Richmond Guano Co. v. Farmers' Cotton Seed Oil Mill & Ginnery

Citations

• 119 F. 709
• 1902 U.S. App. LEXIS 5351

Syllabus

<p>1. Corporations—Limitation of Powers by Purposes of Incorporation— Contracts Ultra Vires.</p> <p>A corporation organized “to build and operate a cotton seed oil mill and ginnery in connection therewith, to compress cotton seed oil, to buy cotton seed, to sell their products, to manipulate and compound cotton seed meal with other substances and elements so as to make fertilizers to be sold for fertilizing lands, and to gin and compress cotton into bales for the market,” has no power to engage in the business of selling a fertilizer manufactured by another, which must be sold in the condition in which it is received, making as a profit what it can obtain above the invoice price; and notes given by the corporation for such invoice price are ultra vires and void.</p> <p>3. Same—Distribution of Assets in Insolvency—Agreement for Attorney Fees in Notes.</p> <p>In South Carolina, where an agreement in a note to pay a stipulated per cent, as attorney’s fees in case of suit thereon is valid, where a court of equity in a creditors’ suit to wind up an insolvent corporation enjoins actions at law to collect claims, and requires all creditors to prove their claims therein, holders of notes containing such agreements, who employ attorneys, are entitled to the stipulated per cent, on the dividends received as attorney’s fees from the fund distributed.</p>