— This is аn appeal from a judgment for $51,811.49 against the Mobile & Ohio Railroad Company in an action on the following written contract for the purchase of coal, identified in the agreed, statement of facts contained in the abstract of the record as Exhibit C-4:
“This Agreement, made and entered into this tlie 1st day of July, 1920,.between the Mobile & Ohio Railroad Company and the Southern Railway Company in Mississippi, hereinafter called the Railroad Companies,, and Illinois Fuel Company, of Sparta, Illinois, hereinafter called the Coal Company, Witnesseth:
“That, in consideration of the mutual promises and other valuable considerations, the Railroad Companies hereby purchase from the Mining Company and agree to receive and pay for, and the Mining Company hereby sells and agrees to ship from its Illinois Mines located at Sparta, the quantity and grade of coal hereinafter stated, upon the terms and subject to the conditions stated below, to-wit:
Period: July 1, 1920, to July 1, 1921, except as hereinafter provided.
Quantity: 50,000 net tons of 2000 pounds.
Shipments Approximately equal daily, quantities.
Quality: Straight run of mines, reasonably free from all impurities such as sulphur, slate, bone, fire clay, and other non-combustible matter; the Railroad Companiеs at their option to take such lump coal as they may require.
Weights: Mine weights and mine prices shall govern all settlements: but in the event the coal is not weighed at the time, then the first railroad weight shall govern.
Prices: Mines at Sjoarta, Illinois.
Mine-run coal $2.45 per net ton of 2000 pounds.
It is distinctly understood that the prices named herein are based on existing rates of pay for all mine labor and these prices will be subject to readjustment in event existing rates of pay are changed.
*910 Terms and Conditions: The Railroad Companies agree to remit in full on or before the twenty-fifth day of each month for all coal shaped during the preceding month. If credit of the Railroad Companies shall at any time become impaired or unsatisfactory, the Mining Company reserves the right to require payment in advance before making further shipments. The Mining Company will assume no responsibility for transportation or charges therefor.
“This agreement shall be subject to labor troubles, floods, accidents, delays, shortage of ears, contingencies of transportation, or other causes beyond the control of the party affected, neither party to be liable for failure to perform on account of these causes. Should prоduction of available tonnage of coal herein contracted for, due to above causes, prevent the Mining Company from meeting all of its obligations, the Railroad Companies agree to accept as complying with agreement during such period, such proportion of the available coal as the Railroad Companies’ orders (under contract herein), bear to such total obligations to the Mining Company. The above conditions not to be applicable to, nor entitle the Railroad Companies to cancel shipments after same have loft mine or mines.
“Non-compliance of the Railroad Companies with any of the terms of this contract will entitle the Mining Company, at its option, at any time, to cancel this contract, irrespective of failure to cancel for prior non-compliance.
“In Witness Whereof, the parties hereto have executed this agreement in duplicate on this the 1st day of July, 1920.
Attest: Mobile & Ohio Railroad CompaNY
(Signed) P. E. Keller By (Signed) W. J. Diehl,
Purchasing Agent.
Attest: SOUTHERN RAILWAY COMPANY IN MISSISSIPPI
(Signed) P. E. Keller. By (Signed) W. J. Diehl,
Purchasing Agent.
Illinois Fuel Company
By (Signed) W. V. Stockton
General Manager.
Attest:
(Signed) J. C. Newman
Secretary
(Illinois Fuel Company Seal) ”
Plaintiff’s petition alleged that it was an Illinois corporation en- • gaged in the business of mining and selling coal; that defendant Mobile & Ohio Railroad Company was an Alabama corporаtion engaged in the business of operating a steam railroad doing business in *911 tlie State of Missouri with offices in the city of St. Louis, Missouri; that the Southern Railway Company in Mississippi was a Mississippi corporation engaged in operating a steam railroad, and that its charter was so amended on or about November 1, 1920, that its name was changed to Columbus & Greenville Railroad Company. After identifying “Exhibit A” attached to said petition as a true copy of said written contract and pleading the contents thereof, said petition further alleged that plaintiff had complied with all the terms and conditions of said written contract, and in pursuance thereof “between July 1, 1920, and July 1, 1921,-plaintiff sold and delivered to the railroads and said railroads received and accepted 8,268.30 tons of coal at $2.45 per ton, and 45,465.45 tons' of coal at $2.62 per ton, and thereupon and thereby said railroads, and each of them, became indebted to plaintiff under said contract in the sum of $127,126.77; . . . that said ■ railroads under-said contract paid $68,954.02 on account of said indebtedness, but, although payment has been often requested, defendant' has failed and refused to pay the balance due, or аny part thereof.- ■ That said balance, being the sum of $58,172.75, with interest, still remains due from defendant to plaintiff and is unpaid.”
