Jackson Lumber Co. v. Trammell

GARDNER, J. The plaintiff (appellee here) seeks to recover for services rendered as a physician, to the employees of the defendant company, under contract for a fixed salary. The defendant is engaged in the operation of a sawmill and the manufacture of lumber at Lockhart, Ala., and as one of the defenses interposed pleaded that it is a corporation, and was not authorized by its character to so contract for the services of a physician. The substance of the plaintiff’s first replication is set out in the statement of the case, and is to the effect that the defendant company, being engaged in the sawmill business in which it is necessary to engage a large number of operatives, and in which accidents are liable to occur, recognized that the comfort and health of its employees is an aid to such company in the accomplishment of the ends for which it was organized; and that a physician employed to attend them in case of sickness or accident is in a sense an auxiliary of the main enterprise of the corporation. The action of the court in overruling the demurrer to this replication is the first question pressed upon our attention by counsel for appellant. The subject of ultra vires has been much discussed, and is one upon which great diversity of opinion has been expressed. As said by another: “There is no clearly defined principle of law that determines whether the particular act is ultra vires or intra vires. The courts are becoming more liberal, and many acts which 50 years ago would have been held to be ultra vires would now be held to be intra vires.” The question for consideration is whether the contract with the plaintiff was within the implied or incidental powers of the — 541 — defendant corporation. Mr. Cook, in his work on Corporations (vol. 2, p. 683), after calling attention to the fact that an ultra vires act is one beyond the express and implied powers of a corporation, states that an intra vires act is one which is within the expréss or implied powers of either the board of directors or a majority of the stockholders, and that an act is intra vires if it can be legally carried out by the directors or a majority of the stockholders. The author further says: “Intra vires acts are frequently spoken of as matters concerning the ‘internal management’ of the corporation.” In the same volume (section 681) he states that the implied powers of a corporation are not limited to those which are indispensably necessary, but include those which are appropriate and suitable to carry out the express powers. A like rule is also declared by the Supreme Court of Wisconsin, in Madison Plank Road Co. v. Watertown Co., 5 Wis. 173, in the following language : “The rule is, that if the. means employed are reasonably adapted to the ends for which the corporation was cheated, they come within its implied or incidental powers, though they may not be specifically designated by the act of incorporation.” To similar effect is the language of the Supreme Court of Maine, in Flaherty v. Portland, etc., Soc., 99 Me. 253, 59 Atl. 58: “The implied powers of a corporation are not limited to such as are indispensably necessary to carry into effect those which are expressly granted, but comprise all that are necessary, in the-sense of being appropriate, convenient and suitable for-such purpose, including the right of a reasonable choice of means to be employed. — Cyclopedia of Law, vol. 10, p. 1097; • 1 Cook on Corporations, § 3.” In the case of Colorado Spgs. Co. v. Am. Pub. Co., 97 Fed. 843, 38 C. C. A. 433, it was said that the acts of a corporation are not ultra vires if “they had a natural and reasonable tendency to aid in the accomplishment of the objects for which the corporation was created.” As illustrative of this rule the Supreme Court of Illinois (Cen. Lbr. Co. v. Kelter, 201 Ill. 503, 66 N. E. 543) held that a corporation organized for “the purchase and sale of lumber, and all adjuncts for carrying on a general lumber business,” has the implied power to execute a bond, for the performance of a building contract, on the part of a contractor, if the bond is executed for the purpose of securing a sale of lumber to the contractor. See, also, Green’s Brice’s Ultra Vires, p. 86 — 542 — et seq. By these quotations from other jurisdictions we do not intend to indicate approval of all that is therein said, but refer thereto as by way of illustration only. The language of our own cases is not out of harmony with the general principles as above referred to. In Chewacla Lime Works v. Dismukes & Co., 87 Ala. 344, 6 South. 122, 5 L. R. A. 100, the following words, pertinent to this question, are used: “Any transaction * * * not necessary or proper to enable the corporation to answer the purposes of its creation is void.” See, also, Steiner & Lobman v. Steiner Land Co., 120 Ala. 128, 26 South. 494; U. S. Fdy. Co. v. Bailey, 194 Ala. 261, 69 South. 825. In Steiner v. Steiner Land Co., 120 Ala. 128, 26 South. 