Summary
In Pearl Realty Co. v. Wells, 164 Miss. 300, 145 So. 102 (1933), the Court spoke in terms of "ratification" and upheld a contract for services rendered in obtaining a cancellation of a lease to a lot upon which Pearl Realty Company subsequently erected a building.
Summary of this case from Fortune Furniture Manufacturing Co. v. Mid-South Plastic Fabric Co.Opinion
No. 30252.
January 2, 1933. Suggestion of Error Overruled January 16, 1933.
1. APPEAL AND ERROR.
Objection that plaintiff could not recover against only one of defendants because suit was joint suit, not having been raised below, could not be considered on appeal (Code 1930, section 568).
2. PLEADING.
If objection that plaintiff could not recover against only one of defendants because suit was joint suit had been made in trial court, declaration could have been amended.
3. CORPORATIONS.
Evidence established that plaintiff was employed to secure cancellation of lease by promoter of corporation and that corporation ratified promoter's act.
4. CORPORATIONS.
Promoters may make contracts which, if ratified by corporation after its organization, bind corporation.
5. APPEAL AND ERROR. In action for compensation for securing cancellation of lease, permitting plaintiff to state his understanding as to who employed him held not reversible error.
Though plaintiff's answer to question as to what he thought respecting who employed him was improper in form because he should have stated what happened on occasion on which he claimed he was employed and leave it to jury to draw its conclusions therefrom, there was no reversible error; such testimony being pertinent only for purpose of showing that plaintiff was not performing services as gratuity, and because facts disclosed that contract was made between plaintiff and promoters of defendant corporation which was subsequently ratified by corporation on its organization.
6. BROKERS. In action for compensation for procuring cancellation of lease, contract between plaintiff and lessee held admissible.
Such contract was properly admitted in evidence, not for purpose of founding a right upon the contract itself, but to show that plaintiff had secured that which he had been employed to secure.
APPEAL from circuit court of Hinds county. HON.W.H. POTTER, Judge.
Chalmers Potter and Green, Green Jackson, all of Jackson, for appellant.
Neither agency nor the scope thereof can be proven by the declaration of the alleged agent.
Columbus Greenville Railway Co. v. Miss. Clinic, 153 Miss. 29, 120 So. 203, 205; McCaskey Register Co. v. Swor, 154 Miss. 396, 122 So. 489; 154 Miss. 396, 122 So. 753; Walters v. Stonewall Cotton Mills, 136 Miss. 631, 101 So. 495.
The fact of an agency for another may be assumed from the fact that one has acted for another for a great length of time.
Russell v. Palentine Ins. Co., 106 Miss. 290, 63 So. 644, 51 L.R.A. (N.S.) 471; Myers Construction Co. v. Batson, 156 Miss. 689, 126 So. 822.
It is familiar learning that a person dealing with an agent must know at his peril the extent of the agent's authority to bind his principal; but where the principal has placed the agent in a position where he appears with reasonable certainty to be acting for the principal and his acts are within the apparent scope of his authority his acts will bind the principal.
Allen v. T.J. Moss Tie Co., 157 Miss. 392, 128 So. 351.
The authorities seem to be practically uniform that, where double employment exists, without knowledge of the parties, there can be no recovery of commission by the agent against the party kept in ignorance. The rule is not based upon the presence or absence of designed duplicity and fraud, but upon an established policy.
Hayes v. Ryker, 151 Miss. 382, 118 So. 199.
The allegation of a joint contract cannot be proved by proof of a several one.
Kimbrough v. Ragsdale, 69 Miss. 677; Spann v. Grant, 83 Miss. 22; Upton v. Adcock, 145 Miss. 372, 110 So. 774.
The promoters of a corporation are not in any sense the agents of the corporation before it comes into existence, for there cannot be an agency unless there is a principal.
