Denniston v. Home Life & Investment Co.

162 Pa. 86 | Pa. | 1894

Opinion by

Mr. Justice McCollum,

The plaintiff agreed to sell the charter, stock etc. to Bentz for thirteen thousand dollars, and of this s,um Fulton, who was his broker in procuring the offer from Bentz, was to receive five thousand dollars. Alleging that he was released from his agí eement with Bentz by the latter’s default, he sold the property on the first of August, 1890, to Kirk for the sum that Bentz was to pay for it, and Kirk agreed to indemnify him against any claim that Fulton might make for services in negotiating for the sale of it. In his statement of claim in this action he declares that Kirk in making the purchase represented “that it was entirely for himself that he was acting, and not for said Bentz and his associates.” He now says that Bentz and Kirk were acting for the same parties and that in consequence thereof he became liable and was compelled by suit to pay to Fulton five thousand dollars for his services in negotiating the sale. He brought this action on the indemnity clause in his written and sealed agreement with Kirk, and he recovered in the court below a judgment of $7,002.87, which represents the sum he alleges he paid to Fulton together with the costs and counsel fees incurred in defending the suit on Fulton’s claim. It will be observed that this is not a case in which the promoters of a corporation are demanding from it compensation for services rendered or reimbursement for moneys expended preliminary to the creation and organization of it, but that it is a case upon a contract entered into by an individual for the purpose of obtaining control of a corporation then in existence. In purchasing the plaintiff’s stock and acquiring from him the possession of the charter, books and papers of the Home Life and Investment Company, Kirk did not represent the company but was acting for himself and possibly for other persons associated with him for the purpose of obtaining control of it. The company therefore was not jointly bound with Kirk for the performance of his agreement with the plaintiff. Nothing short of a clear and unequivocal ratification of the agreement could render the company liable for a breach of any of the covenants contained therein. As we think there was no such ratification in this case we need not inquire whether it was within the power of the corporation to assume all of Kirk’s liabilities under his agreement with the plaintiff. The latter however contends that it did assume them by the resolution adopted by its new board of directors on the 20th of August, 1890. There was nothing in this resolution however which bound the defendant company to perform Kirk’s contract with the plaintiff, or recognized him as its agent in the transaction evidenced by the written agreement of August 1st. It does not appear upon the minutes of the corporation, or in any other way, that the company knew of the existence of such an agreement when the resolution was passed. The action of Kirk and his associates must be distinguished from the action of the corporation. The latter cannot be held upon the agreements of the former without distinct proof of its ratification of them. We have carefully examined and considered the evidence in this case, and our conclusion is that the defendant company is not liable to the plaintiff upon the indemnity clause in his agreement with Kirk, and that the judgment against it must therefore be reversed. This view of the case sustains the eighth specification of error and renders it unnecessary to consider the other specifications. As Kirk has not appealed from the judgment we make no order as to him.

Judgment against the Home Life and Investment Company reversed.