Shackelford v. New Orleans, Jackson, & Great Northern Railroad

| Miss. | Apr 15, 1859

Harris, J.,

delivered the opinion of the court.

This was an action for money had and received, commenced by the defendants in error against the plaintiff in the court below.

A general denial and payment were relied on in the answer, and issue was joined on their answers, and jury and verdict for the defendants in error. On the trial, the main subject-of inquiry was, whether the plaintiff in error was entitled to compensation for certain services performed by him for the defendants in error; and if so, how much ? The record shows that the plaintiff in error was a director in the company of defendants in error at the time the services, for which he claims compensation, were rendered. And the defendants in error introduced several witnesses to prove the custom of railroad companies, as to the duties of directors and their compensation ; this evidence was objected to by plaintiff in error, but admitted by the court, which constitutes the first ground of error assigned.

It is admitted, that neither the charter of defendants in error, nor their by-laws, presents any rule on this subject.

In the case of the Schooner Reeside, 2 Sumner, 567, Judge Story thus expresses himself on this subject: “ I own myself no friend to the almost indiscriminate habit, of late years, of setting up particular usages or customs, in almost all kinds of business and trade, to control, vary, or annul the general liabilities of parties under the common law, as well as under the commercial law. It has long appeared to me, that there is no small danger in admitting such loose and inconclusive usages and customs, often unknown to particular parties, and always liable to great misunderstandings and misinterpretations and abuses, to outweigh the well-known and well-settled principles of law. And I rejoice to find that, of late years, the courts of law, both in England and in America, have been disposed to narrow the limits of the operation of such usages and customs, and to discountenance any further extension of them. The true and appropriate office of a usage or custom is, to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of their contracts, arising not from express stipulations, but from mere implications and presumptions, and acts of a doubtful or equivocal character.”

“It may also be admitted to ascertain the true meaning of a particular word, or of particular words in a given instrument, when the word or words have various senses, some common, some qualified, and some technical, according to the subject-matter to which they are applied.”

We fully concur in the just views so expressed by Justice Story. The foundation of this whole doctrine of usage or custom, when applied to the dealings of men, is, that they are presumed to deal with each other, in reference to the known customs which have immemorially prevailed, either in that particular locality or every-yyhere, in relation to the subject of their dealings, and they are, therefore, presumed to intend that such custom shall be the law of their action. It must be an established custom, existing at the time and place of their dealing, and known to the parties. It must be certain, uniform, reasonable, and not contrary to law. 2 Greenleaf’s Evid. 273, § 251, and numerous cases cited.

“ These usages, many judges are of opinion, should be sparingly adopted by the courts as rules of law, as they are often founded on mere mistake, or on the want of enlarged and comprehensive views of the full bearing of principles. Their true office is to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of the contracts arising, not from express stipulation, but from mere implications and presumptions, and acts of a doubtful and equivocal character, and to fix and explain the meaning of words and expressions of doubtful or various senses. On this principle, the usage or habit of trade, or conduct of an individual, which is known to the person who deals with him, may be given in evidence to prove what was the contract between them.” 2 Greenleaf's Ev. § 251, and note 5.

Both customs and usages must be proved by evidence of facts, not of mere speculative opinions, and by witnesses who have had frequent and actual experience of the custom or usage, and do not speak from report alone. Ib. § 252.

And to the same effect are the authorities cited in the briefs of counsel.

Tested by these rules, the evidence of Goodman and others, as to their opinions of the duties and responsibilities of directors, were clearly inadmissible. Indeed, Mr. Goodman nowhere pretends to prove a custom or usage of any character. Upon the subject of his own compensation as president, instead of proving a custom or usage, he proves, to the contrary, that it has varied from $1000 to $8000. And the rest of his testimony is-nothing but the expression of his opinion as to the law of railroad directors and agencies; and the witnesses, Frost, McKee, and Davis, confirm the opinions of Goodman. This assignment of error was therefore well taken.

The second assignment of error relates to the rejection of the testimony of Harrison and Cole, by whom it was proposed to prove their opinion of the right of the plaintiff in error to compensation for his services.

We think this testimony was rightly excluded; as also all testimony as to what other special agents of the company had been paid for particular services.

It is next insisted that the instructions given for the defendants in error were erroneous. And the second instruction given for the defendants in error is particularly referred to, as asserting or intimating that a director of a railroad company is bound to act as its agent without compensation.

In the absence of charter regulations or by-laws fixing the duties of directors of a railroad company, they are without authority or power to act, in their individual character, for the corporation, as much as any stockholder. These powers and duties are conferred to their action at the meetings of the board. By resolution of the board they may be empowered to transact any business or agency for or on behalf of the corporation. And unless there is some agreement or understanding, express or implied, from the circumstances attending such appointment or agency to the contrary, the law will imply a contract on the part of such company with their agent, whether he be a director or a stranger, that he shall receive, for such service in the business of such agency, whatever compensation he reasonably deserves to have therefor. And on proof of the value of his services, the jury should find accordingly.

It is evident, from the testimony in this cause, that the jury must bave proceeded upon the idea that, as the plaintiff in error, was a director, he was hound to serve the company without compensation in business not pertaining to the meetings and action of the board in session. This was a misconception of the law, resulting in gross injustice to the plaintiff in error.

Let the judgment be reversed, cause remanded, and a venire de novo awarded.

Handy, J., being interested as a stockholder in the railroad company, did not sit in this case.