Kidd v. American Pill & Medicine Co.

• Decision Date: 21 May 1894
• Citation: 59 N.W. 41,91 Iowa 261
• Parties: A. E. KIDD, Appellant, v. THE AMERICAN PILL & MEDICINE COMPANY
• Court: Iowa Supreme Court

59 N.W. 41

91 Iowa 261

A. E. KIDD, Appellant, v. THE AMERICAN PILL & MEDICINE COMPANY

Supreme Court of Iowa, Des Moines

May 21, 1894

Appeal from Clay District Court.--HON. GEORGE H. CARR, Judge.

ACTION for damages. Verdict and judgment for defendant. Plaintiff appeals. From a ruling amending the order overruling the motion for a new trial, defendant appeals. Plaintiff having first served notice of his appeal, he will be treated as appellant.

Affirmed.

Soper Allen & Morling for appellant.

Cory & Bemis, Parker & Richardson and W. W. Cornwall for appellee.

OPINION

KINNE J.

I.

After the consolidation of plaintiff's actions, the pleadings presented, in substance, the following state of facts: It was alleged in the petition that defendant was a corporation that on January 13, 1891, plaintiff was elected general manager of defendant for the term of one year, and the board of directors fixed his salary at three thousand dollars and expenses, payable monthly; that plaintiff entered upon the performance of his duties as such manager, and performed same until May 15, 1891, when defendant wrongfully, and without cause, discharged him; that he has always been ready and willing to perform his duties as such manager; that there is one hundred dollars due him on salary to July 13, 1891; that he has made diligent efforts to find other like employment, and has failed to do so. In another count the same facts are pleaded, and salary for two months ending September 15, 1891, claimed. In another count, under the same facts, the same amount, for the same period, is claimed as damages. To these several counts defendant answered, admitting its corporate capacity, and that it hired plaintiff as its general manager on January 13, 1891, at a salary of three thousand dollars per year, payable monthly, and that he worked for defendant in said capacity until May 15, 1891, and has been fully paid therefor; that on May 15, 1891, and for good cause, defendant discharged plaintiff as of that date; that said discharge was made under and by virtue of provisions in defendant's articles of incorporation and by-laws; that defendant had good cause to discharge plaintiff, in this: That he was incompetent, extravagant in his expenses, and by misstatements influenced the board of directors to contract large indebtedness; that the business was illegal and disgraceful; that his contracts could not be enforced; that in conducting such illegal business, plaintiff got defendant into trouble in collecting claims due it; that plaintiff was contemptuous, and insisted upon running the business of the corporation as he saw fit, without regard to defendant's wishes; that he was discharged because he was engaged in selling certain pills for an illegal, immoral, and unlawful purpose known to him, to wit, for the purpose of procuring abortions of pregnant women; that he, in advertising certain medicine, had taken his advertising matter from a copy of the advertisement of Radam's Microbe Killer, thereby rendering defendant liable to damages; that, prior to selling his business to defendant, he represented that his medicines were of good merit and standard medicines, and were proper and legitimate, and would perform what was claimed for them, and proposed to sell defendant the right to manufacture and sell the same, and represented them as valuable; that relying upon his representations, and believing them, defendant purchased said right to manufacture and sell said medicines, and employed plaintiff as its general manager; that in fact some of the medicines were known by plaintiff to be sold and used for immoral and illegal purposes, which fact he kept from defendant, and after he became its manager, he advertised and sold same for said immoral and illegal purposes; that other medicines so sold were not standard medicines, were not salable, were worthless, and plaintiff had no exclusive right to manufacture or sell the same; that, under his management, plaintiff spent within five months, as expenses, over and above defendant's income, over five thousand dollars without receiving scarcely anything therefor; that, by reason of plaintiff's stubbornness in the business of its board, trouble and quarrels resulted, the prosperity of the business was greatly retarded, and bankruptcy assured; that since May 15, 1891, plaintiff has performed no services for defendant; that plaintiff was incompetent; that the business in which he was engaged, and for which his services were contracted to be performed, was a violation of the laws of Iowa; that defendant did not discover said facts until the indebtedness due defendant for said medicines became due. Plaintiff denied all allegations of new matter in the answer, and averred that defendant at all times was aware of and directing the sale of said medicines, and knew of the nature of the composition of the same and their effects, and in all things plaintiff acted by virtue of the express instructions and directions of defendant. In a counterclaim, defendant charged plaintiff with the appropriation to his own use of certain moneys and property of the defendant, which he denied.