For the amount last above named judgment was prayed, together with interest and costs. In this connection it should be observed that the parties subsequently stipulated and agreed that the amount due the Illinois Fuel Company for coal shipped under this contract was $44,422.86, and it was for this amount together with interest accrued thereon that the trial court rendered judgment in favor of plaintiff in the sum of $51,811.49.
Defendant went to trial on its second amended answer, paragraph I of which denied “each and every allegation in said petition contained.” In paragraph II defendant's incorporation was'alleged, and it was further pleaded that “none of the coal mentioned in plaintiff’s petition was delivered or used by this defendant and the Columbus & Greenville Railroad Company jointly,”- and that it was ultra vires said railroad companies “to assume the asserted obligation, by joint contract Or otherwise,” or for either company to pay for coal shipped to and used by the other, certain constitutional and statutory provisions of the States of Alabama and Mississippi and judicial decisions of the State of Alabаma being specifically pleaded and proved in support thereof. In paragraph III of said answer it was further alleged that “the said "W. J. Diehl, who signed the alleged contract of sale on behalf of this defendant, whs wholly without any authority given to him of conferred upon him by this defendant, either actual or apparent, to make a joint contract of purchase and sale, or a contract obligating and binding this defendant to pay for -coal sold and delivered by plaintiff to the said Columbus & *912 Greenville Railroad Company, or to become guarantor or surety for coal so sold and delivered. ’ ’ In paragraph IV of said answer it was further pleaded that “the alleged contract was made and executed and to be performed in the State of Illinois, and was at all times performed in the State of Illinois,” and that “under its said charter, of incorporation and under the common law at all times in force in the said State of Illinois, as interpreted and declared by the decisions of the courts of last resort in said state,- the said defendant is and at all times has been without power or authority to make a joint contract of purchase or salе, such as is described in plaintiff’s petition, and is, and-at all times has been, without power or authority to make a contract of guaranty, or to obligate or appoint itself to pay for coal sold and delivered to, the Columbus & Greenville Railroad Company,” certain judicial decisions being pleaded and proved in support thereof from the State of Illinois. ,
Plaintiff’s ¡amended reply admitted defendant’s incorporation, but denied each : and. every other allegation in paragraph II. of defendant’s second amended answer. Further replying plaintiff alleged that defendant and the Southern Railway Company in Mississippi were connecting carriers and that under Section 3497 of the Alabama Code of 1907, which .was' specifically pleaded, defendant had power to make, the contract sued on. In reply to paragraph III of defendant’s second amended answer plaintiff denied each and every allegation therein contained, and further replying set up certain facts and alleged that by reason thereof defendant was estopped to deny that W. J. Diehl “had authority to make the joint and several contract sued on.” Rеplying to paragraph IY of defendant’s second amended answer plaintiff denied each and every allegation therein contained, and further replying set up certain facts and alleged that by reason thereof • defendant ‘ ‘ cannot set up the defense of ultra vires and is estopped to deny that it is liable on the joint and several contract sued on.”
Defendant filed demurrer to certain parts of plaintiff’s amended reply, which was overruled. Thereafter defendant filed its motion to strike out certain parts of plaintiff’s amended reply, which motion to strike out was overruled.
The case' was submitted to the court, without the intervention of a jury, upon the issues thus, made and upon an agreed statement of facts and stipulation with exhibits attached, objections being noted with reference .thereto. Before- the decision of the case defendant presented in wiriting -and - requested the court to give thirty-one declarations of law. ..The trial-court gave declarations numbered 5, 17 and 18, and -refused to give the remainder. Defendant filed its exceptions to the rulings 'of the court' in the trial, and after adverse judgment' as aforesaid filed its motions for a new trial аnd in arrest *913 of judgment, which were overruled, and thereafter plaintiff, perfected this appeal.
Counsel .for appellant in their reply brief say there are but two possible major propositions of law in this case, and briefly state what they contend to be the real questions in.the ease as follows:
“First. Did the M. & 0. Railroad Company agree to pay plaintiff for the coal which plaintiff delivered to and which was used solely, by the Southern Railway Company in Mississippi?
“Second. If-it is held that the .defendant did so agree, is the obligation void by reason of the rule of ultra vires?”
’While it may be assumed that the above fairly indicates.appellant’s ultimate position, yet the issues joined are not as easily determinable as such a terse statement might indicate. We shall therefore endeavor to consider also, in accordance with our owinidea of sequence, the numerous points raised and grouped-in appellant’s first brief, and in such connection will make appropriate reference to the pertinent stipulated facts, exhibits and other matters in the record.
