143 Minn. 318 | Minn. | 1919
Action for the breach of an alleged contract of employment in which plaintiff had a verdict, and defendant appealed from an order denying its alternative motion for judgment or a new trial.
Plaintiff in this action, then a resident of Chicago, was an experienced bond salesman of which fact the president and secretary of the bank were familiar, and they initiated negotiations with him looking to his employment as manager of its bond department. The negotiations were participated -in by the officers named and also the cashier and to a certain extent by one member of the board of directors, but the president and secretary were the moving factors therein; they were members of the board, though the cashier was not. The negotiations resulted in the employment of plaintiff for the department stated, and he was formally installed in the position on or about December 15, 1916, and on the eighteenth of that month the president formally executed a writing evidencing the contract of employment which plaintiff indorsed with his acceptance. This, writing set forth all the terms of the employment, which was to continue for the period of one year from December 15, 1916. Plaintiff thereafter continued in the active discharge of the duties of the department, making purchases of bonds for the bank and áttending to other detail work until April 27, 1917, when he was discharged from the service by- the secretary for alleged disobedience of orders. His compensation was paid up to and including May 1. He was unable to obtain employment during the remainder of the year and brought this action to recover the amount that would have accrued to him from the date of the discharge, basing his action on the allegation
Defendant interposed in defense that the contract of employment was invalid, for the reason that the president and secretary of the bank had no authority to enter into the same without being expressly thereto authorized by the board of directors, which authorization was not given. Therefore that defendant was not liable, even though plaintiff was wrongfully discharged. The rightfulness of the discharge was also alleged in defense.'
The trial below developed three principal questions, namely:
(1) Whether the president and secretary had authority to enter into the contract, and, conceding that they had no such authority;
(2) whether the board of directors with knowledge of the facts subsequently ratified the same; and
(3) whether the discharge and dismissal of plaintiff were justified by the alleged disobedience of orders.
The trial court ruled as a matter of law that the president, and secretary had authority to enter into the contract with plaintiff, and further that the board with knowledge of the facts subsequently ratified their action, thereby giving it validity and binding force even though not originally authorized. The third question was submitted to the jury and the verdict supports plaintiff’s claim that his discharge was without justification or valid excuse.'
It is settled law that a contract entered on behalf of a corporation by the unauthorized act of an officer or agent may be rendered valid and binding by ratification. 1 Dunnell, Minn. Dig. § 2116; Willis v. St. Paul Sanitation Co. 53 Minn. 370, 55 N. W. 550; Norwegian E. L. B. C. v. United States F. & G. Co. 81 Minn. 32, 83 N. W. 487. There is a ratification as a matter of law when it appears that the board of directors of the corporation, or other.managing officers having the power and authority to enter into like contracts, either affirmatively approve of the unauthorized contract, or with knowledge of the facts silently acquiesce therein or fail promptly to repudiate it. 7 R. C. L. 663, et seq.
The facts in this case make a clear case of ratification by aequies
The discharge was based on the ground that plaintiff had disobeyed orders in reference to the purchase of certain bonds, for which the secretary exercised the right to dismiss him from his employment. In support of the discharge defendant calls attention to a provision of its by-laws declaring that the board of directors shall decide upon all investments of the capital stock and other funds of the bank. It may be conceded that under the by-laws the board of directors had exclusive authority in the matter of bank investments, -and that it was plaintiff’s duly to obey orders and instructions issued by them. But that fact falls far short of showing a violation of duty by plaintiff. He was employed and installed as manager of the bond department, on the strength of his experience as a bond salesman, and went about the performance of his duties without specific orders or instructions from the board of directors. In fact we find no evidence that the board had issued or promulgated any order in reference to investments to be made by his department. Therefore plaintiff violated no orders coming to
Order affirmed.