5 Johns. Ch. 351 | New York Court of Chancery | 1821
The bill in this case had two objects : 1. To obtain a liquidation, upon equitable principles, of the demand of the defendants, While, Taylor and White, for damages, for the non-fulfilment of the contract of the plaintiff with them : 2. To compel the other defendants, who were members of the Granville Cotton Manufacturing Company, to account to and with the plaintiff, and to contribute, proporlionably, to the payment of the damages to be assessed in favour of While, Taylor and White. The prayer of the bill is, that they may be decreed to pay whatever sums the plaintiff “ may be obliged to lay out and expend on the contract aforesaid, or in defence of the suits at law, against him.”
The defendants, White, Taylor and White, are entitled to a just indemnity, for the loss and injury sustained by them. The decree of the Court of Errors, in this very case, directed this Court, by a reference, or an issue, to ascertain.lhe
The Chief Justice, in the opinion delivered by him in the Court of Errors, in this case, (17 Johns. Rep. 365.) declared, that White, Taylor and White, were entitled to be fully remunerated, for all the damages and losses they had actually sustained; and that he should consider a loss of profits as a legitimate head of damages; and, in short, that they were entitled “ to a just equivalent for their labour, materials, and loss of profit.” Mr. Justice Yales, in the opinion which he delivered in that case, (17 Johns. Rep. 368, 369.) only said, generally, that White, Taylor and White, were entitled to “ compensation and damages,” to be fairly and satisfactorily ascertained, by a reference, or by an issue. To meet the sense of the Court of Errors, as far as we may venture to infer it from those two opinions, (for the decree speaks only of the damages,) and as far as the rule of damages can be prescribed, with justice and precision, I shall direct the master, in order to ascertain and report the damages sustained, to state and report, particularly, the amount due for the work done, and materials furnished, and for all other expenses, by While, Taylor and White, actually and bona fide incurred, under the contract, prior to the first day of August, 1815, when all further execution of the contract was abandoned, by reason of the notice of the inability, or refusal, of the plaintiff to fulfil it. And I shall further direct, that he ascertain and report, in addition thereto, the amount of the actual loss and injury (if any) which these defendants sustained, by reason of such abandonment of the contract.
2. The next point, is, whether the plaintiff is entitled to contribution from the remaining defendants, in respect to those damages ?
The decision of the Supreme Court, upon the contract now in question, was, that the plaintiff contracted with White,
The company could not be bound, beyond the capital paid in, and the president and directors had no power, un-' der the articles of association, to bind the members, individually. Whoever dealt with the company, as such, and without resorting to a personal covenant, was to be presumed to deal with them, according to the terms of their constitution, and to give the credit to the funds of the company, actually paid in, or to be paid in, under assessments duly made. He had no right to look to the credit of the individual members, unless these individual members entered into a personal covenant, or contract. As a check to extravagance and abuse, in the management of the company concerns, every member, under the 6th article, reserved to himself "the right to withdraw himself from fur
The plaintiff, by his contract of the 25 th of April, 1815, with White, Taylor and While, had no right to bind the company, or even the capital stock paid in. He had no authqrity, even from the directors, to make this contract; it was an act entirely unauthorized. The company could not act and contract in its associate capacity ; but by a resolution of the board of directors, or by means of a general agent, duly appointed by such a resolution, in pursuance of the 4th article of the constitution of the com
I have already observed, that there is not the requisite evidence, that the two directors, Raymond and Hitchcock, ever authorised the making of the contract. The association was a regularly organized company, with a president and directors, treasurer, and clerk to the board; and we
There is some contrariety of testimony, respecting the assent of W. Raymond, jun., the director; but the assent pretended, or alluded to, by some of the witnesses, was too loose and equivocally expressed, to be of any force.It was not the assent intended by the creation of the board of directors. The directors, quasi directors, could not deliberate and act, but in their joint capacity. Here was no joint consultation or discussion of the board; and it would be idle, and quite repugnant to good sense and sound construction, to consider loose conversations with one individual, and then with another, in succession, when they were not assembled as a board, as amounting to any thing on the part of these persons, as directors, or as giving any validity tc- the precipitate and rash conduct of the plaintiff. To bind the directors, and through them, to bind the funds of the company, the directors must have assembled in coun■ci*, and deliberated concurrently, and unitedly, and expressed their assent, by a resolution, duly announced and recorded. To reduce their assent down to mere street conversation, with them, successively, in detail, would be to subvert the meaning and .utility of the institution of such a council, and destroy all the check and safely, which was in contem
Decree accordingly.