37 Conn. 520 | Conn. | 1871
Each party filed a motion for a new trial in this case-; the defendants, on the ground that the court erred in ruling that they were liable for the services of the plaintiff rendered for the Bridgeport Rubber Company; and the plaintiff, on the ground that the court erred in ruling that the contract annexed to the finding of the court was not admissible in evidence.
We will first consider the question presented by the defendants’ motion. We are all agreed that under the circumstances detailed in the finding of facts, the ruling of the court below, that the plaintiff was entitled to recover for services actually performed, although for another corporation, was correct. It is not denied .that whatever contract there was in relation to such services, whether express or implied, was made with the defendants. He went into their employment September 1st, 1865, and so continued, as he supposed and believed, until February 1st, 1866, when he was discharged. .The defendants sold out their business to the Bridgeport Rubber Company about the first of October, 1865; but it was done in such a manner, and the change of business was so made, and the business subsequently so conducted, as to leave the plaiiitiff entirely ignorant of the change. The defendants failed to notify him that they were no longer carrying on the business. It was clearly their duty to have given such notice if they would relieve themselves of their liability to him. Although the contract signed by him contemplated the possibility, and probability even, that such a change would, be made, yet there was no certainty of it, and there is nothing in the contract or in the circumstances of the case to show that the plaintiff was to take notice of the transfer at his peril, or which placed him under obligation to make inquiry.
That brings us to consider the question whether the court-below did right in excluding the contract as evidence in the cause, on the ground that it could not be regarded as the con-, tract of the corporation.
We think it is quite clear that the president of a corporation, merely as president, has no power to bind the corporation by any act of his aside from his official duties. It is equally clear that the president, like any other person, may be constituted an agent for the transaction of its business. His authority so to act may be found in the charter or. by-larvs, in a direct vote of the corporation or board of directors, or in usage acquiesced in by the corporation. A corporation will also'be bound by the unauthorized acts of its president if it subsequently ratifies those acts, or so conducts itself with reference to them as that it ought to be estopped from denying his • authority; and generally, the doctrine of estoppel will apply whenever the corporation receives and retains the benefit of the contract.
Now the consideration of this contract, moving from the plaintiff, is two-fold; — 1st, the inconvenience or injury to him in consequence of giving up a lucrative situation ; and 2d, services .to be .rendered by him for the defendants. Those services were chiefly important to the defendants on account of the peculiar situation of their works, then standing idle for the want of a competent foreman, and the skill and experience of the plaintiff in the business in which he was to be
In view of these tacts, is. it consistent with honesty and fair dealing for the defendants, through the instrumentality of this contract, to accomplish their object, and then repudiate the contract and turn the plaintiff out of employment ? Who can believe that the plaintiff, could he have foreseen what was to be, would have entered into this contract ? If not binding, does it not operate as a fraud upon him ? And can this court lend its sanction to a fraud so gross and palpable ?
But there is another ground, as it seems to me, on which the defendants ought to be estopped from denying that this was their contract. The president represented to the plaintiff that he was authorized to sign the contract for the corporation. Before the plaintiff executed it he was informed by McEwen, the secretary, that the contract thus signed “ was duly executed to bind the defendants.” He relied and acted in good faith upon these representations. If it was a question of diligence on his part, it is difficult to see how he could have done more. To whom else should he have gone for information ? The secretary was the legal custodian of the records of the corporation, and ordinarily, and therefore pre■sumptively in this case, of the records of the board of directors also. It was natural for the plaintiff to presume that he knew what they were, and that he understood the powers
But in addition to the official character of the men from whom this information was obtained, the case finds- that McEwen was in fact, at the time, one of the two “ managing men” of the corporation. As it does not appear that the corporation transacted its business through any other agency, we may safely assume that his authority was equivalent to that of a general agent. If so, as he was acting within the apparent scope of his authority, his declaration must be treated as the declaration of the corporation itself. The corporation therefore induced the plaintiff to sign the contract upon the supposition that it was duly executed by the corporation, and ought not now to be permitted to deny it.
But passing from this branch of the case, we will next inquire whether there was a ratification of the contract by the defendants. It is claimed that there was not, because they knew nothing of its terms. We think they had constructive notice at least. It must be presumed that they knew their mill had not been in operation, and that -it started again through the agency of the plaintiff on some terms. They must have known also that the position occupied by the plaintiff was .a difficult one to fill, for the reason that comparatively few persons could be found who possessed the requisite skill and experience. The sale of the concern was also within their knowledge, and we can hardly suppose that they were ignorant of the fact that the sale might seriously affect the plaintiff in his business relations to the company. If they chose Hot to inform themselves in respect to these matters, it was doubtless because they were content to leave them to the management and control of their officers. • If so, it is difficult to see how their ignorance of the facts can justly and equitably operate to their advantage, and to the injury of the plaintiff.
