74 So. 469 | Ala. | 1917
Lead Opinion
The plaintiff (appellee here) seeks to recover for services rendered as a physician, to the employees of the defendant company, under contract for a fixed salary. The defendant is engaged in the operation of a sawmill and the manufacture of lumber at Lockhart, Ala., and as one of the defenses interposed pleaded that it is a corporation, and was not authorized by its character to so contract for the services of a physician.
The substance of the plaintiff’s first replication is set out in the statement of the case, and is to the effect that the defendant company, being engaged in the sawmill business in which it is necessary to engage a large number of operatives, and in which accidents are liable to occur, recognized that the comfort and health of its employees is an aid to such company in the accomplishment of the ends for which it was organized; and that a physician employed to attend them in case of sickness or accident is in a sense an auxiliary of the main enterprise of the corporation. The action of the court in overruling the demurrer to this replication is the first question pressed upon our attention by counsel for appellant.
The subject of ultra vires has been much discussed, and is one upon which great diversity of opinion has been expressed. As said by another: “There is no clearly defined principle of law that determines whether the particular act is ultra vires or intra vires. The courts are becoming more liberal, and many acts which 50 years ago would have been held to be ultra vires would now be held to be intra vires.”
The question for consideration is whether the contract with the plaintiff was within the implied or incidental powers of the
In the same volume (section 681) he states that the implied powers of a corporation are not limited to those which are indispensably necessary, but include those which are appropriate and suitable to carry out the express powers. A like rule is also declared by the Supreme Court of Wisconsin, in Madison Plank Road Co. v. Watertown Co., 5 Wis. 173, in the following language : “The rule is, that if the. means employed are reasonably adapted to the ends for which the corporation was cheated, they come within its implied or incidental powers, though they may not be specifically designated by the act of incorporation.”
To similar effect is the language of the Supreme Court of Maine, in Flaherty v. Portland, etc., Soc., 99 Me. 253, 59 Atl. 58: “The implied powers of a corporation are not limited to such as are indispensably necessary to carry into effect those which are expressly granted, but comprise all that are necessary, in the-sense of being appropriate, convenient and suitable for-such purpose, including the right of a reasonable choice of means to be employed. — Cyclopedia of Law, vol. 10, p. 1097; • 1 Cook on Corporations, § 3.”
In the case of Colorado Spgs. Co. v. Am. Pub. Co., 97 Fed. 843, 38 C. C. A. 433, it was said that the acts of a corporation are not ultra vires if “they had a natural and reasonable tendency to aid in the accomplishment of the objects for which the corporation was created.” As illustrative of this rule the Supreme Court of Illinois (Cen. Lbr. Co. v. Kelter, 201 Ill. 503, 66 N. E. 543) held that a corporation organized for “the purchase and sale of lumber, and all adjuncts for carrying on a general lumber business,” has the implied power to execute a bond, for the performance of a building contract, on the part of a contractor, if the bond is executed for the purpose of securing a sale of lumber to the contractor. See, also, Green’s Brice’s Ultra Vires, p. 86
The language of our own cases is not out of harmony with the general principles as above referred to. In Chewacla Lime Works v. Dismukes & Co., 87 Ala. 344, 6 South. 122, 5 L. R. A. 100, the following words, pertinent to this question, are used: “Any transaction * * * not necessary or proper to enable the corporation to answer the purposes of its creation is void.”
See, also, Steiner & Lobman v. Steiner Land Co., 120 Ala. 128, 26 South. 494; U. S. Fdy. Co. v. Bailey, 194 Ala. 261, 69 South. 825.
In Steiner v. Steiner Land Co., 120 Ala. 128, 26 South. 494, is the following:
“The general rule which prevails in this country is, that corporations created by an act of the Legislature, or organized under the general laws, can exercise only the powers expressly granted, the implied power to do all acts necessary to enable them to exercise the powers expressly granted, and such incidental powers as pertain to the purposes of their creation.”
We have not overlooked the recent case of A. G. S. R. R. Co. v. Loveman Co., 196 Ala. 683, 72 South. 311, where, in discussing the question of ultra vires, the following expression was used: “Expressly authorized by the charter or is necessarily incident to the powers for carrying out the objects of the charter.”
By the use of the words “necessarily incident,” this court did not intend to indicate that such action should be indispensably necessary to the purposes of the corporation, but only that they should be necessary in the sense of being appropriate and suitable for the purposes for which the corporation was organized.—10 Cyc. 1079.
