Board of Trustees v. Smith

George, J., delivei*ed the opinion of the court. The second amendment of the declaration was properly allowed. It was necessary to the attainment of justice. It was no objection to it that it changed the character in which the defendants were sued. They were proceeded against in the original declaration as agents, or a committee, or trustees of the Masonic lodge. It was afterwards discovered that they were a corporation, and it was proper to amend in order to charge them in their true character. The end sought in both declarations was to subject the same property to the plaintiff’s demand. ; It was also a proper exercise of the power of amendment to allow a change of the proceedings from a suit to enforce a [308] mechanic’s lien to an action of assumpsit pure and simple, as was expressly decided in Duff v. Snider, 54 Miss. 245. On the merits of the controversy, it is insisted that the contracts sued on were ultra vires the corporation. These defendants obtained a charter, approved by the governor and attorney-general, under the general incorporation law contained in chap. 55 of the Code of 1871. The terms of this charter gave full power to make the necessary contracts for the building of the Masonic temple in Okolona. The orders sued on were drawn by the contractors for building the temple,'in favor of a material-man, payable out of the amount due on the contract of the defendants. They had a right to accept these orders, as they were an appropriate means of securing to the material-man his legal right to have payment made out of the amount due by the defendants to the contractors. But it is insisted that though the power to make these contracts may be within the terms of the charter, yet the provisions of that instrument authorizing these contracts are themselves illegal, since they provide for the erection of a building, not for charitable purposes, but for pecuniary gain to the members of the corporation. If this were true, it could not avail the defendants here. They procured the charter with the provision contained in it giving the power to make the contracts sued on. Every member of the corporation became such under this charter, and they assented to the exercise by the corporation of the power to make the contracts. They did make the contracts, and received the benefit of them in the erection of the building, which is now their property. They will not be permitted now to allege the invalidity of their charter in defence of an action.to compel them to pay for the benefit thus received. The question presented is different from that which would be presented if the contract were made by the managers without the consent of the corporators, and also without the powers specified in the charter. In that case the stóckholders, as principals, might possibly be allowed to aver the want of power in their agents, the- managers, [309] to bind them, and that they had been thus compelled to enter into a business outside of the scope of their agreement. Yet in that case it has been held that if the stockholders receive the benefit of the contract they cannot refuse to pay the price of what they have appropriated. Here, however, the complaint is, not that the managers have exceeded their granted powers as contained in the charter, but that the stockholders have included in their charter powers not, it is true, per se illegal and improper, but only objectionable because the law does not allow them to be exercised by a corporation formed as this was. If this argument should prevail, it would show only that the stockholders were private partners, and liable individually instead of as members of a corporation, for the powers in the charter are such as individuals and partners may legally exercise ; and if the charter be void as an act of incorporation, it would nevertheless be valid as an agreement for a private and unincorporated association. Treating them as they held themselves out to the world — as a corporation — can work no injury, but is a real benefit to them, since their liability is restricted to the joint or corporate property. Besides, they should not be allowed to deny the character in which they held themselves out to the world and contracted. If the charter is illegal and the corporation is invalid, the State may deprive them of the franchise by quo warranto proceedings. The amended declaration was defective in not averring the powers of Babbitt, the treasurer of the defendants, to accept the orders, it being averred that they were accepted by him ; but it was not demurred to. The attempt now is to extend the demurrer filed specifically to the plea, back to this declaration. But this can be done only where the declaration is so defective that judgment according to law and the right of the cause cannot be given. Code 1871, sect. 611; Shoults v. Kemp, 57 Miss. 220. The defect here is not of that character, for the implication is that Babbitt, the treasurer of the [310] defendants, was acting, under authority from them, on their behalf. The jury were warranted by the evidence in finding that Babbitt had authority to accept the orders for the corporation . Whether the amounts named in the orders were due to the contractors at the time of the acceptance, or ever became due to them afterwards, is controverted in the evidence. Probably the preponderance of the evidence is against the conclusion reached by the jury. But the question was submitted to them fairly by the charges of the judge, and. they chose to believe the witnesses who testified for the plaintiff, and we cannot say that it is clear that they erred. The judgment is affirmed.