494, is the following: “The general rule which prevails in this country is, that corporations created by an act of the Legislature, or organized under the general laws, can exercise only the powers expressly granted, the implied power to do all acts necessary to enable them to exercise the powers expressly granted, and such incidental powers as pertain to the purposes of their creation.” We have not overlooked the recent case of A. G. S. R. R. Co. v. Loveman Co., 196 Ala. 683, 72 South. 311, where, in discussing the question of ultra vires, the following expression was used: “Expressly authorized by the charter or is necessarily incident to the powers for carrying out the objects of the charter.” By the use of the words “necessarily incident,” this court did not intend to indicate that such action should be indispensably necessary to the purposes of the corporation, but only that they should be necessary in the sense of being appropriate and suitable for the purposes for which the corporation was organized.—10 Cyc. 1079. Even in regard to municipal corporations this court has held that such corporations can exercise those powers expressly granted, and those, also, “necessarily or fairly implied in or incident to the powers expressly granted.”—Cleveland Co. v. Greenville, 146 Ala. 559, 41 South. 862. (1) The defendant was engaged in the operation of a sawmill. We judicially know, as it is a matter of common knowledge, that in such an enterprise much machinery is used, that the employment of laborers is essential to its operation, and that accidents are likely to occur. Without laborers the corporation — 543 — would be powerless to carry out the purposes of its creation. It is therefore necessarily interested in the welfare of its employees. Much depends upon their health and their contentment in the service, and to conserve their physical comfort tends to their efficiency, and the greater their efficiency the greater the profits to the defendant company. It could hardly be denied that a private corporation engaged in the manufacture of lumber could, if it saw fit, erect houses for the use of its employees and surround them with such sanitary conditions as would tend- to promote their general and physical welfare, even though its charter might contain no such provisions. These are matters which relate to what might be térmed the “internal management” of the corporation, with which, in the absence of fraud or unfair dealing, the courts as a rule do not interfere. (2) The employment of a physician to look after the health of the employees is but in line with the suggestions above made, and concerns one of those questions of internal management which we think may be fairly incidental to the objects of the corporation’s creation. By contracting for such medical attention the corporation is not engaging in any business other than that expressly authorized in its charter (section 233, Constitution 1901), but merely adopts this as one of the means of executing its express powers (and as to such means the corporation must be held to have a right of reasonable choice), which we think can be said in this instance to have had a very natural and reasonable tendency to aid in the accomplishment of the purpose for which it was created.^) We therefore conclude that the demurrer to the replication was properly overruled. (3) The third replication contains substantially the same averments as those above noted, and, in addition to these, matters are alleged to show ratification of and acquiescence in the employment of plaintiff on the part of the manager and other officers of the corporation. It may be conceded, for the purposes of this case, that under the rule in this state, if the act was ultra vires the corporation it could not be the subject of ratification.—A. G. S. R. Co. v. Loveman Co., supra; Chewacla Lime Wks. v. Dupree, supra. The demurrer was addressed to the replication as a whole, however, and that portion of the replication which we have just discussed was not subject to demurrer. Under such circumstances, therefore, the trial court will not be put in error for overruling the demurrer interposed to the replication — 544 — as a whole.—Ansley v. Bank of Piedmont, 113 Ala. 467, 21 South. 59, 59 Am. St. Rep. 122. . The replication to the plea of the statute of limitations alleges that partial payments were made on the matters set forth in the plea, in each of the years from 1903 to 1913, inclusive. The demurrer to this replication was properly overruled.—Steele v. Steele, 64 Ala. 438, 38 Am. Rep. 15. (4) After suit was brought and before the trial was had, the plaintiff removed from the state, and motion was made that he be required to furnish security for the costs, which motion was granted. Before the next term of the court plaintiff executed bond with security for the costs, but the amount of the bond was limited to $150. At the next term, defendant moved to dismiss the cause for plaintiff’s noncompliance with the order of the court as to giving security for costs. The court held that the bond was insufficient, but that plaintiff had “during the term,” within which to comply with the said order. The motion was made on Monday, the first day of the term. On the day following the case was again called for trial, when plaintiff tendered to the clerk proper security for the costs, which was