Winterfield v. Cream City of Brewing Company

Some question is made whether the due execution of a contract of guaranty by the defendant the Cream City Brewing Company is sufficiently proved. This question is entirely irrelevant, as the issue made by the pleadings involved no such question. The complaint alleges that the defendant the Cream City Brewing Company, by an instrument in writing duly executed, did agree with the plaintiff "that, if default should be made by the said Joseph Scheer in the payment of any of the aforesaid rent which he . . . promised to pay in said lease, . . . that it, the said Cream City Brewing Company, would pay to this plaintiff such sum or sums of money as would be sufficient to make up any deficiency and fully satisfy all the conditions of said lease, and without any notice of such default, or prior demand being made." The allegation seems to be sufficiently comprehensive for the purpose. The answer does not deny that such an agreement was made, but sets up the affirmative defense that defendant had been released by the plaintiff from every liability arising from such agreement. It further expressly admits that the defendant's secretary signed such an instrument. And, as to the other allegations of the complaint, it denies having knowledge or information sufficient to form a belief. The denial is inconsistent both with the affirmative defense and with the specific admission. If it was intended as a denial of the execution of the alleged contract of guaranty, it was evasive and nugatory. For that is a matter which is conclusively presumed to be within the knowledge of the defendant. And a denial in this form does not require the plaintiff to make proof on the subject. Mills v. Jefferson,20 Wis. 54; Sweet v. Davis, 90 Wis. 409. The secretary who signed the contract and who verified the answer knew all the facts relevant to its due execution.

Some point was made that the corporate seal was not attached to the contract of guaranty. That was unimportant Corporations are bound by contracts made by their agents, though not under seal, and on implied contracts. The use of the corporate seal is unnecessary, except where the use of a seal would be required from an individual. 4 Am. Eng. Ency. of Law, 242; 2 Kent, Comm. 291; Ford v. Hill,92 Wis. 188.

It is urged that to make such a contract of guaranty was not within the power of the corporation, — that the contract wasultra vires. The rule, no doubt, is that a corporation cannot bind itself to purposes which are foreign to those for which it was created. While this is true, the general rule, no doubt, is that, except as restrained by law, corporations have the implied power to make all such contracts as will further the objects of their creation, and their dealings in this regard may be like those of an individual seeking to accomplish the same ends. 4 Am. Eng. Ency. of Law, 245. They are not limited in law to the use of such means as are usual or necessary to the objects contemplated by their organization, but, where not restricted by law, may choose such means as are convenient and adapted tothe end, though they be neither the usual means, nor absolutely necessary. Madison, W. M. Plank Road Co. v.Watertown P. Plank Road Co. 5 Wis. 173; Clark v. Farrington,11 Wis. 306-322; North Hudson Mut. B. L. Asso. v. First Nat.Bank, 70 Wis. 31. If the contract is within the general scope of the powers and purposes of the corporation, it will not be void, even if, in some particulars, it is in excess of those powers, unless, by reason of such excess, it is against public policy.Germantown F.M. Ins. Co. v. Dhein, 43 Wis. 420. The purpose of the defendant's organization was to manufacture and sell beer. Doubtless it was competent to make any contract, which was convenient and adapted to further that purpose, which was not against public policy. No doubt, it was within its competency to rent a place for the sale of its beer by its agents or servants. To rent a place where one of its customers should retail its beer would seem, in a similar mannor, to further the purpose of its incorporation. At least, it is not clearly foreign to that purpose. The defendant owned the bar fixtures and furniture which was used by Scheer in the business. It was the defendant's beer which was sold there. The whole purpose was a scheme to make a market for the defendant's beer. The defendant patronized and promoted other similar establishments, in a similar way, in aid of the same general purpose. The scheme was germane to the purpose of the corporation, and not foreign to it. It was notultra vires.

The defendant failed entirely to show any conduct upon the part of the plaintiff which could operate to release it from the obligation of its guaranty. No change had been made in the terms of the lease, nor anything done to affect the strict terms of the obligation of the guaranty.

The report of the referee was right, both upon the facts and the law, and should have been confirmed as made. The judgment of the superior court is wrong, both upon the facts and the law. It must be reversed.

By the Court. — The judgment of the superior court of Milwaukee county is reversed, and the cause is remanded with direction to confirm the report of the referee and to give judgment for the plaintiff according to its terms.