Dexter Imp. Ass'n v. Dexter Christian College

• Decision Date: 01 June 1911
• Citation: 138 S.W. 40,234 Mo. 715
• Parties: DEXTER IMPROVEMENT ASSOCIATION v. DEXTER CHRISTIAN COLLEGE, Appellant
• Court: Missouri Supreme Court

138 S.W. 40

234 Mo. 715

DEXTER IMPROVEMENT ASSOCIATION v. DEXTER CHRISTIAN COLLEGE, Appellant

Supreme Court of Missouri, First Division

June 1, 1911

Appeal from Stoddard Circuit Court. -- Hon. J. L. Fort, Judge.

Reversed and remanded (with directions).

Ely Kelso & Miller for appellant.

(1) There is no question as to the right of the Dexter Improvement Association to make such conveyance as was made in this case. The conveyance was strictly within the scope of the authority conferred by its charter, but if it were otherwise, the question of its being an ultra vires contract could not be raised under the pleadings and facts in this case. While our courts have been very liberal in dealing with petitions in suits to quiet title under the statutes of this State, yet, we have failed to find any authority holding that a party could assault his conveyance in a suit to quiet title without informing the defendant of the fact, and, certainly no court has gone so far as to permit a party to assault his own deed, in every way fair on its face, by merely objecting to its introduction as evidence and then offering testimony in support of his objection. (2) The doctrine of ultra vires when invoked for or against a corporation should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong. Railroad v. McCarthy, 96 U.S 258; First Natl. Bk. v. Trust Co., 187 Mo. 495; Cass Co. v. Insurance Co., 188 Mo. 1. The objection to appellant's deed on the ground that it was ultra vires had no place in this case. 10 Cyc. p. 1072-B; Burgess v. Railroad, 99 Mo. 496; 10 Cyc. p. 1075-E. (3) Acquiescence for a considerable time by a corporation, through its efficient agency and the body of its shareholders, in a state of facts, after knowldege, or after such a length of time and such a condition of circumstances that knowledge is to be inferred, will operate as a ratification in pursuance of the well-settled principle in the law of agency that a principle may ratify the unauthorized act of his agent by acquiescence or even by silence after being fully informed of the facts and circumstances attending the unauthorized act. Kitchen v. Railroad, 69 Mo. 224; Tyrell v. Railroad, 7 Mo.App. 294; 10 Cyc. p. 1076. (4) The objection of respondent that the deed was and is wholly void for the reason it was entirely without consideration is without merit. Bobb v. Bobb, 89 Mo. 412; Weiss v. Heitkamp, 127 Mo. 23; Draper v. Shoot, 25 Mo. 197; Hollecher v. Hollecher, 62 Mo. 267.

N. A. Mozely and Louis F. Dinning for respondent.

(1) This case was tried on the appellant's answer and respondent's replication. Whether the amended petition was a departure from the original is not now important for the answer and the replication present one issue. (2) Plaintiff corporation was organized for the sole purpose of holding the title to the property in question for the benefit of Stoddard county. The warranty deed made by the president of the plaintiff corporation is absolutely void, for under the law the corporation had no authority to donate this property in the way they attempted to do, and therefore the act cannot be ratified or made good. (3) Central Trans. Co. v. Pullman Palace Car Co., 139 U.S. 60; McCormick v. Bank, 165 U.S. 538; City of Goodland v. Bank, 74 Mo.App. 365. This contract, resulting in the warranty deed in question is absolutely void. Bank v. Stoneware Co., 2 Mo.App. 299; Bank v. Bank, 73 Mo. 153; New Land Hotel Co. v. Furniture Co., 73 Mo.App. 135; State ex rel. v. Trust Co., 144 Mo. 562; Kansas City v. O'Connor, 82 Mo.App. 655; Anglo-American Co. v. Lombard, 132 F. 721; Bank v. German American Co., 116 N.Y. 281; Bank v. Snider, 116 N.Y. 370; Bank v. Kennedy, 167 U.S. 362; Insurance v. Eby, 5 Conn. 560. (4) The contract was not the act of the corporation and did not bind it. The president of a corporation is its agent for certain purposes, but he has no power to convey the real estate belonging to the corporation, except he does it by order of its board of directors. Degnam v. Thoroughman, 88 Mo.App. 62; Barnhardt State Bank v. Fesler, 89 Mo.App. 217; Union National Bank v. State National Bank, 155 Mo. 95; Tyler Estate v. Hoffman, 146 Mo.App. 510. (5) When plaintiff learned that the objects of its incorporation had failed it was the duty of the stockholders to have the corporation legally dissolved, as provided by Sec. 2996, R. S. 1909; then it would have been the duty of the trustee to sell this property and give the proceeds thereof to the stockholders. Richards v. Coal & Mining Co., 221 Mo. 165; McCoy v. Farmer, 65 Mo. 249; Morrill v. Railroad, 96 Mo. 177. (6) Section 650, as amended by the Legislature, R. S. 1909, now Sec. 2535, authorizes any relief to which a party is entitled and the pleadings in this case make the issue, is the deed in question valid? Simpson v. Stoddard County, 173 Mo. 421.

