stock of another company, it has no right, as the owner of a majority of the stocks and bonds of such company, to manage its affairs so as to cause a default on a mortgage, and obtain control of the property by foreclosure at less than its value, to the injury of the minority stockholders. Farmers' Loan & T. Co. v. New York & N. R. Co. 150 N. Y. 410, 34 L. R. A. 76, 44 N. E. 1043. To the same effect is Milbank v. New York, L. E. & W. R. Co. 64 How. Pr. 20, in which it was held that a railway company which has acquired by purchase the majority of all the stock issued by another railroad company has no right to vote thereon, and thus acquire control of the latter corporation. A purchase of shares of a domestic corporation by a foreign corporation engaged in a similar business, for the express purpose of controlling and managing the domestic corporation, is ultra vires, and therefore unlawful and vold. Buckeye Marble & Freestone Co. v. Harvey, Tenn. 116, 18 L. R. A. 252, 20 S. W. 427. 2 A manufacturing corporation has no implied power to purchase the stock of an insolvent rival concern which has ceased to do business, with the evident purpose of thereby preventing a reorganization and of obtaining its patronage. DE LA VERGNE REFRIGERATING MACH. Co. v. GERMAN SAV. INST. A corporation cannot become an incorporator by subscribing for capital stock of a proposed corporation, with the intention of conducting the same as its own private enterprise. Nor can it accomplish this purpose indirectly through its officers or employees as pretended incorporators and subscribers for the stock. Central R. Co. v. Pennsylvania R. Co. 31 N. J. Eq. 475. A timber company has no authority to purchase bank shares for the avowed purpose of obtaining the virtual control of the bank, and thus effect loans to the company by conducting the bank through its agents. Sumner v. Marcy, 3 Woodb. & M. 105, Fed. Cas. No. 13,609. 55, 11 Sup. Ct. Rep. 478; California_Nat. | erating Mach. Co. 36 U. S. App. 184, 70 Fed. 221. All the shareholders of a corporation cannot, by uniting in a contract or deed, transfer the property of the corporation without corporate action. Sellers v. Greer, 172 Ill. 549, 40 L. R. A. 589, 50 N. E. 246. The assignment under the Illinois statute regulating assignments by insolvent debtors left no title, legal or equitable, in the insolvent consolidated company, which was the subject of conveyance. Weber v. Mick, 131 Ill. 520, 23 N. E. 646; Burrill, Assignm. 10; Spindle v. Shreve, 111 U. S. 545, 28 L. ed. 513, 4 Sup. Ct. Rep. 522; Walker v. Ross, 150 Ill. 56, 36 N. Ê. 986; Stoddard v. Gilbert, 163 11. 131, 45 N. E. 542. In the absence of express statutory authority, a corporation cannot purchase stock of another corporation. Boone, Corp. § 107; Green's Brice, Ultra Vires, p. 91; Morawetz, Priv. Corp. 88 431, 433; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798; Milbank v. New York, L. E. & W. R. Co. 64 How. Pr. 20; Talmage v. Pell, 7 N. Y. 328; Mechanics & Workingmen's Mut. Sav. Bank & Bldg. Asso. v. Meriden Agency Co. 24 Conn. 159; Central R. Co. v. Pennsylvania R. Co. 31 N. J. Eq. 475; Pearson v. Concord R. Corp. 62 N. H. 537; Denny Hotel Co. v. Schram, 6 Wash. 134; Franklin Co. v. Lewiston Inst. for Savings, 68 Me. 46, 28 Am. Rep. 9. A contract made by a corporation beyond the scope of its powers, express or implied, on a proper construction of its charter, cannot be enforced or rendered enforceable by the application of the doctrine of estoppel. Central Transp. Co. v. Pullman's Palace Car Co. 139 U. S. 24, 35 L. ed. 55, 11 Sup. Ct. Rep. 478; California Nat. Bank v. Kennedy, 167 U. S. 362, 42 L. ed. 198, 17 Sup. Ct. Rep. 831; Buckeye Marble & Freestone Co. v. Harvey. 92 Tenn. 116, 18 L. R. A. 252, 20 S. W. 427; McCormick v. Market Nat. Bank, 162 Ill. 100, 44 N. E. 381, 165 U. S. 538, 41 L. ed. 817, 17 Sup. Ct. Rep. 433; Hamor v. Taylor Rice Engineering Co. 84 Fed. Rep. 392; Durkee v. People ex rel. Askren, 53 II. App. 396, 155 Ill. 354, 40 N. E. 626. Messrs. Leo Rassieur and J. M. Wilson argued the cause and, with Mr. Eleneious Smith, filed a brief for respondents: The subject-matter of the contract was not stock of the consolidated company, but its tangible assets, its outstanding accounts and its goodwill, subject to the payment of its debts, and the custody thereof, until such payment, by the Illinois assignee. German Sav. Inst. v. De La Vergne Refrig The contract was not ultra