Sparks v. Despatch Transfer Co.

• Decision Date: 24 February 1891
• Parties: Sparks et al. v. The Dispatch Transfer Company, Appellant
• Court: Missouri Supreme Court

15 S.W. 417

104 Mo. 531

Sparks et al. v. The Dispatch Transfer Company, Appellant

Supreme Court of Missouri, Second Division

February 24, 1891

Appeal from Jackson Circuit Court. -- Hon. J. H. Slover, Judge.

This is an action on five negotiable promissory notes, alleged to have been executed by defendant by and through one Stewart Jackson. The plaintiffs were copartners, engaged in the horse and mule business in Kansas City, and had been for two years prior to the making of the notes sued on. The defendant was a business corporation, organized under the laws of this state and doing transfer business in Kansas City. On the twenty-first day of June, 1887, one Stewart Jackson, in payment for certain mules by him bought of plaintiffs that day, gave plaintiffs the following note:

"$ 1,860. Kansas City, Mo., June 21, 1887.

"Sixty days after date I promise to pay to the order of Sparks Bros and Hancock $ 1,860, for value received, at the banking office of H. S. Mills, in Kansas City, Missouri, with interest from date at the rate of ten per cent. per annum until paid, and, if interest be not paid annually, to become as principal, and bear the same rate of interest.

"Due August 20, 1887.

"Dispatch Transfer Co.

"By S. Jackson, President."

And on July 5, 1887, said Jackson, in payment of mules that day bought of plaintiffs, gave plaintiffs the following note:

"$ 1,840. Kansas City, Mo., July 5, 1887.

"Thirty days after date we promise to pay to the order of Sparks Bros. and Hancock $ 1,840, for value received, at the banking office of H. S. Mills & Son, in Kansas City, Missouri, with interest from date at the rate of ten per cent. per annum until paid, and, if interest be not paid annually, to become as principal, and bear the same rate of interest.

"Due August 5, 1887.

"Dispatch Transfer Co.

"By S. Jackson, President.

"Indorsed Protest waived.

"S Jackson."

On the eleventh of June, 1887, said Jackson, for mules bought by him of plaintiffs, gave them this note:

"$ 300. Kansas City, Mo., June 11, 1887.

"Sixty days after date I promise to pay to the order of Sparks Bros and Hancock $ 300, with ten-per-cent. interest from date, value received.

"Due August 10, 1887. S. Jackson."

On June 11, said Jackson, for mules by him bought that day of plaintiffs, gave this note:

"$ 375. Kansas City, Mo., June 11, 1887.

"Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock $ 375, with ten-per-cent. interest from date, value received.

"S. Jackson."

And on June 15, this note:

"$ 240. Kansas City, Mo., June 15, 1887.

"Sixty days after date I promise to pay to the order of Sparks Bros. and Hancock $ 240, for one mouse-colored mule bought of C. Sparks, with ten-per-cent. interest from date, value received.

"Due August 14, 1887. S. Jackson."

The plaintiffs declare upon each note separately, and charge that the defendant executed all five of the notes, by its president, Stewart Jackson. There is also a sixth count, which is as follows: "Sixth. Plaintiffs, for another cause of action, state that between the tenth day of June, 1887, and the sixteenth day of June, 1887, plaintiffs, at the request of defendant, sold and delivered to the defendant certain mules as follows, to-wit: On the eleventh day of June three (3) mules, for $ 675; on the fifteenth day of June, 1887, one (1) mule, for $ 240; amounting in all to the sum of $ 915; which said sum defendant owes plaintiffs, and fails and refuses to pay the same, although payment has been demanded; wherefore plaintiffs demand judgment against defendant for the sum of $ 915, and for costs."

The defendant, for its defense, denies that it executed either of said notes; denies that it ever authorized the execution of either of said notes; alleges that said notes were given to plaintiffs by said Jackson on his own private account, and that the consideration therefor was certain mules and horses sold by plaintiff to Jackson for his individual account, and in no way connected with defendant's business; that said mules and horses were never delivered to defendant, and were never bought by or for defendant; that Jackson was carrying on a general business buying and selling horses and mules for his own account, which plaintiffs well knew; and that the horses and mules for which these notes were given were bought by said Jackson in the ordinary course of his business, and plaintiffs knew he did not buy said mules and horses for defendant. Defendant set up its charter, showing that, by it, it was only authorized to conduct a general transfer business in the City of Kansas, moving freight from point to point in said city; that it was never engaged in the business of buying or selling horses or mules, nor authorized anyone to do so for it; that said two notes were wrongfully executed in its name by Jackson; that it had no power to engage in the horse and mule business, and the notes and the trades for said mules were ultra vires.

