Sneider v. Big Horn Milling Co.

• Citation: 28 Wyo. 40,200 P. 1011
• Decision Date: 03 October 1921
• Docket Number: 1021
• Parties: SNEIDER v. BIG HORN MILLING CO
• Court: United States State Supreme Court of Wyoming

200 P. 1011

28 Wyo. 40

SNEIDER v. BIG HORN MILLING CO

No. 1021

Supreme Court of Wyoming

October 3, 1921

ERROR to District Court, Park County, HON. PERCY W. METZ, Judge.

Action by the Big Horn Milling Company against Joseph Sneider and another, individually and as partners under the firm name of Sneider & Wallace. There was a judgment for plaintiff and defendants bring error. The material facts are stated in the opinion.

Affirmed.

Fred Wycoff and E. E. Enterline, for plaintiff in error.

The court erred in receiving any evidence concerning an oral agreement between plaintiff and Sneider and Wallace for the sale of goods referred to in the petition, the transaction being within the statute of frauds. (Comp. Stats. 1910, Sec 3752; Laws 1917, Sec. 4, pages 140-141.) Both statutes were relied upon at the trial, Section 3752, supra, having been enforced until the Uniform Sales Act in 1917; Section 3752 was construed in this court in Williams-Hayward Shoe Company v. Brooks, 9 Wyo. 424 where it was held that before the buyer is held liable for a purchase of goods in excess of $ 50.00 he must either accept and receive part of the goods or sign some note or memorandum in writing, neither of which were shown by the evidence in the case at bar. The court erred in permitting the examination of defendant Wallace with reference to his testimony previously given in a deposition. The statutes prescribe a method of impeachment in proper cases. (Section 4540 Comp. Stats. 1910.) The corporate character of Stone Front Grain Company was not questioned by the pleadings and testimony offered in denial thereof should have been excluded; corporations may contract irrespective of the issuance of stock. (Comp. Stats. 1910, Sections 3966-3975.) Of course directors of a corporation are personally liable for indebtedness in excess of its capital stock. (Comp. Stats. 1910, Section 3992.) Authorities cited in support of the contention that prior to the issuance of stock promoters of the corporation are liable as partners will be found to be governed by statutes peculiar to the forum. This is true in the case of McVicker v. Cone which followed Section 32 of Hills Oregon Code, also true of the case of Walker v. Oliver, (Kans.) and Murdock v. Lamb. The corporation involved in Central National Bank v. Sheldon as shown by the evidence never was incorporated. The verdict is not sustained by the evidence. There is no evidence that Sneider and Wallace were partners. The evidence was insufficient to authorize the court to grant the plaintiff a directed verdict. The judgment should be reversed and the cause remanded.

Brome &amp Hyde, for defendant in error.

Sneider and Wallace solicited credit as partners and it is contended that in as much as they filed a certificate of incorporation after a portion of the goods had been shipped, they, as partners or individuals should escape liability in this action. Irrespective of the corporation, Sneider and Wallace are liable for the purchase price under the evidence. When a purchaser of goods, under an oral contract, procures another to receive and accept goods thus bargained for, without the knowledge of the seller he exercises such control over the goods as to eliminate the statute of frauds in a defense in a suit for the purchase price. The original contract applied to all of the goods. The first two shipments were consigned to Sneider and Wallace and their acceptance of the goods takes the contract out of the statute of frauds. (Davis v. Moore, 13 Me. 424; Rickey v. Tenbroack, 63 Mo. 563; Myer v. Thompson, 16 Ore. 194; Fanner v. Gray, 16 Neb. 401.) Sneider and Wallace claim that they did not accept the goods but received them for the Stone Front Grain Company, a corporation. The evidence shows that the organization of this corporation was never completed. The statutes were not fully complied with in the attempted organization of this company. Hence Sneider and Wallace could not escape liability by transacting business in its name. (Central National Bank v. Sheldon, 121 P. 340; McVicker v. Cone, 28 P. 76 (Ore.); Aspen W. & L. Co. v. City, 37 P. 728.) Unless the statute authorizes transaction of business by a corporation before its stock is subscribed, it cannot lawfully proceed with the main designs of its organization before it is subscribed. (Swesy v. Hotel Co., 5 Neb. 50.) Even if a bona fide corporation had been formed to which goods had been turned over and used, it would not absolve the partners who made the original purchase. (Reed v. Crelins Co., 125 Cal. 117.) Examination of defendant Wallace with reference to admissions theretofore made by him in a deposition as to the receipt and acceptance of the goods involved in the suit was proper, even though the witness be present at the trial; that fact would not prevent proof of an admission made by him in a deposition taken in the case. An admission may be proved by any person who heard it. (Cyc. Vol. 16, pg. 1037.) Surely if an admission be provable by a third person it should be provable by the witness himself. The judgment should be affirmed.