vires the consolidated company, because it was not a mere combination or coalition for the purpose of creating a monopoly or trust, but it was a legitimate business undertaking. Morawetz, Priv. Corp. § 212; Herriman ▼. Menzies, 115 Cal. 16, 35 L. R. A. 318, 44 Pac. 660, 46 Pac. 730; Oil Creek & A. River R. Co. v. Pennsylvania Transp. Co. 83 Pa. 160; Whitney Arms Co. v. Barlow, 63 N. Y. 62, 20 An. Rep. 504; Gasquet v. Crescent City Brewing Co. 49 Fed. Rep. 496; Camden & A. R. Co. v. May's Landing & E. H. City R. Co. 48 N. J. L. 567, 7 Atl. 523. The defendant corporation should not be permitted to plead that it exceeded its charter power in acquiring the assets of the consolidated company, or that the latter company exceeded its powers in disposing of the same. Bradley v. Ballard, 55 Ill. 413, 7 Am. Rep. 656; Union Nat. Bank v. Matthews, 98 Ù. S. 621, 25 L. ed. 188; Whitney Arms Co. v. Barlow, 63 N. Y. 62, 20 Am. Rep. 504; Oil Creek & A. River R. Co. v. Pennsylvania Transp. Co. 83 Pa. 160; Gasquet v. Crescent City Brewing Co. 49 Fed. Rep. 496; Camden & A. R. Co. v. May's Landing & E. H. City R. Co. 48 N. J. L. 567, 7 Atl. 523; Morawetz, Priv. Corp. § 689. Even if the contract required an increase of capital stock and the De la Vergne Company had no power to contract therefor and for the payment in such form, it will nevertheless be compelled to make compensation in some other form,-in money. Hitchcock v. Galveston, 96 U. S. 351, 24 L. ed. 662; Fort Worth City Co. v. Smith Bridge Co. 151 U. S. 294, 38 L. ed. 167, 14 Sup. Ct. Rep. 339; State Bd. of Agri. v. Citizens Street R. Co. 47 Ind. 407, 17 Am. Rep. 702; Parish v. Wheeler, 22 N. Y. 494; Edwards v. Fairbanks, 27 La. Ann. 449; Morawetz, Priv. Corp. § 86; Missouri P. R. Co. v. Sidell, 35 U. S. App. 152, 67 Fed. Rep. 464, 14 C. C. A. 477; Bensiek v. Thomas, 27 U. S. App. 765, 66 Fed. Rep. 104, 13 C. C. A. 457. *Mr. Justice Brown delivered the opinion [48] of the court: The principal question in this case is whether, under the laws of New York providing for the organization of manufacturing corporations, such corporations are authorized to purchase the stock of a rival corporation for the purpose of suppressing competition and obtaining the management of such corporation. The facts of the case are substantially as The Consolidated Ice Machine follows: Company (hereinafter referred to as the Consolidated Company) was a corporation organized under the laws of Illinois, and was engaged in the business of manufacturing and selling refrigerating and ice-making machines. The entire amount of issued stock of such corporation was $100,000, held in various proportions by the plaintiffs in this consolidated cause. Having become insol 67 vent, the company, on October 14, 1890, made in certain specified proportions to each stock- By the fourth clause, the stockholders By the fifth clause, the stockholders in the Consolidated Company covenanted to accept, in lieu of the stock of the Refrigerating Company, $100,000 in cash, at the option of De By the seventh clause, the stockholders of the Consolidated Company agreed that for a period of ten years they would not enter into or become engaged in the selling or making of refrigerators or ice machines, directly or indirectly, within the United States, except one It is asserted by the plaintiffs, who are stockholders in this company, that the assets exceeded in value the liabilities of the company, and that the company was not in reality insolvent, but had assumed contracts to such an extent that, with its limited cap-ing the state of Montana. ital, it was unable to carry them out. Within the ten days provided by the [49] *However this may be, subsequently to the agreement, certificates representing assignment, and on April 16, 1891, the com- thousand shares of the stock of the Consolipany itself, by its president as party of the dated Company, with written assignments first part, and its stockholders as parties of executed by the parties who held the certifithe second part, entered into an agreement cates, were delivered to De la Vergne, alwith the De la Vergne Refrigerating Ma- though ninety-five of these shares were held chine Company, a corporation organized un- by P. J. Lingenfelder and Leo Rassieur as der the laws of New York (hereinafter called executors, and ninety were held by them as the Refrigerating Company), as party of the trustees under the will of one Jungenfeld, third part, and