Lindhorst v. St. Louis Protestant Orphan Asylum
| Decision Date | 30 November 1910 |
| Parties | WILLIAM LINDHORST et al., Appellants, v. ST. LOUIS PROTESTANT ORPHAN ASYLUM |
| Court | Missouri Supreme Court |
Appeal from St. Louis County Circuit Court. -- Hon. John W McElhinney, Judge.
Affirmed.
Campbell Allison and Frank E. Richey for appellants.
(1) The defendant corporation, by its board of directors, authorized the advisory committee to sell the Russell farm at such time such price and terms as met their discretion. The finance committee, having power to sell the farm, had power to appoint Mittleburg agent to sell. R. S. 1899, sec. 971. Mittleburg's appointment as agent to sell was not invalid for want of a formal meeting of the committee, because: (a) Neither the statutes nor the by-laws of the defendant corporation require that the committee hold formal meetings and by authority of the board any two members of the committee could act for it. (b) By its course of dealing for eighteen years, the committee, having held only three or four formal meetings, had thereby established a method of doing business without formal meetings, which manner was ratified by the principle of acquiescence. Madden v. Paroneri Co., 75 Mo.App. 359. (c) "When a corporation has clothed its agent with power to do an act upon the existence of some extrinsic fact, necessarily and peculiarly within the knowledge of the agent, and of the existence of which the act of executing the power is itself a representation, a third party dealing with such agent in entire good faith, pursuant to the apparent power, may rely upon the representation, and the principal is estopped from denying its truth to his prejudice." Forbes could have been authorized, at a formal meeting of the committee, to appoint Mittleburg agent to sell the land in question. By his letter, Forbes represents to Mittleburg that this prerequisite formality had been complied with. The exercise of the power itself presupposes that this had been done. Whether it had been done was peculiarly within the knowledge of Forbes. Plaintiffs had no notice that the prerequisite formality had not been complied with, and acted in entire good faith, pursuant to the apparent power of the agent, and the corporation was bound by the act of its agent. Morawetz on Corporations, p. 62, rule 6; Clark on Corporations, pp. 498, 499, 525; 2 Cummings, Corporations, 119-149; Christian University v. Jordan, 29 Mo. 70; Lungstras v. German Ins. Co., 57 Mo. 107; Edwards v. Thomas, 66 Mo. 468; Tenbrook v. Winn Boiler Co., 20 Mo.App. 19; Smith v. Railroad, 74 Mo.App. 48; Van Cleave v. Gas Co., 82 Mo.App. 684; Rosenbaum v. Gilman, 101 Mo.App. 126; Marshall v. Express Co., 7 Wis. 1; Bank v. Elevator Co., 90 Mich. 555; Sherman C. T. Co. v. Swigart, 43 Kan. 292; Bank v. Bank, 48 N. J. L. 513; McNeal v. Chamber of Commerce, 154 Mass. 277; Mining Co. v. Bank, 104 U.S. 192; Credit Co. v. Machine Co., 54 Conn. 158; Knox County v. Aspinwall, 21 How. 539; Clark v. Washington, 12 Wheat. (U.S.) 544; Moore v. Mfg. Co., 113 Mo. 106. Mittleburg's appointment as agent to sell was not in conflict with the Statute of Frauds, because corporations, being artificial beings, incapable of signing authority to their agents, are from necessity unaffected by the last clause of the Statute of Frauds. The statute expressly enables them to contract by parol through their agents. Mittleburg's act in signing the contract with plaintiffs was the act of the corporation. R. S. 1899, sec. 974; Donovan v. Brewing Co., 92 Mo.App. 341; Maddern v. Realty Co., 75 Mo.App. 358; King v. Ins. Co., 195 Mo. 307; Lungstras v. Ins. Co., 57 Mo. 107. (2) Mittleburg having been duly appointed agent to sell, the memorandum of sale signed by him as agent of the defendant contains a sufficient description of the property and complied with the requirements of the Statute of Frauds. Mantz v. Maguire, 52 Mo.App. 136; Black v. Crowther, 74 Mo.App. 480; Ellis v. Bray, 79 Mo. 227; Kelley v. Thuey, 102 Mo. 526; Smith v. Wilson, 160 Mo. 657.