It is apparently- conceded that the paper writing above set forth was duly signed by the purported parties and constituted a contract between them. The chief matters in dispute are fbe nature of the contract and the force and effect to be given its terms. Opposing counsel make conflicting claims as to the place Q£ contracting,' or the place in which the act was done which made the contract binding, and of the state laws which should govern. The question whether the law of any state has imposed such an obligation as the one here alleged is a question of the law of contracts and therefore involves the determination. of the place of contracting, since the law! of that State is the .law which imposes the'obligation.alleged if any such is. imposed, absent proof of a contrary intention of the parties. Hence, the first , matter to be determined is the place of contracting, and this the court of the for.um decides according to its own. conception .of the.conflict of laws. The guiding, principle is thus stated in Am. L. Inst. Restatement, Conflict of Laws (Tent.), section 3.33:
“A contract is made in the State where the last act toward the completion of the contract is done by a party to the сontract, or by an agent who makes a contract for a principal.”
This statement is well supported in 13 Corpus Juris, 580; Wharton on the Conflict of Laws (3 Ed.) page 888; 5 Ruling Case Law, 935; Peak v. International Harvester Co., 194 Mo. App. l. c. 131; Lukens v. Ins. Co., 269 Mo. l. c. 581; Liebing v. Ins. Co., 276 Mo. l. c. 134; and numerous other authorities. Its accuracy is.not challenged, but the views of opposing counsel are far apart as to which was “the last act- towlard the completion of the contract,” and, consequently, they differ as to the “place of contracting.” Counsel for appellant in *914 sist that it was the • act o£ the mining company, done at S'parta, Illinois, in mailing its signed contract to the agent for the railroad companies at St. Lonis, Missouri, and, therefore, the place of contracting was Sparta, Illinois. Counsel for respondent say that it was the act of the agent for the- railroad companies, done at St. Louis, Missouri, in mailing the contract to the mining company at Sparta, Illinois, after he had signed same on behalf -of his principals, and, therefore, the place of contracting was St. Louis, Missouri.
According to the agreed statement of facts W. J. Diehl, who signed the contract оn behalf of the.railroad companies, “was on the date of the contract involved in this suit purchasing agent of each of said railroad companies.” Also, prior to April, 1920, “the Mobile & Ohio Railroad Company and the Southern Railway Company in Mississippi maintained joint offices for their traffic departments in St. Louis, Missouri, and maintained joint offices for all other departments at Mobile, Alabama. In April, 1920, the offices of those departments at Mobile, except the accounting departments and treasury departments, were moved to St. Louis, and thereafter and on July 1, 1920, both of said railroads maintained offices in the’ same suite of rooms in St. Louis, Missouri, except the accounting departments and treasury departments, which remained at Mobile and occupied joint offices, as above stated.” Also, prior to July 1, 1920, “E. E. Norris had been elected vice-president in charge of operations of the Mobile & Ohio Railroad Company by its board of directors, and had been elected vice-president in charge of operations of the Southern Railway Company in Mississippi by its board of directors, and the said E. E. Norris had authority to purchase suрplies and make contracts and to direct the purchase of supplies and the making of contracts for each of said companies, and also had authority from each company to appoint a purchasing agent for such company. In the exercise of this authority he appointed as purchasing agent for each of said companies W. J. Diehl, who derived his authority from the said Norris. The said Norris knew of the making of the contract involved in this suit and had actual knowledge of the form and terms of said contract, as it was drawn by the said Diehl before the execution thereof.” Also, “after negotiations with the plaintiff, the said W. J. Diehl drafted the contract in question and mailed it unsigned from St. Louis, ón June 29, 1920, to plaintiff in a letter of that date addressed to Mr. R. V. Stockton, general manager, Illinois Fuel Company, Sparta, Illinois, the original of which is attached hereto and marked ‘Exhibit C-l.’ The said Stockton signed the said contract for the Illinois Fuel Company at Sparta, Illinois, and on July 2nd mailed it to the said Diehl at St. Louis, enclosed with a letter of that date, the original of which is attached hereto, marked ‘Exhibit C-2.’ Upon receipt of the said contract the said Diehl signеd *915 tlie name of each of the railroad companies, by himself, as purchasing agent thereof, at St. Louis, Missouri, and mailed one copy thereof, enclosed with a letter of that date addressed to the said Stockton, General Manager, Illinois Fuel Company, at Sparta, Illinois, the original of- which is attached hereto, marked ‘Exhibit C-3.’ ” The three exhibits above referred to are as follows:
EXHIBIT C-l.
■ Mobile and Ohio Railroad Company Southern Railway Company in Mississippi.
W. J. Diehl,
.Purchasing Agent
Saint Louis, Mo., June 29, 1920
File 920
Mr. R. V. Stockton, Gen’l. Mgr.
Illinois Fuel Co., '
Sparta, Ill.
Dear Sir: .
Yours of the 14th inst., quoting on 200 tons mine run coal daily at price of $2.45 per net ton f. o. b. cars, mine No. 4, Sparta, Ill. Also subsequent conference at St. Louis upon the subject.
I am attaching in duplicate contract covering a total of 50,000 net tons of 2000 pounds, to be delivered daily in approximately equal quantities, from July 1st, 1920, to July 1st, 1921, at $2.45 per net ton. Will you lrindly have the contract properly executed on behalf of your company and return to me for final handling. I will return a copy to you properly executed.