duly approved. Defendant’s motion to strike the cause from the docket was overruled. Section 3690, Code 1907, provides that if such security be not given at or before the next term of the court, the suit must be dismissed. Here the security was given in time but in insufficient amount, and plaintiff was allowed by the court to file sufficient security during the term, which was done on the second day of the term. In this there was no reversible error. (5) It is insisted that the affirmative charge was due defendant because of a variance between the contract sued on and that disclosed by the evidence. It is to be noted that the suit is for the recovery of money due on a contract fully executed, and that in such a case the same particularity of averment is not necessary as where the suit is for the breach of an executory contract.—Vincent v. Rogers, 30 Ala. 471; Boylston v. Sherran, 31 Ala. 538; Jones v. King, 81 Ala. 285, 1 South. 591; Birmingham & Atl. Ry. v. Maddox, 155 Ala. 292, 46 South. 780. (6) In counts C, D, and E, the plaintiff sought recovery for a balance due under contract with the defendant, for services fully performed, alleging that the compensation agreed on was $200 per month. Plaintiff so testified on the trial; but he also — 545 — stated that, while the agreement was to pay $200, it was further agreed that $50 per month of this sum was to be retained by defendant, from the beginning of the employment until its termination, as a guarantee of efficiency' in services to be rendered, and that this balance should be paid when the contract terminated. The variance here insisted on relates more to the mode of payment than to any essential term of the contract itself. The suit was for recovery on a contract fully performed, and we are of the opinion that the variance urged does not suffice to reverse the court below for the refusal of the affirmative charge. It is further insisted that the defendant was due the affirmative charge for that the plaintiff failed to offer proof to establish the averments of his replication. While the evidence was meager in this respect, we are not persuaded that it was so lacking in proof to support the material averments of the replication as to withdraw the same from the jury’s determination. Some of the matters alleged are of common knowledge, such as that, in the operation of a sawmill, the employees are subject to accident in the use of the machinery.—16 Cyc. 876. (7) The evidence showed that the defendant corporation is engaged in the manufacture of lumber, and to that end is operating a sawmill at Lockhart, Ala.; and the courts take judicial knowledge of the location, as well as of the population, of the particular community. While the evidence was silent as to the number employed at this mill at Lockhart, it was sufficient to afford the jury the inference that a large number of laborers were engaged in defendant’s employ. The question is, then, reduced to one of law, as to whether the defendant was in the exercise of an implied or incidental power in the employment of plaintiff as a physician to attend these laborers and their families. There was no error in the refusal of the affirmative charge on this theory. (8) Motion was made for a new trial, and the ground urged upon us here is that the verdict was contrary to the weight of the evidence. The trial court had the witnesses before him and the advantage of observing their manner on the stand. The familiar rule under these circumstances, announced in Cobb v. Malone, 92 Ala. 680, 9 South. 738, is still in force and unaffected by recent legislative enactment.—Acts 1915, p. 722; Hackett v. Cash, 196 Ala. 403, 72 South. 52; Finney v. Studebaker, 196 Ala. 422, 72 South. 55; Hatfield v. Riley, infra, 74 South 380. — 546 — Under the rule announced in Cobb v. Malone, supra, it is not the duty of the court to set aside the judgment merely because the verdict of the jury may not correspond with its opinion as to the weight and sufficiency of the evidence. A discussion of the testimony is unnecessary. It has been carefully examined, and we are not persuaded that a reversal of the cause should be awarded on the action of the court in denying the motion for a new trial. (9) Objection to statements of counsel for plaintiff made in argument were interposed by the defendant and sustained by the court; but it is insisted that the statements were prejudicial, and the court should have gone further, and more promptly removed any impression which such argument might have made on the minds of the jury. No action of the court to this end was invoked by the defendant. The question here involved was fully discussed in B. R. & P. Co. v. Gonzalez, 183 Ala. 273, 61 South. 80, Ann. Cas. 1916A, 543, and in the light of the rule there announced we are not persuaded that the judgment should be reversed on account of the matters here complained of. We find no reversible error in the record, and the judgment is accordingly affirmed. Affirmed. Anderson, C. J., and Mayfield, Sayre, Somerville, and Thomas, JJ., concur. McClellan, J., dissents, on the ground that the court erred in overruling the demurrer to the third replication.