Kincheloe Irr. Co. v. Hahn Bros. Co.

Hahn Brothers Company, a co-partnership composed of Peter Hahn and others, as plaintiffs, brought this suit in the District Court of Wharton County against the Kincheloe Irrigating Company, defendant, to recover damages laid at $5,902.00. The cause of action was based on the breach of an alleged contract by the terms of which defendant obligated itself to furnish plaintiffs 360 acres of land, the necessary seed rice and sufficient water for irrigating said lands during the crop season of 1906, plaintiffs to cultivate the land so furnished, harvest the rice crop, and give one-half to defendant. The failure on the part of defendant to furnish a sufficient and timely amount of water for the irrigation of said land, causing a shortage in plaintiffs' rice crop, was the constituting cause of the breach of said contract and of the damages resulting therefrom.

The defense interposed was a general denial and special pleas embodying substantially the plea that if the contract sued on was entered into by Bullock, the agent of defendant, with plaintiffs as alleged, the same was not authorized by defendant and such agent exceeded his authority, and the plea of ultra vires was also interposed in bar of plaintiffs' cause of action. We do not deem it essential to a proper understanding of the question raised by the assignments to state the facts upon which the two special pleas rest further than as they may be disclosed in disposing of such questions.

An intervention was sought by A.W. and H.P. Hahn and granted by the court. The trial was with a jury, and upon a verdict against defendant judgment was rendered in favor of interveners for $4,216.68. Upon appeal to the Court of Civil Appeals the judgment of the trial court was affirmed. (Kincheloe Irrigating Co. v. Hahn Brothers Co., 132 S.W. 78.) Upon petition to this court on January 30th, 1911, a writ of error was granted with the notation that there was probable error in the rulings complained of in the 7th, 8th and 9th assignments of error. This opinion will be confined principally to a discussion of the questions presented in the three assignments mentioned, as the court in granting the writ considered all the other questions complained of in the Court of Civil Appeals as having been properly settled by that court in its decision.

The error complained of in the seventh assignment is, that the Court of Civil Appeals erred "in holding that the trial court properly permitted the plaintiff, Peter Hahn, while testifying in chief and in his own behalf, to state that F.M. Bullock was representing the Kincheloe Irrigating Company in making the contract in question, the objection being that said testimony was a conclusion of the witness invading the province of the jury."

In considering the competency of the statement of Hahn as evidence, we are by defendant's counsel cited to the cases of Southern Home Building Loan Association v. Winans, 24 Texas Civ. App. 544[24 Tex. Civ. App. 544], 60 S.W. 825, and Arndt v. Boyd, 48 S.W. 771, as in point. In the first of the two cases cited it was held by the majority of the Court of Civil Appeals that it was not competent for a witness to state that a particular person is the agent of a corporation. The doctrine there announced is unquestionably the settled rule where the agency is a disputed fact. But in the case at bar it was an admitted fact that Bullock was the agent of the defendant. He was not only one of the important officers of the defendant, but he was the general manager of the corporation. The objectionable testimony had no relevancy to the question of Bullock's agency. That was a conceded fact, but the question involved was whether Bullock, in making the contract with the witness, acted for Templeton and Bullock or for the Kincheloe Irrigating Company. The witness Hahn, who was one of the contracting parties, either knew or did not know which company Bullock represented in making the contract in question. He was making the contract with Bullock, who was the conceded agent of defendant, and if he knew Bullock represented defendant in the execution of that contract it was competent for him to so state. His knowledge of this fact was not in any sense essentially a conclusion. As a substantive fact he might have known it for the reason that he approached Bullock as the general manager of defendant to lease the land in question, or from the statement of Bullock that he made the lease contract for defendant. Neither of the cases cited is in our judgment applicable to the facts of this case. The one relates to the method of proving agency and the other to the question of the authority of the wife to act for the husband. No such question is here presented. We quote the following from the case of Arndt v. Boyd, above referred to: "Question: `From your dealings with Mr. and Mrs. Arndt, before and at this time, who run the business on the Arndt place?' Answer: `Mrs. Arndt, wife of defendant, run and managed the business; in fact, seemed to be boss, and Arndt acquiesced in what she did.' The witness did not state any transaction or dealing with either husband or wife when the other was present, nor in fact any with either relating to the wife's agency for the husband. This evidence was objected to on the ground that it was irrelevant, and was merely the conclusion of the witness. We think it was objectionable on both grounds. The fact sought to be established by the evidence was the wife's authority to act for the husband. Such authority must, in some way, have been conferred by the husband. Of course, it might be proved by circumstances, and implied from his conduct. But, in order to authorize an inference of its existence, it was necessary for the witness to state the fact from which it was to be drawn, and leave the court and jury to make the conclusion."

