107 W. Va. 290 | W. Va. | 1929
The G. C. Murphy Company is a Pennsylvania corporation engaged in a chain store business. The plaintiff, Mack Realty Company, is another Pennsylvania corporation, and according to the testimony of one of its officers “is just the real estate department of the G. C. Murphy Company, and is owned body and soul by the G. C. Murphy Company. ’ ’ The defendant, Beckley Hardware & Supply Company, is a West Virginia corporation engaged in the hardware mercantile business in the city of Beckley. In 1924 defendant’s board of directors conferred authority on T. E. Bibb, its president and general manager, to sell a building which i't owned in that city, at the minimum price of $75,000.00. In 1925, no purchaser having been found for the building, Mr. Bibb reported to the board that he had applications from several renters and recommended that certain improvements be made on the building with a view to renting it. Mr. Bibb’s recommendation was approved, about $10,000.00 was spent in remodeling the building, and it was then rented advantageously. In July, 1928, Paul R. Reed and Walter C. Shaw, who are officers of the G. C. Murphy Company, conferred with Mr. Bibb in the presence of his sons, E. E. Bibb and C. A. Bibb, relative to purchasing the property. E. E. Bibb is a director and secretary and treasurer of defendant; C. A. Bibb is a stockholder. According to Reed and Shaw; T. E. Bibb said that he would like to discuss the terms of sale with another of his directors, but that it did not matter as the board of directors had already given him authority to sell the property at $75,000.00. He thereupon agreed upon terms of an option and on the following day, July 12th, he executed an option under the seal of defendant, giving to the Murphy Company the right for a period of twenty days to purchase the property at $75,000.00, of which amount $15,000.00 was to be paid cash, an indebtedness of $30,000.00 was to be assumed, and the balance was to be paid in five annual installments of
Plaintiff’s brief states that it places no reliance upon tbe special authority conferred on T. E. Bibb by tbe defendant’s board of directors in 1924. Lapse of time and changed conditions bad of course annulled that power. See Clark & Skyles on tbe Law of Agency, section 183. Besides, power to sell does not imply power to sell on credit or to option. Dyer v. Duffy, 39 W. Va. 149; Tibbs v. Zirkle, 55 W. Va. 49; Mechem on Agency (2nd Ed.), section 816, 819; Tiffany on Agency (2nd Ed.), section 24, p. 71.
It is settled law that T. E. Bibb bad no implied authority by virtue of bis position as president and general manager of tbe defendant to execute tbe option. That power was not connected with tbe “ordinary business entrusted to bis management.” Carroll-Cross Co. v. Abrams Cr. Co., 83 W. Va. 205, 212-213; Kelly Co. v. Rhodes, 102 W. Va. 16; Varney & Evans v. Hutchinson Co., 70 W. Va. 169; Cook on Corp. (8th Ed.), section 716, 719. T. E. Bibb, and E. E. Bibb as directors could not agree outside of a meeting of tbe board and
But, says tbe plaintiff, tbe defendant bad clothed T. E. Bibb with tbe apparent authority to sell tbe property. This claim is based on tbe fact that T. E. Bibb bad executed four leases to tenants of tbe building in question, without express precedent authority from defendant. It might well be contended that authority to rent tbe property was incidental to tbe power given T. E. Bibb by tbe board of directors to improve it for the purpose of renting it. Story, Law of Agency, sec. 97; Mechem, supra, see. 789. However that may be, power to lease is radically different from power to sell. Tbe one indicates an intention to retain tbe property, tbe other an intention to dispose of it. Therefore authority to sell cannot be implied from authority to lease. “If the agency arises by implication from numerous acts done by tbe agent, with tbe tacit consent or acquiescence of tbe principal, it is deemed to be limited to acts of tbe like nature. # * * An implied agency is never construed to extend beyond tbe obvious purposes for which it is apparently created. ’ ’ Story, supra, sec. 87. Moreover, tbe representatives of tbe Murphy company do not claim that tbey were led to believe that T. E. Bibb bad tbe power to give tbe option because of bis conduct in regard to tbe leases. It is not shown that tbey even knew of bis connection with tbe leases. Their knowledge thereof, acquired subsequently to their conferences with Mr. Bibb in regard to the option, has no bearing upon tbe question. 21 C. J. 1132. It is unquestioned that whoever would rely on
The plaintiff then says that a presumption of authorized execution arose from the option being signed by the president of defendant and sealed with its corporate seal, which has not been overcome, citing Deepwater Co. v. Remick, 59 W. Va. 343, 346. The record does not support this claim. E. E. Bibb stated that the authority given his father by the board of directors in 1924 was the only authority ever given him to sell the property. J. 0. Freeman, who has been director since 1925, testified that the board of directors had given T. E. Bibb no authority to sell the building since then. The evidence of these witnesses is admissible and uneontroverted. See Thompson on Corp. (3rd Ed.) sec. 3286. “When the facts themselves are in evidence, there is no place for a presumption as to those facts. ’ ’ Burge v. Ray. Co., 244 Mo. 76, 95. Jones Comm, on Ev. (2nd Ed.), see. 32, p. 62; Dwight v. Hazlett, decided on April 9,1929, by this Court; Cook, supra, sec. 722; 14a C. J. 398. Plaintiff seems to labor under the impression that this presumption can be rebutted only by the records of the defendant. . On the contrary, the corporate books are not admissible for that purpose. “Whatever may be the rule as to the records being evidence against the corporation itself, or against its officers and stockholders, it is clear that generally they are not competent to establish a right as against third persons.” Thompson, supra, sec. 1969. Cook, supra, sec. 714; Jones Comm. on Ev. (2nd Ed.), sec. 1735; 7 R. C. L., p. 153-4, sec. 124; 22 C. J., sec. 1095. See also the masterly analysis of this subject by Judge Poffenbarger in C. & O. Ry. Co. v. Deepwater Ry. Co., 57 W. Va. 641, commencing on page 677.
Plaintiff also contends that the delay of defendant in repudiating the option amounted to a ratification. Mere silence or delay in disapproving an unauthorized act of agency for ■an unreasonable time may furnish a presumption' of approval in some cases. Thompson, supra; sec. 2132; Mechem, supra,
An estoppel may arise where inaction operates to the prejudice of an innocent party. Plaintiff invokes that rule because of the following facts: On August 16th, before the conference with representatives of defendant, agents of the Murphy company closed a contract with a third party in Beekley whereby the Murphy company leased another building for a term of twenty-five years involving a total payment of rent amounting to $180,000.00. The officers of the Murphy
The Bibbs are controlling stockholders of defendant. Plaintiff further says that to permit the defendant to repudiate the action of its chief officials and controlling stockholders is to permit the perpetration of a fraud. As has been already shown, the defendant is not bound by the unauthorized act of its officials. Neither is it bound by the conduct of its controlling stockholders outside of a corporate meeting. If fraud there be, it is not the fraud of defendant. “It is a familiar rule of law that a corporation has a personality of its own, distinct from its stockholders, and it is not affected by contracts made by its stockholders with third persons whether they own much or little of its capital stock. * * * The members of a corporation cannot like members of a co-partnership, make an agreement among themselves informally. The corporation must act as a body.” 7 R. C. L.,
Tbe decree of the circuit court is accordingly reversed, and the plaintiff’s bill dismissed.
Reversed; hill dismissed.