196 Mo. App. 640 | Mo. Ct. App. | 1916
Plaintiff commenced his action against the defendant and three individuals.
The petition contained two counts, the first count sounding in damages for breach of an express contract of employment. As there was a verdict and judgment for the defendant on that count, and plaintiff has not appealed, it is unnecessary to set out that count in full, but we will hereafter have occasion to refer to it.
The second count avers that the defendant St. Louis Wholesale Grocer Company, is a corporation organized and existing under and by virtue of the laws of this State, engaged in the wholesale grocery business; that on January 1, 1911, and thereafter, the defendants Kelly, Lukenhill and Vandeloecht were seeking to organize among retail grocers a corporation on the co-operative
The defendant corporation, answering this second count of the petition, admits that the defendant, at the date of the filing of the petition in the case, was a corporation organized and incorporated and with the capital stock averred; admits that Kelly was its president, Vandeloeeht its treasurer, and Kelly, Yandeloecht and Lukenbill, three members of its board of directors immediately after its incorporation; admits that plaintiff received $1700, but denies that that sum was received by plaintiff in the manner or pursuant to the contract or agreement, as alleged in plaintiff’s petition, but alleges that that sum was paid to and accepted by plaintiff in full for all services, if' any, rendered by plaintiff to the defendant corporation or to the other defendants, and in full for any and all matters relating in any way to any and every understanding or agreement, if any, which plaintiff might have had with the defendants Kelly, Lukenbill and Yandeloecht, or with the defendant corporation.
As a further answer and defense to this second count of the petition, the defendant corporation says that it believes, and therefore alleges as a fact, that plaintiff had no such agreement with the defendants
For further answer and defense to this second count, the corporation defendant alleges that there was no consideration to support the alleged approval, acceptance and assumption of all or any liability by this corporation defendant to .plaintiff for and on account of the alleged agreement set out by plaintiff, specifically denying that this defendant approved, accepted or assumed any liability on account of the alleged contract or agreement, and avers that the alleged approval, acceptance and assumption is void and of no binding effect.
■ The defendant corporation further avers that plaintiff has been fully paid for any and all alleged services and expenses, alleged and set out in his petition, and that this defendant is in no. way indebted to plaintiff, specifically denying that any services were rendered or expenses incurred by plaintiff under the alleged con-tract or agreement, and denying that there was such a contract or- agreement. Then follows a general denial ■of all and singular the other allegations in the petition.
There was a trial before the court and a jury. We -will notice the evidence, as'far as necessary, hereafter. At the close of the plaintiff’s evidence in chief and again at the close of all the evidence, the defendant interposed demurrers, which were overruled. There was a verdict in favor of all the defendants on the first count of the petition, as before noted, and in favor of the individual defendants, but against the defendant St. Louis Wholesale Grocer Company for $2000 on the second
There are three specifications of error made by the learned counsel for appellant, these again subdivided.
Under the first specification of error an attack is made on the second count of the petition, which attack may be summarized as urging that that count, by reason of omission of various averments, fails to state a cause of action, and it is urged that for this reason the motion for a new trial should have been sustained. We might dispose of this by saying that defects in a pleading are not ordinarily reached by a motion for new trial. They are reached either by objection to receipt of any evidence, or by demurrer, or by motion in arrest. Failing these, they may even be reached and raised, in some cases, even for the first time in the appellate court'. But, considering this point as if properly made, we think this second count of the petition not obnoxious to any of the objections made to it. It does state a cause of action.
The second assignment or specification of error is that the demurrer to the evidence, interposed by the defendant grocer company at the close of the case, should have been sustained. However that may be, that defendant did not stand on this demurrer but introduced evidence of its own and plaintiff endeavored to meet this by rebutting evidence. As, however, the defendant demurred to the evidence at the close of the case and raises it here, we may assume that the points made under this second assignment are intended to cover the issue raised by that demurrer and we will presently consider it.
