108 P. 1128 | Utah | 1910
Tbe appellants brought this action against the respondent, a corporation, to recover damages for an alleged breach of contract. In February, 1907, appellants and respondent entered into a contract whereby it was agreed that appellants ’should take possession of respondent’s mine and develop certain specified portions thereof by working a certain number of men for a specified time. ■ For all ores mined and sold appellants were to allow respondent a certain per cent., denominated “royalty.” As a part of the foregoing agreement, appellants were also given an option to purchase respondent’s mine at the agreed price of $75,000, payable as follows: $25,000 on or before the 1st day of September, 1907, and $50,000 on or before the 1st day of December following. Time was made of the essence1, and in case the $25,000 payment was not made at the time specified, or within five days thereafter, appellants, by the terms of the contract, were to forfeit all rights thereunder, including the right or option to purchase. Appellants, in effect, alleged in their complaint that in June, 1907, the option agreement aforesaid was modified by the president of respondent by extending the time of making the first payment; that respondent, after granting said extension, refused to comply with the contract as modified, excluding appellants from the mine, preventing them from marketing certain ores which they developed and which were of great, value, forfeiting their rights under the option contract, and thus committing the alleged breach. The respondent, in its answer, denied that the contract was modified as alleged and further, affirmatively averred that, if the president of respondent did make the alleged modification, he did so without authority, and hence the modification, if made, was not binding on the corporation.
Tbe evidence adduced at tbe trial in support of tbe first proposition is as follows: One of tbe appellants, in stating wbat tbe president of respondent, in granting tbe extension of time, said, testified as follows: “Well, be said, ‘I will extend you tbe $25,000' payment, tbe first payment, to tbe last, so when it comes due, tbe last payment, you will have to pay $15,000.’ . . . He said, 'Yes, by tbe way, it might be such a thing that ought to be made in writing.’ I said: 'Mr. Savage, I am no attorney. . . .If there is any writing to be done, you are tbe president. You and tbe secretary have tbe papers fixed up.’ ... So just before be went away I said: 'Now, Mr. Savage, we are both old people. Something may happen to one; something may happen to tbe other. I don’t want to hurt you, and I am sure you don’t want to hurt me.’ ... I said, 'Won’t you tell your secretary about tbe extension, and please go to my attorney, Mr. Henry C. Lund, and tell him also that you have extended tbe-time of tbe $25,000 payment for ninety days longer ?’ He said, 'I will do it.’ We parted.” This witness said that be did not ask for tbe extension; that be “didn’t have gall enough to ask him (tbe president) for it.” Tbe extension was thus granted voluntarily by tbe president.
Tbe “last payment” mentioned in tbe foregoing statement referred to tbe $50,000 payment due on or before December 1, 1907. The effect of tbe extension would thus have made both payments due at-tbe same time and on tbe date last mentioned, and would, 'as appellants contend, have given them three months longer possession of tbe mine. Appellants did not obtain the record of tbe proceedings of respond
The evidence of ratification, in effect, is that some time early in July one of the appellants went to the office of Mr. Price, the secretary of respondent, to pay him respondent’s share of the proceeds derived from the sale of ore taken from the mine under the contract; that at that time the witness informed Mr. Pfice that the president of respondent had granted an extension of ninety days’ time, and Mr. Price said he knew nothing about it. The witness then repeats what he told Mr. Price, as follows: “I said, ‘Strange! Mr. Savage (the president) was out there (at the mine) a month ago, and he volunteered to give me that (the extension) without even asking for it. ... Be kind enough to look into it and find out.’ Something like that I said, and he (Mr. Price) said he would.”
Nothing more appears to have been done or said about the alleged ratification until August 29, 1907, about two days before the first payment was due by the terms of the
Upon substantially the foregoing evidence, the court, upon respondent’s motion, granted a nonsuit; and in making the ruling the court said, “No authority is shown for the making of the extension.” Counsel for appellants strenuously insists that in view of the evidence the president of respondent
“The board of directors to whom the authority to bind the corporation is committed is not the individual directors scattered here and there, whose assent to a given act may be collected by a diligent canvasser, but it is the board sitting and consulting together in a body. Individual directors, or any number of them less than a quorum, have no authority as directors to bind the corporation. And this is equally the rule, although the director who assumes to do so may own a majority of the shares.”
“If it is necessary that authority to do a particular act or enter into a particular contract shall he given in a certain mode, either by reason of a mandatory charter or statutory provision, or by reason of the common-law rule, ratification of such act or contract must be in the prescribed form or mode. ‘The ratification of an act, done by one assuming to he an agent, relates back, and is equivalent to prior authority . . . When, therefore, the adoption of any particular form or mode is necessary to confer the authority in the first instance, there can be no valid ratification except in the same manner.’ Thus, if a corporation can only authorize a particular act or contract by a power under seal, or by formal vote, ratification of such an act or contract must he under seal or by a formal vote, as the ease may be.”
See also Despatch Line, etc., v. Bellamy, etc., Co., 12 N. H. 205, 37 Am. Dec. 203; Blood v. La Serena, etc., Co., 113 Cal. 221, 41 Pac. 1017, 45 Pac. 252.
Neither tbe facts nor tbe law, therefore, warrant tbe conclusion that there was any intention or effort to formally ratify tbe act of tbe president in modifying the original agreement. Is tbe evidence such as would warrant a jury to find that Mr. Price, as tbe secretary of tbe company, ever manifested an intention to or did ratify
In view of the whole evidence, noi jury would have been authorized to find that there had been either a formal ratification of the president’s act in granting the extension of time, nor that the respondent was estopped from ignoring the alleged extension of time by reason of anything that Mr. Price did or omitted to do. ■ The court, therefore, did not err in granting the motion for a nonsuit. In view of this conclusion, the other matters discussed by counsel became immaterial.
The judgment is, therefore, affirmed, with costs to respondent.