I regret to inform you that after further consideration of the matter. we found it impossible to increase the amount to 300 tons per day, as requested.
Yours truly,
W. J. DIEHL,
Purchasing Agent.
EXHIBIT C-2.
The Illinois Fuel Company Miners and Shippers Coal and Coke
W. S. Ingraham, President.
W. V. Stockton, Treasurer.
J. C. Newman, Secretary.
Mines on Illinois Southern and, Mobile & Ohio Railroads.
W. V. Stockton,
Gen. Mgr.
Sparta, Ill., July 2, 1920.
MR. W. J. DIEHL, Purchasing Agent,
Mobile & Ohio, Railroad Company,
St. Louis, Mo.-
Dear Sir:
We are herewith returning to you duplicate contract properly executed for final handling, at.which time, we note, you will return copy to us for our files.
Yours very truly,
W. V. STOCKTON,
General Manager.
*916 EXHIBIT C-3.'
Mobile and Ohio Railroad Company
Southern Railway Company in Mississippi.
W. J. Diehl, Purchasing Agent.
Saint Louis, Mo., July 3, 1920.
Pile 920
M)R. W. V. STOCKTON, General Manager,
Illinois Fuel Co.,
Sparta, Ill.
Dear Sir:
I am returning to you copy of contract properly executed for your files.
Yours truly,
W. J. DIEHL,
Purchasing Agent.
The record does not fully disclose what negotiations were had by the mining company and the agent for the railroad companies prior to said agent’s action in drafting the form of contract and mailing it unsigned to the mining company. However, it is apparent that they had not reached the stage of a completed contract, for it seems from above Exhibit C-l that neither the total amount of coal to be shipped, the dates between which shipments should be made, nor the amount of daily shipments had previously been agreed upon. This is not a case where an oral agreement was fully completed with intention that it should become binding on all parties thereto before reduced to writing, such as is discussed in Hudson v. Rodgers,
Appellant also contends that the contract in question was several, and not joint and several as claimed by respondent. Appellant evidently concedes that this question is to be determined by ^aw Missouri for no constitutional or statutory previsions or court decisions of any other state are pleaded or proved in support of this contention. Section 2155, Revised Statutes 1919, reads as follows:
“All contracts which, by the common law, are joint only, shall be construed to be joint and several.”
Is this a joint contract by the common law? In Hill v. Combs,
‘f Under the common law, where two or more persons undertake the performance of an obligation, the presumption is that the undertaking was joint. Words of express joinder are not necessary for this purpose. Words of severance are required to produce a several responsibility, and in the absence of such words the undertaking is joint and not several. [Bliss on Code Plead., sec. 92; 1 Parsons on Contr. (6 Ed.) p. 11; Pomeroy on Rem. & Reml. Rights, p. 329.] ”
In Townsend v. Roof,
“A joint contract is one by which two or more promisors are jointly bound to fulfill its obligations and either of whom may be charged with the entire liability under the contract, or such contract may be one by which two or more obligors are given a joint right.”
In Kron Livery & Undertaking Co. v. Weaver,
“Besides, we think the statement sufficiently shows a joint liability on the part of the defendants. It shows that both defendants promised to pay for identically the same services; that both agreed to bеcome primarily liable for such payment; that both undertook the performance of the same obligation. In the absence of a contrary showing, the undertaking is presumed to be joint.”
The above excerpts harmonize with the generally accepted view, in proof whereof w'e quote (italics ours) from a few well-recognized authorities.
13 Corpus Juris, 577: “ Whether the promises are several or joint, or joint and several, depends on the construction of the language used, and the intention of the parties as manifested by the language used must be followed by the court. If the contract made by several persons purports simply to bind themselves, or to covenant, without more, the obligation or covenant is taken to be joint only, and not several; if the contract purports that they bind themselves or coven *919 ant severally, the-liability is separate; if they purport-to bind themselves jointly and severally, or to bind themselves and each of them, or to covenant for themselves and each of them, using both joint and several words, the liability is both joint and several. As agreement between promisors that their liability shall be several does not affect the rights of the promisee, where the promisee intends- that their liability shall be joint and is justified in such intention.”
6 Ruling Case Law, 878: "In other words, an obligation undertaken by two. is presumably joint, in the absence of express words to render it joint and several, or a statute declaring every contract, though joint in its terms, to be several as well as joint.” -
1 Parsons on Contracts, page 11: "Whether the liability incurred is joint, or several, or such that it is either joint or several, at the election of the other contracting party,- depends (the rule above stated being kept in view) upon the terms of' the contract, if they are express; and where they are' not express, upon the intention of the parties as gathered from all the circumstances of the case.”
