St. Louis Drug Co. v. Robinson

• Court: Missouri Supreme Court
• Writing for the Court: HENRY
• Citation: St. Louis Drug Co. v. Robinson, 81 Mo. 18 (Mo. 1883)
• Decision Date: 31 October 1883
• Parties: ST. LOUIS DRUG COMPANY v. ROBINSON et al., Appellants.

81 Mo. 18

ST. LOUIS DRUG COMPANY

v.ROBINSON et al., Appellants.

Supreme Court of Missouri.

October Term, 1883.

Appeal from St. Louis Court of Appeals.

AFFIRMED.

David Goldsmith and George W. Taussig for appellants.

There was not, within the meaning of the mortgage, an unreasonable depreciation in the value of the property mortgaged. The terms of the mortgage are unambiguous, and not capable of the construction given it by the court of appeals, and the recourse of the latter court to parol evidence to explain it, was in violation of the rule of law, that in no case can extraneous evidence cause a contract to be construed into what its language does not import. Koehring v. Muemminghoff, 61 Mo. 407; Campbell v. Johnson, 44 Mo. 247; Glendale Mfg. Co. v. Ins. Co., 21 Conn. 37; 8 Mich. 66; 29 Ala. 684; 33 Iowa 571. Nor does the fact that the mortgage alludes to the addition of other property to the stock on hand, imply a power to sell any of that then on hand. Hewson v. Tootle, 72 Mo. 632; Voorhis v. Langsdorf, 31 Mo. 451; Miller v. Jones, 15 Nat. B'k Reg. 150. The filling up of the blank date of the execution of the mortgage at plaintiff's instance, without the knowledge or consent of defendant, avoids the mortgage. First Nat. B'k v. Fricke, 75 Mo. 178; Bell v. Quick, 13 N. J. L. 312; Den v. Wright, 7 N. J. L. 175. Plaintiff was a corporation, incorporated to manufacture and sell drugs, had no power to indorse notes for the accommodation of another, and the mortgage was ultra vires and non-enforceable in this action. 1 Daniels Neg. Inst., (3 Ed.) § 386; Bank v. Bank, 13 N. Y. 309; Bird v. Daggett, 97 Mass. 494; Green's Brice's Ultra Vires, (2 Ed.) p. 252, and notes; Davis v. Smith, 131 Mass. 276. If the case of National B'k v. Skinker, 98 U. S. 621, decides that the defense of ultra vires cannot be asserted in an action by a corporation to enforce a contract which it undertook to make without the legal capacity to do so, it is inconsistent with numerous decisions of this and other courts. Blan v. Ins. Co., 10 Mo. 559; Hoagland v. Railroad Co., 39 Mo. 451; St. Joseph v. Saville, 39 Mo. 468; Pacific R. R. Co. v. Seely, 45 Mo. 212; Matthews v. Skinker, 62 Mo. 329; City v. Gas Co., 70 Mo. 93; Green v. Seymour, 3 Sand. Ch.; Life, etc., Ins. Co. v. Ins. Co., 7 Wend. 34; Crocker v. Whitney, 71 N. Y. 161; Fridley v. Bowen, 87 Ill. 151; Fowler v. Scully,72 Pa. St. 456; Woods v. People's B'k,83 Pa. St. 57; Kansas, etc., B'k v. Rowell, 2 Dill. 371; Merchants' B'k v. Mears, Thompson's Nat. B'k Cases 353. Nor is the contract, if ultra vires, so far executed that defendant is estopped from setting up its illegality. U. S. Trust Co. v. Helmer, 77 N. Y. 71; Thomas v. Railroad Co., 101 U. S. 86; Simpson v. Building, etc., Asso'n, 38 Ohio St. 357; Madison, etc., Co. v. Watertown, etc., Co., 7 Wis. 59; N. W. Union Packet Co. v. Shaw, 37 Wis. 662; Little v. Farmers', etc., Co., 55 Wis. 546. The defense of ultra vires is good under the constitution and State statutes. Const., art. 12, § 7; 1 Wag. Stat., p. 289, §§ 1, 6. The so-called release of defendant, Robinson, in no way affected defendant Squires' interest in the property in suit. Collyer on Part., (6 Ed.) 170; Story on Part., § 322; Halstead v. Shephard, 23 Ala. 558; Mellon v. Webster, 5 Mo. App. 453; Long v. Story, 10 Mo. 636; Mut. Sav. Inst. v. Enslin, 37 Mo. 453; Williams v. Roberts, 6 Cold. 493; Stegall v. Coney, 49 Miss. 761; Kimball v. Ins. Co., Bosw. 495.

