218 F. 340 | 6th Cir. | 1914
This was an action at law, in which, in the court below, Mrs. Donovan, as assignee of her husband, John F. Donovan, was plaintiff, and the Breakwater Company was defendant. The suit was based upon a written contract made October 3, 1908, by which the company agreed to pay Donovan, in installments, about $5,900 in compromise settlement of all existing controversies, and also agreed to employ him at a monthly salary until December 31, 1910. In December, 1909, Donovan commenced suit and later recover-ered judgment in Pennsylvania against the company for the unpaid installments of the compromise settlement and of salary that were then due. In March, 1910, he was discharged from further employment, and the company, claiming sufficient justification, repudiated the contract. He waited until its term expired, brought this suit for the remaining installments of salary, and by direction of the court below recovered judgment. The company’s assignments of error cover several distinct causes for reversal. So far as thought .meriting discussion, these claims are: (1) The contract was ultra vires the corporation. (2) The former recovery in Pennsylvania exhausted the right of action. (3) Issues of fact should have been left to the jury. (4) Defendant was entitled to a credit of $800 earned by plaintiff in other employment.
Another reason for claiming a lack of power is that the contract provided for Donovan’s election as second vice president of the company, and for his holding that position during the term of the contract. Thereupon it is said that the public policy of Ohio, the state where the corporation was organized, would not permit the term of an officer to be fixed for more than one year. Whatever force this contention might have regarding an officer whose powers of management were fixed by statute, it can hardly apply in this instance, where the “office” was created only by a resolution passed by the stockholders, and where its powers and duties were only such as might be, from time to time, prescribed by the board of directors. Indeed, this honorary title given to Donovan seems to be only a convenient name by which his employment was to be called; but, whatever ultimate view might be taken of this particular stated supporting ground for the defense of ultra vires, it, as well as the one just previously stated, are completely met by the fact that the answer presented no such defense, but relied upon the effect of the Pennsylvania judgment as a sufficient bar. This judgment necessarily implied the validity of the contract; and accordingly, when at the conclusion of all the testimony the defendant first asked leave to amend its answer by presenting these defenses of ultra vires, it was at least well within the discretion of the court to do as it did, and to refuse to permit the amendment.
If the plaintiff, within 30-days from the filing of this opinion, files in the court below its written election to reduce the judgment by the sum of $800, with the properly attendant interest, and files in-this court a certified copy of such remittitur, the judgment, as so modified, will be affirmed; otherwise, it .will be reversed, and the case remanded for a new trial. In either case, the plaintiff in error, the company, will recover the costs of this court.