Joseph Schlitz Brewing Co. v. Missouri Poultry & Game Co.

• Decision Date: 09 April 1921
• Parties: JOSEPH SCHLITZ BREWING COMPANY v. MISSOURI POULTRY AND GAME COMPANY et al., Appellants
• Court: Missouri Supreme Court

229 S.W. 813

287 Mo. 400

JOSEPH SCHLITZ BREWING COMPANY v. MISSOURI POULTRY AND GAME COMPANY et al., Appellants

Supreme Court of Missouri, First Division

April 9, 1921

Appeal from St. Louis City Circuit Court. -- Hon. Rhodes E. Cave Judge.

Affirmed.

Charles B. Stark and Jourdan, Rassieur & Pierce, for appellants.

(1) Plaintiff cannot recover on the bond and contract, in an action on contract, because the contract was ultra vires of the Poultry & Game Company as defined in its articles of incorporation, and the constitutional provision and statute governing the powers of corporations. Sec. 7, Art. 12, Mo Constitution; Sec. 2990, R. S. 1909; De La Vergne Co. v German Sav. Instn., 175 U.S. 40; Buckeye Marble & Freestone Co. v. Harvey, 92 Tenn. 115, 18 L. R. A. 252; Anglo-American Land, Mtg. & Agency Co. v. Lombard, 132 F. 721; F. & H. Club v. Kessler, 252 Mo. 424; Bowman Dairy Co. v. Mooney, 41 Mo.App. 665; Orpheum Co. v. Brokerage Co., 197 Mo.App. 661. (2) The contract sued on is void for want of consideration and want of mutuality. Hudson v. Browning, 264 Mo. 58. (3) If the contract sought to be enforced is void, as to the Poultry & Game Company, then there can be no judgment against the sureties. There can be no such thing as a judgment against the sureties where there can be no recovery against the principal. Kansas City v. O'Connor, 82 Mo.App. 655; Tandy v. Commission Co., 113 Mo.App. 413; Building Assn. v. Obert, 169 Mo. 507; Railroad v. Smith, 27 Mo.App. 371; Brandt on Sur. & Guar. (3 Ed.), sec. 19, p. 163.

Abbott & Edwards for respondent.

(1) Full performance takes a contract out of the requirements of the Statute of Frauds, and therefore the contract or transactions between the Poultry & Game Company and plaintiff are not affected by the statute because plaintiff performed all of the conditions imposed upon it. Bless v. Jenkins, 129 Mo. 657; Marks v. Davis, 72 Mo.App. 562; Smith v. Davis, 90 Mo.App. 538; Sloan v. Paramore, 181 Mo.App. 611; Ordelheide v. Traube, 183 Mo.App. 363; Denny v. Brown, 193 S.W. 552. (2) There is no want of consideration or mutuality in the contract or transactions between the Poultry & Game Co. and plaintiff out of which the indebtedness secured by the bond arose. R. S. 1909, sec. 2774; Cold Blast Trans. Co. v. K. C. Bolt & Nut Co., 114 F. 77, 57 L. R. A. 696; Wulze v. Shaefer, 37 Mo.App. 551; 9 Cyc. 329, 333; Heffernan v. Neumond, 201 S.W. 645; Warren v. Coal Co., 207 S.W. 883; Brown Paper Box Co. v. Merc. Co., 190 Mo.App. 584; Stearns on Suretyship (2 Ed.) secs. 28, 57, pp. 34-67; 12 R. C. L. sec. 29, p. 1077; 20 Cyc. pp. 1415, 1416, par. b.; Bleeker v. Hyde, 3 McLean, 279. (3) Where one of the parties to a contract is corporation, the defense of ultra vires cannot be maintained against liability on such contract where it has been performed by one party, the contract not being illegal or immoral or expressly prohibited by charter. The party who has performed may sue on the contract the party who received and retained the benefits of his performance thereunder. 5 Thompson, Priv. Corp. sec. 6016, p. 4666; 1 Clark & Marshall, Priv. Corp. p. 598; St. Louis Drug Co. v. Robinson, 81 Mo. 18; Bank v. Trust Co., 187 Mo. 528; Weyrick v. Grand Lodge, 47 Mo.App. 391; Welch v. Heim Brwg. Co., 47 Mo.App. 608; City of Goodland v. Bank, 74 Mo.App. 365; Chenoweth v. Pac. Express, 93 Mo.App. 185; Smith v. Richardson, 77 Mo.App. 422; York v. Farmers' Bank, 105 Mo.App. 127; Bush Const. Co. v. Bambrick-Bates Const. Co., 176 Mo.App. 608; St. Louis v. Ry. Co., 248 Mo. 10.

JAMES T. BLAIR, J. Elder, J., not sitting.

OPINION

JAMES T. BLAIR, J.

