135 Ky. 706 | Ky. Ct. App. | 1909
Opinion op the 'Court by
Reversing.
This litigation, grows out of an attempt on the part of T. M. Gilmore & Co. to recover of W. B. Samuels & Co. brokerage fees for the sale of 3,266 barrels of whisky at 50 cents per barrel. The plaintiff, T. M. Gilmore & Co., is a corporation engaged in the whisky brokerage business in the city of Louisville. The defendant, W. B. Samuels & Co., is a corporation owning and operating a distillery in Nelson county, Ky. On the 29th day of November, 1906, T. M. Gilmore'& Co. procured from W.B. Samuels & Co. the following writing: “Samuels, Ky., Nov. 29, 1906. This writing witnesseth that W. B. Samuels & Co., incorporated, of Nelson Co., state of Kentucky, have this
The said twelve hundred and sixty-six barrels of whisky at the price of thirty cents per proof gallon, original gauge; the purchaser to take and pay for same not less than two hundred barrels each and every two months from the date of sale, and the cost of carriage additional after the date of sale to be added to the price. To sell two thousand barrels to be manufactured during each and every distillery season from this date, with an option to the purchaser to take and require to be made for him one thousand barrels additional each season if he required or any proportion thereof, for.a period of five years from this date and the purchaser to have the privilege of renewing this contract and extending same for an additional period of five years, provided he gives notice of his intention to renew the contract on or before the first day of July next preceding the date of expiration of the first five-year period. The price of said whisky to be hereafter manufactured to be twenty-five (25c) cents per proof gallon based on corn at 45 cents per bushel in Louisville as shown by bills for same, or in the event that the price of corn should advance the price of the whisky to be increased Ut °£ a cent per gallon for each cent advanced per bushel in corn above 45 cents and if corn declines the price of the whisky to be reduced % of a cent.per gallon
If, during any season the price of corn should exceed 75 cents, then no whisky is to be made except at option of purchaser, but the full amount shall be produced during the life of this contract in such amount each season as the distiller can produce, but not exceeding 3,000 barrels per season except at distillers’ option. Cooperage to be first class 8 or 10 hoop barrels, and the distiller to deliver the whisky as required f. o. b. cars at Samuels, Ky. Outs to be guaranteed not to exceed one gallon over and above the government allowance on each barrel separately. Storage to begin first of each month following month of inspection and to be at the rate of 5 cents per barrel per month, Goods to be paid for.on the 10th of each month succeeding the month of manufacture or delivery of warehouse receipts. Buyers to have option of having a portion of each crop made in such name or names as he may designate other than ’YV. B. Samuels & Co., and buyer is to have the brand of W. B. Samuels placed on any or all of the whisky made under this contract, at his option.
Said W. B. Samuels & Co. is to establish and main-, tain a bottling room suitable for bottling in bond, suitable to meet the requirements of purchaser in bottling the whiskies of said distillery, and said bottling house must be established without delay so as to take care of any orders buyer may give for the bottling of any whiskies now in the W. B. Samuels & Co. warehouses which buyer may purchase on the market. Purchaser is to furnish, for bottling in bond, at Samuels, Ky., all cases, bottles, corks, labels,
The purchaser of the whisky under any contract which may be made by said T. M. Gilmore & Co., to have the option to purchase said distillery at the end of the said first five-year period, or, if contract is extended for an additional five years, then the purchaser to have the option to purchase said distillery plant and premises, at said price' at end of second five-year period. Said W. B. Samuels & Co. agrees to make a deed of general warranty to the purchaser except as to the lien in favor of the United States government. Said "VY. B. Samuels & Co. agree to pay in the event of this sale to T. M. Gilmore & Co. a commission of fifty (50) cents per barrel on each and even, y barrel of whisky taken by purchaser under this contract, said commission to be paid as goods are delivered and paid for, and in the event that the purchaser in the exercise of his option takes the distillery, it is to pay a commission to T. M. Gilmore & Co. of (5) five per cent., when deed is made and notes are given or cash paid. In case distillery is destroyed
Acting on the authority given under this contract, T. M. Gilmore & Co., within the time limited, closed a deal with R. PI. Edelen & Co., by the terms of which they purchased all the whisky and the output of the distillery with a right to buy the distillery property as set out in the authority or contract under which Gilmore & Co. was acting. W. B. Samuels & Co. was notified that this sale had been consummated, and it at once, through its president, wrote a letter to R. H. Edelen & Co., in which it refused to ratify the sale made by Gilmore & Co. on the ground that the authority for making same had not been properly executed by the W. B. Samuels Company, and that the writing signed by its president had not been approved by the board of directors. R. H. Edelen & Co. thereupon brought suit in the Nelson circuit court to compel the specific performance of the contract. A demurrer was filed to this petition, and, being sustained, plaintiff declined to plead further, and its suit was dismissed. Upon appeal here the judgment of the circuit court was affirmed, on the ground that the court would not compel the specific performance of a contract of that nature. Thereafter T. M. Gilmore & Co. filed a suit in the Nelson circuit court, wherein it
