Jackson Lumber Co. v. Trammell

• Decision Date: 15 February 1917
• Docket Number: 4 Div. 612
• Citation: 199 Ala. 536,74 So. 469
• Parties: JACKSON LUMBER CO. v. TRAMMELL.
• Court: Alabama Supreme Court

74 So. 469

199 Ala. 536

JACKSON LUMBER CO. v. TRAMMELL.

4 Div. 612

Supreme Court of Alabama

February 15, 1917

Appeal from Circuit Court, Covington County; A.B. Foster, Judge.

Action by R.H. Trammell against the Jackson Lumber Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded on rehearing.

McClellan J., dissenting.

Suit by appellee against appellant to recover a sum claimed by the plaintiff to be due under a contract made between the plaintiff and the defendant on May 1, 1903, and terminating May 1, 1913, by the terms of which the plaintiff was engaged to attend the employés of the defendant company and render them medical and surgical aid and attention during the time the contract was in force, and for which services plaintiff was to receive the sum of $200 per month. The case was tried on counts C, D, and E, which set up the substance of the contract, and the performance of the required services by plaintiff, and also on the common counts. The defendant interposed pleas of the general issue, payment, ultra vires the statute of limitation, and the statute of frauds.

To the plea of ultra vires the plaintiff filed three replications the first of which alleged in substance that the defendant is a corporation chartered under the laws of Alabama and empowered to operate sawmills and to manufacture lumber; that it has a number of sawmills and employs a large number of hands in the carrying on of its business; that the plant is situated some distance from any other town or thickly settled community; that the plant is run by machinery, and that accidents are liable to occur; that for the comfort protection, and well-being of the employés, and as an auxiliary of the main enterprise of the corporation, plaintiff was engaged as physician and surgeon, at a fixed salary, as set forth in the complaint, and that plaintiff did serve defendant under said contract for a number of years. The second replication was in substance the same as the first, and the third contained substantially the same averments as replications 1 and 2, with the additional averment that under this system of protection the defendant company received monthly contributions from its employés, which money went into the defendant's treasury and was retained by it, and that this arrangement, together with the fact of plaintiff's employment to give medical attention, was known to and ratified by the defendant corporation.

To the plea of the statute of limitation the plaintiff replied that partial payments were made on the matters claimed in said counts, within the period of the statute of limitation.

To the sixth plea, to the effect that the contract sued on was not to be performed within one year from the date thereof, and was not in writing, the plaintiff replied that the contract was to continue so long as both parties were satisfied, no definite period being fixed for its termination, but that it could be terminated by either party at pleasure.

On the trial of the cause plaintiff insisted that he was employed to give medical and surgical attention to the employés of the defendant company at a salary of $200 a month, and that it was agreed that $50 per month of this salary should be retained by the defendant until the termination of the contract; that his work under the contract (which was made with the general manager of the company) began May 1, 1903, and continued until May 1, 1913; that payments were made to him monthly, and usually in the sum of $150, but on two occasions the monthly payment was in the sum of $175, and on four other occasions in the sum of $200; that under the contract his services were to continue until the company became dissatisfied; and that no payments had been made on the $50 per month held back, except as stated above. Plaintiff also testified to some offer of settlement. Defendant offered proof to show that the employment of plaintiff was at a fixed salary of $150 per month, which had been fully paid, and that nothing more was due him. Plaintiff's account with defendant and checks payable to him by the company were offered in evidence.

On the submission of the cause to the jury a verdict for plaintiff in the sum of $6,678.50 was rendered, and judgment was entered accordingly. From this judgment the defendant appeals.

The bill of exceptions shows the following:

During the argument of counsel for plaintiff on the question of the admissibility of the answer to interrogatory 5, the jury being present, the counsel stated to the court in the presence of the jury that the answer to said interrogatory would disclose that the Jackson Lumber Company had collected fees from its employés, and had to its credit on this system of collections over $7,000, which belonged to the plaintiff, and further that one item of the account shown on it was $300 paid to W.O. Mulkey, attorney for the Jackson Lumber Company. And counsel for the defendant protested at that time against the statement thus made to the court in the presence of the jury as being improper.