1 Williston on Contracts, page 607: "Following the analogy of the rule of real property that an estate granted to two persons created a joint tenancy rather than a tenancy in common, it was early held and, except as changed by statute, the law remains that promises by two or more persons create a joint duty unless the contrary is stated.' ‘It is a general presumption of law token two or more persons undertake an obligation that they undertake jointly; words of severance are necessary to overcome this primary presumption.’ The fact that the interests of the obligors in the contract are diverse, does not prevent the duty from béing joint.”
2 Elliott on Contracts, pages 744-5: ‘ ‘When two or more persons assume a contractual obligation or are given a right, it is presumed to be -a joint obligation or a joint-right in the absence of -anything to show a different intention' or a statutory enactment changing the rule. The presumption ■ that the obligation is a joint undertaking is not conclusive, however, and may be rebutted, and is rebutted when the obligation contains words of severance which show that it was the intention of the parties that it should be several as well as joint. But .a promise, the subject-matter of which is entire, and which is joint in its terms and object, cannot be made several by any doubtful implication or limitations. Sucih words Us ‘we 'promise,’ ‘we hereby guarantee,’ ‘we will undertake,’ ‘the plaintiffs are to pay,’ ‘the directors pi-omise,’ no other element entering-in, import that the contract is not to be performed by one of the obligors but by all of them and is therefore joint.”
The contract here in question expressly states that "the Railroad Companies hereby purchase from the Mining Company and agree to receive and pay for, and the Mining Company herеby sells and *920 agrees to ship from its Illinois mines located at Sparta, the quantity and grade of coal hereinafter, stated, upon the terms and subject to the conditions stated below,” etc. It further- provides that “the Railroad Companies agree to remit in full on or before the twenty-fifth day of each month for all coal shipped during--the preceding month.” The contract thus contains characteristic and appropriate expressions of á joint obligation, and there is no severance‘of the subject-matter. Indeed, .the entire contract will be searched in vain for. any word of severance whatsoever. Therefore, according to the great weight of authority above indicated, it was a joint contract by the common law.
In its effort to escape this conclusion appellant asserts that “in determining-whether a contract is-joint or several, courts look not to its terms alone, but consider who and what the parties to the contract are, the purposes- for which and the circumstances under which it w*as made and to the construction given it by the parties themselves in its actual performance.” It will be remembered, however, that according to the general rule already stated, in determining the question whether a contract is joint or several, the intention of- the parties as manifested by the language used in the contract must be followed by the courts. The rule is also thus stated in 13 Corpus Juris, page 578:
“As the promisors or covenantors may bind themselves severally, ' jointly, or jointly and severally, of in any manner or in any words, the only question is to determine the intention. If by a/ny means the courts earn construe that from the words of the instrument it will be done; if that cannot be done, then all the circumstances of. the case and the interests of the parties will be looked at to discover their intention.”
This contract in usual, plain and appropriate'terms manifests an intention that the railroad companies shall be jointly bound. In such case the joint promise cannot be made several “by any doubtful implication or limitations.” Express words of severance must appear. Unless an examination of-the cases cited by appellant on this point discloses some application of an exception to the rule we shall be compelled to apply the general rule. . -
Davis & Rankin v. Hendrix,
It is also urged in behalf of appellant that “the contract shows on its face that the parties did not intend-that the coal should, be delivered to or received by the two Railroad Companies jointly, but intentionally left it to the railroads, each needing coal for the operation of its own line, to direct that separate shipments be made to each at the several coal-chute points on its line; in accordance.with its needs from time -to time.” • Using this interpretation as a basis counsel for appellant adroitly build up the argument that the words “receive” and “pay,”, as used in the contract clause “the Railroad Companies hereby purchase from.the Mining Company and agree to receive and pay,” etc., are the joint predicate of the,sentence .of which “the Railroad Companies” is the subject, that each bears exactly the same relation to the subject, and “as it was intended that each company would separately ‘receive,’ so it was intended that each would separately ‘pay.’ ” This; conclusion apparently -results from a misconception of the use of the word “receive” in the contract. It-is there used as an obligation assumed by the railroad companies to the mining company, ahd not as a right or privilege to be. exercised as the railroad - companies might agree between themselves. The ordinary and accepted-meaning of “receive”.is synonymous with that of “accept.” [4 Words and Phrases (2 Series) p. 200; Standard Oil Co. of Indiana v. United States,
Appellant further says that ‘•'in the performance of the contract the'parties had the-same right to place their own construction on it as they, had to choose the language of it when they made it, and its practical construction by the parties during its performance, before any controversy as to its meaning had arisen, is conclusive, such practical construction not being violative of its terms.” [Otis v. Pittsburgh Coal Co.,
But, appellant urges that plaintiff, having united with defendant in- construing the contract as several throughout, is now estopped from asserting a joint liability, and cites Freet v. American Electrical Supply Co.,
*923 Another outstanding- defense pleaded and here urged by appellant is that defendant was without power, either under its charter or the statutes of Alabama or the law of Illinois, to enter into a joint and several contract for the purchase of coal, and that yjjg contract is, therefore, v Urn vires. On this phase of the ease we must first determine by what law the defense of ultra vires, thus interposed, is governed.
