British-American Portland Cement Co. v. Citizens' Gas Co.

• Decision Date: 24 December 1913
• Citation: 164 S.W. 468,255 Mo. 1
• Parties: BRITISH-AMERICAN PORTLAND CEMENT CO. v. CITIZENS' GAS CO. et al.
• Court: Missouri Supreme Court

164 S.W. 468

255 Mo. 1

BRITISH-AMERICAN PORTLAND CEMENT CO. v. CITIZENS' GAS CO. et al.

Supreme Court of Missouri.

December 24, 1913.

Rehearing Denied February 10, 1914.

1. APPEAL AND ERROR (§ 880)—REVERSAL OF JUDGMENT — DEFENDANT NOT LEGALLY SERVED.

Want of legal service on one defendant would not justify reversal of a judgment against another legally served.

2. VENDOR AND PURCHASER (§ 334)—CONTRACT NOT EXECUTED—LIABILITY FOR MONEY PAID.

A proposed contract of sale not having been executed, the vendor was not liable to the purchaser for a sum payable as a part of the price when the contract was executed, placed in the hands of a stakeholder for payment pursuant to the contract prior to the time it was paid by him to the vendor.

3. CONSTITUTIONAL LAW (§ 324)—CORPORATIONS (§ 641)—RIGHT TO JUSTICE.

In so far as Rev. St. 1909, §§ 3037-3041, deny to a corporation of another state the right to sue in the courts of this state without a license to do business herein, they are void under Const. art. 2, § 10, providing that the courts of justice shall be open to every person, and certain remedy offered for every injury, and that right and justice shall be administered without sale, denial, or delay.

4. CONSTITUTIONAL LAW (§ 307)—DUE PROCESS OF LAW.

They are also void under Const. art. 2, § 30, and Const. U. S. Amend. 14, § 1, guaranteeing due process of law.

5. CONSTITUTIONAL LAW (§ 207)—PRIVILEGES AND IMMUNITIES OF CITIZENS.

They are also void under Const. U. S. art. 4, § 2, guaranteeing the citizens of each state privileges and immunities of citizens in the several states.

6. VENDOR AND PURCHASER (§ 334)—MONEY PAID TO STAKEHOLDER—RIGHT TO RECOVER.

A proposed contract of sale being null and void, and never executed, title to money placed by the purchaser in the hands of a third person

for the use of the vendor when the contract should be executed never passed from the purchaser to the stakeholder or the vendor, and the purchaser is entitled to recover the same from the stakeholder.

7. VENDOR AND PURCHASER (§ 44)—EXECUTION OF CONTRACT—EVIDENCE.

Evidence held to show that a proposed contract of sale was never entered into.

Walker, Brown, and Graves, JJ., dissenting.

In Banc. Appeal from Circuit Court, Jackson County; J. H. Slover, Judge.

Suit by the British-American Portland Cement Company against the Citizens' Gas Company and J. E. Campbell. From a judgment for plaintiff, defendants appeal. Affirmed as to defendant Campbell, and reversed as to the defendant Gas Company.

This suit was instituted in the circuit court of Jackson county by the plaintiff against the defendants, to recover the sum of $10,000 placed by the latter in the hands of J. E. Campbell, as earnest money, for the proposed purchase by the plaintiff from defendant company certain oil and gas lands, including buildings and improvements thereon, situated in the Indian Territory, now the state of Oklahoma. The sufficiency of the pleadings is not questioned, and for that reason I put them aside, with the passing remark that they properly presented the propositions now before the court.

The facts of the case are substantially as follows: The plaintiff was a foreign corporation, organized and existing under the laws of West Virginia, with its principal office in Kansas City, Mo. The defendant company was also a foreign corporation, organized and doing business in the Indian Territory, now the state of Oklahoma. Neither of said companies had complied with the laws of this state regarding their duties to take out a license to do business herein, or to pay the license fees for that privilege; and in passing it may not be out of place to here state that practically all of the business of the Cement Company had been transacted in this state, except what this statement shows was conducted in the Indian Territory or in the state of Oklahoma. And it might here be added that the Cement Company had not gotten in shape to conduct the real purposes for which it was incorporated, and had sold only about $100,000 worth of its stock, the authorized capital of which was $3,750,000. It had not begun the construction of its plant in Oklahoma, and had not begun to manufacture or sell cement, or to pipe oil or gas, and was not organized to the extent that it could do any of the business named in its charter, and at the time of the transaction in question was simply negotiating with the Gas Company, another foreign corporation, for the purchase of the necessary land and pipe lines supplying gas, so as to enable it to begin to do that business, pending which negotiation the latter company succeeded in procuring from the former, the $10,000, previously mentioned. The former company, for convenience, will hereinafter be designated the Cement Company, and the latter the Gas Company. William Peet was the preside of the Cement Company, and it was managed and controlled by William Peet, T. J. Coughlin, T. H. Miller, and Thomas Herrington. The president of the Gas Company was J. E. Jones, and, if I correctly understand the evidence, he and the defendant Campbell were its managers, and probably later Campbell was its president, but that is immaterial. The charters of the respective companies duly authorized them to transact the business mentioned in this case.