Eugene S. Wilson and Arthur B. Shepley for respondent.
(1) The authority to sell the farm was placed in the advisory and investment committee by resolution formally adopted by the board of lady managers; this power was to sell at "such price as to the committee seemed best." Pursuant to this discretionary power the advisory committee held a meeting and fixed a price at which it was willing to sell, but it never met again to consider any subsequent offers. The powers of this committee were discretionary and non-delegable. 21 Am. and Eng. Ency. Law (2 Ed.), p. 857. (2) The resolution creating the advisory committee provided that "two members shall constitute a quorum," but no further meetings were held and the committee therefore did not act; the only other time two members could act was on the absence of the other members from the city. As the other members were not absent from the city and were not even consulted, the action of Mr. Forbes could not bind the defendant. (3) In the absence of written authority to the agent Mittleburg, authorizing the execution of the contract for the sale of the farm for $ 7250, the defendant is not bound by said contract. R. S. 1899, sec. 3418; Johnson v. Fecht, 185 Mo. 343; Kirkpatrick v. Pease, 202 Mo. 489; Young v. Ruhwedel, 119 Mo.App. 239. (4) Ratification of a contract for the sale of land must be in writing and as definite as the original authority. Hawkins v. McGroarty, 110 Mo. 550; Roth v. Goeger, 118 Mo. 558; Johnson v. Fecht, 185 Mo. 335. (5) The contract as made was verbally changed and never ratified; estoppel not being pleaded cannot be relied upon. Moots v. Cope, 126 S.W. 184; Railroad v. Curtis, 154 Mo. 20.
Plaintiffs filed their bill in equity in the circuit court of St. Louis county against the defendant, an eleemosynary corporation, organized and existing under the laws of the State of Missouri, for the specific performance of a contract for the sale of a tract of land situate in said county. The cause is here on appeal from an order and judgment of that court sustaining a demurrer to plaintiffs' evidence.
The petition alleges (a) that Mittleberg, a real estate agent, was duly authorized in writing, signed by defendant, to make said contract; and (b) ratification of said contract by defendant on November 19, 1906.
The answer was a general denial and a plea of the Statute of Frauds, denying the agent, Mittleberg, was ever authorized in writing to make said contract on behalf of defendant.
The following is the contract sued on:
The land in question had been devised to defendant by one Alexander Russell, several years prior to the commencement of these negotiations.
In 1889 the board of lady managers, by resolution, created an "Advisory and Investment Committee" of gentlemen and prescribed the duties of said committee -- "to counsel with, give advice and act for and in behalf of the board of managers in all matters pertaining to the real estate and investments of the corporation." It conferred power on said committee "to take charge of, control, manage and safely keep all invested funds, consisting of bonds, stocks, mortgages, notes and other securities," and it further authorized said committee "to invest any funds of the corporation, change, by sale or otherwise, any investments when deemed advisable by them, and reinvest the proceeds." Said resolution contained also the following: "Two of which committee shall constitute a quorum for business, and in the absence of others from the city, any two of whom may act for said committee."
Mr. Moses S. Forbes was a member of the first committee and continued to be until the beginning of this suit. He was also, at the time this suit was begun, treasurer of the investment fund, and had been for a long time prior thereto. In addition to this, he had, by consent, acted as chairman of this committee during practically all the time of its existence. This advisory committee held but three or four formal meetings during the eighteen years of its existence, the custom being that Mr. Forbes, the chairman, would learn the wishes and opinions of the other members and then act on it and report it to the board as the act of the committee.
On November 20, 1905, at a meeting of the board of lady managers, a letter from Mr. Forbes in regard to the sale of the land given to the home by Mr. Russell was read. Mr Forbes requested the board of directors to authorize the president and secretary to sign the paper and permit the advisory board to sell the land at a certain price named by...
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