Jones v. Williams

• Decision Date: 04 May 1897
• Parties: Jones v. Williams et al., Appellants
• Court: Missouri Supreme Court

39 S.W. 486

139 Mo. 1

Jones v. Williams et al., Appellants

Supreme Court of Missouri

May 4, 1897

Appeal from St. Louis City Circuit Court. -- Hon. Leroy B. Valliant Judge.

Affirmed.

G. A Finkelnburg and Boyle, Priest & Lehmann for appellants.

(1) The contract was a personal one between Jones and Pulitzer. Cook on Stockholders, par. 709; Morawetz on Priv. Corp., par. 232; American Preservers' Co. v. Norris, 43 F. 711; Pullman's Palace Car Co. v. Railroad, 115 U.S 567; Moore & Handley Hardware Co. v. Towers Hardware Co., 87 Ala. 206; Davis Wheel Co. v. Davis Wagon Co., 20 F. 700; Button v. Hoffman, 61 Wis. 20; England v. Dearborn, 141 Mass. 590; Hopkins v Lead Co., 72 Ill. 373; Humphreys v. McKissock, 140 U.S. 304; Smith v. Hurd, 12 Metc. 385; Allemony v. Simmons, 124 Ind. 19; Besch v. Carriage Co., 36 Mo.App. 333; Pfeiffer v. Lansberg Co., 44 Mo.App. 67; Guernsey v. Cook, 117 Mass. 548; Hill v. R. H. C. Mining Co., 119 Mo. 9. (2) It was never adopted or ratified by the company in whole or in part. Steunkle v. Railroad, 42 Mo.App. 73; Story on Agency, sec. 239. (3) It did not vest Jones with the arbitrary and comprehensive powers claimed by him and sanctioned by the decree. R. S. 1889, sec. 2772; Wiggins Ferry Co. v. Railroad, 128 Mo. 245; Lamar Water Co. v. Lamar, 128 Mo. 188; Hobbs v. McLean, 117 U.S. 567; Guernsey v. Cook, 120 Mass. 501; Lawson on Contracts, sec. 389. (4) As the contract of Pulitzer it can not be specifically enforced in a proceeding to which he is not a party. Hill v. R. H. C. Mining Co., 119 Mo. 9; Pullman Palace Car Co. v. Railroad, 115 U.S. 596; Morawetz on Priv. Corp., par. 511; Hannerty v. Theater Co., 109 Mo. 310. (5) It can not be enforced against the corporation as a going concern, even though Pulitzer holds a majority of the stock in the company. Beal v. Chase, 31 Mich. 490; Des Moines Gas Co. v. West, 50 Iowa 16; Morawetz on Priv. Corp., par. 536; Cook on Stockholders, par. 715; Beach on Priv. Corp., par. 230; Flagstaff Mining Co. v. Patrick, 2 Utah, 304; Silver Hook Road Co. v. Green, 12 R. I. 164; Gillis v. Bailey, 21 N.H. 149; Ins. Co. v. Chase, 56 N.H. 341; Railroad v. Richey, 40 Me. 425; Gratz v. Redd, 4 B. Monroe, 186; Howard's case, L. R. 1 Ch. 561; Temple v. Dodge, 32 S.W. 514. (6) Constructed as plaintiff