The general object of the Cement Company was to manufacture and sell cement and kindred products, at its chief works near Nowata, Ind. T., and to produce and transport oil and gas by means of pipe lines in that territory, with its principal office, as previously stated, in Kansas City, Mo. The general purpose of the Gas Company was to produce, sell and transport oil and gas, by means of pipe lines, and to furnish the same to the inhabitants of the town Nowata, and vicinity, for light, heat and manufacturing purposes. Its office and place of business was at Nowata, and J. E. Jones, its president, was a citizen and resident thereof. The Gas Company had erected and was operating a gas plant, and supplying gas to the citizens of Nowata and vicinity, for the purposes mentioned, at and prior to the times hereinafter mentioned.

In the month of June, 1907, one F. C. Vincent leased and purchased some lands near Nowata, upon which he claimed there was large quantities of cement rock, and, with the idea of manufacturing cement therefrom, he entered into a temporary contract (the exact nature of which is not clear, and not material here) with the Gas Company, by which it was to furnish gas for that purpose. Thereupon he went to Kansas City and St. Joseph, and induced some 12 or 15 of their citizens to organize the Cement Company, which was done August 19, 1907. In his negotiations with the Kansas City and St. Joseph parties, Vincent, without the authority, as I gather it, undertook to assign his contract with the Gas Company to the Cement Company, but, be that true or not, it is wholly immaterial in this case, except in that it brought the two companies together regarding the transactions involved in this case.

On June 8, 1908, Jones, the president of the Gas Company, appeared before the board of directors of the Cement Company, then in session at Kansas City, with a view of having some guaranty put up for the performance of the contract made the previous year by and between Vincent and the Gas Company, to furnish him gas for the purposes previously mentioned, and informed the board that he wanted a permanent and final contract made regarding that matter. The board refused to put up the guaranty or to enter into the contract demanded by Jones, and adjourned the meeting. After the adjournment, some of the directors, being importuned further by Jones, retired to the Baltimore Hotel, some distance from the office of the Cement Company, and entered into the following written agreement:

                        "Kansas City, Mo., June 8th, 1908
                

"Memorandum of proposed agreement to be entered into between the Citizens' Gas Company of Nowata, Oklahoma, and the British-American Portland Cement Company of West Virginia, represented by Wm. Peet, T. J. Coughlin, T. H. Miller, Tom Herrington:

"Mr. Jones, of the Citizens' Gas Company, agrees to sell to said British-American Portland Cement Company his contract with R. L. Henry of Chicago, Ill., for the furnishing of gas for domestic and manufacturing purposes to the town of Nowata, Oklahoma, and vicinity; also the pipe line extending from what is known as the Hogshutter field in Oklahoma to the town of Nowata, for the sum of ($45,000.00) forty-five thousand dollars, reserving to himself the franchise to deliver gas to the town of Nowata, for domestic purposes only, for which he agrees to pay the Cement Company three cents per one thousand cubic feet delivered at Nowata, Oklahoma.

"The British-American Portland Cement Company is to pay the above $45,000.00 as follows: ($10,000.00) ten thousand dollars cash upon signing the contract, and ($10,000.00) ten thousand dollars cash six months from the date of signing the contract, and to issue to Mr. Jones 2,500 shares of the preferred stock and 2,500 shares of the common stocks of the British-American Portland Cement Company at par value ($10.00 each). The Cement Company assuming the payment of $45,000.00 par value of bonds of the Citizens' Gas Company.

"The directors agree to use their best efforts to consummate the above agreement.

"The above contract to be entered into not later than June 20th, 1908.

                  "[Signed]  T. J. Coughlin
                            "Wm. Peet
                            "Tom Herrington
                            "T. H. Miller
                            "The Citizens' Gas Company.
                                       "By J. E. Jones, Pres."
                

(The italics are ours.)

Thereafter, on June 20, 1908, a directors' meeting of the Cement Company was held in Kansas City, to consider the proposition made on June 8, 1908 (it having been presented to the board in the meantime), and, after due consideration, the following order was made and entered of record, to wit:

"Whereupon Mr. Courtney moved and...