The third assignment of error is that the court erred in giving plaintiff’s instruction which was directed to this second count of the petition. It is complained of that instruction that it assumes material and controverted facts, unduly and improperly emphasizes the erroneous theory that the $1700 paid to plaintiff was not paid for
The evidence as to what this $1700 was paid for may be said to be conflicting, it being claimed on the part of plaintiff that this $1700 was a general payment to him on account of services, while on the part of defendant the evidence tended to show that it was paid him as his commission on the sale of stock in the defendant corporation and that under the contract between plaintiff and the
• This brings us to a consideration of the demurrer to the evidence. It will be noticed that this second count of the petition is apparently based entirely upon quantum meruit and not upon express contract. The first count of the petition was founded on the breach of a specific contract. On that issue the jury found in favor of all of the defendants and against plaintiff.
A very careful reading of all of the testimony fails' to convince us that plaintiff made out any case entitling him to go to the jury on this second count of his petition.
It appears from the evidence in the case that plaintiff had been engaged in cities other than St. Louis in
“M. Kelly, Jr., President. H. Yandeloecht, Treasurer. St. Louis Wholesale Grocer Company.
Office of J. D. Lukenbill, Secretary.
3866-68 Folsom Ave.
St. Louis, Mo., March 8, 1911.
To Whom It May Concern:
We are organizing a wholesale grocer house in St. Louis to be owned and controlled by retail grocer stockholders of Missouri and Illinois.
This will introduce Mr. N. L. Van Zandt, who is our authorized representative, to explain the proposition fully and to solicit your membership, and collect the first payment, 10 per cent of subscribed stock $25. Check to be made payable to H. Vandeloecht, Treas.
Tours respectfully,
M. Kelly, Jr.,
President.;
Countersigned:
J. D. Lukenbill, Secretary.”
Plaintiff was also furnished with a form of receipt to be given to those persons who subscribed to the stock, as follows;
“M. Kelly, Jr., President. J. D. Lukenbill, Secretary.
H. Yandeloecht, Treasurer.
St. Louis Wholesale Grocer Co.
St. Louis, Mo.
Capital Stock $150,000.00.
$75,000 common. Fully paid. $75,000 preferred.
Shares $50.00 each.
-hereby subscribe for five (5) shares common stock in the St. Louis Wholesale Grocer Co., pay*656 able $5 per share now, and balance, $45 per share, when ready to begin business.
Make checks payable to H. Yandeloecht, Treasurer.
Received of--$25, being first payment of five (5) shares of common stock in the St. Louis Wholesale Grocer Co., payable $5 per share now, and balance, $45 per share, when ready to begin business. ^
St. Louis Wholesale Geocee Co.,
St. Louis, Mo.
By-
Authorized Representative. ”
As before stated, while plaintiff commenced his work in January, 1911, the capital with which to start the $50,000 corporation, that is to say the defendant St. Louis Wholesale Grocer Company, was not secured until March, 1912. The corporation thereupon commenced business about March 15, 1912, and continued in business for a year, when it sold out to another concern, some of the stockholders in the old company becoming stockholders in the purchasing company. During this year of its existence, the gross sales of the corporation amounted to $176,270.94. The promoters’ organization, or “paper organization” had continued and plaintiff worked under their direction in soliciting subscriptions to the stock, apparently until the organization and incorporation of the defendant corporation in March, 1912. The corporation was organized with thirteen directors, of whom the defendant Kelly was one and the president, Lukenbill another and treasurer, and Yandeloecht, a director. Who the remaining ten directors were does not appear. After the organization of the corporation, the plaintiff having been paid $1700, as he says “on general account for services and expenses,” but according to the defendants and all witnesses testifying for them, “in full for all his services in the promotion of the company,” plaintiff asked one or more of the members of the board of directors of the corporation defendant to present his claim
There was no evidence of the amount of expenditures of plaintiff, beyond his statement that in going from town to town he paid his railroad fare and hotel bills. How much these amounted to, does not appear, nor was there any evidence offered or introduced as to the value of the services on his promotion work.
While this is but a summary of a mass of testimony, we think it is a substantially correct statement of the evidence in the case. It must be borne in mind that when evidence was offered and introduced, both counts of the petition were before the court and jury and the court instructed on both.
The verdict on the first count, which sounded in damages for breach of a specific contract, as before noted, was in favor of all the defendants, both the individuals and the corporation, and the verdict against the corporation rests entirely upon the second count— that seeking recovery as on quantum meruit. We are concerned with the second count alone.
We are therefore to determine whether on that evidence plaintiff made out his claim for compensation under the second count.