Even in regard to municipal corporations this court has held that such corporations can exercise those powers expressly granted, and those, also, “necessarily or fairly implied in or incident to the powers expressly granted.”—Cleveland Co. v. Greenville, 146 Ala. 559, 41 South. 862.
. The replication to the plea of the statute of limitations alleges that partial payments were made on the matters set forth in the plea, in each of the years from 1903 to 1913, inclusive. The demurrer to this replication was properly overruled.—Steele v. Steele, 64 Ala. 438, 38 Am. Rep. 15.
It is further insisted that the defendant was due the affirmative charge for that the plaintiff failed to offer proof to establish the averments of his replication. While the evidence was meager in this respect, we are not persuaded that it was so lacking in proof to support the material averments of the replication as to withdraw the same from the jury’s determination. Some of the matters alleged are of common knowledge, such as that, in the operation of a sawmill, the employees are subject to accident in the use of the machinery.—16 Cyc. 876.
The question here involved was fully discussed in B. R. & P. Co. v. Gonzalez, 183 Ala. 273, 61 South. 80, Ann. Cas. 1916A, 543, and in the light of the rule there announced we are not persuaded that the judgment should be reversed on account of the matters here complained of.
We find no reversible error in the record, and the judgment is accordingly affirmed.
Affirmed.
Rehearing
ON REHEARING.
This court has held that no horizontal rule can be laid down embracing questions of this character, but each case must be
In view of the result which has been reached upon this application, we deem it proper to enter into no discussion of the evidence in the cause. It has been carefully considered in connection with the argument of counsel to which reference is made above. Upon a reconsideration of this question, the court has reached the conclusion that a new trial should have been awarded the defendant, and that for its denial the judgment should be reversed. The writer and Chief Justicé Anderson entertained a contrary view and so voted, but a majority of. the court, consisting of Justices Mayfield, Sayre, Somerville, and Thomas, are of the opinion that a new trial should be granted, we are not inclined to record a dissent, and have concluded to yield our view upon the question to that of the majority.
The application for rehearing is granted, the judgment of affirmance set aside, and the cause is reversed and remanded.
Reversed and remanded.
Concurrence Opinion
(concurring). — Upon original submission a majority of the court affirmed the judgment below. I was unable to give my assent to that conclusion because, it seemed to me, error was committed by the trial court in overruling defendant’s (appellant’s) demurrers to replications interposed by the plaintiff to plea 3. On rehearing the order of affirmance has been annulled and a reversal of the judgment entered, but, as appears, upon a different finding of error from that which, in my opinion, underlay the judgment below.
The complaint as amended contained some of the common counts, and also special counts declaring on a contract of employment between plaintiff and defendant, whereby plaintiff was to serve and did serve' defendant as a physician to and for its employees, at an agreed compensation. Among the common counts was one (lettered A) whereby the claim was for money received by the defendant for the use of the plaintiff. It does not appear, so far as I have been able to discover, what disposition, if any, was actually made of this count. Whether the issue tendered by it was, in fact, submitted to the jury is not shown. The pleas, originally filed on November 17, 1913, do not appear to
No demurrer to this plea was filed. For the reasons the writer set down in his individual opinion in Marengo Abs. Co. v. Hooper, 174 Ala. at pages 507-509, 56 South. 580 (the views there expressed being based in part upon decisions of this court in Savage v. Walshe, 26 Ala. 619, 632; Broad Street Hotel Co. v. Weaver, 57 Ala. 26, and also Thompson on Corp. § 1237, and S. & M. R. R. Co. v. Anderson, 51 Miss. 829, 834), this plea was but the legal conclusion, the legal deduction, of the pleader, and was, in my judgment, subject to the demurrer on that account (16 Ency. Pl. & Pr. p. 564; 12 Ency. Pl. & Pr. p. 1024, et seq.; 31 Cyc. p. 49, et seq.; Life Ass’n v. Cook, 20 Kan. 19; Chewacla Lime Works v. Dismukes, 87 Ala. 344, 346, 6 South. 122, 5 L. R. A. 100; 10 Cyc. p. 1096). Reference is thus made to the sufficiency of this plea, not because any error is predicated of the ruling with respect to its sufficiency, but because subsequent pleading of which review is required illustrates the at least confusing effect of permitting the defendant to assert ultra vires as a conclusion of law, instead of exacting the appropriate pleading of the corporation’s charter from which alone its powers and their extent may be judicially ascertained and determined. While evidence may be taken by the court itself to advise its judgment in performing the court’s function in interpreting and construing the corporate charter, the inquiry of corporate power to do an act or to consummate a contract can never be considered or tried on evidence presented to the jury. The question, when properly raised, is purely one of law for the court and not of fact for the jury. — Authorities noted in 174 Ala. pp. 507-509, 56 South. 580.