Scudder v. National Bank,
“Matters bearing upon the execution, the interpretation, and the validity of a contract are determined by the law of the place where the contract is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting the remedy, such as the bringing of suits, admissibility of evidence, statutes of limitation, depend upon the law of the place where the suit is brought.”
The Supreme Court of the United States has not uniformly followed the rules by it laid down in the above case, but the rules have long been approved and generally followed by the courts of Missouri. In Ruhe v. Buck,
“The act of the parties in entering into a contract at a particular place, in the absence of anything shown to the contrary, sufficiently indicates their intention to contract with reference to the laws of that place; hence the rule, as it is usually stated, that a contract as to its validity and interpretation is governed by the law of the place where it is made — the lex loci contractus, or, more accurately, that contracts are to be governed as to their nature, validity, and interpretation by the law of the place where they wiere made, unless the contracting parties clearly appear to have had some other place in view.”
On the very question of capacity to make a contract it is said in Wharton on the Conflict of Laws (3 Ed.) pages 906, 907:
“When the party whose capacity is in question is an artificial person, like a corporation, its capacity is necessarily determined, or at least limited, by the law of its creation, though its capacity may be still further restricted, or at least encumbered with conditions, by a statute of another state or country in which it attempts to contract.
“As between the law of the place where the contract is made and that of the place where it is performable, the weight of authority favors the former. In other words, this matter comes within the first rule of the Seudder case, which, for this purpose, may be treated as an absolute rule, not dependent upon the intention of the parties.”
Also, Minor on Conflict of Laws, page 145:
“If a party has not the legal capacity, he cannot enter into a valid contract; if he has the capacity, he may. This question must be determined at the time he enters into the contract, not when he comes to perform it. It pertains therefore to the making of the contract, and hence the element of capacity must be given the same'situs that belongs to the making of the contract.”
Also, Am. L. Inst. Restatement, Conflict of Laws (Tent.), section 353:
“The law of the place of contracting determines the binding effect of a promise with respect to (a) The capacity to make the promise; (b) The necessary form, if any; in which the promise must be made; (c) The legal requirements for making a promise binding, such as consideration, seal, etc.; (d) The circumstances which make a promise ineffective or a contract voidable; (e) The nature of the act to which a party becomes bound; (f) The time when and the place where the promise is by its terms to be performed; (g) The absolute or conditional character of the promise.”
The general trend of the above authorities is that- contracts are in every case governed as to their
nature and validity
by the law of the
*925
place where they are made, although for the purpose of deciding the question now before us it is not necessary to go as-far as some of these authorities indicate. The rule within which appellant must bring its contention is that matters connected with the performance of a contract are regulated by the law prevailing at the place of performance. - In this case defendant seeks to avoid the joint and several nature of its contract on the ground that it was without capacity to make such a contract. By the almost unbroken current of authority in the United States the question of capacity to contract would, in this case, be determined by the law of the place of contracting, affected only by the terms of defendant’s charter aud possibly by the statutes of the charter granting state, Alabama. [Wharton on the Conflict of Laws (3 Ed.) pp. 906, 907, supra; Pinney v. Nelson, 183 U. S. l. c. 151; Campbell v. Crampton,
Plaintiff’s reply to defendant’s plea .of ultra vires was that defendant could not set up such defense and was estopped to deny that it was liable on said contract because of certain of its acts and 'conduct alleged as follows:
“That prior to and on July 1, 1920, one E. E. Norris was the duly elected vice-president in charge of operations of the defendant, and also the duly elected vice-president in charge of operations of the Southern Railway Company in Mississippi, and' the said E. E. Norris had authority to purchase supplies and make contracts, and to direct the purchase of supplies and the making of contracts for each of said companies, and also had authority from each of said companies to appoint a purchasing agent for such eom'pány. Pursuant to said power he appointed W. J. Diehl" purchasing' agent for each of said companies, and the said W. J. Diehl as such purchasing ¿gent signed the contract sued upon on behalf of defendant and-the Southern Railway Company in Mississippi, and the said E. E. Norris knew of the making of the contract sued on and had actual knowledge of its form and terms, and with full knowledge thereof defendant permitted plaintiff to cоmpletely execute said contract. That plaintiff billed and invoiced all the coal delivered under said contract’ and herein sued for *926 as sold to the defendant, and addressed all communications for payment for the said coal to defendant, and defendant knew, or ought to have known, that plaintiff was relying upon it for payment' for the coal delivered under the contract, but defendant stood by and permitted plaintiff to continue delivering coal under the contract in reliance upon such belief, and defendant has completely executed the contract. That defendant and the Southern "Railway Company in Mississippi, both prior to and after the making of the contract in suit, maintained joint offices in the city of St. Louis, Missouri, and used stationery with the names of both said companies inscribed thereon, and had common offices, and both said companies were owned and controlled by the Southern Railway Company, a Virginia corporation.”
