242 Mass. 395 | Mass. | 1922
This is an action of contract brought to recover the value of services rendered in assisting the defendant to raise money for its use and benefit. The following issue was submitted to the jury: “Was there an agreement made on or about May 14, 1915, between Mr. Skinner [treasurer of the defendant] and Mr. Sears [the plaintiff] to the effect that if Mr. Sears would assist the corporation either by loans of money, or collateral, or by endorsements of notes, the corporation would pay him?” This was answered in the affirmative; in response to another question, the value of the services actually rendered was fixed at $5,000.
The judge ruled as a matter of law that the treasurer had no .authority to bind the defendant by the agreement and, subject to the plaintiff’s exception, ordered a verdict for it. The question is whether this ruling was right.
The defendant is organized under the general corporation law ■of this Commonwealth with its place of business in East Taunton .and is engaged in buying raw material, including cotton, and manufacturing and selling cotton products. Being under-capitalized, the corporation had been financed largely by considerable borrowings of money from banks and individuals, and sometimes by sell
The evidence was sufficient to justify a finding that the defendant was in poor credit and that the plaintiff’s indorsements were of substantial value in obtaining much needed money. The financial affairs were under the management of the treasurer, A. Homer Skinner, who was also a director; in part his duties were to raise money for the use of the corporation.
The directors of the corporation met quarterly. There was no evidence of any by-laws or votes as to the authority of the treasurer except that the former provided that the “board of directors shall have the superintendence and control of all the business and concerns of the corporation. . . . They may appoint and remove at pleasure agents and other employees and define their duties and powers, and fix their compensation, as well as the compensation of the officers of the corporation.” As to the treasurer, the by-laws provided that he should, “subject to the control and direction of the board of directors . . . collect and receive and keep all moneys, funds and securities of the corporation, and . . . generally attend to all its financial concerns;” that he might make “notes and drafts, in behalf of the corporation, so far as authorized and under such limitations as may be imposed by the board of directors.” The board of directors, after Skinner had been elected treasurer, voted as follows: “The Treasurer of the corporation is hereby given authority to negotiate loans and issue the notes of the corporation in such amounts as is necessary to successfully conduct the business of the corporation, and all of such notes to be countersigned by either the president of the corporation or one of the board of directors and by the bookkeeper of the corporation.” “The action of the treasurer in negotiating loans for the benefit of the corporation to the amount of $343,359.76 and the issuing of the notes of the corporation for the same amount is hereby ratified and approved.”
The plaintiff, who was a large stockholder, had been a director from the organization of the company until some time in 1919. On various occasions, beginning in 1915 about the time when Skinner was elected treasurer, he had loaned money to the corpo
The evidence disclosed that the plaintiff, prior to the time of the treasurer’s agreement to pay him for so doing, had indorsed many corporate notes and that the president and treasurer had likewise become indorsers to large amounts and had not been paid for so doing.
No custom or usage appeared under which the officers of this or other business corporations received payment for like services; and there was evidence that the defendant’s officers had never been paid for the use of their names as accommodation parties.
There was no evidence that the officers of the corporation, other than the treasurer, knew or had notice of the agreement under which the plaintiff claims; indeed, the plaintiff testified that he said nothing about being recompensed until the year after his agreement with the treasurer. In July, 1918, he demanded payment, and in October of that year presented a bill to the corporation.
There was no implication of contract because the plaintiff lent his property and credit or because his services were valuable. Neither did any presumption arise therefrom that the assistance was rendered for reward as it was not of the character usually and commonly the subject of hire. Sawyer v. Pawners’ Bank, 6 Allen, 207. Pew v. Gloucester National Bank, 130 Mass. 391. Parker v. Nickerson, 137 Mass. 487, 496. Von Arnim v. American Tube Works, 188 Mass. 515, 517. Marcy v. Shelburne Falls & Colrain Street Railway, 210 Mass. 197. Apsey v. Chattel Loan Co. 216 Mass. 364. No special facts are shown pointing to the existence of an implied agreement as a rational explanation of the plaintiff’s course. See North Anson Lumber Co. v. Smith, 209 Mass. 333.
The plaintiff’s long official connection with the defendant as one of its directors charged him with knowledge of the limits of the treasurer’s actual authority. For this reason, no question is
The power expressly given the treasurer to negotiate loans and issue notes in such amounts as were necessary successfully to Conduct the business entitled him to use only the usual and appropriate means to accomplish that result. Valentine v. Piper, 22 Pick. 85. Sprague v. Gillett, 9 Met. 91. But in its execution — at least as between one of the directors and the corporation — he could not employ extraordinary and unusual means without special authority, or without proof of some relations other than those ordinarily existing between a corporation and its directors. Shaw v. Stone, 1 Cush. 228. See Upton v. Suffolk County Mills, 11 Cush. 586, 589; Mahone v. Manchester & Lawrence Railroad, 111 Mass. 72; Henry Wood’s Sons Co. v. Schaefer, 173 Mass. 443; Rennie v. Mutual Life Ins. Co. of New York, 176 Fed. Rep. 202.
In its ultimate analysis, the main question is whether the defendant’s treasurer, acting in its behalf, had implied authority to contract with one of its directors to pay him for the loan of collateral and for becoming an accommodation party to its commercial paper, all of which was reasonably necessary to facilitate and accomplish the sale or discount of such obligations. Plainly no such authority was implied. Indisputably the officers of the corporation customarily had rendered like aid .without compensation. Moreover, the plaintiff’s official position negatived any presumption that he. was entitled to payment therefor, or that the services were such as were ordinarily rendered for hire. In the circumstances disclosed, such a contract was not fairly and reasonably incident to the duties of the office. The provisions of the by-laws directing the treasurer to attend to all financial concerns did not broaden his authority. Neither did the express vote as to the negotiation of loans and issuing of notes aid the plaintiff. On this record, the contract was not a usual and appropriate means to effectuate his authority.
The plaintiff contends that he can get on because of the receipt of the moneys, and because their actual application to the proper business activities of the defendant constituted ratification, or at least could have been found to have that effect. • But even if it can be so construed, such receipt and use, in any event, cannot have that result unless it appears that the corporation then had
The verdict for the defendant was rightly ordered, and in accordance with the report judgment is to be entered for the defendant.
So ordered.