14 C.J. 253.
Since the promoters of a corporation are not in any legal sence its agents before it comes into existence, it is a well settled rule that a contract made by them, even though it may be made for and in the name of the proposed corporation, is not binding on the corporation when formed, unless it is made so by the charter or statute, or unless it is expressly or impliedly adopted by the corporation after it has come into existence. And a fortiori a corporation is not liable on a contract made with its promoters individually.
14 C.J. 255.
While it is often said, and has sometimes been held, that a corporation may ratify contracts made by its promoters before incorporation, by the great weight of authority, the act of the corporation in adopting contracts entered into by promoters is not a ratification of such contracts in the proper sense, as the term is used in the law of agency, since the promoters could not be its agents prior to its creation, but it is in legal effect a novation or the making of a contract by the corporation as of the date of the adoption. Such ratification or adoption may or may not relieve the promoters from personal liability on the contract, according to the agreement of the parties.
14 C.J. 262.
The instructions given plaintiff were erroneous for the entire record discloses that the Pearl Realty Company had not been organized, and the organization was not made until April, 1929, and the service for which Mr. Wells was claiming compensation was performed prior to March 1, 1929. Therefore Flowers could not be the agent for an entity, which was not in existence.
It was error to permit the witness Wells to give his opinion or understanding of his employment, because this was conclusion of the witness of a matter directly in issue, and invasion of the province of the jury.
Dunlap v. Hearn, 37 Miss. 471; Atwood v. Meredith, 37 Miss. 635; Welch v. Hannie, 112 Miss. 79, 72 So. 861; Birmingham v. Hudson, 222 Ala. 332, 132 So. 1; Knowles v. Boylston, 137 So. 6.
It was error to permit the introduction of the contract exhibit "A" and the letter exhibit "B" to the testimony of J.H. Wells.
Fondren v. Durfee, 39 Miss. 324; N.O.J. G.N.R.R. Co. v. Tyson, 46 Miss. 729, 739.
The authority of the agent from the principal, is not shown by the sworn statements of the agent during the trial.
American Bankers Ins. Co. v. Lee, 161 Miss. 85, 134 So. 836.
A plaintiff may not bring an action on one theory, and then during the course of the trial change the entire theory. The plaintiff is bound by the theory of his case as stated in the declaration.
Simon v. Desporte, 116 So. 535.
When the motion by the defendant to exclude and the request for the peremptory instruction was asked, it was not incumbent upon the defendant to point out specifically the reasons upon which he based the requests. The requests for the peremptory instructions presented the question and raised the point as to whether or not the plaintiff below had proved his case in all of its essential requirements.
Covington County v. Morris, 122 Miss. 495, 84 So. 462; Illinois Central R.R. Co. v. Fowler, 123 Miss. 826, 86 So. 460.
When error of law manifestly appears, the correct rule is, that when error of law manifestly appears, the presumption of law is that it was to the prejudice of the party complaining of it, and that the judgment will be reversed by reason of it, unless it appear by the record that it did not operate to the injury of the party complaining.
Jackson v. Jackson, 28 Miss. 674, 683.
To have permitted an amendment allowing a recovery upon a single liability of the appellant would have been erroneous, and such error as to require reversal.
Miller v. The Northern Bank of Mississippi, 34 Miss. 412.
It is well settled in this state that a plaintiff may not declare upon a joint contract and recover upon a several one.
Wilder v. Harris, 112 Miss. 164, 72 So. 890; Drake v. Surget, 36 Miss. 458; Phipps v. Ingraham, 41 Miss. 256, 258; Carter v. Preston Stetson, 51 Miss. 423.
The Statute of Jeofails while curing purely defective pleading "does not embrace a new and distinct cause of action."
American Nat. Ins. Co. v. Golden, 133 Miss. 282, 97 So. 580.
One may not sue for a joint tort and recover for a several tort.
Oliver v. Miles, 144 Miss. 852, 110 So. 666.
The cause should be dismissed unless upon remand the plaintiff shall elect to amend, within a period specified in the order of remand.
Tyler v. State, 69 Miss. 395; Dick v. State, 30 Miss. 631; John, a slave, v. State, 24 Miss. 569.
