Bradford Belting Co. v. Gibson, 1 Ohio Law Rep. 454

Bradford Belting Co. v. Gibson

1 Ohio Law Rep. 454 | Ohio | 1903

In order that the plaintiff'might recover in this action, it was necessary that she should prove the allegation -made in her petition, that while the contracts were -being performed on her part, “the defendant notified plaintiff to stop the further progress of the work, -and that it w-ould not enter into said lease.” This she attempted to do- by testimony which tended to show that the secretary -of the defendant corporation said, when 'asked by the plaintiff’s -agents whether the death of Mr. Bradford would make any difference in the carrying out of the '-contract by the defendant, •that -he would have to consult the stockholders and directors about *457that, and that afterwards the defendant’s secretary said to plaintiff’s agents that the heirs of Mr. Bradford and the stockholders of the Bradford Belting Co. could not carry out the contract, and that they 'had directed 'him -to so inform the plaintiff. There was no evidence of the authority of the secretary to speak for the corporation in this matter other than his alleged conversations as above stated; and that the defendant for that reason objected to the testimony relating to the alleged statements by the secretary and notice to the plaintiff by the defendant through him, that defendant would not perform the contract on its part; but the court' overruled the objection and admitted the testimony. This evidence is'the pivotal point in this case; 'and Mir. Anspaugh, the defendant’s secretary, flatly contradioted the testimony as to the statements 'alleged to have been made by .him. The court instructed the jury that if he did make such statements that “would be prima, facie evidence that the directors had so decided, and the plaintiff would be authorized .to consider that he had spoken by authority of the hoard of directors,” 'and that “then the 'burden of proof would he upon the defendant to show that he had acted without the authority of the board of directors.” The defendants produced its minute book, which did not show any action upon the subject, and the surviving directors each testified that the board of directors had never authorized any one to notify the plaintiff that the defendant would not carry out its contract'.

The law relating to principal and agent is the same whether the principal he a corporation or a natural person. In either case the principal is bound only by the authorized noth of his agent. The extent of the agent’s authority may he shown by the terms of the appointment, if they are explicit, or it may he shown by a course of dealing by which the agent is held out as having -an authority which would include the act in question. “But in whichever way this is done, it can not be limited by secret instructions of the principal on the one hand;, nor can it be enlarged by the unauthorized representation of the agent on the other." Mechanics Bank v. N. Y. & N. H. R. Co., 13 N. Y., 599, 632; People’s Bank v. St. Anthony’s Church, 109 N. Y., 512, 525. See Smith v. N. & L. R. R., 27 N. H., 86, 97, 98; Fay et al. v. Noble et al., 12 Cush. (Mass.), 1.

In this state the corporate powers, business and property of the corporation must be exercised, conducted and controlled by the board of directors (Section 3248, Revised Statutes); and prima *458facie, the corporate powers of making or refusing, to perform contracts on behalf of the corporation rests in the board of directors. Under onr statutes there is nothing in the nature of a corporate office which would imply authority to perform, the functions which the statute imposes upon the board of directors as a board, not rupon the directors individually. The corporation may by its regulations, so define the duties of its officers as to malee them alter ego within the assigned limits (Section 3252, Revised Statutes). But in the absence of express authority, and of such a course of dealing with the world as clearly implies authority to do the controverted act, the corporation can be bound only by its board of directors. It appearing in this case, merely that Anspaugh was secretary of the company, and that (giving the utmost effect to the testimony) he represented-that he was authorized to speak for the board of directors, the trial court erred both in admitting the testimony which was objected to and in instructing the jury that those facts alone shifted -the burden of proof to the defendant' to show want of authority in the secretary; and the superior court in general term should have reversed the judgment for those errors.

The other questions which have been argued by counsel are not decided, because as to them tire record seems to us to be incomplete and unsatisfactory.

Judgment reversed.