The supplemental contract, and the action of the corporation under it, bear strongly upon this point. That contract
Rut further, the president of the corporation, and the secretary, who was also one of two “-managing men” of the defendants’ company, had full knowledge of the contract, and Simpson, the other “ managing man” of the company, knew that there was a contract under which the plaintiff was serving, and of the amount to be paid him therefor weekly. It was not the plaintiff’s fault, certainly, that he did not understand it fully. In connection with this, it must be remembered that it no where appears that the company had any' other agents or superintendents. It would seem- therefore that the board of directors or trustees chose to transact the business of the corporation through -the agency of these “ managing men.” The knowledge of an agent, in matters pertaining to his agency, and within the scope of his authority, is the knowledge of the principal. This principle is peculiarly applicable to corporations, which must transact their business through agents. And where a corporation has two agents of equal power and authority, notice to one is constructive notice to the other, and, therefore, notice to the corporation. So far as appears, the authority of these “ main business men,” as they are also called, was equal and full. The knowledge of McEwen pertained to business within the
The case then stands thus: The president and secretary had full knowledge of this contract; the secretary was also one of two agents with full power in the premises, and as such agent had full knowledge; the other agent knew there was a contract, and' knew of some of its provisions, with every facility for informing himself fully; he and the president were directors of the corporation; a supplemental agreement, which could not be understood without knowledge of the contract, was signed by the secretary for the corporation, and was fully performed by the corporation; the contract was partially executed by the plaintiff as to time, and, so far as the motives and purposes of the defendants were concerned, was fully executed ; and the execution of the contract was so connected with important and radical changes in the business affairs of the corporation, that the stockholders must be presumed to have had, at least, a general knowledge of the transaction. In the light of these facts to permit the corporation to deny its knowledge of this contract would establish a dangerous precedent. If it had knowledge then there was a ratification ; for there is no pretense that any officer, or other person connected with the company, ever intimated to the plaintiff any objection to the contract. Under these circumstances, and for these reasons, a majority of the 'court do not hesitate to hold that there has been a ratification of this contract by the defendants, and that the plaintiff.is entitled to a new trial.
In relation to the question of damages, we are clearly of the opinion that the plaintiff is not, necessarily, and as matter of law, entitled to recover the full price for the full term of the contract. The defendants violated their contract, and' the plaintiff suffered damage. The injury sustained is the measure of damages. That is ascertained by considering how much he could have earned at the contract price during the balance of the term, taking into consideration the siim payarble weekly, and also the value of the stock stipulated for in
Of course the plaintiff would not he justified in remaining idle for the whole time. He will not he permitted to increase the damage to himself unnecessarily, at the expense of the defendants. He is hound to use ordinary diligence. The defendants are only liable for proximate damages. Such damages as result from his own negligence, or want of proper diligence, are too remote, and not chargeable to the defendants. Upon the same principle he has no right to insist upon employment in the same business or at the same price. If that is not to be had, he is bound to engage in other business, and, if need be, at a less price.
There may be other matters which should be taken into consideration, but we have no occasion to refer to them now. The damages here considered are over and above the valu.e of sendees actually performed.
We advise a new trial on the plaintiff’s motion.
In this opinion Foster and Phelps,
Stevens,‘the president of the defendant company, was the only person who attempted to make the contract in question with the plaintiff in behalf of the company. He doubtless supposed that he had sufficient authority as president to make the contract. This appears from the contract itself, and from his declarations to the plaintiff at their first interview, and from his attempted ratification of the contract soon after it had been executed by the plaintiff. No doubt McEwen, the secretary, who procured the plaintiff’s signature
The majority of the court concede that' Stevens, merely as president, had no authority to bind the defendants, and it is therefore unnecessary to cite authority to that effect.
The court below finds that no general or special authority was conferred upon Stevens to make the contract, and that there was none from usage. I cite from the finding: — “ It appeared and is found by the court that Stevens, without any authority from the by-laws or articles of association of the company, and without any vote or other authorization by the board of directors, and without the knowledge of any other person connected with the company, except the secretary, •McEwen, executed and delivered said instrument to the plaintiff. It further appeared that Stevens had never before made any contracts for the employment of ordinary workmen for the company.”