Plaintiff is a Wisconsin corporation which formerly brewed and sold beer. Defendant Missouri Poultry & Game Company is a Missouri corporation. In August, 1905, F. W. Brockman went to Milwaukee and orally agreed with plaintiff to purchase beer from it; that he would form a corporation for that purpose; that he would go into the business and finance it, furnish a bond signed by himself and August Gehner, and in due time notify plaintiff when to commence shipping its product. On August 26, 1905, the bond was signed. August 29, 1905, Brockman wrote plaintiff ordering beer, and saying: "You can bill this to me if you prefer until the bond is accomplished or make any other arrangement to please yourself, but the new company will take hold of the business at once." On August 31, 1905, Brockman wrote:

"The bond is already signed by Mr. August Gehner, a capitalist of this city and President of the German-American Bank, and myself as surety for the Missouri Poultry & Game Company, and will be forwarded to you as soon as we obtain the charter from the State, which we have applied for, and the only reason that I am not sending it along is because I do not wish to have it returned here or charged, in case the Secretary of State should have some reason or other to make any request for alteration of any of the articles or possibly in the name. At any rate, I stand good for the two cars of beer ordered and for all which will be forwarded by you, and you can take this as your surety."

The bond was sent to plaintiff on September 2, 1905. It reads as follows:

"Know All Men by These Present, That we, Missouri Poultry and Game, Company, a corporation, organized under the laws of the State of Missouri, of St. Louis, as principal, and F. W. Brockman and August Gehner, of St. Louis, Missouri, as sureties, are held and firmly bound unto the Jos. Schlitz Brewing Company, a corporation of Milwaukee, Wisconsin, in the sum of twenty thousand dollars, good and lawful money of the United States, to be paid to the said Jos. Schlitz Brewing Company, its successors or assigns, to which payment well and truly to be made, we do bind ourselves, jointly and severally, our heirs, executors and administrators, firmly by these presents.

"Sealed with our seals and dated this 26th day of August, 1905.

"Whereas, the above bounden principal has agreed to purchase for and during the next ten years from the date hereof, beer brewed by the Jos. Schlitz Brewing Company (a corporation engaged in the manufacture of beer at Milwaukee, Wisconsin), to the exclusion of all other malt beverages, in consideration whereof, said Jos. Schlitz Brewing Company has consented to sell and ship, upon the order of said principal, from time to time as needed in his business, its various brands of beer in conformity to the by-laws, rules and regulations established in that behalf and printed on the back hereof, and at the following prices, to-wit: As per special agreement, and to extend to said principal on such purchases a running credit not exceeding $ 10,000, as long as all purchases in excess of said credit are promptly paid, and the above bounden purchaser, complies with all of his obligations in the premises, the above named obligee having reserved the right to change any or all of the prices aforesaid, from time to time, without notice, to the principal or the sureties; also the right of terminating the aforesaid agreement to sell beer to said principal, without notice, at any time prior to the termination of said period of ten years, and whereupon all amounts then owing from said principal to said obligee shall become due and payable forthwith; and further, reserving the privilege of extending to said principal a running credit in excess of said sum of $ 10,000 dollars and of extending at any time or times to said principal, credit in excess of said sum, all without releasing or discharging thereby the above named sureties from the obligations of this bond:

"Now, Therefore, the condition of this obligation is such that if the above bounden principal, his heirs, executors or administrators shall faithfully comply with said agreement and shall well and truly pay or cause to be paid to the above named Jos. Schlitz Brewing Company, its successors or assigns all sums of money which may or shall be owing to said Jos. Schlitz Brewing Co., at the time or times when the same shall become payable, according to the agreement aforesaid, and the regulations endorsed on the back hereof, without fraud or delay, then this obligation to be void, otherwise to be and remain in full force and virtue; it being expressly understood that the above named sureties shall, under all circumstances, be liable to the obligee for so much of the indebtedness of the principal as is not in excess of the amount of this obligation, but no more, and that the discharge of this obligation shall not release the principal from the payment of any indebtedness due from him to the obligee in excess of such amount."

The by-laws, rules, etc., referred to in the bond stated the authority of agents, provided that no order or agreement for the purchase of beer would be binding until received and accepted by plaintiff at Milwaukee; prescribed credits for returned containers and certain terms of sale, other than prices. The "special agreement" referred to in the bond fixed the prices to be charged and paid for beer. These prices were proved orally. Beginning with the order referred to, the Poultry & Game Company, of which Brockman became the president, ordered from plaintiff large quantities of beer which it received and sold. The business was continued on a large scale for nearly six years and was terminated by plaintiff by a notice of which no complaint is made. At the time of the termination of the arrangement there was due plaintiff, according to the agreed price, the amount for which it recovered judgment, $ 9472.50.

Several grounds are relied upon for reversal.

I. The total amount of beer sold to the Poultry & Game Company was very large. The gross amount billed during one month which it seems, is illustrative of the business done, was over $ 14,000. The...