To plea 3, above quoted, the plaintiff interposed special replications only. No general replication, no general traverse of that plea, was filed. — Code, § 5338. According to elementary rules, of pleading the effect of the interposition of special replications only to plea 3 was to confess the averments of plea 3, and to relegate and confine the special replications to the category of plead
Since it is settled in this jurisdiction by numerous decisions .that a corporation is never estopped to assert ultra vires, even though a benefit has accrued under the engagement involved, it is manifest that the special replications cannot be soundly interpreted as undertaking to Set up an estoppel of the corporation to plead ultra vires against a recovery on counts declaring or based upon an express contract between the plaintiff and the defendant, especially when as is entirely clear, the failure to interpose any character of denial of the averments of plea 3, and the interposition of special replications alone, effected, as a matter of law, the confession that the corporation was without authority under its charter to engage as the special counts of the complaint declare. It is further obvious that the special replications, in so far as their effect may be attributed an effort to avoid plea 3 as an answer to the special counts declaring on the contract, were but an effort to set up in avoidance of the effect of that plea acts of the officers of the corporation to estop the corporation from asserting its confessed want of power to contract as the special counts aver. Of course, it is not possible, under our decisions, for any act of an officer to bind the corporation to the performance of an engagement to make or effect while the corporation is without power to do. The demurrers to the replications taking this objection thereto were due to be sustained; and the grounds specifying the further objection that officers of a corporation are without power to ratify the ultra vires act of the corporation were likewise well taken. I have not overlooked the suggestion in brief for appellee, in response to the appellant’s application for rehearing, that plea 3 should be interpreted as averring the absence of express power in this corporation to make the contract declared on in the special counts of the complaint; this as the premises for a contention that such a limitation of the plea’s averment would serve to justify and to vindicate the plaintiff’s replications as asserting the existence and the exercise of the incidental powers described in the replications.'
Under our practice, a count, plea, or. replication is an entity in pleading, and must be construed accordingly. A pleader, except in rare cases, may and does by the force of his allegation thereof constitute that material which otherwise might be immaterial See Highland Avenue R. R. Co. v. South, 112 Ala. 642, 20 South. 1003. If the expression in Bain v. Wells, 107 Ala. 570, 571, 19 South. 774 (sixth headnote), can be regarded as a deliberate ruling by the court that a demurrer will lie to a part of a plea, it is manifestly unsound as shown by repeated adjudications here; among which see Ansley v. Bank, 113 Ala. 477, 478, 21 South. 59, 59 Am. St. Rep. 122—a decision opposed in this particular to Bain v. Wells, supra, on which counsel for appellant there relied as shown in the reproduction of the brief on page 473 of 113 Ala. The method for eliminating immaterial matter from a plea or replication, is by motion to strike.—Ansley’s Case, supra; Walter v. Railroad Co., 142 Ala. 474, 482, 39 South. 87, among others.
Recurring to count A, as before stated: If it appeared from the record that plea 3 had been interposed to count A, there might have been ground for the contention that the adverse ruling on the appellant’s demurrer to the replications was error without injury, though this is, in my opinion, very doubtful. It appears from the defendant’s answers to interrogatories, offered in evidence, that the fund out of which a doctor to serve the employees of the defendant was to be paid was created through the payment to the defendant of monthly installments contributed by the employees, and was for the purpose of affording the employees medical attention, etc., while in the service of the defendant. The fund thus created was a trust fund, having impressed upon it the limitation fixed by the purpose inspiring its contribution and payment to the defendant. “Where one man has money in his hands, which ex equo et bono belongs to another, if there be no contract, modifying or controlling the general liability to pay, the person entitled to the money may recover in an action for money had and received to his use.” — Third headnote to Hitchcock v. Lukens, 8 Port. 333; Davis v. Orme, 36 Ala. 540. If the express contract of employment declared on
In reviewing this record, I am unable to find support in the . evidence for averments made material by their incorporation in the replications. I am not able to exercise judicial knowledge to supply the deficiency in the proof of these averments.
Upon the. considerations indicated, I concur in the reversal of the judgment.