Sparks v. Despatch Transfer Co.

• Decision Date: 24 February 1891
• Citation: 104 Mo. 531,15 S.W. 417
• Parties: SPARKS et al. v. DESPATCH TRANSFER CO.
• Court: Missouri Supreme Court

15 S.W. 417

104 Mo. 531

SPARKS et al. v. DESPATCH TRANSFER CO.

Supreme Court of Missouri, Division No. 2.

February 24, 1891.

CORPORATION — NOTES EXECUTED BY PRESIDENT — AGENCY.

1. Parol evidence is not admissible to charge a corporation on a negotiable note, signed by its president in his own name, with nothing on the face of the note to indicate the capacity in which he signed.

2. A transfer company used mules as a motive power. Its president executed two notes in the name of company in payment for mules bought by him. He had bought all the mules ever used by the company, and had repeatedly given notes in the name of the company, which had always honored his orders and paid the notes so drawn. Prior to giving the notes in suit the payee had made 13 sales to the president as the purchasing agent of the company, and in each case his acts were ratified. Held, that the company was liable unless the payee knew or had reasonable means of knowing that the president was buying the mules on his own account.

3. The answer denied the authority of the president to sign the notes, and alleged that he did a general business of buying and selling mules on his own account, and that those for which the notes were given were bought by him in the ordinary course of his business, and not for the company, as the plaintiff well knew. The company requested a charge that the plaintiff could not recover if, having an opportunity to recover the mules, he made no effort to do so after he learned that the president had bought them for his own use, and was about to ship them for sale on his own account. Held, that such an issue was not tendered by the answer.

Appeal from circuit court, Jackson county; J. H. SLOVER, Judge.

This is an action on five negotiable promissory notes, alleged to have been executed by defendant by and through one Stewart Jackson. The plaintiffs were copartners, engaged in the horse and mule business in Kansas City, and had been for two years prior to the making of the notes sued on. The defendant was a business corporation, organized under the laws of this state, and doing transfer business in Kansas City. On the 21st day of June, 1887, one Stewart Jackson, in payment for certain mules by him bought of plaintiffs that day, gave plaintiffs the following note: "$1,860.00. Kansas City, Mo., June 21, 1887. Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock eighteen hundred and sixty dollars, for value received, at the banking office of H. S. Mills, in Kansas City, Mo., with interest from date at the rate of ten per cent. per annum until paid, and, if interest be not paid annually, to become as principal, and bear the same rate of interest. Due Aug. 20, 1887. DESPATCH TRANSFER CO., by S. JACKSON, President." And on July 5, 1887, said Jackson, in payment of mules that day bought of plaintiffs, gave plaintiffs the following note: "$1,840.00. Kansas City, Mo., July 5, 1887. Thirty days after date we promise to pay to the order of Sparks Bros. and Hancock eighteen hundred and forty dollars, for value received, at the banking office of H. S. Mills & Son, in Kansas City, Mo., with interest from date at the rate of ten per cent. per annum until paid, and, if interest be not paid annually, to become as principal, and bear the same rate of interest. Due Aug. 5, 1887. DESPATCH TRANSFER CO., by S. JACKSON, President. Indorsed: Protest waived. S. JACKSON." On the 11th of June 1887, said Jackson, for mules bought by him of plaintiffs, gave them this note: "$300.00. Kansas City, Mo., June 11, 1887. Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock three hundred dollars, with 10% interest from date, value received. Due Aug. 10, 1887. S. JACKSON." On June 11th said Jackson, for mules by him bought that day of plaintiffs, gave this note: "$375.00. Kansas City, Mo., June 11, 1887. Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock three hundred and seventy-five dollars, with 10 per cent. interest from date, value received. S. JACKSON." And on June 15th this note: "$240. Kansas City, Mo., June 15, 1887. Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock, two hundred and forty dollars, for one mouse-colored mule bo't of C. Sparks, with 10 per cent. interest from date, value received. Due Aug. 14, 1887. S. JACKSON." The plaintiffs declare upon each note separately, and charge that the defendant executed all five of the notes, by its president, Stewart Jackson. There is also a sixth count, which is as follows: "(6) Plaintiffs, for another cause of action, state that between the 10th day of June, 1887, and the 16th day of June, 1887, plaintiffs, at the request of the defendant, sold and delivered to the defendant certain mules as follows, to-wit: On the 11th day of June three (3) mules, for $675.00; on the 15th day of June, 1887, one (1) mule for $240.00; amounting in all to the sum of $915.00; which said sum defendant owes plaintiffs, and fails and refuses to pay the same, although payment has been demanded; wherefore plaintiffs demand judgment against defendant for the sum of $915.00, and for costs."