J. P. Ellis for respondent.

The mortgage was open to construction by the light of surrounding circumstances and the acts of the parties. Patterson v. Camden, 25 Mo. 13; Bruner v. Wheaton, 46 Mo. 363; Koehring v. Muemminghoff, 61 Mo. 403; St. Louis Gas Light Co. v. St. Louis, 46 Mo. 121. Even if the referee's theory of the construction of the mortgage be true, still it only amounts to this: that before condition broken, the plaintiff claimed possession and prematurely brought suit. Two months after suit the note matured, was not paid, and plaintiff became entitled to possession, and so continued to be entitled to date. Even although the suit was prematurely brought, the law will not return the property to defendant, he not being now entitled to it. Boutwell v. Warne, 62 Mo. 350; Dilworth v. McKelvy, 30 Mo. 149; Wheeler v. Train, 4 Pick. 168; Gillham v. Kerone, 45 Mo. 487; Babb v. Talcott, 47 Mo. 343; Jones v. Evans, 62 Mo. 375. The surrender and relinquishment of the firm's property in the firm's name, to pay firm debt, by defendant, Robinson, after suit brought, bound the co-partnership, even although Squire refused to sign the instrument. Stegall v. Coney, 49 Miss. 761; Keck v. Fisher, 58 Mo. 532; Parsons on Part., (3 Ed.) side pp. 392, 393, and note. The defense of ultra vires does not lie in this case. Morford v. Farmers' B'k, 26 Barb. 568; Lafayette Sav. B'k v. St. Louis, etc., Co., 2 Mo. App. 299; Daniel Neg. Inst., (1 Ed.) § 187; Monument Nat. B'k v. Globe Works, 101 Mass. 57; Union Water Co. v. Murphy's Flat Fluming Co., 22 Cal. 620; Thomas v. Railroad Co., 10 C. L. J. 306; Whitney Arms Co. v. Barlow, 63 N. Y. 62; Steam Nav. Co. v. Weed, 17 Barb. 375; Sedgwick on Stat. and Const. Law, p. 90; Township v. Talcot, 19 Wall. 666; Parish v. Wheeler, 22 N. Y. 494; Bissell v. Railroad Co., 22 N. Y. 258; DeGroff v. Ames, etc., 21 N. Y. 124; State, etc., v. Citizens' Street R'y Co., 47 Ind. 407; Farmers', etc., B'k v. Railway Co., 17 Wis. 372; Grand Gulf B'k v. Archer, 8 S. & M. (Miss.) 151; Bank v. Nevitt, 6 S. and M. (Miss.) 513; Wade v. Am. Col. Society, 7 S. and M. 663; Chester Glass Co. v. Dewey, 16 Mass. 102; Moss v. Lead Mining Co., 5 Hill 140; Matt v. U. S. Trust Co., 19 Barb. 568; The Banks v. Poitiaux, 3 Rand. 136; Bank v. Hammond, 1 Rich. (Law) 288; Leazure v. Hillegas, 7 S. & R. 313; Goundie v. Northampton, etc.,7 Pa. St. 233; 12 Miss. 75; 16 Miss. 151; 10 Wis. 230; 16 Me. 231; 8 Wheat. 355; Vidal v. Girard, 2 How. 127; Nat. B'k v. Matthews, 8 Otto 621; McIndoe v. St. Louis, 10 Mo. 577; Chambers v. St. Louis, 29 Mo. 543; Land v. Coffman, 50 Mo. 243; Thornton v. Guenther, 71 Mo. 221; 7 Mo. App. 42; 71 Mo. 465; 63 Mo. 118; 29 Vt. 96; 44 Iowa 244. The right of the State itself to call to account a corporation for exceeding corporate powers, is limited to cases in which the constant and willful violation of the conditions of the corporate grant appear. High on Quo Warranto, p. 472; Potter v. Bank, 5 Hill 490; Suydam v. Morris Can. B. Co., 5 Hill 491; 11 Barb. 213. A corporation may be a trustee for strangers to it and its purposes, provided the trust be not repugnant to, or inconsistent with, its corporate objects. Vidal v. Girard, 2 How. (U. S.) 127; 1 Paige 214; Phillips Academy v. King, 12 Mass. 546; Amer. Academy v. Harvard College, 12 Gray 582; Chambers v. Bap. Ed. Soc., 1 B. Mon. 215; 1 Perry on Trusts, (2 Ed.) §§ 43, 44. Nor can any one but the crown question the capacity of a corporation to hold and act as trustee. 12 Clark & F. 425, 487. There was no alteration in the date of the mortgage; while the body of the instrument does not show the date which was by omission left blank, the acknowledgment contained the true date of the execution and acknowledgment, to-wit, October 19th, 1876, and inserting the date in the blank left in the body was not an alteration of the date of the instrument. The supplying of omissions which are manifest, and which are done to effectuate the intention of the parties, is not an alteration, either material or otherwise. 2 Daniel Neg. Inst., (1 Ed.) p. 362, § 1403. Defendants knew of the insertion of the omission in the body of the deed, and failed to complain of it, and are now estopped. Pelkington v. Ins. Co., 55 Mo. 172, 178. Besides, Robinson, a member of defendants' firm, knowing the facts, affirmed by his acts the validity of the mortgage.