As is said by the supreme Court of Arkansas in Little Rock & Ft. Smith R. R. Co. v. Perry, 37 Ark. 164,
Learned counsel for respondent placed great reliance upon the decisions of our Supreme Court in Taussig v. St. Louis & Kirkwood Ry. Co., 166 Mo. 28, 65 S. W. 969, and Taussig v. St. Louis & Kirkwood R. R. Co., 186 Mo. 269, 85 S. W. 378, as also, among others, on Little Rock & Ft. Smith R. R. Co. v. Perry, supra, and Bell’s Gap R. R. Co. v. Christy, 79 Pa. St. 54. On their facts we find no analogy between these cases and that at bar. In the first place, the parties with whom plaintiff claims to have made his' original bargain were no more' the corporation than was plaintiff himself. They were all mere promoters. Paraphrasing what is said by Judge Graves in Taylor v. St. Louis National Life Ins. Co., 26 Mo. 283, l. c. 290, 181 S. W. 8, it stands out in bold-faced type that Kelly and the other individual defendants were not and could not have been president, secretary and treasurer of the defendant corporation at the time of the alleged employment of plaintiff. Further along in the opinion in that case, Judge Craves says (1. c. 293 et seq.), and referring to an alleged contract between the plaintiff there and what is called the “organization committee:” “All the proceedings seem to appear in the name of the-organization committee, until the time came when, as they thought, all the proposed charter capital had been subscribed, whereupon they all met, adopted the proposed
As a general rule, a corporation is not liable for services rendered by a promoter. There are cases, however, which hold that a promoter is entitled to recover for services rendered by him in promoting the corporation. “But in such cases it should be made to appear: (a) that he himself expected to be compensated for his services; (b) that such services were rendered at the icquest of, or under contract with the associate promoters, or a majority of those; and (c) that the acts done were necessary to the organization and its objects, and that the corporation received and enjoyed the benefits.” [1 Thompson on Corporations (2 Ed.), secs. 88 and 89.]
It is true that our Supreme Court has said in Taussig v. St. Louis & Kirkwood Ry. Co., 166 Mo. l. c. 38, referring to services in the preparation of articles of incorporation, and in connection with procuring the incorporation, “That for such services the plaintiff may recover upon an implied promise to pay their reasonable value is also sustained by the weight of authority, unless the understanding was that they were to be gratuitous.” Judge Brace cited a number of authorities, including that of Bell’s Gap R. R. Co. v. Christy, 79 Pa. St. 54, of which he says that the rule is there well stated, and quotation is made of the first of the syllabi of that case. When we turn to the Pennsylvania decision itself (l. c. 59), we find the law more fully stated than in the syllabus, thus:
“We do not desire to controvert the principle, established in England, and to some extent recognized in this country, that when the projectors of a company enter into contracts in behalf of a body not existing at the time, but to be called into existence afterwards, then if the body for whom the projectors assumed to act does*660 come into existence, it cannot take the benefit of the contract without performing that part of it which the projectors undertook that it should perform. Conceding to this principle its full force and effect, we are unable to see its application to the facts of this case. It may very well be that where a number of persons not incorporated are yet informally associated together in the pursuit of a common object, and with the intent to procure a charter in the furtherance of their design, they may authorize certain acts to be done by one or more of their number, with an understanding that compensation shall be made therefor by the company when folly formed. And if such arts are necessary to the organization and its objects, and are subsequently accepted by the company, and the benefits thereof enjoyed by them, they must take such benefits cum onere, and make compensation therefor. But the projectors or promoters of the enterprise within the meaning of the rule referred to, evidently must be a majority at least of such persons, and not one, two, or three, or a small minority thereof. Such minority can have no more authority to bind the association or corporation in its incipient or inchoate condition than they would have to bind it if fully organized. In this case the two or three persons who it is alleged promised the plaintiff to see him paid, bound no one but themselves.”
See further on this, Queen City Furniture & Carpet Co. v. Crawford, 127 Mo. 356, 30 S. W. 163; State ex rel. Hadley v. People’s United States Bank, 197 Mo. 574, l. c. 591, 94 S. W. 953; Taylor v. St. Louis National Life Ins. Co., supra, Van Noy v. Central Union Fire Ins. Co., 168 Mo. App. 287, l. c. 295, 153 S. W. 1090; Royal Casualty Co. v. Fuller, not yet officially reported, but see 186 S. W. 1099.