contends, the contract is ultra vires and against public policy. Flagstaff Mining Co. v. Patrick, 2 Utah, 304; Coburn v. Land & Cattle Co., 25 F. 791; West v. Camden, 135 U.S. 507; Guernsey v. Cook, 128 Mass. 501; Noel v. Drake, 62 Kan. 265; Wilbur v. Stoepel, 28 Mich. 344; Noyes v. Marsh, 123 Mass. 286; Cone's Ex'r v. Russell, 48 N.J.Eq. 208; Fremont v. Stone, 42 Barb. 169; Fennessy v. Ross, 39 N.Y.S. 323; Neall v. Hill, 16 Cal. 145; Grant on Corp. 243. (7) The plaintiff has an adequate remedy at law by an action for damages. Marshall v. Craig, 4 Am. Dec. 647; Pond v. Wyman, 15 Mo. 175; Davis v. Crawford, 12 Am. Dec. 382; Jones v. Walker, 56 Id. 557. (8) The just enforcement of the contract between the parties involves the constant supervision of the court. Cooper v. Pena, 21 Cal. 403; Danforth v. Philadelphia, 30 N.J.Eq. 12; Blanchard v. Detroit, 31 Mich. 43; McCarthy v. Armstrong, 32 S.C. 203; W. & M. Co. v. Freeman, 41 F. 412; Railroad v. Speer, 32 Ga. 550; Railroad v. Marshall, 136 U.S. 393. (9) The contract can not be specifically enforced for want of mutuality. Marble Co. v. Ripley, 10 Wall. 359; Fry on Specific Performance, secs. 460, 461; Iron Age Co. v. Tel. Co., 83 Ala. 498; Pomeroy on Contracts, secs. 163-165; Ickert v. Beavers, 106 Ind. 487; Buck v. Smith, 29 Mich. 166; Baldwin v. Society, etc., 9 Sim. 393; Wakeman v. Barker, 22 P. 239; Smith v. McVeigh, 11 N.J.Eq. 239; Mastin v. Halley, 61 Mo. 196-200; Glass v. Rowe, 103 Mo. 513-539. (10) The court will not enforce the contract because that involves the compulsory acceptance of personal services and compulsory maintenance of personal and confidential relations. Waterman on Specific Performance, sec. 33; Fry on Specific Performance, secs. 460, 461; De Rinafinola v. Corsette, 4 Paige Ch. 264; Rogers Mfg. Co. v. Rogers, 20 A. 467; Davis v. Forman (1894) 3 Ch. L. R. 654; Pickering v. Bishop of Ely, 2 Y. & C. C. C. 249; Horne v. Railroad, 10 Weekly Rep. 170; Brett v. Shipping Co., 12 Weekly Rep. 596; Gillis v. McGhee, 13 Ir. Ch. 48; Johnson v. Railroad, 3 De Gex. M. & G. 914; Mair v. Tea Co., L. R. 1 Eq. Cases, 411; Stocker v. Brockelbank, 20 Law Journal (N. S.), Ch. Cas. 408; Bainbridge v. Smith, 41 Ch. Div. 462; Buck v. Smith, 29 Mich. 166; Richmond v. Railroad, 33 Iowa 423; King v. Gildersleeve, 21 P. 961; Converse v. Hood, 21 N.E. 876; Dulin v. Wood & Coal Co., 35 P. 1045; Coburn v. Cedar Valley Land & Cattle Co., 25 F. 791.