OPINION

WOODSON, J.

The plaintiff brought this suit to the circuit court of Stoddard county, at the September term, 1906, thereof, against the defendant, seeking to have a certain bond reformed, which was executed by the latter to the former upon the grounds of mistake.

The petition in substance stated that the plaintiff conveyed certain property by a general warranty deed to defendant; and that in turn the latter had executed to the former the bond before mentioned. That by mistake of the scrivener the bond did not in truth and fact fully recite the agreement and understanding of the parties to the bond, alleging that the understanding was that the defendant should expend $ 1000 per year for ten years, and that the bond erroneously stated that defendant was to expend upon the premises the sum of $ 10,000 within the period of ten years from and after its date; and that the intention of the parties was that the defendant was to maintain a nine months' school on said property in each year, for a period of ten years, while the bond left the number of months of each term in each year blank.

Sometime afterwards, the plaintiff filed an amended petition to quiet title under section 650, Revised Statutes, 1899, merely stating that the plaintiff was the owner of the property in fee simple, and that the defendant claimed some right, title or interest in and to said property, which was adverse and prejudicial to plaintiff's title. To that petition the defendant filed the following answer, formal parts omitted:

"Now comes defendant and for answer to plaintiff's amended petition admits that both plaintiff and defendant are corporations as therein alleged, and admits that defendant claims to be the owner in fee simple of the property described in said petition.

"Further answering, defendant denies each and every allegation in plaintiff's petition contained, and asks to be hence dismissed with its costs.

"Further answering, defendant says that it acquired the absolute title in fee simple to the property described in plaintiff's petition on the 19th day of June, 1902, and is still the owner in fee simple of said property; that defendant entered into possession of said property on said 19th day of June, 1902, and has been in the open, notorious, adverse and peaceable possession of said property continuously from said 19th day of June, 1902, up to the present time.

"That no claim, title or interest of any kind whatever has ever been asserted by plaintiff during all this time to said property, and plaintiff avers that this suit is not the proper legal and corporate act of plaintiff.

"Further answering, defendant says that it has at no time had information of any kind or character whatever that plaintiff claimed any title to said property after it was acquired by defendant as aforesaid on said 19th day of June, 1902, and at this time has no knowledge or information sufficient to form a belief as to what induces plaintiff to make the claim of title set out in plaintiff's petition.

"Wherefore, the defendant having fully answered again prays judgment and for costs."

The reply was as follows:

"Now comes the plaintiff in the above cause and for replication to the answer of defendant filed herein, denies each and every allegation, matter, fact and thing of new matter in said answer set out and pleaded.

"Plaintiff further replying avers that the attempted conveyance of the property in suit by the president and secretary of plaintiff to the defendant, on June the 19th, 1907, was not the corporate act of plaintiff or its stockholders, but was attempted to be executed by its president and secretary under the mistaken belief that plaintiff had authorized the same, which plaintiff avers is not true, and further avers that the execution of said deed and the attempted conveyance of said property thereby was without the knowledge of plaintiff's stockholders and against their will; that said alleged conveyance was and is wholly without consideration and void; that plaintiff's board of directors were wholly without power or authority to give away, and its president and secretary were wholly without power to execute a valid deed giving away (as was attempted to be done by said deed) all and every item of property constituting the capital stock of said plaintiff and thereby rendering plaintiff wholly insolvent.

"Plaintiff denies as aforesaid that said deed is valid and binding upon it and alleges that the same was executed without power or authority as aforesaid, but alleges that said deed does not even express the design and intent of the board of directors of plaintiff nor of the defendant; that it was the understanding and agreement between the directors of plaintiff and the defendant that said deed should be a conditional one and not an absolute conveyance; that said defendant should expend the sum of one thousand dollars annually...