153 Mich. 52 | Mich. | 1908
The plaintiff brought an action to recover damages for the breach of a contract of employment covering the period of three years from the 1st day of February, 1904. The contract purported to be signed on the one part by the plaintiff, and on the other by George C. Morris, secretary-treasurer, on behalf of the defendant company, and provided compensation of $1,500 per year for the term of three years. The plaintiff continued in the employment of the defendant during 1904, and until the 11th of March, 1905, when his employment was terminated. The president of the company, Mr. Corliss, had in January, 1905, told him that his services would not be required, and that he had better seek other employment, and when told by the plaintiff that he had a contract with the defendant, and upon the production of the contract signed by Mr. Morris, he was assured by the president of the company that the contract was not binding. He was allowed to continue, however, until the 11th of March, when his services were finally dispensed with.
The circuit judge directed a verdict for the plaintiff for the amount of salary stipulated from the time of his discharge up to the date of the commencement of the suit.
It is very obvious that there was no conclusive evidence of ratification, as upon the first discovery of the existence of a contract by the defendant, its validity was questioned, and plaintiff very clearly understood that in his continued employment the company was not recognizing the validity of this contract. The plaintiff’s case must •rest upon the implied power which the circuit judge seems to have found arising from the fact that Mr. Morris was secretary-treasurer of the corporation and manager of its business under the direction of the board of directors, to justify a contract of employment for a term of three years.
Section 7040, 2 Comp. Laws, provides:
‘ ‘ Sec. 4.’ The stock, property, affairs and business of every manufacturing or mercantile corporation shall be managed by not less than three directors, who shall be chosen annually by the stockholders at such time and place as shall be provided by the by-laws of said corporation, and who shall be stockholders and shall hold their offices for one year and until others shall be chosen in their stead.”
Mr. Morris was elected as secretary-treasurer for the term of one year.
A case very much in point is Camacho v. Engraving Co., 2 App. Div. (N. Y.) 369, in which a contract made by the defendant’s vice-president and general manager for a term of three years was under consideration. The court said:
“But no presumption of law can be indulged in that, because a person acts as such a manager, he has the power to bind his principal to contracts of an extraordinary nature, and of such a character as would involve the corporation in enormous obligations and for long periods of time. If. a general manager, simply by virtue of his being charged with the ordinary conduct of the business, would have the right to bind his principal to a contract for service for three years, involving the obligation to pay thousands of dollars of salary to an employ é, why may not .that power extend indefinitely, so that he may make contracts for all employés for indefinite periods, and thus assume to himself a power which it cannot be supposed was ever intended to be lodged in him ? ”
The case is in all substantial respects on all fours with the present case. It is cited with approval by this court in Nephew v. Railroad Co., 128 Mich. 602. See, also, the cases collected in note to Carney v. Insurance Co., 49 L. R. A. 471 (162 N. Y. 453).
The case cited by plaintiff’s counsel, Ceeder v. Lumber Co., 86 Mich. 541, is not in conflict with the views here expressed. It was assumed in that case that the employment of a sawyer for the season was usual and necessary in the conduct of the business with which the president of the company was entrusted, and it was held that as the primary intention of a corporation in employing an agent
The court was in error in directing a verdict for the plaintiff, and the judgment will be reversed, with costs, and a new trial ordered.