Rosenbaum v. Gilliam

• Decision Date: 12 May 1903
• Citation: 74 S.W. 507,101 Mo. App. 126
• Parties: ROSENBAUM v. GILLIAM.
• Court: Missouri Court of Appeals

74 S.W. 507

101 Mo. App. 126

ROSENBAUM v. GILLIAM.

Court of Appeals at St. Louis, Missouri.

May 12, 1903.

CORPORATIONS — OFFICERS — APPARENT AUTHORITY—LIMITATION OF POWER—EFFECT ON DEALINGS WITH THIRD PERSONS—INSTRUCTIONS.

1. Where an officer of a corporation, placed in control of its affairs and permitted to manage its business, deals with a party with respect to the affairs of the corporation who has no knowledge of the want of the officer's authority, such party may hold the corporation, though the latter exceeds his authority.

2. Where a person deals with officers of a corporation placed in control of its affairs and permitted to manage its business with respect to matters within their apparent authority, by-laws of the corporation limiting the power of the officers are not admissible as against such person, in the absence of proof showing knowledge of them on his part.

3. A peremptory instruction in favor of one party is improper where there is substantial testimony, direct or inferential, tending to establish the claims of the adverse party.

4. In actions at law tried by the court, instructions should be given and refused in the same manner as when the trial is before a jury, so as to enable the appellate court to determine the theory of law adopted by the trial court.

5. The giving of instructions by the court before whom an action is tried, to the effect that on the evidence plaintiff cannot recover, is equivalent to a demurrer to the evidence, and cannot be considered a general finding.

Appeal from St. Louis Circuit Court; Wm. Zachritz, Judge.

William A. Rosenbaum tendered to J. H. Gilliam, as assignee of the Phœnix Battery Company, a claim against the assignor. From a partial allowance of the claim the claimant appealed to the circuit court, and from the judgment rendered on a new trial granting substantially the same relief the claimant appeals. Reversed.

Broadhead & Sharp, for appellant. John M. Holmes, for respondent.

REYBURN, J.

Plaintiff tendered to defendant, as assignee, for allowance against the estate of the Phœnix Battery Manufacturing Company, under section 342 of the Revised Statutes of 1899, a demand expressed as follows:

                               New York, February 13, 1900
                Phoenix Battery Mfg. Co., to William A. Rosenbaum
                  Electrical Expert and Patent Solicitor
                     177 Times Building, Dr
                 1899
                Sept. 11. To services and disbursements
                           made for you in preparing and
                           filing applications for patents on
                           chemical generator of electricity
                           in Canada, England, France, Belgium,
                           Germany, Austria, Hungary,
                           Russia, Sweden, Norway,
                           Italy, Denmark, Spain, Switzerland,
                           Portugal, Mexico, Brazil,
                           Argentine, Japan, India, New
                           Zealand, South Australia, N. S.
                           Wales, Queensland, Victoria, as
                           per special contract with you...........$3,000 00
                Sept. 15. Rec'd payment on acct. from you .........   500 00
                                                                   _________
                          Balance .................................$2,500 00
                Nov. 8.   To final U. S. Government fee,
                           paid for you this day...................    20 00
                 1900.
                Jan. 4.   To notary's fees on your note for
                           $500.00, dated October 4th, at
                           three months, on account of the
                           above, not paid and protested..........     3 20
                          Interest on amount covered by
                           said note .............................     7 50
                Feb. 4.   To notary's fees on your note for
                           $500.00, dated October 4th, at 4
                           mos. on account of the above,
                           not paid and protested.................     3 20
                          Interest on amount covered by
                           said note .............................    10 00
                                                                  _________
                                                                  $2,543 90
                

At the hearing before the assignee the demand was allowed against the assigned estate to the extent of $20, the item for cash paid for final government fee; upon appeal by plaintiff to the circuit court, a trial anew ensued before the circuit judge, a jury being waived, with substantially the same result. It appeared that a corporation had been organized under the laws of Missouri, styled the "Phœnix Carbon Manufacturing Company," for the purpose of manufacturing electric generators, carbon points, and like products, adopting in such manufacture a process invented by E. L. Anderson, who had made application to the United States for letters patent upon his invention, but which then had not been issued. He had executed a written license to H. L. Page, and this licensee had in turn assigned his rights thereunder to the carbon company. Claimant had been employed by Anderson and S. G. Booker to obtain letters patent in the United States, and his fees for such services were paid by the carbon company. The defendant's assignor was organized in March, 1899, entitled the "Phœnix Battery Manufacturing Company," and acquired from the carbon company that department of its business using the process invented by Anderson. The stockholders and officers of the two corporations were substantially the same; the secretary and treasurer of both was H. L. Page, and the superintendent of both companies was S. G. Booker. The license of Anderson was transferred by the carbon company to trustees, under an agreement providing that the Anderson license should be held for the benefit of the battery company, but should not constitute an asset, nor become the property of such company, until a majority of its stockholders in writing should direct its transfer, and then to be made at a fair valuation, payable in shares of stock of the Phœnix Battery Manufacturing Company, to be distributed among its stockholders according to their respective holdings. In Anderson's license to Page, the licensee and his assigns were authorized to use any of the processes protected by any patents which Anderson might obtain from the United States or from foreign countries in the art of generating electricity, and to make use of any improvements, devices, or apparatus embraced by the proposed patents in any of the countries in which Anderson might obtain such letters patent.

The testimony disclosed that the active business of the battery company was conducted at its factory in the city of St. Louis, under the general charge and management of its secretary-treasurer, Page, and its superintendent, Booker; the general financial business being conducted by Page, who, however, had received at no time express authority to execute or deliver in behalf of the company any promissory notes in its name. The board of directors met at intervals at the office of the president, remote from the place of business of the company where its mail was received, and which was rarely visited by the directors or officers other than Booker and Page, and the latter made daily reports to the president and attended the board meetings. The battery company had adopted for its government a code of by-laws, containing, among others, the following provisions:

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