In 7 Ruling Case Law, pages 674, 675, 676, with reference to the defense of ultra vires, it is said:
“In suits between the corporation and strangers dealing with it, the question is whether the act is one which the corporation is not authorized to perform under any circumstances, or one that it may perform for some purposes, or under certain conditions. In the first case it is strictly ultra vires; and as a general rule there can be no recovery because' the party dealing with the corporation is bound to know, from the law of its existence, that it has no power to perform it. In the second case the contract is not in its strict sense ultra vires, and the issue will turn upon whether the party dealing, with it is aware of the intention to perform the act for some unauthorized purpose, or whether the attendant circumstances justify its making and its performance. . . . However, the defense is looked upon by many courts with disfavor whenever it is presented for the purpose of avoiding an obligation which a corporation has assumed merely in excess of the powers conferred upon it, and not in violation of some express prohibition of the statute; and, in the modern cases especially, the rule has been frequently announced that the plea of ultra, vires should not be allowed to prevail, whether interposed for or against a corporation, when it will not advance justice, but, on the сontrary, will accomplish a legal wrong.”
Among the numerous cases cited in a note supporting the last sentence above quoted is First National Bank v. Guardian Trust Co., 187 Mo. l. c. 526, 534. Regarding the availability of the defense of ultra vires we there said:
“The conclusions reached as indicated herein find support in a number of -well-considered cases in other jurisdictions, and is in keeping with that just rule, as announced by the Neiv York courts, that the plea of ultra vires should not as a general rule prevail, whether interposed for or against a corporation, when it would not advance justice, but on the contrary would accomplish a legal wrong. *927 Similar views are entertained by the' Supreme Court of the’ United States. In Railroad v. McCarthy, 96 U. S. l. c. 267, it is said that ‘the doctrine of ultra vires, when invoked for of against a corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong.’ . . .
“At this advanced age in our civilization and the rapidity with which our commercial interests are advancing, methods and occasions for concentrating the efforts of our people in the prosecution of business by forming corporations, multiplying from day to* day, the time is at hand for the еnforcement of the rule as announced by Lord St. Leonabds in Railroad v. Hawks, 5 H. L. Cases, l. c. 370, where it was said that ‘the safety of men in their daily contracts require that this doctrine of ultra vires should be confined within narrow bounds.’ ” ■
In Cass County v. Mercantile Town Ins. Co.,
“It is well settled in'this State that the defense of ultra vires is not open to a corporation when the contract has been fully executed on the part of the other contracting party, :and it is not expressly prohibited by law.” ■ •
In Joseph Schlitz Brewing Company v. Missouri Poultry & Game Co.,
“This court and the courts' of appeals of this State long since adopted the rule in force in most of the states which we said in Millinery Co. v. Trust Co., 251 Mo. l. c. 579, has been tersely stated by Rombatier, P. J., in Winscott v. Inv. Co., 63 Mo. App. l. c. 369, to be that: ‘the defense of ultra vires .is not admissible where the contract has been fully executed on one side, unless it is' a contract expressly prohibited by law.’ ” ■
In Marshall v. Maccabees,
“Jt is well settled in this State that the defense of ultra vires is not open to a corporation when the contract in suit has been fully executed on the part of the other contracting- party, and it is not expressly prohibited by law.” - •
In Lohrer v. Charles F. Vogel Real Est. Co. (St. Louis Court of Appeals),
*928 “The contract between plaintiff and defendant has been executed. Plaintiff forbore the sale under the original deed of trust, and performed her part of this contract, and defendant would now be estopped from claiming ultra vires, because the acts of defendant, in executing this guaranty, are not prohibited ■ by its by-laws, articles of incorporation, or the general lawA A corporation, deriving all its powers to act from its articles of incorporation and the general law, can make no lawful contract in violation of the provisions of either; but su&h a corporation cannot take advantage of the authorized act of one of its officers in leading some one into the performance of аn agreement which is not prohibited by its articles or- the general laws. This is especially true where the contract has been executed by the other party. [Smith v. Richardson, supra; Mining Co. v. Taylor,247 Mo. 1 ,152 S. W. 5 ; St. Louis Drug Co. v. Robinson,81 Mo. 18 ; City of Goodland v. Bank,74 Mo. App. 365 .] ”
Such is the law in Missouri as to the availability of the defense of ultra- vires under the circumstances noted. Appellant contends that under its charter- and the statutes of Alabama it was without power to bind itself by the joint and -several contract here -pleaded, but the record before us does not disclose any charter or statutory provision prohibiting its doing- so. According to the record plaintiff had fully performed the contract; and the other railroad to which the coal yet unpaid for was delivered at the instance and request of the dual agent of. said railroads was in the hands of a receiver long before the defense of ultra vires was interposed. Appellant contends, however, that the interposition of this defense will not result in a legal wrong. We-do not agree that such would be the case. It appears. that the other railroad company is insolvent and unless defendant pays; plaintiff it will never be paid for the coal in question. It is said that defendant receivеd no benefit under' the