The cause was tried to a jury, and they returned a general verdict for defendant, and made the following special findings: "First. What, if any, amount do you find due the plaintiff upon his claim for damages for balance of salary prior to July 15,--for balance of salary prior to July 15, 1891,--being the claim for one hundred dollars damages? A. Nothing. Second. What amount do you find plaintiff entitled to on his claim of five hundred dollars as damages on account of salary from July 13 to September 15, 1891? A. Nothing. Third. Was plaintiff, during his employment by defendant, at the time of his discharge, managing the defendant's said business to the best of his ability, and in good faith giving the defendant the benefit of his experience and judgment in conducting the said business? A. No. Fourth. In his management of defendant's said business, was plaintiff unreasonably extravagant? A. No. Fifth. Did the defendant employ the plaintiff to conduct for it an illegal and unlawful business? A. No. Sixth. Was the defendant's business conducted as an illegal business? A. Yes. Seventh. Was the defendant's business conducted in an illegal manner? A. Yes; in part. Eighth. Do you find that Le Duc's pills have a legitimate use? A. Yes. Ninth. Did the defendant's officers or stockholders, or any of them, know the character of the business that the defendant bought of the plaintiff? A. Some of them did. Tenth. Did the plaintiff willfully misappropriate any of the defendant's money? A. No. Eleventh. Did the plaintiff willfully convert any of the defendant's goods or property? A. No. Twelfth. Was plaintiff incompetent in his management of defendant's business? A. Yes. Thirteenth. Did the plaintiff dishonestly procure the notes of the record of the meeting of the stockholders of December [January] 13, 1891, to be changed? A. No. Fourteenth. Did the plaintiff change the contract between the defendant and W. J. A. Montgomery, after the same was signed, without the knowledge or consent of Montgomery? A. No. Fifteenth. Do you find that Le Duc's pills, as advertised and sold, were so advertised and sold for an illegal purpose? A. In part they were. Sixteenth. What, if any, sum do you allow defendant upon its counterclaim? A. Not anything." The court overruled the motion for a new trial, and rendered judgment on the verdict against plaintiff for costs and he appeals. Five months thereafter, plaintiff filed a motion and showing asking that the order overruling the motion for a new trial be amended nunc pro tunc, so as to show that an exception was taken thereto. This application was resisted, but the motion was sustained, and the record amended accordingly. From this ruling and order the defendant appeals.

II. As to plaintiff's appeal. Defendant insists that the appeal should be dismissed for reasons stated in its motion filed and argued at the January term, 1894, of this court. As that motion was overruled, the matters presented in it will not now be considered.

III. This case presents many questions, and a discussion of them all would not be warranted. A large number of errors present purely technical questions, which are without substantial merit, and need not be discussed. We shall treat of a few matters which seem of controlling importance in the proper disposition of the case. It is argued with much persistence that plaintiff was an officer of the corporation, elected by the stockholders and hence not subject to be removed by the board of directors. As we read the record, plaintiff was, after January 13, 1891, general manager of defendant company, elected as such by the board of directors. Under the articles of incorporation and by-laws, the board were invested with the authority to so elect him, and to discharge him for good cause.

IV. There was no error in admitting testimony relating to false representations made by plaintiff to defendant company as to his indebtedness, and the amount and character thereof. It was a part of the contract of purchase of the plaintiff's business that defendant should pay certain of his debts and employ him as its general manager. If he made false statements relating to them, thereby inducing the defendant to purchase said business, and assume and pay debts not contemplated by the agreement, and by reason thereof, also induced the employment from the discharge of which he now complains, he was guilty of practicing a fraud upon the defendant, and was dishonest and unreliable. This testimony clearly tended to show proper cause for plaintiff's discharge.

V. It is claimed that the testimony of one Crane, to the effect that, three years...