Ward v. Davidson

Citation1 S.W. 846,89 Mo. 445
PartiesWard et al., Appellants and Respondents, v. Davidson et al., Respondents and Appellants
Decision Date18 March 1886
CourtUnited States State Supreme Court of Missouri

Cross-Appeals from St. Louis Court of Appeals.

Reversed.

G. A Madill, and James & C. S. Taussig for plaintiffs, as appellants and respondents.

(1) Under the law and facts, the court below properly restrained the defendant corporation from trading in boat stores with outsiders and from purchasing and selling grain. These transactions were and are beyond the power of the corporation; they are not authorized by the express terms of the charter, and they were not necessary for the legitimate business of the corporation. Even if they had been expedient and made with pure motives, they would have been none the less illegitimate. Authorities in support of this proposition are abundant. Every abuse of its power, by a corporation, is a violation of the law of its being, and a forfeiture of its franchises. Commonwealth v. Ins. Co., 5 Mass. 232; 2 Kent's Com. [13 Ed.] 312; Green's Brice's Ultra Vires, 78-82, 90-92; Ang. & Ames on Corp. [10 Ed.] secs. 242, 256; Gregory v. Patchett, 38 Beav. 595; Lyde v. Railroad, 36 Beav. 10, 16; St. Louis v. Russell, 9 Mo. 507; Hoagland v. Railroad, 39 Mo. 459; Mathews v. Skinker, 62 Mo. 329; Pearce v. Railroad, 21 How. 442; Bangor v. Whiting, 29 Me. 123; Railroad v. Dandridge, 8 Gill & J. 318; Coleman v. Railroad, 10 Beav. 1; Terrett v. Taylor, 9 Cranch, 51; Attorney-General v. Bank, Walk. (Mich.) 97; Blair v. Ins. Co., 10 Mo. 559; Railroad v. Marion, 36 Mo. 303; Ruggles v. Collier, 43 Mo. 303; Attorney-General v. Railroad, 6 Jur. [N. S.] 1006; Downing v. Railroad, 40 N.H. 230; Wiswall v. Railroad, 3 Jones Eq. 183; Bangor Corp. v. Whiting, 29 Me. 123. A railroad company cannot operate or support a connecting line of steamboats for the purpose of increasing or benefiting its own business. Hoagland v. Railroad, 39 Mo. 459; see also Colles v. Trowbridge, 18 N.Y. 397. The grain transactions were ultra vires whether they created a partnership or not. Green's Brice's Ultra Vires, 334-8; Champion v. Bostwick, 18 Wend. 175; Brownlee v. Allen, 21 Mo. 124; Lenglee v. Smith, 48 Mo. 276. (2) The obedience of the corporation to the preliminary injunction affords no reason why the injunction should not have been made perpetual at the final hearing. Duke, etc., v. Morris, 6 Hare, 340; Kaime v. Harty, 4 Mo.App. 357; Kerr on Inj. [2 Am. Ed.] 440. (3) The evidence does not show acquiescence by plaintiffs in the ultra vires act of the corporation or any laches on their part. (4) But even if there had been acquiescence or laches of the plaintiffs, the court was still justified in restraining the corporation from violating the law and its charter in the future. The restraining orders in this case did not affect innocent parties dealing with the corporation, who might be heard in invoking the doctrine of acquiescence by stockholders. In this case the restraining orders affect solely the corporation, and enjoin it from doing in the future, that which it had done in the past, without warrant of law. Kerr on Inj. [2 Am. Ed.] 44, and cases cited; Kaime v. Harty, 4 Mo.App. 357, 359; Gas Light Co. v. Broadbent, 7 H. Lds. 600, 612; Duke of Beauford v. Morris, 6 Hare, 340, 350; Cudden v. Morley, 7 Hare, 201; Potts v. Levy, 2 Drews, 272; Gay v. Railroad, 4 Ry. Cases [Eng.] 235; Clark v. Young, 2 B. Mon. 57; 1 High Inj. [2 Ed.] sec. 41, p. 32; Id., sec. 714, p. 462; Railroad v. Railroad, 81 Ill. 523; McLaughlin v. Kelly, 22 Cal. 211; Lorondes v. Bettle, 33 L. J. Ch. 451; Printing & Dyeing Co. v. Fitch, 61 Paige Ch. 68. (5) The corporation is the only defendant affected by the restraining orders. But the corporation does not in its motion for a new trial and rehearing, or in its assignment of errors in this court, complain of, or point out the injunction orders as a ground for a new trial, and ought not to be heard in this court to object to that part of the decree. Griffin v. Regan, 79 Mo. 75; Billinger v. Carrier, 79 Mo. 318; Hill v. Alexander, 77 Mo. 296, 303; Bevin v. Powell, 11 Mo.App. 220, 221; Buche v. Ravins, 10 Mo.App. 579. (6) The plaintiffs were entitled to a decree compelling the individual defendants to account for, and to return to the corporation, the money and property which they illegitimately appropriated to themselves, or which they permitted their co-defendants to appropriate; to account for all profits which they illegitimately made by the use of the money and property of the corporation; to account for losses occasioned to the Packet Company by breaches of trust, and for interest on money of the corporation used by them, or with their consent. As far as the court rendered money judgments against the defendants, they are not only fully supported by the evidence, but the plaintiffs claim here, as appellants, that the judgments should have been for a much larger sum, and against all defendants. (7) Hutchinson was properly removed. The court will deal with him as it finds him at the time of the decree. The power of removal of unfaithful officers should be exercised by the corporation. St. Charles College v. Adams, 44 Mo. 585; Dodge v. Wolsey, 18 How. 331; Rogers v. Lafayette Ag. Works, 52 Ind. 297; Heath v. Railroad, 8 Blatch. 347; Kochler v. Black, 2 Black, 722. (8) The court properly exercised its authority in appointing a receiver. R. S., 1879, sec. 949; Keokuk, etc., v. Davidson, 13 Mo.App. 561; Davis v. Gray, 16 Wall. 219; Nichols v. Perry, 11 N.J.Eq. 126; High on Receivers, secs. 109, 110. (9) The rule of equity pleading was (and still is, where not superseded by the code), that anything which arose in a cause subsequent to the commencement of the suit, had to be stated in a supplemental bill, which did not take the place of the original bill, but supplemented it and was read in conjunction with the original bill. Story's Eq. Pl. [9 Ed.] secs. 332, p. 296; and sec. 336, p. 299; Mitford's Pl., 60; 2 Dan. Ch. Pl. & Pr., 1516, and notes; Goodwin v. Goodwin, 3 Atk. 370; Thompson v. Hill, 5 Yerger, 418. And so, under the general equity practice, amendments of a bill always related to matters which occurred prior to the filing of the first bill. 1 Dan. Ch. Pl. & Pr., p. 407, note 3. But the code of practice has done away with this distinction and treats the terms "amended and supplemental petitions" as synonymous (R. S., 1879, sec. 3573), and does away with the old practice of supplemental petitions to be read in conjunction with the original petition. R. S., sec. 3576.