HENRY, J.

This is an action to recover possession of personal property, to-wit: Stock, fixtures and furniture of defendants' drug store. Plaintiff's claim is under a chattel mortgage, executed by defendants, to secure a $5,000 note to plaintiff, dated October 1st, 1876; payable one year after.

This suit was instituted August 14th, 1877, two months before the maturity of the note, and plaintiff bases its right to recover upon a stipulation in the mortgage, which, after providing that the mortgage property should remain in the possession of the mortgageors until the maturity of the note, contained this condition: “In case of sale or disposal, or attempt to sell or dispose of said property, or an unreasonable depreciation in the value thereof,” plaintiff or its legal representatives, might take said property or any part thereef, into its possession.

The mortgage not only covered the stock, fixtures and furniture then in the store, but “any and all articles that may hereafter be added to the present stock, or fixtures or furniture, and, which may be on hand at the time the St. Louis Drug Store claims possession.” The cause was referred to F. A. Wislizenus, Esq., to try the issues; and, among other fects reported as found by him, are the following: “Upon the execution of the mortgage, defendants with plaintiff's consent, and, indeed under oral agreement to that effect, continued to retail the mortgaged property, and made additions to the stock from time to time. These additions, by no means, kept pace with the sales.” That: “The conduct and conversation of the parties to the mortgage, show that they understood the mortgage to require them to keep the stock of goods up to the standard of the value originally mortgaged.” “That the value of the property in the defendants' drug store, at the time of the seizure, was a little more than one-half of the property on hand when the mortgage was given.” “That there was no material shrinkage in the prices of drugs and other articles composing the stock.”

On these facts, the question arises, was there an unreasonable depreciation in the value of the stock, within the meaning of the above proviso? The...