Quinn v. American Bankers' Assurance Co.
| Decision Date | 07 April 1914 |
| Citation | 165 S.W. 823,183 Mo.App. 8 |
| Parties | SAMUEL QUINN, Appellant, v. AMERICAN BANKERS' ASSURANCE COMPANY, Respondent |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Wm. B. Homer, Judge.
REVERSED AND REMANDED.
Judgment reversed and cause remanded.
Brownrigg & Mason for appellant.
(1) Actual authority of an officer to make contracts or to act in a certain capacity for a corporation may be shown not only by resolution of a board of directors, but by inference or from his being allowed for a considerable period with the knowledge of the directors to exercise the authority. Tyler's Estate v. Hoffman, 146 Mo.App. 510; Washington, etc., Bk. v. Butchers, etc., Bank, 107 Mo. 33. (2) Not only is it unnecessary that there be previous authority or formal ratification to make an agent's act binding on his corporation but if an agent does an unauthorized act for a corporation, it will be held to have ratified that act if it neglects to promptly disavow such act upon learning thereof. First Nat'l Bk. v. Fricke, 75 Mo 178.
Arthur N. Sager for respondent.
The American Bankers' Assurance Company of Delaware (respondent) was not liable for the debts of the American Bankers' Assurance Company of Missouri. There was no evidence that the Delaware corporation had expressly or voluntarily assumed the debts of the Missouri corporation. There was no showing of fact which, in law, rendered the Delaware corporation liable for the debts of the Missouri corporation. Austin v. Nat'l Bank, 49 Nebr. 412; Holden v. Phoenix Rattan Co., 47 N.E. 241; Houston Ice & Brew. Co. v. Nicolini, 96 S.W. 84; Houston Ice & Brew Co. v. Stratton, 89 S.W. 1111; Burge v. Railroad, 100 Mo.App. 460; Powell v Railroad, 42 Mo. 63; Berthold v. Land Company, 91 Mo.App. 233; 10 Cyc., p. 287; Clark & Marshall on Private Corporations, Sec. 342, p. 3395.
--This is a suit for money advanced to the use and benefit of defendant's predecessor, the American Bankers' Assurance Company, incorporated under the laws of Missouri. The finding and judgment were for defendant, and plaintiff prosecutes the appeal.
Defendant, American Bankers' Assurance Company, is a corporation organized and existing under the laws of the State of Delaware and appears to be a mere continuation of the prior company by the same name which was organized under the laws of Missouri and to whose benefit plaintiff advanced the money here sued for.
Plaintiff, Samuel Quinn, together with John B. Christensen, H. A. Vrooman and Ernest A. Peters promoted and organized the American Bankers' Assurance Company, which was incorporated under the laws of Missouri on October 1, 1909. The object and purpose of the company was to insure depositors in banks against loss, and the home office was located in the city of St. Louis. By the charter of the company, its capitalization was authorized at one million dollars, to be divided in as many shares of stock, of the par value of two dollars per share; one-half of which amount to constitute a surplus fund. The evidence is conclusive, and, indeed, it seems to be conceded, that the four persons named--that is, plaintiff, Quinn, Christensen, Vrooman and Peters--agreed among themselves to advance equal portions of such an amount of money as was necessary to organize and launch the company, the amounts so advanced by each to be repaid them by the company after it came into existence. At the time, plaintiff was engaged in Oklahoma in connection with the launching of an institution known as the Mid-Continent Life Insurance Company, and, therefore, in a measure, he depended upon Christensen to represent him, when absent, in the matter of organizing the American Bankers' Assurance Company. When the parties were about ready to incorporate the American Bankers' Assurance Company, Christensen wrote plaintiff to send on his portion of the money to be used for that purpose--that is, $ 150. In response to this letter, plaintiff forwarded Christensen his check for $ 150 in the latter part of September, 1909, and Christensen employed the money realized thereon in incorporating the company, on the first day of October thereafter, as he did a like sum contributed by himself, Vrooman, and Peters. This one payment of $ 150 so made by plaintiff to be used for the purpose of incorporating the company was made prior to the incorporation, but subsequent payments were made thereafter. Upon the company being incorporated, Ernest A. Peters was elected president thereof by the first board of directors and John B. Christensen vice-president and also its general counsel. While all of these parties seem to have been active in the matter of organizing and launching the company, it appears that Christensen was the principal figure, or the more active one of the number, and this may be because he was the general counsel of the company and a lawyer, possessed of special knowledge with respect of such matters. Christensen and plaintiff Quinn were intimate friends, and it appears, in the absence of plaintiff, Christensen advanced some money for him toward the end desired.
