151 N.E. 7 | Ind. Ct. App. | 1926
Action by appellee against appellants to recover damages for a breach of a verbal contract entered into between him and the individual appellants, under which contract appellee agreed to assign a 30-year coal lease that he owned on lands in Vigo County to a corporation to be organized and formed by them.
It is averred in the complaint that under said contract said individual appellants, on or about September 1, 1922, promised and agreed with appellee that, if he would assign said lease, they would form a corporation with a capital stock of $25,000, issued and paid up, and would set aside and allot to appellee one-sixth of the capital stock of said corporation, and would issue to him, in consideration of the assignment of said lease, $2,000 *504 of the capital stock of said corporation, and would advance to him a sufficient sum of money, without interest, for him to purchase the balance of his one-sixth interest in said corporation, on the condition that he should pay his said balance of said corporate stock out of the dividends accruing on all his stock, and by paying $2 per day out of his salary as mine boss and superintendent of the proposed mine to be opened and constructed. They and each of them further agreed, in consideration of such assignment of such lease to the proposed corporation, to employ appellee as mine boss and superintendent of said mine at $8 per day steady employment during the remainder of his natural life.
In consideration of such verbal contract, appellee, on September 9, 1922, assigned his coal lease to the Mt. Pleasant Coal Company, which lease was accepted by such company, and it constructed a mine on the land covered by the same, and has been operating thereunder ever since said assignment.
Appellant Mt. Pleasant Coal Company, through its duly authorized officers and directors, had knowledge, at the time of the assignment of said lease, of the contract that the individual appellants, as promoters, made with appellee to obtain the assignment of said lease, and appellant company thereby fully ratified, adopted and confirmed the promises and agreements of the individual appellants made to appellee prior to the incorporation of said company, and, by reason thereof, the corporation became jointly liable on said contract with the individual appellants.
All the appellants breached and violated said contract by refusing to issue to appellee any of the stock in the company and by refusing to advance appellee money to purchase such stock. Appellants, after said corporation was organized, and after the mine was fully completed, on January 13, 1923, in pursuance of said promise of life *505 employment, employed appellee as mine boss and superintendent of said company, and, on March 13, 1923, discharged him as such mine boss and superintendent without any cause whatsoever.
There was a general denial by each of appellants and an affirmative paragraph by the coal company, in which two written contracts were set up, the first applying to the employment of appellee in superintending the sinking of the shaft and erecting the tipple of the mine of the company, and the second employing appellee as mine boss of the mine for the period of one month after it was completed. To the affirmative paragraph of answer, appellee filed a general denial and also an affirmative reply, in which he admitted the execution of the first contract, but alleged that the second contract was void by reason of the fact that he was induced to sign it without reading it because of fraud and false representations on the part of appellants' attorney and appellant Scott, at a time when a confidential relationship existed between appellee and said attorney, and appellee and said Scott. The reply further alleged that the second contract was obtained by said fraud in the furtherance of a conspiracy among all appellants to defraud appellee of the rights, benefits and consideration promised him under the terms of the verbal contract set forth in his complaint.
Appellants separately and severally demurred to the complaint, which demurrers were overruled. Appellant coal company also demurred to the second paragraph of reply, which demurrer was overruled.
There was a trial by jury, which resulted in a verdict against appellants for $10,000, on which, after appellants' motion for a new trial and their motion in arrest of judgment were each overruled, judgment was rendered, from which this appeal.
Appellee contends with apparent earnestness that the appeal should be dismissed because the judgment in the *506 trial court was against Eugenia R. Wilson, administratrix 1. of the estate of George R. Wilson, deceased, while the assignment of errors names "Virginia" R. Wilson, administratrix of the estate of George R. Wilson, deceased, as one of the appellants. But the discrepancy was harmless. It is clearly the result of some inadvertence, and there is not even a suspicion with the court that the parties so named are not one and the same. We hold that the names are idem sonans.
Appellants say that the court erred in overruling each of their separate and several demurrers to the complaint, and argue that the alleged promises of the individual appellants to 2, 3. have the corporation, to be organized in the future, issue to appellee $2,000 worth of its capital stock, if ratified by the corporation as alleged, became the promise of the corporation, and the individual promisors were released from any and all obligation therein, citing, as Indiana authorities to sustain their contention, Davis, etc., Mfg. Co. v. HillsboroCreamery Co. (1894),
The rule that must control under the averments of the complaint herein is thus stated in 14 C.J. 269:
"Of course promoters of a corporation are personally liable on contracts which they have entered into personally, even though they have contracted for the benefit of the projected corporation, and although the corporation has been formed and has received the benefit of the *507 contract, and they are not discharged from liability by the subsequent adoption of the contract by the corporation when formed, unless there is a novation or other agreement to such effect."
This rule of law was quoted with approval by this court inHilgemeier v. Bower Mfg. Co. (1923),
Appellants next contend that the alleged promise of the individual appellants to loan money to appellee, without interest, with which to pay for stock in the corporation to 4. be organized in the future, and to be paid back at the rate of $2 per day from appellee's wages, was an individual promise which the corporation under its charter had no power to ratify as alleged, and that such act would be ultra vires,
citing Agar v. Pagin (1906),
But it is argued that a corporation is not bound by a promoter's contract even though it receives the benefit thereof. It may be conceded that if the promoter's contract was 5, 6. not made primarily for the benefit of the corporation, and if the corporation does not adopt it or promise to perform it, there would be no liability on the part of the corporation to perform. But where, as here, the promoters of a corporation make a contract in the interest of the contemplated corporation, if such corporation when organized recognizes and adopts it, it then becomes the contract of the corporation.Davis, etc., Mfg. Co. v. Hillsboro Creamery Co., supra. As was said in Smith v. Parker (1897),
This salutary rule of law is generally supported by the decisions of other courts.