The statement of the issues involved in the case quoted from is all that should be required to show the dissimilarity of the questions presented in that and in this case. In commenting on the question decided in the Arndt case, since the question there presented is not analogous to the one presented in this case, we neither approve nor disapprove the conclusion there reached by the Court of Civil Appeals.

A fuller examination of the record leads us to conclude that there was no error in permitting the witness, Peter Hahn, to state that Bullock, in making the contract in question with him, acted for the Irrigating Company.

Complaint is made in the eighth and ninth assignments that there was error in permitting the witness Hahn to state that plaintiffs got the seed rice to plant their crop for the year 1906 from the Kincheloe Irrigating Company, and that one-half of the rice crop for that year was delivered to said company, for the alleged reason that said testimony was the conclusion of the witness. If the witness knew the facts stated, we are unable to understand why he should not have been permitted to state such facts to the jury. Corporations act exclusively through agents, and if the rice was delivered or caused to be delivered to plaintiffs by an agent of defendant, it was competent for the witness to state that plaintiffs got the rice from defendant. If one-half of the rice was delivered to the employes of defendant in charge of its teams and whose duty it was to collect the rent rice and to haul it from the field for defendant, we think it was a statement of a fact to say the rice was delivered to defendant, and such statement was not the conclusion of the witness. If it was developed upon cross examination that the witness had stated facts not within his knowledge, the proper practice would have been to move to withdraw such testimony from the consideration of the jury. We find no such proceeding in the record. Believing the testimony complained of as a conclusion of the witness to have been rather the statement of facts known or that might have been known to the witness, we find no error in the admission of same.

The contention so strongly urged by eminent counsel for the defendant that the general manager of the Irrigating Company exceeded his authority if he made the contract declared upon by plaintiffs, and that the purposes of defendant's incorporation did not authorize the leasing of land, might under a different state of facts present a perfect defense. It is conceded to be a correct proposition of law that a general agent cannot exceed his authority and thereby bind his principal. But when we attempt to apply this principle to the case at bar we are met with the issuable facts that defendant undertook the performance of the contract, partly performing it and accepting benefits thereunder.

If Bullock, as defendant's general manager, exceeded his authority in making the contract with plaintiffs, it becomes immaterial as a defense against a claim for damages growing out of the breach of such contract, if as a matter of fact defendant undertook the performance of the contract so entered into. Evidence was offered to show that defendant undertook to comply with the terms of the agreement, and hence the plea of authority exceeded is not available as a defense.

If the contract entered into was for a business not authorized by defendant's charter and therefore ultra vires, a plea setting up such defense is unavailing if, as matter of fact, the corporation received benefits under such agreement. It may be stated as a rule of law that an action for damages for breach of contract will not be avoided by the plea of ultra vires, when the corporation has received benefits under the alleged illegal contract. In such a case and under such circumstances the corporation is estopped from denying its power to make the contract. Steger v. Davis, 8 Texas Civ. App. 23[8 Tex. Civ. App. 23], 27 S.W. 1068; 10 Cyc., 1156; Main v. Casserly, 67 Cal. 127; Colorado Loan etc. Co. v. Grand Valley Canal Co., 3 Col. App., 63, 38 P. 178; Union Hdw. Co. v. Plume etc. Mfg. Co., 58 Conn. 219, 20 A. 455; Chapman v. Ironclad Rheostat Co., 62 N.J.L. 497, 41 A. 690; Quantmeyer v. J.H. Mohlman Co., 29 Misc. 746, 60 N.Y. Supp., 220; also28 Misc. 795, 59 N.Y. Supp., 1113.

A strong presentation is made by defendant's counsel of their claim that the evidence fails to show that the Irrigating company was a party to the contract sued on, or that the contract was performed by defendant or that defendant received benefit thereunder. However weak the testimony may be to establish these essential facts, if there is any testimony of any probative force in the record showing or tending to show that Hahn made the contract with Bullock as the representative of the Irrigating Company and not for Templeton and Bullock, that the contract was undertaken to be performed by defendant, and that defendant received one-half of the rice crop as its share of the rent, we are denied jurisdiction to make further inquiry into the subject. Conceding there is a weakness in the testimony as found in the record to establish the facts above indicated, we cannot say there is no testimony of any probative force tending to establish such material facts. This being the case, and the court having fairly presented these issues to the jury, their verdict cannot be disturbed by this court. Finding no error in the judgment of the Court of Civil Appeals, the same is affirmed.

Affirmed.