Broadhead & Haeussler and Cecil V. Scott for defendants, as respondents and appellants.

(1) The judgment against Hutchinson was clearly wrong. (a) In removing him from the office of director, because the removal from office was based upon his dereliction of duty in his office as director, and yet he was not a director until long after the institution of the suit, and, therefore, could not have been guilty of any neglect of duty as director when the suit was brought. (b) In rendering judgment against him for twelve hundred and eighty-two dollars where there is no charge against him in the petition, except for failure to discharge his duty as director. (2) The money judgments against the other directors were erroneous -- because there is no determination of the issues made by the pleadings, nor anything to show upon what issues these judgments were rendered. The demand of the plaintiffs in this suit is not an entirety, but consists of several distinct causes of action and unless the judgment shows upon which cause of action it was rendered, it would be no bar to another suit upon any one of the causes of action set out in the petition. Corby, Adm'r, v. Taylor, 35 Mo. 447. Where the cause is submitted to the court without a jury, a judgment rendered generally, without finding the issues between the parties, is erroneous. Furgeson v. Sewell, 1 Mo. 256. A record of a judgment is sufficient, if the time, place, parties, matter in dispute, and the result are clearly stated. Barrett v. Garrigan, 16 Iowa 47. A judgment or decree should show upon its own face what the court has decided. Horner v. Colmesuit, 1 J. J. Marsh. 506. Where two or more issues are joined, it is error to omit finding on any of them. Jones v. Snedecor, 3 Mo. 390. (3) The plaintiffs in this case and the corporation must be held to have acquiesced in most of the acts charged against the defendants as causes of action in this suit. "The directors of a private corporation are agents of the stockholders and of the corporation." Field on Corporations, sec. 156. "The acts of these agents are subject to ratification like the acts of other agents." Ibid, sec. 162. "The books which these agents keep and make are the books of the corporation and are binding upon it and its stockholders, to this extent, that they are presumed to know everything contained in those books. Contracts of a corporation made by it, or its directors, or other agents, although ultra vires, are not necessarily void. If they are executed without any objection on the part of those who have become acquainted with their nature and have made no objection, they are binding so far as the corporation and its stockholders are concerned." Ibid. secs. 259, 260, 261, 263. "A corporation may enter into contracts that may become binding, although such contracts exceed its authorized powers." Ibid. sec. 263. "If the agents of the corporation are proceeding to exercise powers ultra vires, before they have become executed and have passed into the business of the corporation, a court of equity would interfere and forbid their execution." Ibid. sec. 264. But an interested party cannot wait, after knowing such an act is about to be done, and take the chances of its being beneficial to him and then...

To continue reading

Request your trial
2 cases
  • Steele v. Brazier
    • United States
    • Missouri Court of Appeals
    • December 6, 1909
    ... ... departure. Harrison v. Murphy, 106 Mo.App. 465; ... Cohn v. Sanders, 175 Mo. 455; Land Co. v ... Case, 104 Mo. 572; Ward v. Davidson, 89 Mo ... 445; Pratt v. Walther, 42 Mo.App. 491. (3) Plaintiff ... should not have to elect between his causes of action. R. S ... ...
  • Broussard v. Mason
    • United States
    • Kansas Court of Appeals
    • February 15, 1915
    ... ... Tobin Canning Co. v. Fraser, 17 ... S.W. 25; Brewster v. Stratman, 4 Mo.App. 42 and 43; ... McAllen v. Woodcock, 60 Mo. 180; Ward v ... Davidson, 1 S.W. 846, 89 Mo. 455. (3) When Broussard ... became trustee he was not at liberty to exercise his rights ... as creditor in ... ...

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT