p. 26Henry Mesinger, Respondent, v. The Mesinger Bicycle Saddle Company, Appellant.Headnote
Agreement by the promoter, and subsequent president of a corporation, to pay a salary to one who is to-be an employee of the corporation from the date of its-incorpora- . iHon, although his service is to begin at a later date.An agreement made by a promoter of a corporation about to be formed, with a person who was to enter its employ, that his salary should continue while he. was absent on a European trip, is so ratified as to become binding on the corporation, where the promoter, who afterwards became its president, failed to give notice of any disavowal of the agreement to the employee, and the latter commenced work for the corporation, several weeks after it was incorporated, upon his return from the trip.
Such employee, in an action brought by him against the corporation, is entitled to recover for his services from the date of its incorporation.
Appeal by the defendant, The Mesinger Bicycle Saddle Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 13th day of April, 1899, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 11th day of April, 1899, denying the defendant’s motion for a new trial made upon the minutes. .
Henry A. Forster, for the appellant.
Thomas Abbott McKennell, for the respondent.
The action is brought to recover a balance of salary alleged to be due to the plaintiff. It is conceded that he was employed at a salary
p. 27of $3,000 per annum, but the date when his employment commenced is in dispute. The defendant was incorporated on July 23, 18.96, and the plaintiff has been permitted to recover from this date, although he did not actually begin work until several weeks later, as he was absent on a European trip. This recovery is based upon the undisputed testimony of the plaintiff’s brother to the effect that, prior to the defendant’s incorporation, Hulbert, one of its promoters, and afterwards its president, told him that the plaintiff might take this trip, and that his salary would continue while he was away. The only question in the case is whether this testimony furnished a legal basis for the verdict. The agreement may be treated as though made directly with the plaintiff, for it was communicated to him by his brother, and the latter evidently acted as his agent.
It is now settled in this State that an agreement made in behalf of a corporation about to be formed, although not initially binding upon it, may, by the company’s acts, after it attains a legal existence, be so ratified as to become a corporate obligation. This ratification may be effected by the person who entered into the original agreement, if that person, at the time of the ratification, has become an executive officer of the company, entitled in that capacity to bind it by such an agreement. (Oakes v. The Cattaraugus Water Company, 143 N. Y. 430 .) This agreement in question was certainly one which the defendant’s directors had power to make or to ratify. Hiring employees and allowing them vacations with a continuance of salary are among the commonest features of corporate management. This being so, the making or ratification of such an agreement by the defendant’s president wasjprima facie valid, and threw upon the defendant the burden of showing that it was without authority. (Patterson v. Robinson, 116 N. Y. 193 .) This burden the defendant made no attempt to sustain.
It is argued that this money was a mere gratuity, and' that the promise to ¡Day it was but an executory promise to make a gift, and was wholly without consideration. That is an erroneous view of the situation. The defendant agreed to pay a specified sum for a specified period of service, which did not include the time that plaintiff was away. The plaintiff’s actual services were a sufficient consideration for the whole sum agreed to be paid.
p. 28That the agreement was ratified seems clear. There was no express ratification, for neither the plaintiff nor his brother had any conversation on the subject with Hulbert after the incorporation of the defendant: But there was an implied ratification. It was Hulbert’s duty, if, as the defendant’s representative, he wished to disavow the agreement, to so notify the plaintiff. He had, of course, full knowledge of its existence, and that the plaintiff was acting in reliance upon it. He accepted the plaintiff’s services, rendered in pursuance of the agreement, and the defendant, which was bound by his action, cannot now be permitted to repudiate it.
The judgment and order appealed from should be affirmed, with costs.
Van Brunt, P. J., Patterson and O’Brien, JJ., concurred.
Judgment and order affirmed, with costs.