Immediately after the incorporation, and after Christensen's election as vice-president and general counsel, he, with the knowledge and consent of all of his associates, expended several thousand dollars in advertising the company, getting out literature, providing offices, furniture, etc., and called upon his associates for their contributions under the original agreement. In response to this call, plaintiff sent Christensen $ 250 in December, 1909, that is, after the company was a going concern, and $ 600 more about the first of January, 1910. The entire payments so made by plaintiff amounted to $ 1000, the first $ 150 of which was paid immediately before the incorporation of the company, but to be used in procuring its charter, and the remaining $ 850 after the company was organized, and to Christensen, its vice-president and general counsel, and all for the use and benefit of the company. It was agreed, before any payments were made, and the understanding was continued throughout, that each of the four original incorporators, including plaintiff, should be repaid by the company, either in stock or cash, as they should elect.
Plaintiff's business in Oklahoma in connection with the Mid-Continent Insurance Company made such demands upon his time as to render it impossible for him to become actively identified with the American Bankers' Assurance Company, and because of this he elected to withdraw and take compensation in money rather than in stock for the amounts so advanced. To this end, he wrote Christensen a number of letters and also visited him and urged the payment of his claim in money. Christensen wrote plaintiff several letters putting him off from time to time, but all of which acknowledged his claim as a valid one, and in one letter Christensen suggested that he would take stock in the company on account of plaintiff's claim and pay plaintiff the money himself. Plaintiff answered this letter promptly, to the effect that he did not care who paid him the money, but he did not want stock in the company, and he would not give his consent to "shifting" the claim from the company to Christensen, but looked to the company for its payment. It appears that Christensen reported the matter of plaintiff's claim to the executive committee of the American Bankers' Assurance Company and they discussed it fully. Christensen informed the officers of the company touching the matter and that plaintiff had advanced $ 1000 for the use and benefit of the company, $ 150 of which was advanced before the incorporation and $ 650 after it was a going concern; that the money was used for the benefit of the company, and that it was agreed on the part of himself and his associates it should be repaid by the company. Indeed, Mr. Peters, president of the company, knew of this, and so, too, did Mr. Vrooman another director, for they together with Christensen and plaintiff, Quinn, were all parties to the arrangement, and each advanced an equal amount thereunder. It appears the company issued stock to all of these parties, save plaintiff, in payment of the advances so made by them, but as plaintiff demanded the money instead, his claim, though recognized, was deferred from time to time.
During the month of January, 1910, some change was made in the officers of the company and Mr. H. M. Ruby became its president and Mr. A. C. Landon, secretary and treasurer. These gentlemen were also members of the executive committee. Finally plaintiff insisted that he should be repaid, not only his $ 1000 but $ 14 interest accumulated thereon, as well, and thereupon, on April 22, 1910, Mr. John B. Christensen, vice-president and general counsel of the company, presented this claim to the executive committee, by which it was ratified, and 507 shares of stock of the company, at two dollars per share, of the par value of $ 1014, were issued to John B. Christensen in payment thereof. It is said that Christensen informed the executive committee that plaintiff did not care to have stock issued in his own name, and, therefore, requested it should be issued in the name of Christensen, but in payment of plaintiff's claim, and that Christensen would hold it in trust for him. Both sides reveal the facts in evidence to the effect that the company recognized plaintiff's claim on that day, and ratified the acts of Christensen in contracting the indebtedness, by issuing the 507 shares of stock to compensate it. Indeed, plaintiff sets forth in his petition this transaction as a ratification and relies upon it in part for a recovery, while defendant pleads the same in its answer as a...
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