Temple Lumber Co. v. Miller

• Decision Date: 12 February 1943
• Docket Number: No. 14452.,14452.
• Parties: TEMPLE LUMBER CO. v. MILLER.
• Court: Texas Court of Appeals

Page 256

169 S.W.2d 256

TEMPLE LUMBER CO. v. MILLER.

No. 14452.

Court of Civil Appeals of Texas. Fort Worth.

February 12, 1943.

Rehearing Denied March 19, 1943.

Appeal from District Court, Denton County; B. W. Boyd, Judge.

Action by A. A. Miller against the Temple Lumber Company for damages growing out of an alleged contract. Judgment for plaintiff, and defendant appeals.

Affirmed.

James R. Wiley, of Denton, and C. M. McWilliams and R. O. Kenley, both of Houston, for appellant.

Davis & Davis, of Denton, for appellee.

SPEER, Justice.

Plaintiff A. A. Miller sued defendant Temple Lumber Company, a corporation, for damages growing out of an alleged contract by which defendant contracted to construct a dwelling house for plaintiff in the City of Denton, Texas.

The pleadings, consisting of an amendment and three supplemental petitions by plaintiff, and an amended answer and two supplemental answers by defendant, along with a cross-action, need not be given in detail, but their substance may be seen from what we shall say concerning the points decided by the court in the absence of a jury trial, and the errors assigned.

Court found that each party was indebted to the other; that plaintiff's debt was greater than that of defendant, offsetting one against the other, and rendered judgment for plaintiff for the excess of his claim over that of defendant. The defendant has appealed.

At the request of defendant, the court filed findings of fact and conclusions of law. The facts found are, in substance: That plaintiff and defendant entered into a contract, part in writing and part oral, by which defendant would furnish all material and labor in the construction of a house for plaintiff according to a set of plans and specifications furnished by plaintiff for the sum of $3072. That changes agreed upon could be made and results could reduce or increase the contract price; if reduced, plaintiff was to have the benefit, and if increased, he should pay. Defendant was a corporation long before and at the time of the transaction, and W. B. Peters was the manager of the Denton place of business. The corporation's charter set out the purposes of the corporation as that of "manufacturing lumber and the purchase and sale of material used in such business and doing all things necessary and incident to such lumber business." That J. E. Graham was, at the time in controversy, an employee of defendant at its place of business; plaintiff and Graham were friends of long standing; all negotiations were between plaintiff and Graham; from the beginning, Graham represented to plaintiff that defendant was back of the contract and it was to be between plaintiff and defendant; Graham was, at all times, in charge of the construction, and that he was defendant's general agent while in charge of the job; Graham signed the plans and specifications as follows: "O.K. Guaranteed as to performance, Temple Lumber Company, by J. E. Graham, Agent." His acts in this connection were those of defendant. That after the contract sued on was consummated, defendant, acting through Graham, procured one Tunnicliff to actually do and superintend the construction of the house; that plaintiff never had any dealings with Tunnicliff, never knew him until he began the work; plaintiff inquired of Graham why Tunnicliff's name appeared on the contract, and was told it was only a formality to enable defendant to finance the deal, but that plaintiff's contract was between him and defendant. That Tunnicliff was the agent of defendant; when it was reported to plaintiff the house was completed, he made a check payable to Tunnicliff for $1072 and gave it to Graham, who endorsed it and passed it to the credit of defendant; plaintiff borrowed $2000 and paid it to Graham and defendant received the proceeds.

The fact findings include many items of defective workmanship and materials and that it would require $800 to correct them; that on account of changes made in the plans, plaintiff still owed to defendant $180.56. That defendant was a principal in said contract and that in all matters involved Graham was acting within the scope and apparent scope of his authority.

Court concluded as a matter of law that defendant was a principal in the contract and if not an active principal, then an absolute guarantor of its performance; that the contract made by defendant was not ultra vires; that Graham had authority to bind defendant in making the contract; that defendant had received the consideration for the contract and was estopped to plead ultra vires. That since defendant owed plaintiff more than plaintiff owed it, an offset of the lesser amount should be made from the greater, and plaintiff should recover the difference. We have not attempted to give the entire findings nor conclusions, but only those complained of.

Defendant has presented 20 points of alleged error, but the first three are admittedly abandoned; they pertain to the sufficiency of the evidence to establish plaintiff's claim of $800; no further notice will be taken of those points.

The remaining points relied upon are briefed in groups, indicating that they each in some form present alleged errors relating to the same matter. Nos. 4, 11, 12, 13, 14, 15 and 20 are in the first group and assert that there is no competent evidence to support the court's fact findings that plaintiff ever made a contract with defendant, while purportedly acting through J. E. Graham; that the conclusions of law to that effect and that the said acts were not ultra vires were improper in law, and were without support in the evidence.

Under these points, defendant's brief is devoted to the specific point of ultra vires. It is insistently urged that since defendant's charter only authorized it to buy and sell lumber and building material, it could not be held to have made a contract to construct a building, as contended by plaintiff.

We will forego the historical background of the policy of our law for which our statutes have been enacted for the creation of corporations with specific powers and authority and their business relation to the public as a body politic. It appears that the early English cases, as well as some by federal courts, and even the early cases decided by our state courts, are not in complete harmony with respect to the extent a corporation may go and bind itself. But the trend seems to be that even though the charter provisions do not, in so many words, authorize an act, the corporation may bind itself to do many things, when not against public policy and are not forbidden by law. There is a clear distinction between acts which are void because of legal inhibitions, and those which are not prohibited but are those which are not enumerated in the purpose clause of the charter. In the latter class are to be found instances which include acts which are appropriate, convenient and suitable in...