It follows then, if this contract was the contract of the defendants, that it became such by their ratification of it with full knowledge of all its terms; or it became their contract because the facts of the case show that the defendants are estopped from denying the- authority of the president to make it. It seems to me there is no foundation in the case for either of these claims. It appears by the finding that, aside from the president and secretary, no officer or stockholder of the company knew even of the existence of the contract, and much less its terms. I cite again from the finding': — “ It appeared that during the whole time that the plaintiff continued to work at the factory, the president and secretary knew of the full conditions and terms of the contract, and of the amount of compensation to be paid the plaintiff under it, and that Simpson' undei’stood the amount to be paid weekly to the. plaintiff under the contract, but knew nothing farther
■ I am not now considering what effect McEwen’s knowledge of the contract may have had on 'the company, but independently of that knowledge it was claimed that the defendants are liable, because they received and retained the benefit of the contract. The chief benefit resulting from the contract is said to be, the putting of the mill in running order preparatory to an advantageous sale. It is said that the mill was lying idle for want of a competent foreman and had been for two months; that the company contemplated a sale of the property, and in order to make a good sale it was important that the mill should be put in operation. The plaintiff put the mill in operation; a sale was effected; .and so it is said the defendants reaped the chief benefit of the contract. It is singular, if it was so important that the mill should be in operation in order to effect an advantageous sale, that the defendants should have commenced the negotiations for the sale as far back as the thirteenth of July, when the claim is that the mill was lying idle. One would suppose, if it was ever important to have the mill in operation, it was doubly so at this time, in order to create a favorable impression at the commencement of the negotiations. The prospective members of the future Rubber Company resided in Bridgeport, in the immediate vicinity of the defendants’ mill. They certainly had the fullest opportunity to inform themselves respecting the character of the mill and its operations, and after commencing, and continuing the negotiations for the period of seven weeks, it can hardly be supposed that they remained
It seems to me that the president and secretary must have been utterly wanting in judgment if they supposed that the advantages to be derived from having the mill in operation during the remainder of the negotiations would justify the expense of engaging a competent foreman, whose services were to commence some seven weeks thereafter, at an outlay of §5,000 and fifty shares of the defendants’ stock, when the negotiations were liable to terminate at any time if a sale of the property should be made.
Again, it is singular, if this was the chief object in view in making the contract, that the plaintiff should have been hired for so long a period. I know it is claimed that the probability was that a competent foreman could not have been engaged for a shorter time. The finding is silent upon the subject. If this was an important fact in the case the plaintiff was bound to show it, but instead of doing so it does not appear even by his testimony that any effort was made to engage his services for a shorter period. At all events, it is easy to see that if the plaintiff was willing to work two years for the sum of §5,000 and fifty shares of the defendants’ stock, he must have been willing to work one month for much less compensation. One would suppose that he could easily have made an arrangement with his employers to be absent from their service for so short a period. But be this as it may, all speculation upon this subject is mere conjecture.
Again, it seems tó me that in other respects more is claimed from this part of the case than the finding will warrant. It does not appear how long work was suspended at the mill for the want of a competent foreman. The finding simply says that when the plaintiff visited the mill, at the request of the president to inspect the machinery, the factory was found idle for the want of a competent foreman. How long it had
Suppose I am a farmer, and owing to the peculiar circumstances in which I am unexpectedly placed, I find myself in need of a competent man to take charge of my. farm for a few days. My servant knows my need, and without any authority engages a man for me, and I find him at work on my farm under circumstances that lead me to suppose he lias been engaged by the day, and I pay him accordingly. At the end of ten days I ascertain that my servant made a contract with him for a term of years. Am I bound by the contract simply because I have received the benefit of his labor for the ten days I was in need of help, although the service has been rendered on a pretended contract for a term of years payable by the day ? It seems to me there is no need of answering the question, for every lawyer must admit that I would not be liable farther than for the sendee actually rendered. To hold me liable on the contract I must know, while the service is being rendered, what the contract was that my servant attempted to make. Without such knowledge I venture to say a case cannot be found in all the hooks that would hold me liable. The party dealing with my servant must see to it that I have such knowledge, or he runs his risk. In the sale of chattels it is said “ let the buyer beware so it may be said of a man dealing with a party who claims to be the agent of another — let him beware. Let him beware of the representations of authority that are made, for he takes them at his risk. Story on Ageney, § 138. How does this case differ from the one we have in hand, so far as the question I am considering is concerned ? It seems to me they are identical in principle.