BLUME, Justice. POTTER, C. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

The parties will be hereinafter referred to in the same order as in the court below. The plaintiff sues the defendant for a balance of $ 3668.91 and interest for goods sold and delivered to defendants commencing with January 30, 1917, to and including June 30, 1917. Plaintiff is a corporation located at Basin, Wyoming, engaged in the milling business. The evidence shows that about January 1st, 1917 defendant Sneider wanted to make arrangements with plaintiff, through one J. W. Alexander, an employe of plaintiff, for an extension of credit to Sneider and Wallace in connection with the feed business. Alexander referred him to the manager of plaintiff. About January 10th, 1917, N. J. Long, manager of the plaintiff, accordingly had a conference with the defendants at Thermopolis, Wyoming, during which the defendant, Sneider, in the presence of defendant Wallace stated that they, the defendants, were going into business (at Thermopolis) to sell flour and feed in a building owned by Sneider; that defendant Wallace had had experience but had no money, and that they wanted to arrange to buy goods of plaintiff and asked for extension of credit to the firm. To this plaintiff, through its manager, agreed on the strength of the responsibility of the defendant Sneider. During the conversation nothing whatever was said as to the formation of a corporation by defendants. All orders for goods seem to have been given either by telephone or in writing by defendant Wallace, but none of the written orders could be found. The first order for $ 744.12 was shipped on January 30, 1917; the second, for $ 1895.95 on February 10, 1917. Both of these orders were billed to defendants in the name of Sneider and Wallace. Subsequent orders, eight in number, were billed in the name of Stone Barn Grain Company. This change in the name in which the goods were billed was made, as stated by the manager of plaintiff, because the defendants in the meantime had used printed stationery reading: "The Stone Barn Grain Company, Incorporated," but that all sales were in fact made to Sneider & Wallace in accordance with the talk at Thermopolis, and that credit was extended only to Sneider & Wallace. The various shipments were put on board of the railroad cars at Basin, billed to Thermopolis, and actually received, at least, by defendant Wallace in some capacity, except one car delivered to another party at the request of Wallace. It will not be necessary to refer to this one car again, but will for convenience be considered as delivered the same as the other cars. Four payments were made on the shipments from time to time; one for $ 800 and three for $ 500 each, and a further credit given on July 14, 1917, of $ 1094.03 by reason of a car of oats turned over by defendants to plaintiff. In the month of June, 1917, defendant Sneider had a conversation with witness Alexander, and on July 10, he had another with plaintiff's manager. Both of these conversations were to the effect that he had more business than he could manage; that he was going out of the feed business and turn it over to de-defendant Wallace, and wanted to know whether from that time on plaintiff would rely solely on the credit of Wallace. An amount of $ 50.00 due for shipment previously made was on the latter date arranged with him to be debited to the account of Wallace instead of the old account. On July 14th defendant Wallace told plaintiff's manager that defendant Sneider had left the firm on July 10. Subsequently, upon statement and request of Mr. Sneider, the credit for the car of oats was changed from the account of Wallace to that of the old account. The books of accounts of plaintiff, properly identified, were introduced in evidence, showing credit extended in the manner as above mentioned. Defendant Sneider did not take the witness stand. Plaintiff offered the deposition of defendant Wallace, and upon that being excluded, called him as a witness. He admitted that he had, at the time when the deposition was taken, testified that the various shipments had been received by him. Upon cross-examination, he testified that all the orders he gave and all business done by him were for and on behalf of the Stone Front Grain Company, and that the goods were not received and accepted for or on behalf of himself or Sneider & Wallace. On re-examination he produced the bills of shipment made on January 30 and February 10th which show that the goods were billed to Sneider & Wallace. He stated further that the Stone Barn Grain Company was not a corporation; that the letter heads and checks were in that name instead of in the name...