James M. Lewis and Judson & Taussig for respondent.

(1) Dealing with the defendant company as a corporate entity, the appointment of plaintiff as editor and manager of the Post-Dispatch under the terms and conditions set forth in the contract, was the contract of the defendant corporation, in law as well as in equity. The notice of appointment was signed by Pulitzer as president. The appointment under the conditions of said contract may be shown to be the contract of the company by authorization, express or implied ratification, express or implied, in whole or in part, or acceptance by the corporation of the benefits of the contract. Milledge v. Boston Iron Co., 5 Cushing, 175 and 179; Am. Preservers' Co. v. Taylor Mfg. Co., 46 F. 152; Sparks v. Dispatch Transportation Co., 104 Mo. 547. The contract must be construed in the light of all the surrounding circumstances, and clearly appears to have been intended as a corporate act, for the benefit of all interested in the property. Bishop on Contracts, sec. 392; County of Johnson v. Wood, 84 Mo. 489. (2) Mr. Pulitzer, as president of the corporation, was vested with the executive powers of the company, and under the testimony admittedly exercised, and was permitted by all interested in the corporation to exercise, absolute control. His authority to represent the corporation will, therefore, be implied from the manner in which he was permitted to conduct its business. Bank v. North Mo. Co., 86 Mo. 125; Ins. Co. v. Seminary, 52 Mo. 480; Kiley v. Forsee, 57 Mo. 390; Sparks v. Dispatch Transportation Co., 104 Mo. 531; Bank v. Bank, 107 Mo. 133; Moore v. Gaus & Sons' Mfg. Co., 113 Mo. 98; Winston v. Bank, 18 Mo.App. 665; Oakes v. Cataraugus Water Co., 143 N.Y. 432; Sherman v. Fitch, 98 Mass. 59; Martin v. Webb, 110 U.S. 7; Taylor on Corporations [3 Ed.], sec. 236; Railroad v. Sidell, 66 F. 27; Railroad v. Sidell, 67 F. 27; State v. Silva, 32 S.W. 1007, 1013. (3) Whether authorized or not, the contract was ratified by the defendant corporation, considered in its strictest sense as a legal entity distinct from the individuals composing it. Bank v. Bank, 107 Mo. 133; Bank v. Fricke, 75 Mo. 178; 4 Thompson on Corp., sec. 5285, et seq.; Pittsburg Co. v. Keokuk Bridge Co., 131 U.S. 371; Fitzgerald Co. v. Fitzgerald, 137 U.S. 98. (4) Ratification of part of an unauthorized act is the ratification of the whole. The admitted acceptance of plaintiff as editor and manager was of itself a ratification of the entire contract. Mechem on Law of Agency, 130; Bankv. Badger Lumber Co., 54 Mo.App. 327; State ex rel. Laupheimer v. Harrington, 100 Mo. 170. (5) At the time of this admitted partial ratification, March 21, the directors participating therein had full knowledge of the essential features of the contract. The testimony of Carvalho and White shows clearly that the resolution of ratification theretofore prepared was knowingly altered for the purpose of making a partial ratification. (6) The corporation, still considered in its strictest sense as a legal entity, as well as all the directors and all the stockholders, accepted the benefits of the contract, to wit, the talents and services of the plaintiff; and said corporation and all interested therein are now estopped from disputing the validity of said contract. 2 Thompson on Corp., secs. 5247, 5250, et seq. (7) Still considering the corporation in its strictest sense as a legal entity, there is no legal objection to the contract in question. First. It is not ultra vires, nor does it involve a delegation or abrogation of the powers of the board of directors. The contract gives plaintiff control of the newspaper, not of the corporation. Green's Ultra Vires, 491; 1 Morawetz on Corporation, sec. 534; Taylor on Corporation, sec. 235; Anderson v. Langden, 1 Wheaton, 85; Bank v. Chickering, 3 Pickering, 335; Bank v. Ridgley, 1 H. & G. (Md.) 324-332; Bank v. Rogers, 7 N.H. 33; Railroad v. Furnace Co., 27 Ohio St. 321; San Diego v. Flume Co., 29 L. R. A. 39; 28 Cal. 549. Second. Nor did it in any sense lack mutuality of obligation and remedy. Pomeroy on Specific Performance, sec. 166; Allen v. Cerro Gordo Co., 40 Iowa 349; 2 Beach, Eq. Juris., sec. 637; Mastin v. Grimes, 88 Mo. 484. Third. Neither has the admitted principle which invalidates contract whereby a director for a personal consideration undertakes to sell his influence in an election to a corporation office, any application to the facts of the case at bar. The primary purpose of the contract was admittedly not the sale of the stock. That was included solely to enlist the plaintiff more thoroughly in the success of the enterprise, and for the benefit of all interested in the property. (8) His contract was for the control of certain property of the corporation as distinguished from the corporation itself. Neither is he estopped or precluded from the assertion of his contract rights by any waiver thereof in connection with the corporate meetings. The evidence shows that he persistently, both at the stockholders' and directors' meetings, prior and subsequent thereto, reasserted...