Jackson Lumber Co. v. Trammell

74 So. 469, 199 Ala. 536, 1917 Ala. LEXIS 194
CourtSupreme Court of Alabama
DecidedFebruary 15, 1917
StatusPublished
Cited by21 cases

This text of 74 So. 469 (Jackson Lumber Co. v. Trammell) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jackson Lumber Co. v. Trammell, 74 So. 469, 199 Ala. 536, 1917 Ala. LEXIS 194 (Ala. 1917).

Opinions

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]*541defendant 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]*542et 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]*543would 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.

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Bluebook (online)
74 So. 469, 199 Ala. 536, 1917 Ala. LEXIS 194, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jackson-lumber-co-v-trammell-ala-1917.