Lotterhos Travis, of Jackson, for appellee.
If it be that the declaration exhibited in this cause declared on a joint contract and that a recovery was predicated upon a several contract, yet the record is wholly silent as to any objection which the appellee made at the trial as to this cause, and having failed to object specifically upon this ground, the point cannot be raised for the first time in the Supreme Court.
Kimbrough v. Ragsdale, 69 Miss. 674, 13 So. 830; Spann v. Grant, 83 Miss. 22, 35 So. 217; Jones v. Bunch, 125 So. 551; Knox v. Henderson Taylor, 135 So. 214, 160 Miss. 476.
The declarations of the agent off of the witness stand cannot be testified to by others in order to show his agency and the scope of it. It does not mean that the agent cannot be put on the witness stand and be permitted to testify as any other witness to his agency as well as the scope of his agency. Therefore the evidence of the agent, which established or tended to establish that he was the servant of the appellant and in the scope of his employment was competent.
Walters v. Stonewall Cotton Mills, 136 Miss. 361, 101 So. 495.
While a corporation is not always bound by engagements made on its behalf by its promoters before its organization, yet after it comes into existence it may adopt the engagements thus made for it in advance. Such preliminary contracts, if within the corporate powers, and not otherwise objectionable, may, by adoption, become the contracts of the corporation, and be enforced against it.
7 R.C.L., page 81, section 60.
To render the contract of the promoters binding on the corporation it is not necessary that its adoption should be express; it may be shown from acts or acquiescence of the corporation or its authorized agents, as any similar contract may be, and if the corporation subsequently recognizes and treats such contract as valid, this makes it, in all respects, what it would have been if the requisite corporate power had existed when it was entered into. And as a general rule adoption or ratification, after its organization, results from the acceptance by the corporation of the benefits of the contract; having exercised rights and enjoyed benefits secured to it by the terms of a contract made by its promoters in its behalf a corporation should be held estopped to deny its validity.
7 R.C.L., page 82, section 61.
A corporation may become liable on contracts made by its promoters prior to its organization by adopting such contracts, either expressly or impliedly, or by accepting the benefits thereof.
1 Thompson on Corporations, section 110; 17 A.L.R. 452; Gardiner v. Equitable Office Bldg. Corp. (C.C.A.), 273 Fed. 441, 17 A.L.R. 431; Mulvihill v. Vicksburg Ry. Power Mfg. Co., 88 Miss. 689, 40 So. 647.
The corporation is as much bound as a natural person by duly implied authority of its agents, as well as by authority expressly given; and a corporation is governed, like an individual, by the same principles as to the ratification of the acts of its agents and as to estoppel in pais.
Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241.
Being an implied contract, not evidenced by record, it was competent for the witness Wells to testify as to what his understanding with reference to his employment was.
4 Wigmore on Evidence (2 Ed.), section 1971.
A witness may testify generally to the ownership of personal property as a fact, but on cross-examination he may be required to state the facts within his knowledge touching the ownership and thereby aid the jury to determine the value of his testimony.
Pilcher v. Smith, 58 So. 672.
Not reversible error to permit the witness to state his conclusion in answer to such a question when the witness has stated the facts upon which his conclusion was based.
Haas Bros. v. Craft, 64 So. 163.
The simple issue of fact in this case, as raised by the appellant in its notice under the general issue, was whether Wells was employed by E.G. Flowers and/or Pearl Realty Company or by Mrs. Fitzhugh. This being the issue of fact, it was competent to prove by the documents that Wells in completing the transaction was not acting for Mrs. Fitzhugh but was acting for the purchasing group, through the offices of E.G. Flowers, who supervised the making of the agreement.
A variance between the allegations and the proof shall not be deemed material unless it shall have actually misled the adverse party to his prejudice in maintaining his defense upon the merits.
Section 568, Code of 1930.
The objection of a variance between pleading and proof is raised too late by a motion for a new trial.
Jackson v. Lewis, 142 Miss. 806, 108 So. 156.
