Perryman & Co. v. Farmers' Union Ginning & Mfg. Co.

• Decision Date: 17 May 1910
• Citation: 52 So. 644,167 Ala. 414
• Court: Alabama Supreme Court
• Parties: PERRYMAN & CO. v. FARMERS' UNION GINNING & MFG. CO.

52 So. 644

167 Ala. 414

PERRYMAN & CO. v. FARMERS' UNION GINNING & MFG. CO.

Supreme Court of Alabama

May 17, 1910

Appeal from Geneva County Court; P. N. Hickman, Judge.

Action by Perryman & Co. against the Farmers' Union Ginning &amp Manufacturing Company. From a judgment for defendant plaintiff appeals. Reversed and remanded.

W. R Chapman, for appellant.

W. O Mulkey, for appellee.

MAYFIELD J.

This action is assumpsit. The complaint declared upon the common counts, and specially upon a breach of a contract to purchase "one No. 6 Cotton Seed Huller." The breach of the contract alleged was in the failure of the defendant to receive and to pay for the huller, as contracted. The court sustained demurrers to counts 2 and 3, upon the ground that these counts did not show affirmatively that the defendant corporation ever approved the order or contract for the purchase of the huller. After demurrers were sustained to counts 2 and 3 as above stated, count 4 was added; which count was like counts 2 and 3, but contained the additional allegation that the defendant corporation approved said order, and directed the shipping out of the machine so purchased. The demurrer was overruled as to this count, and the case was tried upon the general issue as to this special count and the common counts. The plaintiff proved the contract of sale, which was in writing and signed by one Holman, president of the corporation, and also proved that, subsequent to the making of the contract of purchase, the defendant by letter ordered the machine purchased shipped out, and that it was so shipped out in pursuance of this order, and that the defendant refused to receive it or to pay for it on its arrival at its destination; hence this suit.

It appears from the plaintiff's evidence that the directors of the defendant corporation, after the purchase and after the machine was ordered to be shipped to the purchaser, met and disapproved the purchase and order which had been theretofore made by its president, secretary, treasurer, and some other director. The defendant offered no evidence, and on its written request the court gave the affirmative charge in its favor. It is insisted that the court erred in sustaining demurrers to counts 2 and 3, and in giving the affirmative charge for the defendant.

The court was clearly in error in both instances. Neither of the counts was subject to the demurrer interposed. If the contract of purchase was unauthorized by the directors of the corporation--that is, if the president and secretary and treasurer of the corporation had no authority to bind the corporation in the premises--this was defensive matter which ought to have been set up and proved by the defendant. The contracts and orders sued on purported on their faces to be executed in the name of the corporation, and were signed by the proper officers of the corporation. If the contract was ultra vires, or if the officers had no authority to bind the corporation in the premises, this was matter for special pleas, and not ground of demurrer. There was no proof to show that these particular purchasing officers of the corporation did not have authority to act for and bind the corporation in the premises. The most that is shown is that all the directors did not expressly authorize the particular purchase or order, and that they did, in meeting, after the purchase and order were made, disapprove and attempt to disaffirm. This they could not do, so as to bind the plaintiff, if the purchasing officers had in the first instance the right to make the contract and the right to approve and affirm it; and they did so affirm it, and order the goods shipped, before the directors met and disaffirmed the sale. While the purchase or order given by the president for the company was originally made subject to the approval of the defendant corporation, it was subsequently approved by it, if the officers of the corporation had the authority to approve it and thus to bind the company--and there is no proof they did not, at that time, have such authority. And if they had it, the directors could not, by subsequently withdrawing such authority from such officers, relieve the corporation and disaffirm and annul a contract which they had properly made, and which did bind the corporation at the time it was made.

The evidence as to the authority of these officers--the president, secretary, treasurer, and general manager--to bind the corporation was not so conclusive as to warrant the court in giving the affirmative charge for the defendant. The contract sued on was in writing, and properly signed by the corporation, and contained an express stipulation that the order was not subject to countermand, though it was subject to the approval of the corporation; and the counts alleged and the proof...