Indianapolisco v. St Louis, Ft Co

• Decision Date: 31 January 1887
• Docket Number: ROLLING-MILL
• Citation: 30 L.Ed. 639,120 U.S. 256,7 S.Ct. 542
• Parties: INDIANAPOLISCO. v. ST. LOUIS, FT. S. & W. R. CO. 1
• Court: U.S. Supreme Court

120 U.S. 256

7 S.Ct. 542

30 L.Ed. 639

INDIANAPOLIS ROLLING-MILL CO. v. ST. LOUIS, FT. S. & W. R. CO.¹

January 31, 1887.

H. C. McDougall, for plaintiff in error.

John F. Dillon, for defendant in error.

MILLER, J.

This is a writ of error to the circuit court of the United States for the district of Kansas. The plaintiff in error, which was also the plaintiff below, is a corporation existing under the laws of Indiana, and doing business in that state. The defendant in error is a corporation of the state of Kansas. The latter company, while building its railroad, contracted on the eighth day of October, 1881, with the former for the purchase of iron rails. The contract was for 10,000 tons, to be delivered, during the period between October and June inclusive, on board of the railroad cars at Indianapolis. A jury was waived, and the case was tried before the court, which made a finding of facts, on which it declared the law to be for the defendant, and rendered judgment accordingly. During the trial the defendant company produced a release, apparently executed by the plaintiff company, from the obligation of the contract to receive and pay for the iron, except so far as it had been fulfilled, and upon the validity oft his release the decision depends.

It appears from the facts found by the court that the plaintiff was in the habit of receiving payment for iron delivered, by drafts on the defendant, payable in New York, and that Moran Bros. were the financial agents of the defendant, through whom such payments were made; that drafts to the amount of $54,000 were due on the fourth day of October, 1882, and the company, being hard pressed for money, asked an extension of payment, which was granted for four months; that when these drafts again fell due, they were protested for non-payment, and the defendant company was insolvent, which fact was well known to the plaintiff. It appears, also, that Mr. Thomas, who was the treasurer of the plaintiff company, visited New York, and called upon the firm of Moran Bros., at whose banking-house said drafts were payable, and evdeavored to induce them to pay the drafts, but that Moran Bros., who had no funds of the defendant's at the time, declined to do so, but finally said: 'We, Moran Brothers, will pay these drafts if you will sign a release for the balance of the contract.' To this Mr. Thomas replied that he was not authorized to execute such a release; but he communicated with Mr. Jones, who was the president and superintendent of the company, and obtained from him authority to accept the money and sign the release. This was accordingly done, the release being dated 'New York, eighth February, 1883,' and signed 'INDIANAPOLIS ROLLING—MILL Co., by J. THOMAS, Treasurer.' It is said by the plaintiff that Mr. Thomas had no authority to execute this release, or to make this contract, and there- fore it is void. Bearing upon this proposition, it is found, as a matter of fact, by the court, that Mr. Jones was president, and Mr. Thomas treasurer, at the time of this transaction. The original contract for the sale of the iron is executed by Mr. Jones, as president, without the seal of the company, and there is no evidence of any resolution of the board of directors authorizing or approving that contract. The by-laws of the plaintiff corporation, as the court finds, declare that the superintendent, who is this case was Mr. Jones, 'shall have charge of the works, property, and operations of the company, and shall employ all operatives, and certify all wages due and other expenditures to the secretary, * * * and shall, with the approval of the president, buy and sell material, and make all contracts for the same, and for work,' etc. And the court further finds that, under this bylaw, Mr. Jones had the power to buy and sell material, and to make all contracts for the same. Another by-law declares that 'the superintendent and all other persons shall in all cases be subject to the control of the board of directors, in everything where the board shall elect to exercise such...