76 Vt. 131 | Vt. | 1903
The defendant is a Vermont corporation running an electric railroad between Barre and Montpelier, and is sued for six miles of copper feed wire which the plaintiff, a corporation of another state, claims to1 have sold and delivered to it in August, 1898. The defense is that the wire, although received by the defendant and made a part of its plant, was purchased by Ferguson & Richardson, a firm of contractors, who, it is claimed, were bound to and did furnish it, as a part of the equipment, under their contract with the road. Ferguson, of the firm of contractors, was likewise a director of the defendant and a member of its executive committee. It was he who ordered the wire of the plaintiff. In doing so he claimed to be acting for the corporation as director and committee-man, and so' far as the plaintiff’s understanding and intention are concerned the wire was furnished upon the. credit of the defendant. Kennedy, the president of the defendant and at the same time a member of the executive committee, saw the bills of the wire soon after it came and noticed that it had been procured on the credit of the defendant. He also knew that it was being made a part of the plant. Yet he took no steps to^ notify the plaintiff that it must not look to the defendant for its pay. Thus a majority of the executive committee acted in a way to bind the defendant if the committee itself could have bound it. McNeil v. Boston Chamber of Commerce, 154 Mass. 277. The third member knew nothing of the transaction and took no active part in the management. There were nine directors, indeed, but the whole business of the corporation was managed by the officers of the board, and the officers took their instructions from Ferguson who was allowed to control everything. This appears from the testimony of the directors themselves. Kennedy, Ferguson and Flynn, three of the number, were themselves the exec
A claim was advanced that the road, from the time the cars began to run until after the wire- had been put up, was being operated by Ferguson as contractor for the purpose of testing it, and not by him as an officer of the corporation. An offer was made to show this and a ruling obtained that it might be shown; but the testimony produced had no tendency to support the offer. A few answers, if taken alone, might be thought to do so, but read in connection with other answers of the same witness and with the unquestioned facts, they cannot be considered to have the effect claimed.
It wa^ June 28th when the cars began to run. It was the last of August when the wire was ordered. It was the first of September when the wire was received, and the end of September when the last of it was installed. From July 3d the superintendent of the road was Smith. The assistant, and only acting, treasurer was Butman. The man who controlled the corporation was Ferguson. During these three months the road was in active operation in the name of the defendant. There is no> pretense that anything was left to be done towards its construction unless it was the supplying of the wire in question. The daily receipts were collected by
So we must add to the facts summed up in the beginning the further fact that the wire was purchased and appropriated at a time when the road was being operated by the defendant.
The question then is whether the corporation is bound by the action of the committee.
A by-law provided for “an executive committee of three to perform the general duties of directors, the assent of the directors to be had before the acts of such committee shall be binding upon them.” But we do not regard that as altering the rule of law touching the power of directors to act through a committee. It can not mean that ordinary every-day matters must be specifically authorized one by one, for that would make the committee useless, and on the other hand matters.
The principle that a board of directors is the depositary •of discretionary powers to be exercised by the board itself and not to be delegated by it to any smaller body even of its •own members is entirely consistent with the other principle that it may delegate authoritj’’ to perform such duties as are required in the usual and ordinary course of its business. The act here questioned was the procuring of material or supplies necessary for the prompt and orderly conduct of its daily business and for the safety of human life, and in our opinion falls within the second principle. The authority to1 perform such an act must be held to have been conferred by the unanimous acquiescence of the directors in the course of business which had been pursued.
The directors were all consenting to- the operating of the road by the committee. By so consenting they did exercise their judgment and discretion, and impliedly authorized those who were actually operating to do the things and procure the supplies needful therefor. The latter, as agents of the board, were therefore acting within the scope of their authority in procuring them. Hooker v. Eagle Bank of Rochester, 30 N. Y. 83, 86 Am. Dec. 351; Olcott v. Tioga R. Co., 27 N. Y. 546, 84 Am. Dec. 298, 303; McNeil v. Boston Chamber of Commerce, 154 Mass. 277.
If the officer who purchased the material on the credit of the corporation was under contract with the latter to furnish it himself that may afford a subject for adjustment or litigation between the officer and the corporation, but is not •enough to defeat a plaintiff otherwise entitled to recover.
Judgment reversed, and came remanded.