The defendant, for its defense, denies that it executed either of said notes; denies that it ever authorized the execution of either of said notes; alleges that said notes were given to plaintiffs by said Jackson on his own private account, and that the consideration therefor was certain mules and horses sold by plaintiff to Jackson for his individual account, and in no way connected with defendant's business; that said mules and horses were never delivered to defendant, and were never bought by or for defendant; that Jackson was carrying on a general business buying and selling horses and mules for his own account, which plaintiffs well knew; and that the horses and mules for which these notes were given were bought by said Jackson in the ordinary course of his business, and plaintiffs knew he did not buy said mules and horses for defendant. Defendant set up its charter, showing that by it it was only authorized to conduct a general transfer business in the city of Kansas, moving freight from point to point in said city; that it was never engaged in the business of buying or selling horses or mules, nor authorized any one to do so for it; that said two notes were wrongfully executed in its name by Jackson; that it had no power to engage in the horse and mule business, and the notes and the trades for said mules were ultra vires. Also pleaded especially that by one of its by-laws it was provided: "No debt for a sum larger than five hundred dollars shall be contracted in behalf of the company by any officer thereof, without a vote of the board of directors authorizing same" That the debt sued for in the first and second and sixth counts exceeded five hundred dollars. That said mules were not bought for defendant by said Jackson in the usual routine of business: that they were not needed by defendant for its business; that they were not desired; that defendant knew nothing of their purchase, and its board of directors never authorized their purchase, nor the contracting of the debt therefor. This answer was verified by Harry E. Overstreet, secretary and treasurer. The reply was a general denial. The cause was tried by a jury, and resulted in favor of plaintiffs on each count except the sixth.

The facts developed by the evidence are as follows: The defendant was a corporation engaged in the transfer business in Kansas City. Stewart Jackson was the president of the company. The company, as originally organized, had a capital of $10,000, — 100 shares. Jackson had the controlling interest, — 55 shares. Afterwards the stock was increased to $30,000, of which Jackson had 160 shares, — a majority of all the stock. Jackson was the president from the beginning until he left, in August, 1887, after the execution of the notes sued on. It also appears that Jackson purchased every mule and horse that defendant ever owned until he absconded; that defendant's business required mules to haul the freight it handled; that, beginning with November, 1885, and ending May 13, 1887, defendants had some 13 different transactions in mules with plaintiffs or the firm which plaintiffs succeeded, aggregating some $3,000; that in a number of these transactions the defendant gave its note in its name, by Jackson, who conducted all the trades. There was also evidence that the mules were all turned over to defendant's barns. Defendant offered evidence that it did not get the mules; that, although brought to its barns, they were taken out by Jackson, and shipped to St. Louis; that Jackson bought the mules on his own account, and that plaintiffs knew it. Plaintiffs offered evidence that they thought and were informed that the mules were bought by Jackson for the defendant; that when Jackson gave the three notes sued on in counts 3, 4, and 5, they directed him to give the company's notes to the clerk of plaintiffs in their counting-room, and did not know, till after Jackson had absconded, the notes simply bore his name; that they were selling the stock to defendant. On the trial defendant objected to the introduction of the three notes sued on in the third, fourth, and fifth counts, for the reason that they were incompetent, irrelevant, and immaterial, as they were the individual notes of S. Jackson alone; that defendant was not and could not be bound thereby. The court gave nine instructions for the plaintiff, in which the liability of defendant for the acts of Stewart Jackson, done in its name, was correctly defined. The eighth instruction is as follows: "(8) As to those notes here sued on, executed in the name of S. Jackson, the jury will ascertain whether these were executed for and in behalf of the company; and if you find that they were so executed, then as to these the defendant is liable thereon to the same extent as if said notes had been...