Pungs v. American Brake Beam Co.

102 Ill. App. 76, 1902 Ill. App. LEXIS 475
CourtAppellate Court of Illinois
DecidedMay 5, 1902
StatusPublished
Cited by1 cases

This text of 102 Ill. App. 76 (Pungs v. American Brake Beam Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pungs v. American Brake Beam Co., 102 Ill. App. 76, 1902 Ill. App. LEXIS 475 (Ill. Ct. App. 1902).

Opinion

Mr. Presiding Justice Windes

delivered the opinion of the court.

The principal contest in this case is made upon the contract between appellee and appellant set out in the statement, and as to the transactions had under said contracts, the only other item being that of §46, which the appellee claims was wrongfully paid out of its money by appellant on a private matter of his own.

As to this item of $46, it seems sufficient to say that we have examined the evidence pertaining to it, which appears to Be conflicting, but is sufficient, in our opinion, to justify a verdict for the plaintiff including that amount.

As to the contracts dated November 25, 1895, and January 1, 1897, above referred to, the first claim of appellant is that they are illegal and void, as being against public policy. Numerous decisions are cited in support of the contention, but we think none of them are directly applicable to the facts of this case. They relate, in so far as they may have a bearing on this question, to secret interests or profits or advantages to be derived by an officer of or stockholder in a corporation, in corporate contracts, or to persons acting in a public capacity, and not to cases like this, where the corporation whose officer, the appellant, made these contracts, which were either approved directly through its board of directors, or the corporation permitted him to act thereunder, with full knowledge of all the facts relating thereto.

Appellant’s counsel, in their argument, based their claim as to the illegality of the first contract upon the fact that by its recitals it was not to become operative unless another contract satisfactory to appellee was entered into for the sale by the Supply Co. to appellee of its brake beam machinery, and because the large salary which it gives to appellant was an inducement to him to use his influence in his capacity as officer, stockholder and director of the Supply Co., to bring about the execution by that company of the contract between it and the appellee. Certainly these matters would be of the greatest importance to the Supply Co. in entering into its contract to sell its machinery to the appellee, and it might well be, under the authorities cited and relied upon by appellant, that his contract to act as superintendent for appellee would be void, had it been kept secret by appellant from the Supply Co. The evidence shows that at the time of the making of this contract the appellant was the general manager and director of and stockholder in the Supply Co., and that the business relations between it and the appellee company were very close, the appellant having theretofore acted as agent of the appellee company, and it was the desire of the Supply Co. to dispose of its brake beam machinery to the appellee, lease a portion of the Supply Co.’s factory to the appellee, manufacture brake beams for it, and at the same time utilize all the waste material (which was quite considerable) in the manufacture of the beams, in the business of the Supply Co. In view of all these matters and of the fact that the Supply Co., by its board of directors, approved of both the contracts of date November 25, 1895, we think the appellant’s contract of that date with appellee was a valid and binding contract upon him. The Supply Co. is not complaining, and the appellant should not be heard to question the validity of the contract. Dexter v. McClelland, 116 Ala. 37-49; 1 Beach on Contr., Sec. 717.

Moreover, this contract relates to merely private matters which concern only the two corporations and the appellant, and in no way relate to any public interest. So long as all the parties interested acted under the contracts with full knowledge of all the facts, it is doubtful, to say the least, whether any matter of public interest is at all involved. That being so, the contract should rather receive that interpretation which would make it binding upon the parties, than one which would render it invalid. The rights of the individual in mere private contracts should, as a general rule, prevail over the rights of the public in doubtful cases. 1 Chitty on Contrs. (11th Amer. Ed.), 112; 1 Beach on Mod. Law of Contrs., Sec. 717, and cases cited; Barrett v. Carden, 65 Vt. 431, and cases cited; Shreffler v. Nadelhoffer, 133 Ill. 536-55; Houlton v. Nichol, 93 Wis. 393; Thompson v. Seavor, 91 Ill. App. 500, and cases cited; affirmed 189 Ill. 159.

Before a contract should be held to be void, as contrary to law or a sound public policy, it should be made to appear clearly—beyond reasonable controversy.

The contract of January 1, 1897, between the appellee and the appellant, as well as the contract of the same date between the Supply Co. and the appellee, was made upon the same lines as the other two contracts above referred to, of ¡November 25, 1895. "While no express ratification of the latter two contracts was made by the Supply Co., the salary of the defendant, by his contract of January 1, 1897, is less than one-half of what the appellee agreed to pay him for like services under the contract of ¡November 25, 1895. The contract of January 1,1897, between the Supply Co. and the appellee, seems to be in the interest of the Supply Co., and the same intimate business relations between the two companies as under the former contract appear to be continued by this new contract. The two companies, as appears from the evidence, acted under this latter contract, and the Supply Co., all the time during the existence of the appellant’s contract with the appellee, dated January 1,1897, knew of appellant’s relations to and his employment by the appellee. In fact it appears from the record that counsel for appellant on the trial offered to concede that the contracts of ¡November 25, 1895, were ratified by the two companies, provided that was coupled with a statement that the contract of January 1, 1897, was also ratified by the two companies.

In view of all these matters, we think that appellant’s contract with appellee of January 1, 1897, is valid and binding.

The next contention of appellant is that, conceding the validity of the contract of ¡November 25, 1895, still the overcharge "amounts for sheets of rolled steel claimed by appellee only amount to $456.64, instead of $1,312.50. If appellant’s construction of this contract were the correct one, his computation as to the overcharges would probably be about the correct figure. His claim is that under that contract he was only bound to furnish 10,000 sheets of steel. A reading of the first division of that contract, in the light of the evidence, as we think, demonstrates that this construction of the contract is not the correct one. The latter part of this provision is as follows:

“ If it be within his power to increase this quantity at these rates, and it be the desire of the Brake Beam Company to have him do so, he will increase the quantity, but it shall not be his obligation under the contract to actually furnish more than 10,000 sheets; this steel to be paid for thirty days from date of invoices.”

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Bluebook (online)
102 Ill. App. 76, 1902 Ill. App. LEXIS 475, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pungs-v-american-brake-beam-co-illappct-1902.