129 S.W. 148 | Tex. App. | 1910
The building stone company was a corporation under the laws of Texas. As such it undertook by its contract in writing, dated September 26, 1906, in consideration of $2,500 to be paid to it by Mitchell, to furnish material therefor and to "well and sufficiently perform and finish" for Mitchell, under the direction and to the satisfaction of his architects, "all the work included in the excavating, grading, cement floors, brick work, concrete blocks and footings . . . of the two story and basement residence" to be constructed for said Mitchell. To secure the performance by the building stone company of its undertaking under the contract, an instrument dated October 1, 1906, purporting on its face to be the bond in the sum of $1,250 of the building stone company as the principal obligor therein, but which was never signed by it, was executed by appellees Jake F. Zurn and E. B. Harrold, as sureties. It appears from the record that after it entered into the contract, the building stone company did "a portion of the excavating" it had undertaken to do, and, that on its failure to further comply with its contract, Mitchell had the portion of the house the building stone company had undertaken but failed to construct, constructed by other parties, and out of a different character of material from that the building stone *133 company had bound itself to furnish and use. Mitchell then brought his suit against the building stone company, and against Zurn and Harrold as the sureties on said bond, for damages he claimed to have suffered by reason of the breach by the building stone company of its contract. As the result of a trial before the court without a jury, Mitchell recovered a judgment against the building stone company for the sum of $1,175 as the damages he was entitled to, but was denied a recovery as against appellees, Zurn and Harrold. From conclusions of fact made by the court, it appears that he found "that the Hydraulic Stone Company refused to carry out the contract, and breached the same in every particular; that by such refusal and breach, the plaintiff is damaged and actually lost the sum of $1,175, divided into the following items, to wit:
"Failure and refusal to furnish cement porch, etc., .................................. $50.00 "Failure and refusal to furnish cement floors, etc., ................................. 55.00 "Failure and refusal to furnish brick work, etc., ................................... 95.00 "Failure and refusal to furnish cement blocks, ....................................... 585.00 "Failure and refusal to furnish labor and work on, and for placing cement blocks, ....... 390.00 -------- $1175.00"
The trial court's conclusions of law were, "that plaintiff is entitled to recover of the Hydraulic Building Stone Company said sum of $1,175, and since the Hydraulic Building Stone Company, the party signing the contract for the faithful performance of which the bond was required and given, did not sign said bond, but were recited in said bond to be the principal thereto, and said bond was signed only by defendants Zurn and Harrold, I am of the opinion that defendants Zurn and Harrold are not bound by the bond, and that plaintiff is not entitled to recover as against them."
The appeal is prosecuted by Mitchell.
After stating the case as above. — In disposing of this appeal we will consider questions made by the assignments and cross-assignments, without reference either to the order in which they are presented in the briefs, or to the parties presenting them.
Was the contract void as to the building stone company, because an undertaking beyond the scope of its powers as defined by its charter? We think the question must be answered in the affirmative. The building stone company had received from appellant no part of the consideration to be paid to it for performance by it of its undertaking under the contract. It therefore, was in a position to assert as a defense to appellant's suit that the contract made the basis of same wasultra vires as to it. The purpose of its corporation, as specified in its charter, was "to manufacture and deal in building material and to purchase and sell such material as is necessary in the transaction of its business." With only such power conferred upon it, it undertook by the contract, in addition to furnishing the material therefor, to do the work necessary in grading and excavating for the building, in constructing *134
cement floors therefor, and in building with brick and concrete blocks the foundation and walls thereof. Clearly, by the terms of its charter it was not expressly authorized to undertake such work. Should such an undertaking be regarded as incidental to an exercise of the power expressly conferred upon the building stone company, because reasonably necessary to enable it to carry on its business of manufacturing and dealing in building material? While it does not so appear from the record, it may be that the purpose of the building stone company in entering into the contract was to effect a sale of material to go into the building, and it may be that it could have effected a sale thereof in no other way than by doing the work specified in the contract. But this, we think, would not be a sufficient reason for holding its undertaking to do such work to be within its charter powers. The testimony indicated that the work it undertook to do was worth about as much as the material it was to use in doing it. The work and material together was worth, according to the testimony of a witness, about $3,800. So, to support the contract as one the building stone company had power to make, it would be necessary to hold that its undertaking to do about $1,900 worth of work, was an incident merely to the sale by it of about $1,900 worth of material. Such a holding, it seems to us, would not be reasonable. It would be only a little short of saying that the building stone company could bind itself to do any and every thing which, directly or indirectly, would result in a sale of material it was authorized to deal in. "It can not be said," the court remarked in Safety I. Wire C. Co. v. Baltimore, 74 Fed., 372, "that anything which will promote a demand for goods manufactured under the charter is within the incidental powers of the corporation. Were this true, a corporation organized for the business of quarrying rock could contract for the erection of a costly building, in the construction of which its rock would be used. A corporation organized for the manufacture of terra-cotta pipes could contract for the sewerage of a large city." Not only would such a view require us to ignore the general policy of the law (Ramsey v. Todd,
In drafting the contract between the building stone company and appellant, a printed form was used. Following that form, on the same sheet of paper, was a printed form of a bond, which was used in drafting the bond in question. The bond recited that the "Hydraulic Building Stone Co., a corporation of the State of Texas, as principal, and . . . and . . . as sureties, are held and firmly bound unto J. E. Mitchell, of Tarrant County, State of Texas, in the sum of $1,250 lawful money of the United States of America, well and truly to be paid to the said J. E. Mitchell at Fort Worth, Texas, for which payment, well and truly to be made, we bind ourselves and each of us by himself, our and each of our heirs, executors and administrators," etc., on the condition that the building stone company should perform and fulfil the covenants, stipulations and agreements in its "certain contract for the performance of certain work, and furnishing of certain materials in said contract described, which said contract is hereto annexed." The building stone company had executed the contract, but had not signed the bond so drafted. But the bond had been duly and unconditionally, so far as the record shows to the contrary, executed by Zurn and Harrold as sureties. Was the bond, because it had not been signed by the principal, void as to the sureties? The authorities in other jurisdictions are in conflict (1 Brandt on Suretyship, secs. 169, 170; 27 A. E. Ency. Law, pp. 438, 439), but it is believed that those in this State, and, perhaps, the weight of those outside this State, indicate that the question should be answered in the negative. Wright v. Jones,
The conclusions reached with reference to the questions determined render it unnecessary to consider several cross-assignments presented by appellee.
The judgment is reversed, and the cause is remanded for a new trial.
Reversed and remanded.