In re Ballou (1914), 215 Fed. 810, involved an order against a corporation to issue $2,000 of its stock, and the court, speaking with reference thereto, says: "Prior to the incorporation of the corporate petitioner, the petitioners Lawson, Mason, and one Stallsworth, who were *509 its promoters and incorporators, entered into a contract with the bankrupt, whereby they agreed that if he would assist them in procuring from W.F. Hall a mine lease of certain coal lands in Harlan County in this district for the corporate petitioner, it would, after its incorporation and organization, give him $2,000 of its capital stock. Pursuant to this contract the bankrupt assisted those persons in procuring such a lease for them, and thereafter they caused the corporate petitioner to be incorporated and organized and assigned the lease to it. The referee found such to be the facts from the evidence before him." The contention was that the corporation was not bound by the contract of its promoters and incorporators, and the court said: "It is true that a corporation, nothing more appearing, is not bound by the contract of its promoters. But if a corporation after it is organized adopts such a contract, it is bound thereby and, if it accepts the benefits of the contract, it thereby adopts it."
In Possell v. Smith (1907),
In Mantle v. Jack Waite Mining Co. (1913),
In Bobzin v. Gould Balance Valve Co. (1908),
In Lowe v. Connecticut, etc., R. Co. (1864),
In Chase v. Redfield Creamery Co. (1900),
Other authorities are: United German Silver Co. v. Bronson
(1917),
Appellants' next contention is that the alleged promise of the individual appellants to have the corporation, to be *512
organized in the future, furnish to appellee lifetime 7. employment as mine boss or mine superintendent, even if ratified by the corporation as alleged, was and is against public policy and void, citing to sustain the contention, Cox
v. Baltimore, etc., R. Co. (1913),
Other authorities to the same effect are: Pennsylvania R. Co.
v. Doland (1892),
The assignment of a valuable coal lease, as in the present case, makes a consideration as efficacious as the agreements in the cases cited not to sue for injuries suffered, and for 8. which the companies were held liable; and we may add that such assignment was a sufficient consideration for the obligation assumed by each of the individual appellants, as well as by appellant corporation, if for no other reason, because these individual appellants became the sole stockholders, directors and officers of the appellant coal company and thereby received the full benefit of such assignment.
Appellant coal company challenges the second paragraph of appellee's reply, to which the court overruled its separate demurrer, for the reason, as appears by its memorandum 9, 10. to its demurrer, that the reply sets up facts which are apparently designed to set aside a written contract and substitute therefor an oral contract, and bases its challenge upon the well-established rule of law that a parol contract cannot be pleaded in contravention of a subsequent written contract, nor in avoidance of its terms. But, as we understand the issues as presented, appellant coal company, by its second paragraph of answer, set up the two written contracts made subsequent to the alleged oral contract into which it claims that such oral contract, if any there was, was merged, while appellee, by his second paragraph of reply, avers that the first contract mentioned in the coal company's answer was entirely independent of the original oral contract, such first written contract being, as appears on its face, a contract for the sinking of a shaft, erecting a tipple, building a scale house and installing scales, an employment which was, as averred, entirely independent of appellee's employment for life *514 as mine boss and superintendent. As to the second contract set up in said second paragraph of answer, appellee avers in his second paragraph of reply that fiduciary and confidential relations existed between appellee and appellant Moore, who was the attorney for appellants, but acting as such for appellee, and appellant Scott, who was the secretary of appellant company, and that, while such relations existed, they each made fraudulent representations to appellee by which he was induced to sign said second contract, and that he did sign the same without reading it. We hold that the second paragraph of reply is a sufficient reply to appellant coal company's answer setting up the contracts, and that the demurrer thereto was properly overruled.
Under their motion for a new trial, appellants forcefully present that the verdict of the jury is not sustained by sufficient evidence. We have carefully examined the 11. evidence as set out in appellant's brief, and have to say that, while we might not have reached the same conclusion as to its preponderance as the jury reached, there is evidence to sustain the verdict, and it is not for this court to weigh the same. It is altogether probable that the jury, in determining the preponderance of evidence, considered the circumstance that, at the beginning of the negotiations between appellee and appellants, appellee had a valuable coal lease on 80 acres of land, and that, when he was discharged, appellants had the lease, and he had received nothing therefor except compensation for services which he had theretofore rendered for the company. The verdict cannot be disturbed for insufficiency of the evidence.
Appellants further present error of the court in admitting certain evidence over the objection of appellants; but the questions and objections thereto do not appear in 12. appellants' statement of the record, and are found only in appellants' motion for a *515
new trial. This is not sufficient to present any question for our consideration. Gwinn v. Hobbs (1917),
There is a reference to evidence to which objection was made in the statement of the record pertaining to the value of the lease, the condition and market value of the mine, including 13, 14. good will, and the number of tons of coal in each acre, but the statement of the record is not sufficient to present any question. Had it been, such evidence was entirely proper as a basis upon which to estimate the damages suffered by appellee. We do not consider the question, however, for the reason that it is not properly raised.
Appellee tendered 27 instructions to be given to the jury, of which the court gave 13; appellants tendered 38, of which the court gave 29; the court gave nine instructions on its own motion. We have examined each of these instructions, as well as appellants' respective objections thereto and answers to such objections by appellee, and we hold that the jury was well instructed as to the law of the case, and that there was no reversible error in instructing the jury.
Judgment affirmed.
Enloe, P.J., and McMahan, J., dissent. *516