John C. De la Vergne, of the deceased. These shares were assigned by the state of New York, president of that com- parties without an order authorizing_them pany, party of the fourth part. This agree to do so from the probate court of St. Louis, ment is the basis of the action. After recit in the state of Missouri, in which the estate ing that the Refrigerating Company was will of Jungenfeld was in the process of admining to acquire such right as the Consoli-istration. Two days after the receipt of dated Company and its stockholders could assign in and to the assets of such company; that under the laws of Illinois the Consolidated Company was not entitled to the pos session of its assets in the hands of the assignee until its obligations had been discharged; that the Refrigerating Company was incorporated with a stock of $350,000 when its assets were worth $1,400,000; and that its stockholders were considering a plan of increasing the stock to $2,000,000, of which $1,000,000 was to be turned over to the Consolidated Company under the terms of the agreement. these certificates De la Vergne's attorney wrote to Mr. Rassieur, calling his attention to certain technical defects, which were immediately remedied by suitable instruments of further assurance. No objection was then made that the assignments of the executors and trustees were insufficient for want of an order of the probate court authorizing the same. In the following July demands were several times made by Mr. Rassieur for himself and his associates for the $100,000 in stock or money stipulated by the contract, but no response was received until September, when Mr. Fitch, acting for the Refrigerating Comdefendants declined to carry out their part pany, announced for the first time that the of the contract. The reasons for the refusal do not seem to have been substantial ones. The letter contained an announcement that Mr. *De la Vergne's counsel was ready to re- [51] turn the papers sent to him to whomsoever was legally entitled to their custody. There was no reconveyance to the Consolidated Company of whatever was covered by the The second clause contained a covenant to contract, the covenant of its stockholders to issue to the stockholders of the Consolidated refrain from transacting business for ten Company fully paid-up stock in the Refrig-years was never released, and none of the erating Company to the amount of $100,000 certificates and assignments of stock were Therefore, in view of these facts, the Consolidated Company and its stockholders covenanted with the Refrigerating Company and its president, De la Vergne, to sell and convey unto the Refrigerating Company all their right, title, and interest in and to the assets of the party of the first part, subject to the payment of its obligations, and subject to the custody thereof in the legal custodian, R. E. Jenkins, assignee as aforesaid. ever delivered back. It appeared, however, As the general assignment to Jenkins, that in the meantime the Refrigerating Com- executed October 14, 1890, was most sweeppany had secured the former New York of-ing in its terms, and included all the real and fice of the Consolidated Company; had em- personal property and effects of every kind ployed its agent in making contracts with and description belonging to the corporation, former customers of that company, which or in which it had any right or interest, it contracts were taken in the name of such was doubtless sufficient to pass the goodwill agent. He was, however, furnished with the of the business, which was an incident either means by which they were carried out, and to the premises, to the name of the corporaassignments were taken from him, which tion, or to the tangible property with which practically secured the goodwill of the com- the business was carried on. Churton v. pany, although the Chicago assets were al- Douglas, Johns. V. C. (Eng.) 174, 188; lowed to go to sale by the assignee. At this Menendez v. Holt, 128 U. S. 514, 32 L. ed. sale Mr. De la Vergne was present and of- 526, 9 Sup. Ct. Rep. 143; Metropolitan fered for the tangible assets the sum of Bank v. St. Louis Dispatch Co. 149 U. S. 436, $25,000. 