Also, pleaded especially that by one of its by-laws it was provided: "No debt for a sum larger than $ 500 shall be contracted in behalf of the company by any officer thereof, without a vote of the board of directors authorizing same;" that the debt sued for in the first and second and sixth counts exceeded $ 500; that said mules were not bought for the defendant by said Jackson in the usual routine of business; that they were not needed by defendant for its business; that they were not desired; that defendant knew nothing of their purchase, and its board of directors never authorized their purchase, nor the contracting of the debt therefor. This answer was verified by Harry E. Overstreet, secretary and treasurer. The reply was a general denial. The cause was tried by a jury, and resulted in favor of plaintiffs on each count except the sixth.

The facts developed by the evidence are as follows: The defendant was a corporation engaged in the transfer business in Kansas City. Stewart Jackson was the president of the company. The company, as originally organized, had a capital of $ 10,000, -- one hundred shares. Jackson had the controlling interest, -- fifty-five shares. Afterwards the stock was increased to $ 30,000, of which Jackson had one hundred and sixty shares, -- a majority of all the stock. Jackson was the president from the beginning until he left in August, 1887, after the execution of the notes sued on. It also appears that Jackson purchased every mule and horse that defendant ever owned until he absconded; that defendant's business required mules to haul the freight it handled; that, beginning with November, 1885, and ending May 31, 1887, defendants had some thirteen different transactions in mules with plaintiffs or the firm which plaintiffs succeeded, aggregating some $ 3,000; that in a number of these transactions the defendant gave its note in its name, by Jackson who conducted all the trades. There was also evidence that the mules were all turned over to defendant's barns. Defendant offered evidence that it did not get the mules; that, although brought to its barns, they were taken out by Jackson, and shipped to St. Louis; that Jackson bought the mules on his own account, and that plaintiffs knew it. Plaintiffs offered evidence that they thought, and were informed, that the mules were bought by Jackson for the defendant; that when Jackson gave the three notes sued on in counts 3, 4 and 5, they directed him to give the company's notes to the clerk of plaintiffs in their counting-room, and did not know, till after Jackson had absconded, the notes simply bore his name; that they were selling the stock to defendant.

On the trial defendant objected to the introduction of the three notes sued on in the third, fourth and fifth counts, for the reason that they were incompetent, irrelevant and immaterial, as they were the individual notes of S. Jackson alone; that defendant was not and could not be bound thereby. The court gave nine instructions for the plaintiffs, in which the liability of defendant for the acts of Stewart Jackson, done in its name, was correctly defined.

The eighth instruction is as follows: "8. As to those notes here sued on, executed in the name of S. Jackson, the jury will ascertain whether these were executed for and in behalf of the company; and, if you find that they were so executed, then as to these the defendant is liable thereon to the same extent as if said notes had been executed in the name of the company."

For the defendant the court gave twenty-two instructions, fully submitting all the issues tendered in its answer, that the mules were purchased by Jackson on his individual account that plaintiffs knew it, and whether the purchases were ultra vires. The court refused the twenty-third instruction, which is as follows: "23. The jury are further instructed that, even if they should believe from the evidence that at the time of the execution of the notes in controversy, and signed in the name of the defendant company, plaintiffs in good faith believed they were dealing with defendant's company, and yet, while the mules, which in return for said notes they delivered to S. Jackson, remained in his possession, and the plaintiffs knew of their whereabouts before disposed of by said Jackson, plaintiffs or their authorized representatives became aware, or had reason to know, that said Jackson deceived them, and misrepresented to them that said mules were for defendant company, and, notwithstanding such knowledge, made no effort to recover their said mules, but suffered said Jackson to proceed and dispose of the same, then they cannot recover from defendant company; and in determining these questions the jury should determine from the evidence whether said mules were shipped by said ...