contract. Agiain we do not agree with appellant. - Under the agreed statement of facts at the time defendant signed this' contract E. E. Norris was the duly elected vice-president in charge of' the'• operations of both railroads, he had authority to purchase supplies and make contracts and to direct the purchase -of supplies and the making of contracts for each of said companies and to appoint a purchasing agent for said companies; pursuant to said power he appointed ‘W. J. Diehl purchasing agent of said companies- and the said W. J'. Diehl as such purchasing agent signed this contract, the said Norris at. the time having full knowledge of said contract and the contents thereof; both prior to and after the making of said contract said railroads maintained joint offices in-the. city of St. Louis, Missouri, used stationery with the names of both companies inscribed .thereon, had common officers, and wore-both owned and controlled by the Southern Railway Company, a Virginia corporation; and all the coal delivered un *929 der said contract was shipped as directed by the dual agency of -said companies, and the' same w*as invoiced tó and all communications for the payment thereof were addressed to' defendant. True, it is conceded that none of the coal the purchase price of which is here sued for was used by defendant, but for that reason defendant would not be relieved of liability under its joint and several contract. Nor can we say that defendant derived no benefit from the contract. The above arrangements under which the two railroads chose to conduct their business, including the’making of this contract for, the purchase of coal, weré evidently by them deemed mutually beneficial or "they would not have been pursued. The coal purchased under this contract ivas no inconsiderable amount,' doubtless resulting ip terms more advantageous to them than could have been obtained in the purchase of a smaller amount.'' Defendant used and paid for inore than half of the total amount called for by the contract and received its proportionate share of the benefits incident thereto. During all the time it was receiving these substantial'benefits, at least some of which must have been рecuniary, it made no suggestion that in signing the contract • it had exceeded its corporate powers. Not until about seven days before the 'contract wíás to expire did defendant even intimate that it would not pay this indebtedness, although for weeks previous plaintiff had addressed repeated demands therefor to defendant, and even then it did not suggest that the defense of ultra vires would be interposed. It is true that in a letter addressed to plaintiff under date of January 14, 1921, Mr. J. L. Howell, as superintendent of transportation for both railroads, requested plaintiff to “bill eight cars of this coal per week to the Columbus & Green-ville Railroad at Columbus, Miss, and the balance to the Columbus & Greenville Railroad at Winona, Miss., instead of the Mobile & Ohio, as you have been, doing in the past.” Counsel for appellant now stenuously urge that the word “bill” as here used means “to charge against another in an account for future payments,” and even contend that the word has no other meaning or usage. Even if defendant had used the word in that sense we fail to see how its original contract would thereby be altered. But counsel are plainly in error as to both contentions. The transitive'verb'“bill” has a common and well-known usage in railroad and shipping сircles synonymous with “ship.” In The Century Dictionary and Cyclopedia this usage is illustrated by the following excerpt from United States Constitution Report, No. 73, page CXII:
‘ ‘ Parties in the United States having goods to ship to Corea may, as heretofore, hare them billed to Yokohama by American or other lines and then rebilled to Corea.” ■ . .
The context of defendant’s above letter plainly shows that such was its intended usage and meaning. The expression merely *930 amounted to shipping instructions and was so understood by both parties, because in its reply plaintiff indicated its willingness to be governed thereby and thereafter treated it as such throughout and continued to render invoices and make demands on defendant for the purchase price thereof without any objection or intimation on the part of defendant that it- would not pay. same until about seven days before the expiration of the contract, when for the first time it denied liability. Surely under the law of Missouri defendant cannot now avail itself of the defense of ultra vires.
Appellant also says that the question of estoppel is to be governed by the law of Illinois where plaintiff performed its part of the contract, and that-undеr the law of that state the defense 0£ vires is available in this case. We do not consent to the first proposition, and it, therefore, becomes unnecessary for us tb rule on the secpnd. The acts and conduct of defendant which make this defense unavailable do not arise out of, nor are they in any sense connected with, the performance of the contract. They were misleading from the very start and having been persisted in until the contract was duly performed defendant cannot now by pleading ultra vires avail itself of an inconsistent position to effect a legal wrong. The law of the place of contracting' would still govern, and we deem it unnecessary to .burden this opinion with a consideration of the law of Illinois.
Appellant further says that the dual agent, Mr. Diehl, did not have authority “to bind, defendant .to the asserted obligation.” No authorities are presented in support of this suggestion. We think the stipulated facts and the conclusions of law, hereinabove approved dispose of this question adversely to appellant’s contention.
The conclusions ive have reached and stated herein -obviate the necessity of -considering other contentions made by appellant.
Finding no error- in the rulings of the trial court it follows that its judgment herein should be and the same is affirmed.