Star Brewery v. United Breweries Co.

JENKINS, Circuit Judge (after stating the facts as above). We do not need to consider the questions whether the United Breweries Company was bound by the agreement entered into by its promoters previous to its organization; whether that agreement was merged in the deed to the Breweries Company; whether the evidence exhibited the existence of an illegal combination — for the reason that we are satisfied that the transaction was closed, and the property was in fact turned over to the breweries company, which went into possession, and the contract supposed to be illegal must be deemed to have been executed. We cannot distinguish this case from that of Gilbert, Sheriff, v. American Surety Company of New York (herewith decided) 121 Fed. 499. The two Rices — one the former president and the other the former secretary of the Star Brewery Company — operated the brewery as the agents of the Breweries Company .and at the expense of the breweries company, receiving salaries from it and making daily reports of the business. Their possession was the possession of the breweries company. Denial of the right of that •company to its rightful possession, and the forcible exclusion from its possession, were wrongful and without justification; and, as we have pointed out in the case referred to, one may not, under such a ■condition of things, allege illegality in the agreement which led up to the conveyance to defeat possession by the vendee of the property •conveyed. The Rices acted as agents of the Breweries Company, and are estopped to assert title adverse to their principal. Nor can the Star Brewery Company of Chicago avail itself of the wrongful act •of Rice. It is urged that the agreement between' Patrick H. Rice and Durand tended to prove that possession was not to be delivered until. satisfaction of all liens upon the property. It is sufficient to say that the question is not material, in view of the fact that possession was delivered and the business was operated by the United Breweries Company through its agents. The contract in question was executed December 2, 1897. The deed bears date the 9th day of August, 1898, and conveys the property absolutely, with covenant of title and covenant for quiet and peaceable possession. It may well be ■said that the agreement was merged in the deed. But aside from that, we are of opinion that the agreement is not susceptible of the •construction contended for. It provided that the conveyance of the property should be free and clear of all liens and claims whatsoever; that, if at the time of the receipt of the purchase price the real estate should be incumbered, the amount of the cash payment should “be reduced by the amount of such incumbrance. It provided that the vendor should cause all debts of the Star Brewery Company to be paid within 90 days from the receipt of the purchase price, except the debts and liabilities which may have been deducted from the purchase price, or which may have been assumed by the purchaser. It provides that the purchaser should pay at the time of the conveyance and transfer of the property, and as the purchase price of the property, the [716] sum of $150,000 in cas 1,1, and the further sum of $500,000 in shares of the company to be organized. The provision of the agreement upon which the contention is founded is this: “The business of said, company [meaning the Star Brewery Company] shall be conducted by its officers in the manner and upon the same salaries as heretofore until the payments herein provided for are made.” The deed conveyed the property subject to two incumbrances, one of which still remains unpaid to the extent of $40,000, the time of payment of the principal of which has been extended, and the interest promptly paid, and its payment further secured by pledge of the bonds 'of the United Breweries Company, greater in amount and value than the amount of this incumbrance. It is clear to us that the payments contemplated by the agreement had reference to the purchase money to be paid to the seller. This is made manifest by the provision that, if the property should remain incumbered at the time of the conveyance, the owner would accept in lieu of the cash payment provided for the amount less the amount of any incumbrance. That agreement was carried out. The amount of the incumbrance was deducted, the balance was accepted, and the property conveyed subject to the incumbrance, ánd possession delivered. It is clear that the clause in question did not refer to incumbrances upon the property, but merely to the cash payment to be made to the seller. The judgment is- affirmed.