155 Mo. App. 211 | Mo. Ct. App. | 1911
The appellant, LeMay-Wegmann Brokerage Company, was incorporated under article 9, chapter 12, of the Revised Statutes of 1899,
By a supplemental agreement of date December 21, 1907, to the effect that upon the payment upon the 15th of each succeeding month by defendant of ten cents for each dozen of washboards manufactured and sold by it during each month from November 1, 1907, to June 1, 1908 (it appearing that only six of the notes had been paid, some of the remaining eighteen being in default and defendant desiring an extension on all of the unpaid notes), the time of payment of all was extended to June 22, 1908, providing, however, that any sums paid in the meantime under the above provision for payment of what is practically a royalty, should be credited on the notes in the order of their maturity; it being stipulated that, with this exception, the agreement of March 22, 1907, should remain in full force. This agreement was signed by plaintiff, and in the name of the defendant by George Wegmann, its treasurer.
Among other notes which appear not to have been paid after the execution of this supplemental agreement was the last one, numbered twenty-four, for $100. This action was accordingly commenced on it before a justice of the peace, resulting in a judgment for plaintiff, whereupon defendant appealed to the circuit court and
At the trial the note was introduced in evidence over the objection of defendant, that it was beyond the scope of the authority of the company to make it, and it was not shown that the party who executed and delivered it had any authority from the corporation to do it. Defendant saved exception to the overruling of the objection. Plaintiff, testifying in his own behalf, identified the note and first agreement as having been signed by Louis J. LeMay and the supplemental agreement as having been signed by George Wegmann, he testifying that he had also signed the agreements and that the note in evidence was one of the notes referred to in it and was a part of the consideration for the contract. He further testified that he delivered the letters patent referred to and that they are still in the possession of defendant, although the legal title to them is still in him (plaintiff). He further testified that he knew these parties as officers of defendant, the one as president, the other as treasurer, and knew Henry Wegmann as manager, having charge of the men engaged in work at the offices or plant of the de
At the request of the defendant the court made a finding of facts which, in substance, after finding the incorporation of the defendant and reciting the purposes for which it was organized, found that the buying and selling of washboards was included within the purposes for which the corporation was organized; that on the 22d of March, 1907, plaintiff was the owner of the letters patent issued to him by the United States, giving him the exclusive right to make, use and sell the kind of washboards specified in the patents and that he was also at
“In the opinion of the court, to sustain a defense of ultra vires on the foregoing facts, would permit a fraud*221 to be perpetrated on plaintiff which courts should not countenance.
“As stated in the case of Russell v. Cassidy, 108 Mo. App. l. c. 580:
‘The present action is upon a note of which prima facie and in absence of testimony to the opposite effect, defendant received the benefit and it would be inequitable and unjust to permit'the defendant to question the power of the payee to accept the note from him. The maker of a note cannot defend an action on the note brought by a corporation or its privy on the ground that the corporation had no corporate power to take the note. Bank v. Gillilan, 72 Mo. 77, etc., etc.’
“In this case the maker of the note should not be permitted to defend an action on its note on the ground that it had no corporate power to make it.
“In the case of Seymour v. Spring Forest Com. Assoc., 144 N. Y. 333, the New York court states that: ‘That kind of plunder which holds on to the property but pleads the doctrine of ultra vires against the obligation to pay for it, has no recognition or support in the law of this state.’
“In the opinion of the court, the rule announced in the New York Case is a good one to apply to the facts in the present case.”
Following the finding of fact and conclusion of law, the. court rendered judgment for plaintiff, and it appears by the record that defendant excepted to the “decree and judgment and the form thereof,” and motions for new trial and in arrest were duly filed, overruled and exception saved. Whereupon defendant duly perfected appeal to this court, filing its bill of exceptions which had been duly signed by the trial judge.
As will be noticed, the defense rests entirely upon the plea of ultra vires. One of the earliest of the writers on the subject of ultra vires, Brice, in the 2 Am. Ed. (1880), edited and annotated by Green, sec. 4, pp. 783 and following, lays down as the true view of the relation
In the Cass county case, supra, our Supreme Court, referring to the case of City of Goodland v. Bank, 74 Mo. App. 365, approves the statement found in that case, to the effect that the courts of our state have repeatedly declared that a violation of a charter cannot be taken advantage of collaterally or incidentally but only on a direct proceeding instituted for that purpose, and adds that it has further been declared by our courts that in a collateral proceeding to declare the ultra vires acts of a trading corporation void, it must be shown to be the intention of the charter, as gathered from its terms, not only to restrict the business of the corporation to certain things, but in addition to declare that when it exceeds these restrictions, the act should be void. “If,” says the court (l. c. 15), “such intention does not exist in the charter, the state alone can question such acts as ultra vires, except when the contract is against public policy or good morals.” •
Without going further into a discussion or citation of authorities, it is sufficient to say as to the case at bar, that it presents no merit whatever and is so obviously an attempt, under a plea of ultra vires, to perpetrate a fraud, that no court would twist a salutary rule underlying the doctriné of ultra vires into such a vicious use as to allow a defendant corporation to escape from liability on a contract of which it has enjoyed and still retains the benefits. It is in evidence that the corporation defendant is composed of but three stockholders; but three men are named as stockholders in the articles of incorporation, and while the record is silent as to whether any new parties have come in, the fact of ownership of the stock, once shown to exist, and nothing to the contrary appearing, carries the presumption that it still
Even if the transaction be considered a conditional sale on. the part of plaintiff, the right of defendant, in such case, to become the absolute owner of the patents and of the tools became absolute upon compliance upon its part with the terms of the contract. These are rights of which no act of plaintiff could divest it and which, in the absence of any stipulation in the contract restraining it, defendant could transfer by sale or mortgage ; upon the performance of the condition of the sale, the title to the property would vest in the vendee, or in the event that he has sold or mortgaged it, in his vendee or mortgagee, without further bill of sale; vests so completely that he could maintain replevin to recover possession. [Williston on Sales, sec. 331, citing and quoting Carpenter v. Scott, 13 R. I. 477, l. c. 479.]
We hold that there has been such a complete compliance with this contract on the part of plaintiff that this defendant, represented as it was in the whole transaction by all of its stockholders and all of its officers and all of its directors, and having enjoyed all the benefits thereof, cannot at this late day, and for the first time, when called on to pay, claim lack of corporate authority to enter into the. contract. Such a defense in such a case is so redolent of fraud that it will not be tolerated. The defense in this case is so flimsy and the appeal so lacking in merit, that if we had been asked to impose the statutory penalty for prosecuting a vexatious appeal, we would have been very much inclined to do so.
The ’judgment of the circuit court is affirmed.