Common Sense Mining Co. v. Taylor

• Decision Date: 24 December 1912
• Parties: COMMON SENSE MINING COMPANY, Appellant, v. H. L. TAYLOR et al
• Court: Missouri Supreme Court

152 S.W. 5

247 Mo. 1

COMMON SENSE MINING COMPANY, Appellant, v. H. L. TAYLOR et al

Supreme Court of Missouri, First Division

December 24, 1912

Appeal from Jasper Circuit Court. -- Hon. Hugh Dabbs, Judge.

Affirmed.

Charles H. Winston for appellant.

(1) Inasmuch as plaintiff's by-laws provide that the board of directors shall have management and control of the business of the corporation, and shall meet on the second Tuesday of each month and at such other times as the board may, by resolution, direct, and as said by-laws provide that no officer or employee of the company shall have power to bind the company by contract without the express authority of the board of directors, and as the board of directors did not by resolution or otherwise direct a meeting of the board to be held on April 18, 1906, and as only the five directors who attended were notified of that meeting, and the other two directors, Van Dorp and Braucher, were not notified and did not attend, the so-called contract of those five directors and Taylor pleaded by defendants is not the contract of plaintiff, nor is it binding on plaintiff. The pretended contract pleaded by defendants was not and could not be made or authorized by the board of directors at that pretended meeting. Hill v. Mining Co., 119 Mo. 29; Coal Co. v. Watson, 107 Mo.App. 451. (2) The telegram was sent by Sanderson without authority of the board of directors. There was no meeting of the board of directors in reference to it. There was no extension of the contract, even if such contract ever existed. The directors themselves could not extend it without assembling and holding a meeting of the board as such. Hill v. Mining Co., 119 Mo. 9. (3) There is no estoppel barring plaintiff's recovery in this action. Steel v. St. Louis S. & R. Co., 106 U.S 447; Gray v. Gray, 83 Mo. 106; Curtis v Browne, 63 Mo.App. 431; Galbraith v. Newton, 30 Mo.App. 380; Blodgett v. Perry, 97 Mo. 263; Douglas v. Cissna, 7 Mo.App. 44; Taylor v Zepp, 14 Mo. 482; Terrill v. Bouleware, 24 Mo. 254; Burke v. Adams, 80 Mo. 504; Newman v. Hook, 37 Mo. 207; Sutton v. Dameron, 100 Mo. 141; Bales v. Perry, 51 Mo. 449; Lumber Co. v. Kreeger, 52 Mo.App. 418; Railroad v. Apperson, 97 Mo. 300; St. Louis v. Schulenburg Co., 98 Mo. 613; Stagg v. Linnenfelser, 59 Mo. 336; Austin v. Loring, 63 Mo. 19; Bartlett v. Kander, 97 Mo. 356; Throckmorton v. Pence, 121 Mo. 50; State v. Branch, 151 Mo. 622; Gale v. Ins. Co., 33 Mo.App. 664; Smith v. Roach, 59 Mo.App. 115; Smith v. McPike, 70 Mo. 175; State to use v. Berning, 74 Mo. 87; Nichols v. Bank, 55 Mo.App. 81. a. Because none is pleaded by defendants, whose answers aver a contract of purchase from plaintiff and performance by defendants. Golden v. Tyler, 180 Mo. 196; Carthage v. Carthage L. Co., 97 Mo.App. 20; McDonald v. DeSoto S. & B. Assn., 175 Mo. 250. b. Because both plaintiff and defendants had equal means of knowledge. Defendants knew the truth. Bales v. Perry, 51 Mo. 449; Blodgett v. Perry, 97 Mo. 263; Thompson v. Renoe, 12 Mo. 157; Olden v. Hendricks, 100 Mo. 533: Galbraith v. Newton, 30 Mo.App. 380; Taylor v. Zepp, 14 Mo. 482; Terrill v. Bouleware, 24 Mo. 254; Burke v. Adams, 80 Mo. 504; Douglas v. Cissna, 17 Mo.App. 44; Wurmser v. Frederick, 62 Mo.App. 634; Rosenkranz v. Swofford, 175 Mo. 518; Harrison v. McReynolds, 183 Mo. 533. (c). Because defendants were acquainted with the true character of their own title or with the fact that they had none. Steel v. St. L.S. & R. Co., 106 U.S. 447; Brant v. Coal & I. Co., 93 U.S. 327; Henshaw v. Bissell, 85 U.S. 271; Bump v. Butter, 93 F. 300; Elliott v. Keith, 121 Ga. 121; Pointer v. Chapman, 8 Utah, 452; Houser v. Austin, 2 Idaho, 199. d. Because Moore and Bushnell and Taylor never intended to be, and were not, fair in the transactions. If they had intended to be fair, they would not have taken possession or operated the mine, till they got title or at least were sure of a valid and fair contract binding themselves as well as plaintiff. Electric Street S. Co. v. Mfg. Co., 125 Mo. 140; Wilson v. St. L. & W. R. Co., 120 Mo. 58; Cassidy v. Metcalf, 1 Mo.App. 593; 66 Mo. 519; Southworth v. Hopkins, 11 Mo. 331; Hollmann v. Conlon, 143 Mo. 369. e. Because no man is entitled to the aid of a court of equity when that aid becomes necessary by his fault. If the defendants had promptly within time have paid the claims as listed and then taken the papers held by the Conqueror Trust Company, such aid as they now ask would not have been necessary. It was their neglect or fraud by which those claims were left unpaid. State v. Potter, 63 Mo. 212; Quinlan v. Keiser, 66 Mo. 605; Hollmann v. Conlon, 143 Mo. 383. f. Because Moore and Bushnell as well as Taylor, were wrongfully defrauding plaintiff and they authorized all that Taylor did in wasting and injuring plaintiff's premises, and in the discounting of the bills listed to be paid and in the refusal and failure to pay same. Omnia praesumuntur in odium spolia toris. Pomeroy v. Benton, 57 Mo. 531, and 77 Mo. 64; Ferneau v. Whitford, 39 Mo.App. 311; State v. Alexander, 119 Mo. 447; State v. Potter, 9 Mo. 356. g. Because the secret oral agreement between Moore and Bushnell and Taylor, whereby he was to receive a salary, management, control and share of the property, and to make it profitable to Moore and Bushnell, was a fraud on the rights of plaintiff, whose agent he undertook to be in the proposed sale under his proposition to the five directors who entrusted him in the matter. Pomeroy v. Benton, 57 Mo. 531.