37 L. ed. 799, 13 Sup. Ct. Rep. 944; Willett In their answer as amended, defendants v. Blanford, 1 Hare, 253; Wedderburn v. set up as justification for a refusal to perform Wedderburn, 22 Beav. 84; Bradbury v. Dickthe contract that no assets of the Consoli-ens, 27 Beav. 53; Williams v. Wilson, 4 dated Company ever came into the possession Sandf. Ch. 379; Sheppard v. Boggs, 9 Neb. of the defendants, since all, including the 257; Wallingford v. Burr, 17 Neb. 137. goodwill, had been transferred to Jenkins, This was evidently the view taken by the the assignee, for the benefit of its creditors, assignee, since he subsequently advertised and remained in his possession and control the goodwill of the business for sale, and sold until they were disposed of under the direc- the same under an order of the court to tion of the probate court for the benefit of Clarence A. Knight and Otto C. Butz, who creditors, and that they were insufficient to afterward sold the same, including certain discharge the liabilities; that the contract of the assets, to John Featherstone's Sons. sued upon purporting to be executed on be- *It is difficult, even if the contract were [53] half of the Refrigerating Company by De legally executed, to see what assets of value la Vergne, its president, was executed with- belonging to the Consolidated Company out authority; that no benefit of any kind passed 'to the Refrigerating Company under ever accrued to the company under the con- it, except perhaps the possibility that the tract; that the company never received any assets would prove more than sufficient to of the consideration moving to it under the pay the debts; or that a settlement might be contract; that it never received any of the effected with a majority in number and assets of the Consolidated Company, nor any amount of the creditors, when, under the of the stock; that it never in any manner laws of Illinois, the assignor would be enratified or approved the contract, but, on the titled to a reconveyance and redelivery of contrary, rejected the same, and that the the assigned assets. In such case the goodplaintiff's well knew at the time of making will would doubtless return with the other the contract that De la Vergne had no power assets to the assignor, i. e., the corporation, or authority to bind the Refrigerating Com- but not to the stockholders, and the right to pany; that the defendants notified the plain-sue for a breach of the contract would betiffs that they would not be bound by the [52] contract, and that such rejection of the contract was acquiesced in by the plaintiffs, and that, relying upon such acquiescence, the defendants abandoned all interests in the Consolidated Company; that the contract was in reality for the stock of the Consolidated Company, and that the Refrigerating Company was not authorized by its charter, by the laws of New York or of Illinois, to purchase such stock, and that the agreement was ultra vires; and, further, that the Refrigerating Company had no authority to stipulate for an increase in its capital stock, as was attempted under the contract, and that the contract was against public policy and wholly void. 1. The main defense pressed upon our consideration is one which does not seem to have been called to the attention of the circuit court, and one upon which the judges of the circuit court of appeals were equally divided in opinion. It is that the president of the Refrigerating Company had no authority to sign the contract in question, and that the agreement itself was ultra vires the corpora- | tion. long to the corporation, or its assignee. There was also a covenant that the Consolidated Company would not engage in a similar business within ten years from the date of the contract. The Refrigerating Company, however, did not avail itself of this opportunity to compromise with the creditors of the Consolidated Company, but allowed the assignee to dispose of the assets, which, on a forced sale, lacked $150,000 of being sufficient to pay the debts of the Consolidated Company. In addition to this, however, there was 'no corporate action taken authorizing any such conveyance by the corporation, and such conveyance would not, under the laws of Illinois which conform in this particular to the general law, be within the power of the stockholders, even though they all signed it. without formal action at a meeting held for that purpose. Sellers v. Greer, 172 Ill. 549, 40 L. R. A. 589, 50 N. E. 246; Hopkins v. Roseclare Lead Co. 72 Ill. 373; Humphreys v. McKissock, 140 U. S. 304, 312, 35 L. ed. 473, 475, 11 Sup. Ct. Rep. 779; Allemong v. Simmons, 124 Ind. 199, 23 N. E. 768; Smith v. Hurd, 12 Met. 371, 385, 46 Am. Dec. '690; |