The objection to a variance between pleading and proof must be distinctly raised before verdict.
Greer v. Bush, 57 Miss. 575; Kimbrough v. Ragsdale, 69 Miss. 674, 13 So. 830; I.C.R.R. Co. v. Cathey, 70 Miss. 332, 12 So. 253; I.C.R.R. Co. v. Price, 72 Miss. 862, 18 So. 415; True-Hixon Lumber Co. v. McDonough, 154 Miss. 720, 123 So. 855; Jones v. Bunch, 125 So. 551; Knox v. Henderson Taylor, 135 So. 214, 160 Miss. 476.
J.H. Wells was the complainant in the court below, and filed suit jointly against E.G. Flowers and the Pearl Realty Company, claiming five hundred dollars for services rendered in securing a cancellation of a lease on lot situated in Jackson, Mississippi, upon which the Tower building has been erected at the corner of Pearl and Roach streets.
It appears, that, prior to the organization of the Pearl Realty Company, which was organized for the purpose of erecting and owning the Tower building, an office building, E.G. Flowers, of the firm of Enochs Flowers, a Massachusetts trust, was negotiating with G.T. Fitzhugh, husband and agent of Mrs. G.T. Fitzhugh, who owned the property at that time, upon which the Tower building is now situated, for the purchase of said property. Said property was leased for a term of years, at that time, to one J. Calhoun Smith. Wells was called over the telephone one morning to come to the Edwards House, where E.G. Flowers, G.T. Fitzhugh, and Webb Buie were in conference, negotiating with reference to securing the lot above referred to, for the purpose of erecting the Tower building thereon. Wells was called in on this occasion for the purpose of consultation as to the value of the property; there being a difference between E.G. Flowers, on the one side, and G.T. Fitzhugh on the other side, as to the reasonable value of the property. Wells, Buie, and Fitzhugh had a private conference in which Wells stated to Fitzhugh that he thought the price of the property was too high, and, after discussing the matter, a more favorable proposition was made by Fitzhugh to Flowers. In the negotiations, however, G.T. Fitzhugh made it clear that Mrs. Fitzhugh would not pay the expenses of having the lease canceled.
After the parties had negotiated and had reached an agreement on the price for the lot, E.G. Flowers stated to Wells to get busy and secure a cancellation of the Smith lease "for us," using the word "us" instead of "me."
Wells did not make any charge for his visit to this conference, or what took place there, other than the request of Flowers to him to "get busy and secure a cancellation of the lease." Acting on this request, Wells became active and took up the matter of a cancellation of the lease with Smith, the lessor. Enochs and Flowers owned a lot across the street from the building in which J. Calhoun Smith was conducting his business on the leased lot, and he finally agreed to surrender his lease on the condition of securing a lease of the lot across the street owned by Enochs Flowers, after certain repairs and improvements on the building had been made, and for a certain sum of money in cash.
Various conferences were held between Wells and Smith in conducting these negotiations and between Wells and Flowers in reference thereto, resulting in Smith's demanding five thousand dollars for a cancellation of his lease. Flowers requested Wells to take the matter up with Fitzhugh and see if he would not share in the payment of five thousand dollars required to secure a cancellation of the lease. Wells had represented Mrs. Fitzhugh in procuring rentals and leases of her property in Jackson, Mississippi.
Wells did communicate with Fitzhugh, agent for Mrs. Fitzhugh, in regard to the matter of sharing in the payment of five thousand dollars for a cancellation of the lease, and finally Fitzhugh agreed that he would pay one-half, or two thousand five hundred dollars, as a donation or gratuity, so the deal could be carried through and, accordingly, sent his check for two thousand five hundred dollars to Enochs Flowers for that purpose. Enochs Flowers paid the five thousand dollars, and then contracted to lease to Smith the building owned by them for a term of years, at a given rental.
On the trial, E.G. Flowers testified that whatever he did in the matter he did for the Pearl Realty Company, a corporation, and not for himself personally.