Fred L. Williams for respondents.

(1) The contract was binding upon the plaintiff. 1st. The contract itself duly signed by plaintiff's president and attested by plaintiff's secretary raises the presumption that it was with full authority from plaintiff and that the officers of plaintiff had the authority to execute the instrument. 3 Clark & Marshall on Private Corporations, par. 682, p. 2090. 2d. It was not necessary that the corporate seal of the plaintiff be placed upon said contract to make it legal or binding upon the plaintiff corporation. Buckley v. Briggs, 30 Mo. 452. Sec. 2993, R.S. 1909, provides that corporations may even contract by parol. 3d There is no evidence offered by plaintiff that Van Dorp and Braucher, the other two directors of the corporation, did not have notice of the meeting, but on the other hand, Farquhar, the secretary of the plaintiff, testifies that Van Dorp was notified of the meeting by telephone. Sanderson testifies that Braucher was in Kansas City and present with the other directors when Taylor's proposition was discussed. The legal presumption is that all directors were properly notified. Ins. Co. v. Holmes, 68 Mo. 601; Rutherford v. Hamilton, 97 Mo. 549; Pitman v. Lead & Zinc Co., 113 Mo.App. 518; 2 Thompson on Corporations (2 Ed.), par. 1144, p. 78. 4th. The board of directors of a corporation have power to sell or convey all the assets of a company in order to pay the debts of the company. 3 Clark & Marshall on Private Corporations, par. 691 (c), pp. 2100, 2101, 2102; Ib., par. 779 (a), p. 2362; 5 Thompson on Corporations (2 Ed.), par. 6138, p. 958; Hutchinson v. Green, 91 Mo. 367; Chew v. Ellingwood, 86 Mo. 273; Shockley v. Fisher, 75 Mo. 501; Descombes v. Wood, 91 Mo. 196; Foster v. Planing Mill Co., 92 Mo. 89; Bank v. Iron Co., 97 Mo. 44; Huse v. Ames, 104 Mo. 92. (2) Plaintiff is estopped to set up defense that the contract was without its authority and void. a. The contract was executed by proper officers of plaintiff. b. The presumption that defendants had a right to rely upon, and upon which they did rely, was that the officers of the company had power to execute the contract. c. Defendants acting in good faith and upon said contract expended large sums of money on the property, to-wit, approximately $ 18,000 more than the ore sales from said property. d. The plaintiff received the benefits of said contract by having its debts paid. The estoppel of a corporation to annul an executed agreement, or one whose consideration it has received (which, though unauthorized, it not prohibited by law or its charter), is grounded on the idea of preventing a fraud by the corporation on the party whom it had misled into the performance of the agreement. Smith v. Richardson, 77 Mo.App. 422; McLaughlin v. College, 20 Mo.App. 42; Bailey v. Trustees, 12 Mo. 174; 3 Clark & Marshall on Private Corporations, sec. 680, p. 2081; Tenney v. Lumber Co., 43 N.H. 343; Kuser v. Wright, 52 N.J.Eq. 825; Wire Co. v. Steel Co., 164 Ill. 149; Brown v. Wright, 25 Mo.App. 54. (3) The plaintiff corporation has ratified the contract. Preston v. Lead Co., 51 Mo. 43; Kiley v. Forsee, 57 Mo. 390; Bank v. Fricke, 75 Mo. 178; Holmes v. Board of Trade, 81 Mo. 137; Campbell v. Pope, 96 Mo. 468; Bank v. Bank, 107 Mo. 133; Donham v. Hahn, 127 Mo. 439; Jones v. Williams, 139 Mo. 1; Moore v. Ins. Co., 56 Mo. 343; Field v. Inv. Co., 123 Mo. 603; State v. Perkins, 90 Mo. 610. (4) Even though there be want of authority from directors to the president to make a contract, it does not render the contract void but only voidable. City v. Bank, 74 Mo.App. 365; Drug Co. v. Robinson, 81 Mo. 18; Field v. Inv. Co., 123 Mo. 603; Hill v. Mining Co., 119 Mo. 9; Ins. Co. v. Smith, 117 Mo. 261; Sparks v. Dispatch Trans. Co., 104 Mo. 531; Lysaght v. Stone Masons' Assn., 55 Mo.App. 547; Winscott v. Inv. Co., 63 Mo.App. 367; Grohmann v. Brown, 68 Mo.App. 630; Smith v. Richardson, 77 Mo.App. 432.

OPINION

GRAVES, P. J.

Both pleadings and proof in this cause are voluminous in the extreme. Plaintiff, a Missouri corporation, by its petition sues for the possession of a certain mining property in Jasper county, Missouri, which it formerly held and possessed under a mining lease from another company. Monthly rents and...