W. B. Samuels & Co. answered, and, in addition to traversing the allegations of the petition, interposed the following defenses: (1) That the writing sued on was not the act and deed of W. B‘. Samuels & Co., and that the company was not bound by the unauthorized act of its president; (2) that at the time of the execution of this writing M. A. Samuels was not competent to contract; (3) that she was over-reached and deceived in its execution by T. M. Gilmore; and (4) that it was without consideration. In its reply, the affirmative matter in 'each of these several defenses set up in the answer was traversed, and plaintiff also set up the business relations theretofore existing between it and defendant, its previous employment to sell this same property, the organization of defendant and its mode of conducting business, and the circumstances under which the contract sued on was made and entered into. This affirmative matter in the reply was traversed of record, and on the issues thus made ibe case proceeded to trial. At the conclusion of all the testimony, the court peremptorily instructed the jury to find for the defendant, which was done, and the plaintiff’s petition was dismissed. Prom that ruling and judgment this appeal is prosecuted.
The record discloses the following state of facts, about which there is practically no dispute: The defendant company was organized many years ago for the manufacture and sale of whisky, and W. B. Samuels, for whom it was named and who organized the
After the death of W. B. Samuels., a meeting of the stockholders was held on the 25th of August, 1902, at which time the stock owned by him was formally transferred to his wife and son, and three shares were issued to D. P. Simons for the purpose of perfecting the organization.- It appears that the certificate for these three shares of stock was signed in blank by D. P. Simons and delivered to H. M. Samuels, and was thereafter kept by him in the company’s safe, so that at most he was but a nominal owner of the stock. On that same day the following order was placed upon the minute book of the company:
It is further made to appear that in the summer of 1906, and some months before the execution of the contract sued on, the defendant had employed the plaintiff to sell the product of this distillery and an interest in the distillery property, and that, under said employment, plaintiff undertook to sell the property, and did find a prospective purchaser, who, for some reason, declined to close the contract, although at that time it apjoears both M. A. Samuels and IT. M. Samuels were desirous of having it carried out. When this sale had fallen through, T. M. Gilmore, of T. M. Gilmore & Go., testifies that it was understood between him and the defendant that he would seek to
When reduced to their last analyses, the defenses interposed by the defendant are two: First, that the contract sued on is an entirety and not severable, and that, as neither the president nor the president and secretary and treasurer had authority to sell and dispose of the distillery property, the contract into which they entered with plaintiff, by which they authorized its sale, together with the sale of the whisky on hand and the annual output of the distillery for five years, is void; and, second, that at the date of its execution the mind of M. A. Samuels, the president of the company, was so weakened and enfeebled by the continued and protracted use of morphine that she did
, We will first dispose of the question as to whether qr not this is a severable contract, and, for the purposes of this case, we will proceed upon the theory (without so deciding) that the president of a company, even though advised and counseled by the secretary and treasurer, who is also a member of its board of directors, has no authority to sell and (dispose of the real estate owned by the corporation in the absence of express authority from the board of directors so to do, when the business of the corporation is not that of buying and selling real estate. Here the president of the company undertook, through the plaintiff, to sell the whisky on hand, together with such whisky as should be manufactured during the next five years, and the distillery property itself. The business of this corporation was the manufacture and sale of whisky. It can hardly be seriously questioned, in the absence of any express authority from the board so to do, that the president or
We have, then, a contract, a part of which is authorized by the board of directors, and which, therefore, the president had a right to execute, and a part of which, as stated, for the purpose of this case only, she had no right to execute. Are these so connected and interwoven as that they must be treated as" a whole, or may this contract be separated into its component parts and such as were authorized carried into effect? It is not always an easy matter to determine just what contracts are severable, and what are not. The text-writers and authorities agree that in determining whether a contract shall be treated as sever-able or as an entirety the intention of the parties will control, and this intention must be determined by a fair construction of the terms and provisions of the contract itself. In 3 Page on Contracts, See. 1484, we find the rule thus stated: “In determining whether a contract is entire or severable, the intention of the parties is paramount, and, if this intention is clearly expressed, no question can arise as to which class of
On the question of apportionment of the consideration, we find in the same authority, under section 14U1, the following: “In determining questions of performance, the fact that several covenants are each supported by a distinct consideration, which consideration is thus separately apportioned, is often enough to show that the covenants are severable.” In 2 Parsons on Contracts (9th Ed.) p. 517, we find the rule slated in this manner: “The question whether a
In Story on Contracts (5th Ed.) p. 28, the author thus states the rule: “The weight of opinion and the more reasonable rule would seem to be that where' there is a purchase of different articles, at different prices, at the same time, the contract would be several as to each article, unless the taking of the whole was rendered essential either by the nature of the subject-matter, or by the act of the parties.” Our court has in many instances, viz., Craddock v. Aldridge, 5 Ky. 15; Allen v. Sanders, 46 Ky. 593; Berryman v. Hewit, 29 Ky. 462; C. & O. R. R. Co. v Shelbyville, B. & O. R. Co., 117 Ky. 95, 77 S. W. 690, 25 Ky. Law Rep. 1265, been called upon to construe contracts where the issue was made to turn on the question as to whether they were severable or not, and it has uni
In- the case of Craddock v. Aldridge, supra, Aldridge contracted with Craddock to build a house for a certain sum of money, to be completed at a certain time. One-fourth of this money was to be paid when the work was begun, one-fourth when the roof was finished, and the remainder when the house was completed. It was held that this was a severable contract. Again, in Allen v. Sanders, supra, where the plaintiff agreed to build a house for the defendant by a specified time, and defendant agreed to pay $50 in cash and the balance when the work was completed, it was held that there was a severable contract, and the covenant calling for the payment of $50 in cash could be enforced. See, also, Leonard v. Dyer, 26 Conn. 172, 68 Am. Dec. 382; Patton v. Gilmer, 42 Ala. 548, 94 Am. Dec. 665; Mechanics’ Nat. Bank v. Frazer, 86 Ill. 133, 29 Am. Rep. 20; Scott v. Kittanning Coal Co., 89 Pa. 231; Pierson v. Crooks, 115 N. Y. 539, 22 N. E. 349, 12 Am. St. Rep. 831; Coleman v. Insurance Co., 49 Ohio St. 310, 31 N. E. 279, 16 L. R. A. 174, 34 Am. St. Rep. 565.
Applying these general principles to the contract under consideration, we find that it is expressly agreed that the plaintiff shall receive from the defendant 50 cents per barrel for each barrel of whisky which it sold for the defendant, and that, in the event the purchaser of the whisky exercises the option given to purchase the real estate, then the plaintiff shall receive for his compensation for effecting this sale 5 per cent, of the gross sum realized from the
Thus, by the provisions of the writing sued on, the plaintiff was authorized to sell the whisky which the defendant company at that time owned and should
This raises a novel question. The defense of want of capacity has frequently been interposed by individuals in seeking to escape liability upon contracts into which they have entered, but we are cited to no case where a corporation has sought to be excused from performing its contract upon the sole ground that its representative who made the contract for it did not have sufficient mental capacity to know and understand the character and effect of the transaction. This lack of precedent is due, perhaps, to the fact that a corporation enjoys many advantages which the individual does not. It is an artificial being whose affairs are in general not affected by the sickness, mental derangement, or death of one of its officers. The law requires that its business shall be
But, in order that it may avail itself of this right, it must be clearly established that the said contracting agent did not, at the time the contract was entered into, have sufficient capacity to know and understand what he was doing, and that this fact was not known to other officers or agents of the company, or, if known to them, they did not know that such officer was attempting to act for or represent the company. It is not enough to show that such contracting agent was, by the use of drugs, disease, or from other cause, at times lacking in mentality, but the evidence of the defective mind must relate immediately to the time when the transaction complained of was being entered into.
But even if the evidence led. us to entertain a contrary view, and to hold that she did not at that time
The fact that he did not object to plaintiff seeing his mother and discussing the matter with her and contracting with her relative thereto is another evidence that he did not regard his mother as incompetent to transact business, and that neither they nor their attorney so regarded her is further evidenced by the fact that when, a few days after the contract had been entered into, the company through its president notified Edelen & Co. that they would not carry out the contract, the ground upon which they sought
The contract being a severable one, and there being no merit in the contention of appellee that in the execution of the contract it was not properly represented, the record discloses no defense whatever to plaintiff’s suit, and, this being made to appear, a peremptory instruction should have been given the jury to find in favor of plaintiff, under the terms of the contract, 50 cents per barrel for each barrel of whisky on hand at the date of its execution and such as was manufactured during the succeeding year.
The judgment of the lower court is therefore reversed, and the case remanded for further proceedings consistent herewith.