After the negotiations between Flowers and Wells were entered into, the Pearl Realty Company was incorporated and organized, and acquired title to the lot and erected the Tower building.
Flowers further testified that all his acts in said matter were ratified and approved by the Pearl Realty Company after its organization.
It is insisted that there should have been a peremptory instruction for the appellants, Pearl Realty Company, based upon several reasons, one of which that the suit was filed as a joint obligation against Flowers and the Pearl Realty Company. It is contended that there could be no recovery against one, because the suit was a joint suit.
This objection was not raised in the court below, and, if it had been raised, the declaration could have been amended. Failure to make objection in the court below cannot be availed of here. Section 568, Code of 1930, and authorities there cited.
It is also insisted that the evidence is insufficient to constitute a contract, and that, if there was any contract at all, it was the contract of Enochs Flowers with Wells, and not the contract of the Pearl Realty Company. Flowers' testimony shows conclusively that all he did was for and on behalf of the Pearl Realty Company, and that all his acts in this matter were ratified by the Pearl Realty Company after its organization.
It is permissible for promoters to make contracts which, if ratified by corporations after they are organized, will bind the corporations. 7 R.C.L., pp. 81, 82, secs. 60, 61; Mulverhill v. Vicksburg Ry., Power Mfg. Co., 88 Miss. 689, 40 So. 647, and Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241.
A number of instructions given for the plaintiff are complained of as error. These have reference to Flowers as agent for the Pearl Realty Company. The jury, in these instructions, were told that, if Flowers employed the plaintiff, representing the Pearl Realty Company, and he was authorized to act for it, and his acts were afterwards ratified by that company, they should find for the plaintiff.
It is argued that Flowers could not act as agent of the Pearl Realty Company because, at the time the alleged contract was made, the Pearl Realty Company had not come into being. It is a sufficient answer to this contention, we think, to say that, after the corporation was created, it ratified what Flowers had done. It was in contemplation of the parties, who afterwards organized the corporation, to erect an office building, and to incorporate for that purpose.
It is next complained that the court erred in permitting the plaintiff, Wells, as a witness, to testify as to his understanding of who employed him. He was asked, while he was a witness, as follows: "Q. Mr. Wells, I will ask you what was your understanding as to who was employing you to perform these negotiations?"
Objection was made to this, but the court permitted the witness to answer as follows: "A. It was my full understanding that I was representing Mr. Flowers and is associates entirely."
The appellant then moved to exclude Wells' testimony in reference to what he understood as to who he represented, but the court ruled on this motion as follows: "He might not have been authorized to work for any one, but I think it is perfectly competent for him to state the person that he was working for. Whether he would be entitled to employment, and whether there was a meeting of the minds would be another proposition, but I have no doubt that he is entitled to state who he considered to be the person that he was employed by and who he was working for."
It is, of course, proper for a witness to state facts, and, whatever was said on that occasion was for the jury to draw its conclusion from, but we do not think this was reversible error. It was pertinent only for the purpose of showing that the plaintiff, Wells, was not performing these services as a gratuity.
When the facts are considered, the facts and inferences constitute a contract drawn from what was said and the conduct of the parties. Therefore the witness' answer as to what he thought or considered, while improper in form in which it was developed, is not reversible error.
It is next objected that the contract between Smith and Wells, acting for Enochs Flowers, was improperly admitted in evidence. From what has been stated, it is clear that Wells' services were secured for the cancellation of this lease, so that the corporation thereafter to be created could erect an office building as it desired on the leased lot. The contract was mere evidence that the lease of Smith had been canceled or transferred to Enochs Flowers. It was important to admit this contract, not for the purpose of founding a right upon the contract itself, but to show that J.H. Wells had secured that which he had been employed to secure.
The subsequent ratification of all of Flowers' acts have made the obligation incurred by Mr. Flowers to pay J.H. Wells for his services in securing a cancellation of the lease, the obligation of the Pearl Realty Company.
We find no reversible error, and the judgment of the court below is affirmed.
Affirmed.