But much reliance was placed upon the fact that the secretary was one of the “ managing men” of the company; and it was claimed that, inasmuch as it does not appear that the defendants transacted their business through any other agency, we may safely assume that his authority was equal to that of a general agent, and that his declarations to the plaintiff must therefore be treated as the declarations of the defendants. To this claim I have several answers to make, which convince me that it is not sound.
In the first place, if the secretary was clothed with the authority of a general agent, it was a fact all essential for the plaintiff to prove, and should not have been left to be inferred from the fact that it does not appear that the defendants transacted their business through any other agency. The
Again, what authority the secretary had as one of the “ managing men” is left exceedingly in doubt by the finding. The foreman of a weaving shop may be called a “ managing man.” Any man who has any power to direct others in any line of business, or any control over the business itself, is a “ managing man.”
. But if we are to speculate on the subject, it seems to me very clear that the court below never used the expression in the sense of a general agent. General agent is a term well known. It is found in all the books, and it would be unpardonable in the court, if the proof was that the secretary was a general agent, that the fact should not have been directly found in so many words. And then again, it is remarkable indeed if the secretary had this authority that he did not exercise it when he made the'supplemental contract with the plaintiff. He attempted to bind the defendants by virtue of his official character as secretary. Why did ho pass by authority which was ample and resort to that which was deficient ? Why did he vouch for the authority of the president in making the original contract, and not make it himself if he had this authority, and relieve the mind of the plaintiff ? The reason is apparent. He did not suppose at that time that he had authority iii any other capacity than that of secretary. Again, if the secretary had this authority, he never exercised it. He merely expressed his opinion to the plaintiff that the president had authority to bind the defendants, and was doubtless sincere. This was all that was intended. It is all that the language imports. • It is not claimed'that lie attemjited to ratify the contract made by the president, but simply that he represented the defendants in making the declaration, so that his declaration became theirs in contemplation of law.
The law in regard to the declarations of agents is well settled. They are not the declarations of the principal unless the agent is transacting his business within the legitimate
These are the reasons why I think this claim is unsound.
Again, it is claimed by the plaintiff that the defendants ratified the contract made by their president. Here again the finding does not warrant the inference. It is said that the terms of the supplemental contract were well known to the defendants', and if' known, then they infer that the original contract must have been likewise known to them, for they say it was endorsed on the original contract, and expressly refers to it, and the object and occasion'of'making it cannot well be understood without a knowledge of the original contract, and so they claim that the original and supplemental contracts were well known to the defendants. All that the court below has found on the subject-is simply that the supplemental contract was endorsed on the original contract and the sums due under it were paid to the plaintiff, but that no officer of the company, except the president who made it, and the secretary who asserted that it was duly signed to bind the company, knew of the existence of the original contract, and much less of its terms. What reason then is there for supposing that the supplemental contract “ was well known to the defendants ? ” The sums due under it were paid to the plaintiff, but the court does not inform us who paid them. They were doubtless paid by the party who made it, without the knowledge of the defendants. This must be evident, for "the supplemental contract was endorsed on the original contract, and’ if the original was not known, how could the supplemental be known ?
Again it is said that the defendants must have known that the position occupied by the plaintiff was a difficult one to fill, for the reason that comparatively few persons could be found who possessed the requisite skill and experience. This is altogether conjecture. There is nothing in the finding on the subject. But the counsel for the plaintiff rely very much in this part of the case upon the fact that the sec
I have now considered the main points made by the plaintiff’s counsel with regard to a ratification of the contract by the defendants. There are other considerations relied upon, but it seems to me they have very little weight in view of the circumstances surrounding thé defendants during the time the plaintiff was at work. They had been negotiating a sale of their entire property for seven weeks at least, when the plaintiff appeared and commenced work. At this time they must have been on the point of completing their contract of sale. They knew that their president, secretary, and all their other officers were fully aware of these facts. Now, what was there that would lead a man of ordinary discernment to suppose that their president and secretary had attempted to make a contract with the plaintiff for a term of years ? The plaintiff was paid by the week, indicating that he was hired by the week. Simpson, one of the directors, and one of the “ managing men” of the company, who resided near the factory and attended daily to its concerns, knew nothing of this extraordinary contract, but supposed the plaintiff was engaged temporarily by the week, and assisted in paying him accordingly. I am therefore of
Judge Phelps of the Superior Court was caflled in to sit in the place of Judge Seymouk, who having been counsel in the case when at the bar, did not sit.