American Preservers' Trust v. Taylor Mfg. Co.

• Decision Date: 18 May 1891
• Citation: 46 F. 152
• Parties: AMERICAN PRESERVERS' TRUST v. TAYLOR MANUF'G CO. et al.
• Court: U.S. District Court — Eastern District of Missouri

46 F. 152

AMERICAN PRESERVERS' TRUST v. TAYLOR MANUF'G CO. et al.

United States Circuit Court, E.D. Missouri, Eastern Division.

May 18, 1891

A. Leo Weil, C. H. Krum, Frank Ryan, and James O. Broadhead, for complainant.

Judson & Reyburn, for defendants.

THAYER J.

This case was before the court on a former occasion on an application for a preliminary injunction. The bill has since been amended, and the questions now to be determined arise on a general demurrer to the complaint.

1. An injunction was refused because it did not appear, when such an order was applied for, that the Taylor Manufacturing Company had signed or had become bound by the 'agreement of co-operation' (as it is termed) of date May 15, 1889. Vide 43 F. 711. The bill has been so amended as to overcome that objection, at least on demurrer. It is now averred that that agreement, though it was only signed by stockholders of the manufacturing company, was in fact 'executed for an in behalf of said company,' and that said stockholders 'were duly authorized and empowered to so act for the company,' and that the company 'received the proceeds of the sale of the trust certificates,' which formed a part of the consideration for executing the agreement of co-operation. In view of these allegations, it cannot be held, on demurrer, that the corporation is not bound by the agreement of co-operation, merely because its name is not appended to the agreement, or because the agreement on its face purports to be the individual obligation of certain of its stockholders. When a contract is one which a corporation is empowered to make, and has in fact authorized to be made for its benefit, but in the name of some other person or persons, it may be held liable thereon. So far as natural persons are concerned, it is usually immaterial by what name they see fit to evidence their assent to a contract providing they do assent and intend to become bound; and the same doctrine has been held applicable to corporations. Melledge v. Iron co., 5 Cush. 158; Carrol v Society, 125 Mass. 565.

2. It accordingly becomes necessary to consider the case upon the assumption that the Taylor Manufacturing Company executed the agreement of co-operation and thereby covenanted 'that for the period of twenty-five years * * * it would not within the territory of the United States of America, engage * * * in the manufacture or sale of preserves, jellies, fruit butters,' etc. According to the averments of the bill, the agreement of co-operation was executed 'in compliance with and in pursuance of' a promise to execute such an agreement, made by the Taylor Manufacturing Company, when it became a member of the American Preservers' trust,' and signed the articles of association. It appears that the execution of that agreement was one of the conditions upon which the manufacturing company was allowed to become a member of the trust, and to share in the benefits incident to such membership. It follows, that the consideration supporting its covenant to discontinue the manufacture and sale of preserves was not merely the sum of money received for its plant, tools, brands, and trade-marks, but the consideration consisted in part of advantages gained, or supposed to have been gained, by admission to the trust. For the purposes of this decision, therefore, the 'trust agreement,' executed some time in the spring of 1888, and the 'agreement of co-operation,' executed in May, 1889, must be treated as part and parcel of the same agreement. The terms of both agreements were assented to at the same time. It was made a condition, when the Taylor Manufacturing Company was admitted to the trust, that it should enter into a covenant (termed an 'agreement of co-operation') to discontinue one branch of its business, which covenant it subsequently executed. In its legal aspects, therefore, the case presents the same features that it would present if the covenant which complainant seeks to enforce had been incorporated into the trust agreement.

3. The next question to be considered is whether the trust agreement, as described in the bill, was one to which the Taylor Manufacturing Company, a corporation created by the laws of the state of Missouri, could lawfully become a party. It seems that the American Preservers' Trust was an...