During the argument of the case before the jury by the plaintiff's counsel, in the opening argument, he stated that there was shown that the Jackson Lumber Company collected from its employés a large sum of money for the payment of the plaintiff, and that the plaintiff was entitled to it. The defendant objected to the remark, and moved the court to exclude it, and the court excluded the remark, stating that the argument was not proper, whereupon the counsel for plaintiff stated that he did not wish to make an improper argument, and did not want to do wrong. Also in the opening argument, attorney for plaintiff stated that the Jackson Lumber Company, the defendant, was a large and powerful corporation, and that a judgment against it could not hurt it.

In the concluding argument, which was made by Hon. W.L. Parks, he often stated to the jury that the defendant was a large and powerful corporation, and on one occasion that the plaintiff was a poor man. The defendant objected to the latter statement, and the court sustained the objection without comment, whereupon counsel for plaintiff then stated that he would withdraw the statement as to plaintiff being a poor man, and asked the jury to look at him and determine for themselves his condition.

Counsel for the plaintiff, in his closing argument, stated that the plaintiff had an honest contract, and was entitled to the money he is suing for, and the defendant comes forward with the Jackson Lumber Company's methods to defeat an honest claim. Defendant objected as to the statement of the Jackson Lumber Company's methods, and the court sustained the objection. And then the attorney for the plaintiff stated that he would add "according to the evidence in this case."

W.O. Mulkey, of Geneva, and Steiner, Crum & Weil, of Montgomery, for appellant.

W.L. Parks and J.M. Prestwood, both of Andalusia, for appellee.

GARDNER J.

The plaintiff (appellee here) seeks to recover for services rendered as a physician, to the employés of the defendant company, under contract for a fixed salary. The defendant is engaged in the operation of a sawmill and the manufacture of lumber at Lockhart, Ala., and as one of the defenses interposed pleaded that it is a corporation, and was not authorized by its charter to so contract for the services of a physician.

The substance of the plaintiff's first replication is set out in the statement of the case, and is to the effect that the defendant company, being engaged in the sawmill business in which it is necessary to engage a large number of operatives, and in which accidents are liable to occur, recognized that the comfort and health of its employés is an aid to such company in the accomplishment of the ends for which it was organized; and that a physician employed to attend them in case of sickness or accident is in a sense an auxiliary of the main enterprise of the corporation. The action of the court in overruling the deumrrer to this replication is the first question pressed upon our attention by counsel for appellant.

The subject of ultra vires has been much discussed, and is one upon which great diversity of opinion has been expressed. As said by another:

"There is no clearly defined principle of law that determines whether the particular act is ultra vires or intra vires. The courts are becoming more liberal, and many acts which 50 years ago would have been held to be ultra vires would now be held to be intra vires."

The question for consideration is whether the contract with the plaintiff was within the implied or incidental powers of the defendant corporation. Mr. Cook, in his work on Corporations (vol. 2, p. 683), after calling attention to the fact that an ultra vires act is one beyond the express and implied powers of a corporation, states that an intra vires act is one which is within the express or implied powers of either the board of directors or a majority of the stockholders, and that an act is intra vires if it can be legally carried out by the directors or a majority of the stockholders. The author further says:

"Intra vires acts are frequently spoken of as matters concerning the 'internal management' of the corporation."

In the same volume (section 681) he states that the implied powers of a corporation are not limited to those which are indispensably necessary, but include those which are appropriate and suitable to carry out the express powers. A like rule is also declared by the Supreme Court of Wisconsin, in Madison Plank Road Co. v. Watertown Co., 5 Wis. 173, in the following language:

"The rule is, that if the means employed are reasonably adapted to the ends for which the corporation was created, they come within its implied or incidental powers, though t

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