It does not appear in the case at bar how many were associated with these three individual defendants in acceding to the proposition which plaintiff claims. It does appear, however, affirmatively, that there were more than the three individual defendants associated together in this preliminary work, and it most certainly
These cases which we have cited from the Pennsylvania and Arkansas Supreme Courts are leading cases
Another point to be here borne in mind is, this is an action at law on quantum meruit as set out in this second count. Not a particle of testimony was given or offered to show the value of any services, so upon what basis the jury awarded plaintiff $2000 is impossible of ascertainment. The learned counsel for respondent attempts to meet this proposition by saying that even if there was no evidence of the value, which, however, that counsel denies, the case could nevertheless have gone to the jury. In support of this, counsel cites some cases which he thinks sustain him. We do not think they cover services of the kind here involved.
In Bradner v. Rockdale Powder Co., 115 Mo. App. 102, 91 S. W. 997, where it appeared that no proof was adduced to show the reasonable value of the services of plaintiff rendered in selecting a suitable site for the erection of a powder magazine, plaintiff insisting that the value of such services came within the reasonable common knowledge of ordinary men and that the jury might settle on that value without evidence to aid them, our court said: “The reasonable value of such services as plaintiff rendered is not a matter of such common knowledge that testimony on the subject may be dispensed with. . , , The very essence of a case quan
Without going further into the authorities and referring to those which are so fully reviewed in the cases which we have cited, it is sufficient to say that it does not appear in the first place that the three individual defendants, who are alleged to have employed plaintiff, were a majority even of the promoters; in the next place, the testimony is entirely too indefinite to constitute substantial testimony to the effect that even these parties may be said to have availed themselves of the services of the plaintiff with any sort of understanding that he was to receive, in addition to his commissions on the sale of stock, one-half of one per cent, on the gross sales of the corporation when formed, for a period of five years, or any other sum. That depended on the contract set up in the first count of the petition and the verdict of the jury against plaintiff and in favor of all the defendants negatives the existence of the contract there alleged. Furthermore, it does affirmatively appear that when the matter of the services of plaintiff was first called to the attention of the directors of the corporation after its organization, they not only denied any such understanding as to payment of one-half of one per cent, on the gross sales of the company for five years, or any other sum, but explicitly claimed that plaintiff had been paid in full for all the services which he had rendered in connection with the sale of stock.
It is to be borne in mind that’there is no pretense that the plaintiff in this ease rendered any services whatever in connection with the organization of the corporation, beyond soliciting and receiving subscriptions to its proposed capital stock. None of the facts present in the Taussig cases, or in the Arkansas, Indiana and Pennsylvania cases are here present. In each one of
In the Royal Casualty Company case, supra, as before noted there was a distinct adoption of the contracts of the promoters, made by the corporation after its organization, with a full knowledge of all the facts connected with it. If we are to allow the plaintiff to prevail in this case, we must hold that by the mere act of accepting incorporation — by the mere act of becoming a corporate body, the corporation, as an entity, had accepted the benefit of the services of the plaintiff in obtaining subscriptions to its capital stock. Of course, it could not lawfully engage in business, under our law, until at least one-half of the stock is subscribed and paid for in cash or' its equivalent. [Laws 1911, p. 148.] Beyond this soliciting and placing of subscriptions to stock, the plaintiff here does not pretend to have rendered any services whatever in connection with the organization of the corporation. Yet to enable plaintiff to recover, we must hold that three of the promoters had power to pledge the whole income of the corporation to be formed to a payment to this plaintiff for his services in procuring subscriptions to its stock, and that by the mere act of incorporation, accepting the subscriptions and going on with its business, the corporation bound itself to pay for obtaining the subscriptions. Until the organization of the corporation, the only parties concerned in securing subscriptions to the proposed corporation were the promoters, of whom plaintiff himself was one, and all the work plaintiff performed and all the services he rendered were for the promoters and not for the corporation. The corporation, as such, prior to its organization, was not concerned in that. We are
On the grounds we have stated, plaintiff is debarred from any recovery, and the demurrer to the evidence should have been sustained.
The judgment of the circuit court must be reversed. It is accordingly so ordered.